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Category: Allied Laws

Allied Laws

53. Rajia Begum vs. Barnali Mukherjee

2026 INSC 106

February 02, 2026

Arbitration Agreement – Partnership firm – Serious Allegations of Forgery – Non-arbitrability of Dispute – High Court’s order referring the dispute to arbitration was set aside. [S. 8, 9 & 11, Arbitration and Conciliation Act, 1996; Article 227, Constitution of India]

FACTS

A partnership firm was constituted between Barnali Mukherjee (Respondent) and two others. Rajia Begum (Appellant) claimed that by virtue of a Power of Attorney she executed a Deed of Admission and Retirement whereby she was inducted as a partner and the original partners retired. The Admission Deed contained an arbitration clause and formed the sole basis of her claim. Respondent categorically denied the execution and existence of the Admission Deed and alleged that it was a forged and fabricated document. It was further contented that Appellant never acted as a partner and was reflected only as a guarantor in all contemporaneous records. The partnership business was later absorbed into a company. Appellant initiated proceedings under Section 9 of the Arbitration and Conciliation Act, 1996, which were rejected by the High Court on ground that the arbitration agreement was doubtful. The said finding attained finality after dismissal of the Special Leave Petition. Subsequently, Respondent filed a civil suit seeking a declaration that the Admission Deed was forged. Appellant applied under Section 8 of the Act to refer the dispute to arbitration, which was rejected by the Trial Court and the First Appellate Court, However, the High Court, exercising jurisdiction under Article 227 of the Constitution, set aside these orders and referred the dispute to arbitration. Parallelly, Appellant also sought to appoint an arbitrator under Section 11 of the Act, which was rejected by the High Court on the ground that the existence of the arbitration agreement itself was in serious dispute. Both orders were challenged before the Supreme Court.

HELD

The Supreme Court held that, where serious allegations of fraud are made which go to the very root of the arbitration agreement itself, such disputes are non-arbitrable. Arbitration is founded on consent, and a party can be compelled to arbitrate only if the existence of a valid arbitration agreement is established even at a prima facie level. The Court found substantial and cogent material casting grave doubt on the genuineness of the Admission Deed, including its unexplained absence from records for nearly nine years, inconsistencies with admitted facts, and contemporaneous documents showing that Appellant acted only as a guarantor and not as a partner. The arbitration clause being embedded in a document whose existence was seriously disputed could not be enforced independently. It was further held that although findings under Section 9 proceedings are prima facie, once they attain finality, they cannot be ignored in the subsequent proceedings arising from the same factual foundation. The High Court, therefore, erred in exercising supervisory jurisdiction under Article 227 to upset concurrent findings of the Trial Court and First Appellate Court while referring the matter to arbitration under Section 8. The Supreme Court affirmed the High Court’s refusal to appoint arbitrator under Section 11, holding that appointment would premature and legally impermissible when the existence of the arbitration agreement itself under serious cloud.

Accordingly, the appeal challenging the Section 8 reference was allowed, the High Court’s order referring the dispute to arbitration was set aside, and the appeal challenging the rejection under Section 11 was dismissed.

54. Rampyare & Anr. vs. Ramkishun & Anr.

2026:CGHC:5238

January 29, 2026

Will – Presumption under Evidence Act not applicable to Will – Mere registration of a Will does not dispense with the mandatory requirement of proof of execution and attestation. [S 63(c), Indian Succession Act, 1925; S 68, S. 69 of the Indian Evidence Act, 1872]

FACTS

The Plaintiffs/Appellants instituted a civil suit seeking declaration of title, possession and permanent injunction in respect of agricultural land situated in Chhattisgarh. Their claim was founded on a registered Will, allegedly executed by their grandfather (Mahadev), bequeathing the suit property in favour of their father (Ramavatar). It was pleaded that after grandfather’s death, the Will came into effect and father’s name was mutated in the revenue records. Upon father’s death, the Plaintiffs claimed to have inherited the suit land and continued in possession for several decades. The Defendant No. 1, the brother of the father allegedly got his name wrongly recorded in the revenue records and forcibly took possession of the land. The Defendants contested the Suit contending that the property was ancestral in nature, that grandfather had no male issue, and that after his death the property was equally partitioned between the Plaintiffs and Defendants. The Defendants denied execution of any Will and alleged that the Will relied upon by the Plaintiffs was forged and fabricated. The Trial Court dismissed the Suit holding that the Will was not proved in accordance with law.

HELD

The High Court dismissed the Second Appeal and upheld the concurrent findings of the courts below. It was held that mere production of a Will which is more than 30 years old does not attract the presumption under Section 90 of the Indian Evidence Act, 1872. A Will stands on a distinct footing and must be strictly proved in accordance with Section 63(c) of the Indian Succession Act, 1925 read with Section 68 and 69 of the Indian Evidence Act, 1872. The observed that none of the attesting witnesses to the Will were examined, nor was the Will proved through permissible secondary evidence as required by law. The testimonies of the Plaintiffs merely asserted execution of the Will without satisfying statutory requirements. Mere registration of a Will does not dispense with the mandatory requirement of proof of execution and attestation. The High Court further held that the scope of interference in a Second Appeal is extremely limited and no substantial question of law arose in the present case. The concurrent findings of fact recorded by the Trial Court and the First Appellate Court were neither perverse nor contrary to law.

Accordingly, the Second Appeal was dismissed.

55. Rampyare & Anr. vs. Ramkishun & Anr.

2026:BHC-AS:4235

January 28, 2026

Stamp Duty – DRT Auction – Stamp Duty Payable on Auction Sale Consideration and not on Independently Determined Market Value – The Collector of Stamps was directed to adjudicate stamp duty on the basis of the auction sale consideration. [S. 25(b), S. 34(a)(ii) and S. 31 of the Maharashtra Stamp Act, 1958]

FACTS

The property was a secured asset in recovery proceedings initiated by the Central Bank of India before the Debt Recovery Tribunal-I. Pursuant to a recovery certificate issued, the Recovery Officer ordered the sale of the property by public e-auction. A sale proclamation was issued, and the auction was conducted. The Petitioner was declared the successful bidder and purchased the property. A sale certificate was issued. After rectification, the Petitioner applied to the Collector of Stamps for adjudication of stamp duty under Section 31 of the Maharashtra Stamp Act, 1958, contending that stamp duty ought to be calculated on the auction sale consideration. By an interim order and a final order, the Collector of Stamps determined stamp duty on the market value of the property instead of the auction price, levying stamp duty along with a penalty. Aggrieved thereby, the Petitioner approached the Bombay High Court. The Respondent objected to the maintainability of the Writ Petition on ground of the availability of an alternate statutory remedy and contented that, stamp duty was rightly levied on market value as per ASR rates.

HELD

The Bombay High Court held that availability of an alternate statutory remedy does not bar exercise of writ jurisdiction where the controversy involves a pure question of law. The Court observed that the core issue was whether stamp duty on a scale certificate issued pursuant to a DRT conducted auction should be levied on the auction sale price or on an independently assessed market value. The Court further held that the Circulars cannot be applied to override the legal sanctity of a transparent tribunal conducted auction. Determination of stamp duty on a higher market value, ignoring the auction consideration, was held to be legally unsustainable.

Accordingly, the writ petition was allowed, the impugned orders were quashed and set aside, and the Collector of Stamps was directed to adjudicate stamp duty based on the auction sale consideration.

56. Hemalatha (D) By Lrs. vs. Tukaram (D) By Lrs. & Ors.

2026: INSC: 82

January 22, 2026

Registered Sale Deed – Presumption of Validity – Sham Transaction – Scope of Oral Evidence – Allegations of inadequacy of consideration and continued possession were held insufficient to invalidate the sale. [S. 91 & 92, Indian Evidence Act, 1872; Order VI Rule 4, Civil Procedure Code, 1963; S. 58(C) of the Transfer of Property Act]

FACTS

The Respondent-Plaintiff, Tukaram was the owner of a residential house, he mortgaged the property to one Sadanand Garje. A registered sale Deed was executed in favour of Smt. Hemalatha (Defendant No. 1) for a consideration out of which some amount was paid directly to redeem the mortgage and the balance was paid in cash. On the same date, a registered Rental Agreement was executed whereby Respondent and his family became tenants in the Suit property at a monthly rent. The Respondents paid rent for about fourteen months and thereafter defaulted. The Appellants initiated eviction proceedings. As a counter, Respondent filed a Civil Suit seeking declaration that the Sale Deed and Rental Agreement were nominal, Sham, and not intended to be acted upon, contending that the transaction was in substance a loan or mortgage and that he continued to be the real owner. The Trial Court decreed the suit in favour of the Plaintiff holding the Sale Deed to be sham. The First Appellant Court reversed the decree and upheld the sale as genuine. The High Court, in second Appeal, restored the Trial Court’s Judgment. Aggrieved, the Defendants approached the Supreme Court.

HELD

The Supreme Court allowed the appeal, set aside the judgement of the High Court, and restored the decision of the First Appellate Court. The Court held that a registered Sale Deed carries a strong presumption of validity and genuineness, and courts must not lightly declare such documents as sham. The burden to rebut this presumption lies heavily on the party alleging sham or nominality and requires clear pleadings with material particulars. It was held that Sections 91 and 92 of the Evidence Act bar oral evidence to contradict the terms of a clear and unambiguous registered document. While oral evidence may be admissible where a document is alleged to be a sham, such plea must be supported by cogent pleadings and proof. Mere use of expressions like “nominal” or “sham” without particulars, amounts to clever drafting creating an illusion of cause of action. The Court found that the Sale Deed did not contain any conditions required under Section 58(C) of the Transfer of Property Act, 1882 to constitute a mortgage by conditional sale. There was no clause for reconveyance, no debtor-creditor relationship, and no evidence of security for a loan. The Plaintiff’s conduct – execution of a registered rent agreement, payment of rent, admission of tenancy in reply to legal notice, delay in challenging the sale, and collusion with co-defendants-clearly established that the transaction was an outright sale. Allegations of inadequacy of consideration and continued possession were held insufficient to invalidate the sale.

Accordingly, the appeal was allowed, the judgment of the High Court was set aside and restored the decision of the First Appellant Court.

57. Bhaskar Yadav vs. Directorate of Enforcement

2026 LiveLaw (Del) 127

February 02, 2026

PMLA – Anticipatory Bail under PMLA – Applicability of Twin Conditions – Necessity of Custodial Interrogation in Large-Scale Cyber fraud and Cryptocurrency-Based Money Laundering – The Applicants failed to satisfy the mandatory twin conditions under Section 45 PMLA and dismissed both Anticipatory Bail Applications.[S. 3, 4, 17, 44, 50 & 70, Prevention of Money Laundering Act, 2002; S. 420, 120B IPC; S. 66C & 66D, Information Technology Act, 2000]

FACTS

The present anticipatory bail applications arose from a large-scale investigation into cyber fraud and money laundering initiated by the Directorate of Enforcement (ED) on the basis of two FIRs registered by the CBI for offences of cheating, criminal conspiracy, and IT-related frauds. These offences constituted Scheduled offences under the Prevention of Money Laundering Act, 2002 (PMLA). The prosecution alleged the existence of an organised transitional cyber fraud syndicate operated by foreign actors through platforms such as Telegram, WhatsApp, and fraudulent websites. Victims were induced to part with money on the pretext of part-time jobs and investment schemes. The proceeds of crime were routed through numerous mule bank accounts in India and layered across multiple accounts before being siphoned abroad, primarily through UAE-based fintech platform PYYPL or by conversion into cryptocurrency. The Applicants, both Chartered Accountants, were alleged to be key members of the so-called “Bijwasan Group”, which controlled and operated multiple shell entities and mule bank accounts. Though initially not arrested, the Applicants were granted interim protection from arrest by the predecessor bench, subject to joining investigation. The ED opposed anticipatory bail, citing the need for custodial interrogation and failure of Applicants to satisfy the twin conditions under Section 45 PMLA.

HELD

The Delhi High Court dismissed both the anticipatory bail applications, holding that the rigours of Section 45 PMLA constitute a distinct and grave class of economic offences with serious transnational ramifications, warranting a stricter approach to bail. Rejecting the contention that the case involved mere cryptocurrency trading, the Court observed that cryptocurrency was only a tool used for laundering proceeds of crime generated through cyber frauds. The Courts found that the investigation revealed a complex vertical and horizontal layering of proceeds of crime, with the Applicants playing a significant role at multiple levels. The Courts held that there were no reasonable grounds to believe that the Applicants were not guilty of the offences alleged, nor could it be said that they were unlikely to commit offences while on bail. The plea of parity with co-accused was rejected on the ground that those accused were granted regular bail and custodial interrogation was not sought in their cases. The Court further held that dilution of the twin conditions under Section 45 PMLA on the grounds of Article 21 applies primarily in cases of prolonged incarceration and cannot be extended to anticipatory bail where custodial interrogation is required. In view of allegations of destruction of evidence, assault on officials, bribery, and continuing investigation with fresh complaints still emerging, the Court found custodial interrogation to be necessary.

Accordingly, the Court held that the Applicants failed to satisfy the mandatory twin conditions under Section 45 PMLA and dismissed both anticipatory bail applications.

Allied Laws

48. Rajani Manohar Kuntha & Ors vs. Parshuram Chunilal Kanojia & Ors

2025 LiveLaw (SC) 1253

December 02, 2025

Tenancy – Eviction – Tenant cannot dictate – Bona fide Requirement – Scope of Revisional Jurisdiction is narrow – The bona fide requirement has to be assessed from the landlord’s perspective and not from the tenant’s convenience.

FACTS

The Appellants (Landlords) instituted a suit seeking eviction of the Respondents (Tenants) from a commercial Premises. The eviction was sought on the grounds of bona fide requirement for commercial use. The Trial Court, upon appreciation of the pleadings and evidence, decreed the suit for eviction, holding that the requirement was genuine and bona fide. The First Appellate Court confirmed the findings and decree of the Trial Court. In revision, the Bombay High Court set aside the concurrent findings of the Trial Court and the First Appellate Court. The High Court undertook a detailed scrutiny of the pleadings and evidence and held that the landlord’s bona fide requirement was not established, inter alia, relying on the existence of other premises and the obtaining of a commercial electricity connection during the pendency of proceedings.

On an appeal to the Supreme Court:

HELD

The High Court exceeded its revisional jurisdiction by re-appreciating evidence and conducting a microscopic scrutiny of facts, despite the concurrent findings of fact recorded by the Trial Court and the First Appellate Court. Revisional jurisdiction can be exercised only when the findings of the courts below are ex facie perverse or without jurisdiction. Further, the Supreme Court observed that a tenant cannot dictate to the landlord as to the suitability of alternative accommodation or how the landlord should conduct his business. The bona fide requirement has to be assessed from the landlord’s perspective and not from the tenant’s convenience. Relying upon settled principles of law, the Court reaffirmed that the concurrent findings of fact should not be interfered with in revision, and the High Court’s interference was held to be without jurisdiction.

Accordingly, the judgement of the High Court was set aside, and the Trial Court and First Appellate Court decrees of eviction were restored.

49. Cement Corporation of India vs. ICICI Lombard General Insurance Company Limited

2025 INSC 1444

December 15, 2025

Insurance Law – Fire Insurance – Proximate Cause – Exclusion Clause – Theft preceding Fire – Interpretation of Fire and Special Perils Policy [Indian Contract Act, 1872]

FACTS

The Appellant, Cement Corporation of India, a Government company, obtained a Standard Fire and Special Perlis (Material Damage) Insurance Policy from the Respondent insurer covering its Cement Factory. An unknown miscreant entered the factory premises during the night and attempted theft of copper windings and transformer oil using blow torches and gas cutters. During the course of such attempted theft, a transformer caught fire, resulting in extensive damage to the insured property. An FIR was registered, and the Appellant lodged an insurance claim. The Surveyor appointed by the insurer opined that the fire resulted from the attempted theft and recommended repudiation of the claim by invoking the Riot, Strike, Malicious Damage (RSMD) exclusion clause, treating burglary as the proximate cause. Relying on the survey report, the Respondent repudiated the cause and the claim. Aggrieved, the Appellant filed a consumer complaint before the National Consumer Disputes Redressal Commission (NCDRC). The NCDRC dismissed the complaint, holding that burglary/theft was the proximate cause of loss and that theft was not a covered peril under the policy.

HELD

The Supreme Court held that a fire insurance policy is a contract of indemnity against the loss caused by fire, and once it is established that the damage occurred due to fire, the cause that ignited the fire becomes immaterial unless it is specifically excluded under the policy or is attributable to fraud or wilful misconduct of the insured. The Court observed that burglary/theft was not an exclusion under the specific peril of “Fire” in the policy. The RSMD exclusion could not be invoked to defeat a claim where the loss was directly attributable to fire, an insured peril with its own distinct exclusions. The Court further held that the doctrine of proximate cause had been wrongly applied by the NCDRC, as the immediate and effective cause of loss was fire, while theft merely preceded the incident.

Accordingly, the Supreme Court allowed the appeal and set aside the repudiation of the claim as well as the order passed by the NCDRC.

50. Apsara Co-operative Housing Society Ltd. vs. Vijay Shankar Singh

WP 3908 of 2025 (Bom)(HC)

January 05, 2026

Cooperative Housing Society – Housing Society formed for collective management is neither “industry” nor “establishment” – Proceedings not maintainable – Gratuity Act, 1971 is inapplicable – irrespective of earning income through installation of telecommunication towers/antennas. [S. 2(j), Industrial Disputes Act, 1947; S. 1(3)(b), S. 2(4) Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017]

FACTS

The Petitioner is a Co-operative Housing Society registered under the Maharashtra Co-operative Societies Act, 1960. The Respondent was appointed as Building Manager in 2013, and his services were terminated in 2022.

The Respondent filed claim before the labour court for bonus, leave wages and gratuity before the Controlling Authority. The Petitioner opposed the maintainability by filing applications seeking dismissal of both proceedings, contending that it is neither an “industry” within Section 2(j) of the Industrial Disputes Act, 1947 (ID Act) nor an “establishment” within Section 2(4) of the Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017. (MSE Act)

The Labour Court/Controlling Authority dismissed applications, holding that the Respondent should be permitted to lead evidence. Aggrieved, the Petitioner filed writ petitions challenging the said orders.

HELD

The Bombay High Court held that for invoking provisions of the ID Act, the Respondent (Original Applicant) must establish that the employer is an “industry” within Section 2(j) of the ID Act. A co-operative housing society formed by flat owners only for collective management of the building does not carry on any systematic trade, business or commercial activity and therefore cannot be treated as an “industry”. The Court further held that the mere existence of facilities such as a clubhouse or earning income through the installation of telecommunication towers/antennas does not, by itself, convert the society’s activities into a systematic commercial activity. Such incidental income is aimed at reducing maintenance contributions and does not constitute trade/business. Thus, the Labour Court erred in rejecting the dismissal application and in posting the issue for evidence, since the Respondent would not be able to demonstrate any industrial activity even upon leading evidence.

On the gratuity claim, the Court held that the applicability of the Payment of Gratuity Act (Section 1(3)(b) depends upon whether the entity is a shop/establishment within the meaning of the MSE Act. Under Section 2(4) of the Maharashtra Shops Act, an “establishment” contemplates an entity carrying on business/trade/profession or incidental or ancillary activities thereto. A cooperative housing society, managing residential premises for members’ personal use, does not carry on business/trade/profession and therefore is not an “establishment”.

Accordingly, the Court concluded that the Petitioner Society is neither an “industry” under the ID Act nor an “establishment” under the Maharashtra Shops Act and therefore both the proceedings were not maintainable.

51. Kanchana Rai vs. Geeta Sharma & Ors.

2026 LiveLaw (SC) 41

January 13, 2026

Hindu Law – Maintenance – Dependents –“Any widow of his son” – Widowhood after father-in-law’s death – Right to claim maintenance from estate of father-in-law. [S. 21(vii), Hindu Adoptions and Maintenance Act, 1956]

FACTS

The dispute arose inter se among heirs/family members of the late Dr. Mahendra Prasad, who died on December 27, 2021. He had three sons: (i) Ranjit Sharma (who later died on March 02, 2023), (ii) Devinder Rai (husband of Appellant Kanchana Rai, predeceased), and (iii) Rajeev Sharma.

Respondent No.1 Geeta Sharma, wife of Ranjit Sharma, filed proceedings before the Family Court seeking maintenance from the estate of her father-in-law under the Hindu Adoptions and Maintenance Act, 1956.

The Family Court dismissed the petition as not maintainable, holding that Respondent No.1 was not a widow on the date of death of the father-in-law, since her husband was alive at that time.

In appeal, the High Court set aside the Family Court order and held that the petition was maintainable as Respondent No.1 was the widow of the son of the deceased and thus a dependant, and directed the Family Court to decide the matter on merits and quantum. On appeal to the Supreme Court.

HELD

The Court analysed Chapter III (Sections 18–28) of the Act and especially Section 21(vii), which defines “dependants” to include “any widow of his son” so long as she does not remarry, subject to inability to obtain maintenance from husband’s estate/children, etc. The Court held that the language is clear and unambiguous and does not permit reading the words as “widow of his predeceased son”. The legislature consciously used “any widow of his son”, and the time of becoming a widow is immaterial.

The Court reiterated the literal rule of interpretation, holding that courts cannot add or subtract words from statutes. The Court further observed that restricting maintenance only to widows whose husbands died during the lifetime of the father-in-law would create an arbitrary classification violating Article 14 and would also offend Article 21 by exposing widowed daughters-in-law to destitution.

The Appeal was dismissed.

52. UOI . vs. Paresh Chandra Mondal

2026 LiveLaw (SC) 42

January 07, 2026

Nomination – Provident Fund – Succession Certificate/Probate – Nominee’s primacy – Harmonious construction – Government should not insist on succession certificate where valid nomination exists – Nominee as trustee (not beneficial owner). [S. 4(1)(c)(i), S. 5(1), Provident Funds Act, 1925; R. 33(ii), GPF (Central Services) Rules, 1960]

FACTS

The Petitioners filed a Special Leave Petition challenging the judgment passed by the Calcutta High Court whereby the High Court dismissed the writ petition filed by the Union of India against an order of the Central Administrative Tribunal,

The Tribunal had allowed the application filed by the Respondent seeking release of amounts lying in the General Provident Fund (GPF) of his deceased brother, holding that the Respondent was the only valid nominee and entitled to receive the amount under Rule 33(ii) of the General Provident Fund (Central Services) Rules, 1960.

The Union of India contended that since objections were raised by nephews of the deceased, and as the amount exceeded Rs.5,000/-, Section 4(1)(c)(i) of the Provident Funds Act, 1925 required production of succession certificate/probate/letters of administration for release of such amount, and that Rule 33(ii) could not override the statutory mandate. It was also argued that, though the Respondent produced a succession certificate, the GPF amount was not mentioned in its schedule.

HELD

The Supreme Court declined to entertain the SLP and upheld the approach of the Tribunal and the High Court, holding that Rule 33(ii) of the GPF (Central Services) Rules, 1960 provides that where the subscriber leaves no family and a valid nomination subsists, the amount standing to his credit shall become payable to the nominee.

Further, if succession certificates/probates were insisted upon even in valid nomination cases, it would render nominations otiose and defeat their object. The Court relied upon Section 5(1) of the Provident Funds Act, 1925, which begins with a non-obstante clause and confers entitlement upon the nominee to the exclusion of all other persons, thereby giving primacy to a valid nomination. The Court further observed that the Government should avoid becoming party to private inheritance disputes, which would inevitably occur if succession certificates were insisted upon even in nomination cases.

SLP of the Petitioner was dismissed.

Allied Laws

43. K. S. Shivappa vs. K. Neelamma

AIR 2025 SC 4792

October 07, 2025

Minor’s Property – Repudiation of Voidable Transfer – Transfers held to be void ab initio. [S. 8 of the Hindu Minority and Guardianship Act, 1956; Article 60 of the Limitation Act, 1963]

FACTS

Mahadevappa owned plots in Davanagere, which were purchased in the names of the three minor sons of Rudrappa. Without obtaining the mandatory permission of the District Court under Section 8(2) of the Hindu Minority and Guardianship Act, 1956, Rudrappa, the natural guardian, sold plot no. 56 and plot no. 57 to third parties in 1971. The purchasers further transferred the plots, including a transfer of plot no. 57 in 1993 to Smt. Neelamma (Respondent). After attaining majority, the surviving minors, along with their mother, repudiated the guardian’s unauthorised sales by executing fresh sale deeds in favour of K.S. Shivappa (Appellant). Appellant thereafter combined both plots and constructed a house. The Respondent filed a suit for declaration and possession, claiming that her vendor had a good title. The Trial Court dismissed the suit, holding that the minors had validly repudiated the earlier sale through their later conveyance to Appellant. The First Appellate Court reversed the decision, holding that in the absence of a suit for cancellation, the guardian’s sale had attained finality. The High Court affirmed this view, leading to the appeal before the Supreme Court.

HELD

The Supreme Court held that a sale of a minor’s property made by a natural guardian without obtaining prior court permission under Section 8(2) of the Hindu Minority and Guardianship Act, 1956, is voidable, and it is not mandatory for the minor, upon attaining majority, to file a suit to set aside such a sale. The Court clarified that a voidable transaction may be avoided either through a formal suit or by unequivocal conduct, such as the minor subsequently selling the same property within the period of limitation. In this case, the surviving minors, after attaining majority, had validly repudiated their father’s unauthorised sale by executing a fresh sale deed in favour of the appellant, K.S. Shivappa. Consequently, the earlier sale to the respondent’s predecessor became void ab initio, and no valid title ever passed to the Respondent. Additionally, the Court held that Respondent failed to prove her title since she did not enter the witness box, and her power-of-attorney holder could not testify on matters within her personal knowledge.

Accordingly, the decrees of the First Appellate Court and High Court were set aside, and the Trial Court’s dismissal of Respondents suit was restored.

44. Dharmrao Sharanappa Shabadi & Ors vs. Syeda Arifa Parveen

2025 SCC Online SC 2155

October 07, 2025

Mohammedan Law – Oral Gift (Hiba) – Proof of Relationship – Limitation Act. [S. 50 & 73 of the Hindu Minority and Guardianship Act, 1956; Article 60 of the Limitation Act, 1963]

FACTS

The dispute pertained to agricultural land situated at Village Kusnoor, Karnataka. The original owner of the land, Khadijabee, obtained a decree of title in 1971. The Plaintiff, Syeda Arifa Parveen, claimed that she was the only daughter and legal heir of Khadijabee and that her mother had orally gifted 10 acres of the land to her, which was later recorded in a Memorandum of Gift. Upon the death of Khadijabee and her husband Abdul Basit, the Plaintiff alleged that she had become the absolute owner of the entire suit property. The Defendants, however, contended that they had validly purchased the entire land through five registered sale deeds executed by Abdul Bas (claimed to be Abdul Basit), and their names had been consistently recorded in the revenue records since then. When the Defendants allegedly interfered with her possession, the Plaintiff filed a suit seeking declaration of ownership, cancellation of sale deeds, and a permanent injunction.

HELD

The Supreme Court held that the Plaintiff failed to prove her status as the daughter of Khadijabee, as the oral testimony relied upon lacked credibility and was unsupported by any documentary evidence such as birth records, school certificates, or family documents. The Court further held that the alleged oral gift (Hiba) was not proved in accordance with Mohammedan Law, as there was no proof of actual or constructive delivery of possession to the Plaintiff at the time of the gift, and the consistent mutation entries in favour of Abdul Basit and thereafter the Defendants negated the claim of transfer of possession. Additionally, the Court ruled that the High Court had exceeded its appellate jurisdiction by enhancing the relief in favour of the Plaintiff without there being a cross-appeal. It also observed that the suit filed in 2013 challenging the sale deeds of 1995 was clearly barred by limitation. Consequently, the Defendants were held to be the lawful owners under their registered sale deeds.

Accordingly, the judgments of Trial Court and the High Court were set aside and Civil Appeal was allowed.

45. Sangita Sandip Jadhav & Ans vs. State of Maharashtra & Ors.

2025 SCC Online Bom 880

April 2, 2025

Stamp Duty – Refund – Agreement for Sale Cancelled – No Possession Handed Over – Limitation within Section 48. [S.47(c)(5) & S. 48(1) of Maharashtra Stamp Act, 1958 (MSA)]

FACTS

Petitioners entered into a registered Agreement for Sale to purchase a Flat in “Rukmini Heights”, Satara. They paid part consideration and stamp duty along with registration fees. Since loan applications were not sanctioned and they could not proceed with the transaction, the parties executed a registered Deed of Cancellation, wherein it was clearly stated that possession of the flat was never handed over. Petitioners applied for a refund of stamp duty under Section 47(c)(5) of MSA. The Collector of Stamps rejected the application, holding that possession was handed over based on a clause in the Agreement for Sale and invoked the Proviso to Section 48(1) of MSA, which bars refund where possession has passed. Appeal before the Chief Controlling Revenue Authority was also dismissed, leading to the present petition.

HELD

The Bombay High Court held that there was no conclusive evidence of possession having been delivered on execution of the Agreement for Sale, especially when only 15% of the total consideration was paid. The covenant relied upon by authorities was contradictory to the clause requiring execution of a Sale Deed only after payment of full consideration. The Cancellation Deed explicitly recorded non-delivery of possession, which further negated the conclusion of conveyance-like transfer. Even assuming possession was deemed to have been handed over, the Court held that the refund application was filed within six months from execution of the Agreement for Sale, thus satisfying Section 48(1) of MSA. Since the intended transaction had completely failed, the case squarely fell under Section 47(c)(5) of MSA. Retaining stamp duty in such circumstances would amount to unjust enrichment by the State. Therefore, the impugned orders were quashed, and the Respondents were directed to refund to the Petitioner.

Accordingly, rejection orders of the Collector and Chief Controlling were set aside and a refund was directed.

46. Varinder Kaur vs. Daljit Kaur & Ors.

2025 SCC Online Del 6212

September 26, 2025

Cancellation of Gift Deed – Neglect of Senior citizen – Maintenance is an Implied Condition. [S.23, Maintenance and Welfare of Parents and Senior Citizens Act, 2007]

FACTS

Respondent No. 1, Smt. Daljit Kaur executed a gift deed dated 05.05.2015 in favour of her daughter-in-law, the Appellant, transferring her residential property. Later, alleging neglect and maltreatment, she invoked Section 23 of the Senior Citizens Act, seeking cancellation of the gift deed on the ground that the Appellant had refused to provide basic amenities, care, medicines, and had even threatened her with confinement and harm. The Maintenance Tribunal refused cancellation on the basis that the gift was not shown to be conditional. However, on appeal under Section 16, the District Magistrate set aside the Tribunal’s decision and directed cancellation of the gift deed. The Appellant challenged said order before the High Court in a writ petition, which was dismissed by the learned Single Judge. The Appellant then filed the present Letters Patent Appeal under Clause X of the Letters Patent before the Division Bench.

HELD

The Delhi High Court held that for senior citizens gifting property to children or close relatives, “love and affection” inherently implies the condition of receiving care in return. Thus, an express condition in the deed is not mandatory for invoking Section 23. The Court further noted ample material in the form of letters and complaints showing that the Appellant had denied Respondent No. 1 basic necessities, medicines, and personal belongings, and had subjected her to threats and ill-treatment soon after obtaining the transfer. In such circumstances, the deeming fiction under Section 23(1) becomes operative, rendering the transfer voidable, and justifying cancellation of the gift deed. The Court endorsed the beneficial and purposive interpretation adopted by the District Magistrate and Single Judge, consistent with the statutory objective of protecting the dignity, security, and welfare of senior citizens.

Accordingly, the appeal was dismissed and cancellation of gift deed was upheld.

Editor’s Note: Readers may note that the subject matter of this dispute was covered in detail in the feature “Laws and Business” in the September 2025 Edition of BCAJ. Those who are interested may read the said feature for a more comprehensive view covering multiple cases.

47. Rama Bai vs. Amit Minerals through Incharge Officer & Anr.

2025 SCC Online SC 2067

September 24, 2025

Motor Accident Compensation – Driver without Valid License – Insurer Liable on ‘Pay and Recover’ Principle. [S.149(2)(a)(ii), Motor Vehicles Act, 1988]

FACTS

The Appellant is the mother of the deceased Nand Kumar, who was working as a conductor in a truck. The truck collided with a tractor-trolley, causing his death. The Motor Accident Claims Tribunal awarded ₹3,00,000/- as compensation and fastened liability on the driver and owner, as the driver’s driving licence had expired on 20.06.2010 and was only renewed from 03.11.2011 to 02.11.2014 — thus the driver did not hold valid licence on the date of the accident. In appeal, the High Court enhanced the compensation to ₹5,33,600/- with 7% interest, but absolved the Insurance Company from the liability due to breach of policy conditions. The Appellant approached the Supreme Court seeking application of the ‘pay and recover’ principle so that immediate compensation is not delayed.

HELD

The Supreme Court held that although the driver did not possess a valid driving licence on the date of accident giving the Insurance Company a valid defence under Section 149(2)(a)(ii) and justifying avoidance of liability, the beneficial object of the Motor Vehicles Act requires that victims are first compensated promptly. The Court applied the doctrine of “Pay and Recover”. The Insurance Company must first satisfy the award and thereafter recover the amount from the vehicle owner through appropriate legal proceedings.

Accordingly, the appeal was allowed and insurer was directed to ‘Pay and Recover’.

Allied Laws

39. Rhutikumari vs. Zanmai Labs Pvt. Ltd. & Ors.

2025 LiveLaw (Mad) 373

October 21, 2025

Cryptocurrency – Property – Not a currency nor a tangible property – Virtual Digital Asset. [S. 9 Arbitration and Conciliation Act, 1996, S. 2(47A) Income-tax Act, 1961]

FACTS

The Applicant invested in XRP coins. Following a cyberattack, the platform froze user accounts, preventing the Applicant from accessing or trading her holdings. The Applicant filed an application under Section 9 of the Arbitration and Conciliation Act, 1996, seeking an injunction restraining the Respondents from interfering with her portfolio.

HELD

Allowing the Application, the Court inter alia, relying on the decisions of the Hon’ble Supreme Court in the case of Ahmed G.H. Ariff vs. CWT 1969 (2) SCC 471 and Jilubhai Nanbhai Khachar vs. State of Gujarat 1995 Supp (1) SCC 596 held that “cryptocurrency” is a property. It is not a tangible property, nor is it a currency. However, it is a property which is capable of being enjoyed and possessed (in a beneficial form). Further it observed that cryptocurrency is treated as a virtual digital asset and transacting in it is not treated as a speculative transaction, and governed under Section 2(47A) of the Income-Tax Act, 1961.

40. Zoharbee & Anr vs. Imam Khan (D) Thr. Lrs. & Ors.

2025 LiveLaw (SC) 1014

October 16, 2025

Muslim Law – Inheritance – Matruka Property – Agreement to Sell. [S. 54 & 55 of Transfer of Property Act , 1882]

FACTS

The dispute was between the widow of the deceased Chand Khan and brother of the deceased concerning the inheritance of properties left behind by the deceased. The Respondent, brother contented that a plot was already transferred to third parties through an agreement to sell executed during the lifetime of the deceased and with part consideration received before the death and the rest afterward. The Trial Court accepted the brother’s contention, holding that the agreement to sell stood proved and nothing remained for partition. The First Appellate Court, however, reversed the decision, holding that an agreement to sell does not transfer the ownership and that the properties continued to vest in the name of the deceased at the time of his death. Therefore, the widow’s claim to 3/4th of the estate was maintainable. The High Court dismissed the second appeal, finding no substantial question of law.

HELD

On appeal, the Supreme Court, affirming the orders of the First Appellate Court and High Court, held that an agreement to sell does not convey the title or create any proprietary interest. Consequently, all the property left in the deceased’s name at the time of his death formed part of his matruka estate. The Court clarified that matruka includes all movable and immovable property left by a deceased Muslim, to be distributed after satisfaction of debts and legacies. The Court further held that under Sunni law, where a man dies leaving a wife but no child, the wife
is entitled to one-fourth share, and the remainder devolves upon the brother as the residuary heir. The Court also observed that the widow could have sold only her one-fourth share and not the entire property.

Accordingly, the Appeals were dismissed. The orders of the First Appellate Court and High Court were affirmed.

41. B S Enviro N Infracon Pvt. Ltd. vs. Vij Contracts Pvt. Ltd.

2025:DHC:9230-DB

October 17, 2025

Contract – Full and Final Settlement – Effect of Acceptance of Payment – Bar to Subsequent Claims. [S. 62 & 63, Indian Contract Act, 1872; S. 96, Civil Procedure Code, 1963; S. 13, Commercial Court Act, 2015]

FACTS

The Appellant, BS Enviro N Infracon Pvt. Ltd., was engaged by the Respondent, Vij Contracts Pvt. Ltd., as a sub-contractor for supply, installation, testing, and commissioning of an 800 KLD Sewage Treatment Plant (STP) at Haryana. The principal contract was between the Respondent and IRCON Infrastructure & Services Ltd. A Letter of intent was issued to the Appellant. The Appellant supplied materials through three invoices and claimed balance payment. A meeting was held between both parties and IRCON officials, during which a written settlement statement was prepared, recording a total reconciliation and settlement of accounts subject to withdrawal of the MSME complaint. Two cheques were issued and encashed by the Appellant. The Appellant did not withdraw the MSME complaint and subsequently filed a civil suit, which was dismissed by the Commercial Court. The present Appeal was filed under Section 96 of the Civil Procedure Code, 1963 (CPC).

HELD

The Delhi High Court upheld the findings of the Trial Court and dismissed the appeal. It was observed that the document bore the signatures of both the parties and clearly recorded the mutual settlement of dues. Having accepted and endorsed the cheques in full satisfaction, the Appellant could not subsequently reopen settled accounts. The Court held that under Sections 62 and 63 of the Indian Contract Act, 1872, a contract can be novated or discharged by mutual consent, and once a creditor voluntarily accepts a lesser amount in satisfaction of the total claim, he is barred from raising further demands. The Appellant’s contention that the payment was made to “keep the contract alive” was found inconsistent with the contemporaneous written record. No independent evidence was led by the Appellant to prove any additional or unbilled contract value, retention, or damages. Once the accounts were settled and payment accepted, the Applicant was estopped from re-agitating the claim.

Accordingly, the Appeal was dismissed. The decree of the Commercial Court was affirmed.

42. Giri Chhaya Cooperative Hsg. Society Limited vs. Sushila Laliwala (since deceased) through heirs and legal representatives.

2025:BHC-AS:45381

October 16, 2025

Cooperative Housing Society – Recovery of Maintenance Charges – Limitation – Continuous Cause of Action. [S. 91, 92(1)(b) Maharashtra Cooperative Societies Act, 1960]

FACTS

The Petitioner, a Cooperative Housing Society, filed a dispute before the Cooperative Court seeking recovery of maintenance arrears from the Respondent, occupant. The flat was originally owned by Smt. Sushila Laliwala, a member of the society, and her legal heirs continued to occupy the flat and enjoy common amenities but failed to pay maintenance charges. Despite repeated demands and a demand notice, the Respondents did not clear the dues. Consequently, the society initiated a dispute under Section 91 of the Maharashtra Cooperative Societies Act, 1960 (MCS). The Respondent contested the claim on the grounds that (a) the dispute was barred by limitation, (b) the interest charged was excessive, and (c) the claim lacked particulars. The Cooperative Court dismissed the claim as time-barred under Section 92(1)(b), and the Cooperative Appellate Court affirmed the dismissal in an Appeal. Aggrieved, the society filed a writ petition before the Hon’ble Bombay High Court. .

HELD

The Bombay High Court held that both the Cooperative and Appellate Courts misinterpreted Section 92(1)(b) of MCS, 1960. The Court observed that the liability to pay maintenance charges is a recurring and continuous obligation, arising each billing period, so long as the occupant continues to occupy the premises and enjoys common facilities. The cause of action, therefore, is continuous and recurring, and limitation runs afresh for every billing cycle. The society had restricted its claim to arrears from January 1 2009, to 31 December 2015 and filed the dispute in 2015, which was within the six-year limitation period prescribed under Section 92(1)(b). The Court emphasised that Section 92 is a special provision of limitation intended to protect the legitimate dues of cooperative societies, overriding the general limitation Act. The court observed that the Respondent had not disputed receiving maintenance bills or produced any proof of payment. The objection regarding excessive interest could not defeat the principal claim, though the Court reduced the rate of interest at 9% per annum as reasonable.

Accordingly, the writ petition was allowed. The orders of the Cooperative and Appellate Courts were set aside.

Allied Laws

34. Sanjabij Tari vs. Kishore S. Borcar & Anr.

2025 INSC 1158

September 25, 2025

Dishonour of Cheque – Presumptions of Financial Capacity – Probation allowed for offenders – There is no legal bar to granting probation in Section 138 cases – Not a serious criminal offence. [S. 118 and 139 Negotiable Instruments Act, 1881 (NI Act) S. 269SS of the Income Tax Act, 1961]

FACTS

The Appellant – Complainant, Sanjabij Tari, alleged that he had advanced a friendly loan to Respondent No. 1 – Accused and towards the repayment of the said loan, Respondent No. 1 issued a cheque which, on presentation, was dishonoured due to insufficiency of funds. The Trial Court held that Respondent No. 1 had admitted his signature on the cheque, and the statutory presumption under Sections 118 and 139 of the NI Act stood unrebutted and accordingly found Respondent No.1 guilty under Section 138 of the NI Act. On Appeal, the Appellate Court rejected the contention of Respondent No. 1 that the Appellant had no means to advance such a loan and accordingly dismissed the Appeal and upheld the conviction. In a Revision Petition, the High Court acquitted Respondent No. 1 ex parte, holding that the Appellant lacked financial capacity to advance such a large sum. The Appellant’s subsequent application for recall was further dismissed on the ground that the court had become functus officio. Hence, an Appeal was filed before the Hon’ble Supreme Court.

HELD

The Hon’ble Supreme Court held that it is essential to first outline the scope and intent of Sections 138 to 148 of the NI Act. It was held that if the accused admits signing the cheque, a presumption under Sections 118 and 139 of the NI Act arises. Respondent No. 1 led no independent evidence to show that the Appellant couldn’t have lent the money. Non-reply to the statutory notice under Section 138 allows an adverse inference against Respondent No. 1. The Supreme Court held that there is no legal bar to granting probation in Section 138 cases, it ruled that a convict for cheque bounce under Section 138 of NI Act can be released on probation instead of being jailed, as these are not serious criminal offences.

The Court further held that Section 269SS of the Income Tax Act merely restricts large cash transactions; it does not make such transactions illegal, invalid or statutorily invalid and provides only for a penalty under Section 271D.

Accordingly, the High Court’s acquittal was set aside, and the Trial and Sessions Courts’ convictions were restored.

35. Delhi Development Authority vs. Corporation Bank & Ors.

Civil Appeal No. 11269 of 2016 / 2025 INSC

1161 September 25, 2025

Mortgage of Leasehold Property – Without Consent – Invalidity of Action – Restitution to Innocent Auction Purchaser – Strict procedural compliance is mandatory in public auctions to safeguard fairness and public trust in the debt recovery process. [S. 29, Recovery of Debts Due to Banks Act, 1993]

FACTS

The Delhi Development Authority (DDA) allotted land to one Sarita Vihar Club on leasehold basis. The lease deed expressly required prior written consent of the Lieutenant Governor for any mortgage. The Club obtained a loan of from the Corporation Bank, deposited the original lease deed, and mortgaged the plot without express consent from the Lieutenant Governor. On default, the Bank approached the Debt Recovery Tribunal and the Recovery Officer ordered an auction despite Delhi Development Authority’s objections that the mortgage was illegal and it had rights of unearned increase and pre-emptive purchase. The property was e-auctioned and sold to Jay Bharat Commercial Enterprise Pvt. Ltd. (JBCEPL), the Auction Purchaser.

The Delhi Development Authority filed a Writ Petition in the High Court and the petition was dismissed. Hence, leading to an appeal before the Hon’ble Supreme Court.

HELD

The Hon’ble Supreme Court held that the e-auction conducted by the Bank was invalid and void because the Bank failed to disclose material encumbrances and liabilities attached to the auction property, specifically the DDA’s claim for unearned increase and the lease conditions. The Court further held that this non-disclosure is not permissible and requires full and honest disclosure of all encumbrances in any sale proclamation. The Court emphasised that strict procedural compliance is mandatory in public auctions to safeguard fairness and public trust in the debt recovery process.

Accordingly, the Appeal was allowed and the High Court’s order was set aside, and the Auction proceedings were quashed.

36. Kamlakant Mishra vs. Additional Collector & Ors

Special (Civil) D. No. 42786 of 2025

September 12, 2025

Maintenance of Senior Citizens – Eviction of Parents – Jurisdiction of Tribunal – Maintenance Tribunal had no jurisdiction to direct eviction – Order of High Court set aside. [S. 22, 23 and 24, Maintenance and Welfare of Parents and Senior Citizens Act, 2007 (Act)].

FACTS

The Appellant is an 80-year-old Senior Citizen living with his wife and owns two properties in Mumbai. Respondent No. 3 is the eldest son, financially secure and well-established and capable of supporting his aged parents. Due to old age and health concerns, the Appellant and his wife shifted to Uttar Pradesh, leaving properties in Mumbai. During this time, the Respondent No. 3 took possession of both the properties instead of safeguarding them for his parents. Effectively, the Appellant and his wife were rendered homeless and dependent, while Respondent No. 3 enjoyed the benefits of the properties. The Appellant filed an application before the Maintenance Tribunal under Sections 22, 23, and 24 of the Act seeking eviction of Respondent No. 3. The Tribunal ordered eviction of Respondent No. 3 and maintenance. The Respondent no. 3 filed an appeal before the High Court, where the Court ruled in favour of the Respondent No. 3, stating that the Maintenance Tribunal had no jurisdiction to direct eviction, since Respondent No. 3 himself was a senior citizen, and the order for maintenance and eviction was set aside. Hence, the Appellant approached the Supreme Court.

HELD

The Supreme Court held that the High Court erred in holding that the Respondent No. 3 was a senior citizen merely because he had crossed 60 years of age by the time the writ petition was decided. The Supreme Court clarified that the relevant date is the date of filing of the application before the Tribunal; therefore, Respondent No. 3 could not claim the statutory protections available under Section 2(h) of the Act. The Supreme Court emphasised that the Maintenance Tribunal has wide jurisdiction under Section 22 – 24 of the Act to pass necessary and appropriate orders not only for maintenance, but also for the protection of the life and property of senior citizens. The High Court wrongly concluded that the Tribunal lacked jurisdiction to pass an eviction order and held that such reasoning turned the object of the Act upside down, as the statute is designed primarily for the welfare of aged parents and senior citizens, not to shield defaulting children. The Supreme Court set aside the order of the High Court and restored the orders of the Maintenance Tribunal.

37. Shivranjan Towers Sahakari Griha Rachana Sanstha Maryadit vs. Bhujbal Constructions & Ors

2025:BHC-AS:37175 September 04, 2025

Arbitration – Arbitrability of Disputes – Co-operative Society bound by Arbitration Clause in Members Agreement. (S. 16 – Arbitration and Conciliation Act, 1996 (Act); S. 36 – Maharashtra Co-operative Societies Act, 1960; S.11 – Maharashtra Ownership Flats Act, 1963)

FACTS

The disputes arose out of a development project, where Respondent No. 2 to 8 were the owners of the land at Pune, and granted development rights to Respondent No. 1, the builder. The builder constructed five buildings and sold flats to individual purchasers through an Agreement for Sale governed by the Maharashtra Ownership Flats Act, 1963 (MOFA). The builder failed to form a society and execute a conveyance in favour of flat purchasers as required under MOFA. The purchasers subsequently formed a society and sought a deemed conveyance before the competent authority under Section 11 of MOFA. The builder invoked Clause 38 of the Agreement for Sale and filed an Arbitration Petition under Section 11 of the Act. The Arbitrator was appointed, granting liberty to the society to raise objections under Section 16 of the Act. The Petitioner Society filed an application under Section 16 of the Act that no arbitration agreement existed between the society and the builder. The arbitrator rejected the application, holding that society’s title flowed through the same sale agreement and it was therefore bound by its terms, including the arbitration clause.

HELD

The Bombay High Court held that the orders under Section 16 of the Act can only be challenged under Section 34 of the Act after the final award. Writ jurisdiction under Articles 226/227 lies only in cases of patent lack of inherent jurisdiction or exceptional rarity. The Court relied on Section 36 of the Maharashtra Co-operative Societies Act, 1960, which grants a society independent juristic personality but also recognises that members act collectively through the society. The deemed conveyance, being unilateral, could not contain an arbitration clause, but did not preclude arbitration since the underlying rights and obligations stemmed from the earlier Agreements for Sale. The society was not a third party to the arbitration, and having derived rights from the individual purchasers, it stepped into their shoes for all purposes, including dispute resolution through arbitration.

Accordingly, the Bombay High Court found no patent lack of jurisdiction or perversity in the arbitrator’s order and upheld the decision of the arbitrator.

38. Sangeeta Gera vs. Sanjeev Gera

2025:DHC:8356-DB

September 22, 2025

Matrimonial Law – Cruelty and Desertion – Joint Ownership and Benami Transaction Prohibition – Maintenance pendente lite – The title was in both names, the wife was entitled to a 50 per cent share in the sale proceeds of the property – The order of the family court was upheld. (S.13(1) (ia) & (ib), 23(1)(a), 24 and 27, Hindu Marriage Act, 1955; S. 4 Prohibition of Benami Property Transactions Act, 1988)

FACTS

The marriage between the parties was solemnized according to Hindu rites and registered in Noida and they lived together in Mumbai until they began to live separately. The husband filed a petition in the Bandra Family Court seeking divorce on the grounds of cruelty. The wife moved a transfer petition before the Supreme Court, which transferred the case to the District Judge, Tis Hazari Courts Delhi. Meanwhile the wife filed application for maintenance Pendente lite and litigation expenses. In a separate proceeding under the Protection of Women from Domestic Violence Act, 2005, she had already been granted interim maintenance, and later the Mahila Court, Delhi, awarded her interim maintenance. During the marriage, the parties purchased a Flat in their joint names. The entire purchase consideration and EMIs were admittedly paid by the Husband. Subsequently, due to default in repayment, the bank auctioned the flat, adjusted the dues, and deposited the surplus amount in a joint account with HSBC Bank. The Family Court dismissed the husband’s petition, holding that cruelty and desertion were not proved. Hence, an appeal was filed in the Delhi High Court.

HELD

The Delhi High Court held that a husband cannot claim exclusive ownership of a property jointly held with his wife, even if he alone paid the entire purchase price or EMIs (Equated Monthly Instalments). Once a property is registered in the joint names of both spouses, any claim by the husband that it solely belongs to him would violate Section 4 of the Benami Transactions (Prohibition) Act, 1988, which bars enforcement of rights over property held benami. The court also held that a jointly acquired owned property cannot be treated as the wife’s Stridhana, as Stridhana only includes property gifted to her, before or after marriage, for her exclusive ownership. However, since the title was in both names, the wife was entitled to a 50 per cent share in the sale proceeds of the property.

Accordingly, the order of the Family Court was upheld, and the appeal was dismissed.

Allied Laws

29. Brij Bihari Gupta vs. Manmet and Ors.

Civil Appeal No. 6338 – 6339 of 2024/

2025 INSC 948

August 8, 2025

Motor Vehicle – Compensation – Liability – Transfer of vehicle from owner to driver – Not a legal transfer in the eyes of the law – Owner liable to compensate – Insurance company liable to indemnify owner – Insurance company cannot seek extinguishment of insurance policy on the basis of unrecognised transfer of vehicle. [S. 50, Motor Vehicle Act, 1988].

FACTS

The case arose out of a motor accident involving a goods vehicle in Chhattisgarh. Several petitions were made before the Hon’ble Motor Accident Claims Tribunal. The Hon’ble Tribunal awarded compensation and held that (i) the registered owner, (ii) the driver (Appellant/ostensible owner of the vehicle), and (iii) the insurance company (Respondent) were jointly liable. Aggrieved, an appeal was filed before the Hon’ble Chhattisgarh High Court by the Insurance company – Respondent. The Hon’ble High Court observed that the car was not yet legally transferred in the name of the driver (i.e. the Appellant/ostensible owner), and the insurance policy was in the name of the registered owner and not the driver. Therefore, it was held that the liability of the insurance company to compensate extinguishes and falls entirely on the driver (Appellant). Aggrieved, an appeal was filed before the Hon’ble Supreme Court.

HELD

The Hon’ble Supreme Court held that the legal ownership of a vehicle, along with the corresponding liability, remains with the registered owner until a formal transfer of registration is effected in accordance with Section 50 of the Motor Vehicles Act, 1988. In the present case, the Hon’ble Court held that the registered owner continues to be liable for third-party claims irrespective of any informal transfer of possession or private agreement of sale. Reliance was placed on the earlier decision in the case of Naveen Kumar v. Vijay Kumar & Ors. (2018) 3 SCC 1, which categorically held that the registered owner alone is responsible for third-party claims, even if the vehicle has been sold but the statutory transfer of registration is incomplete. Applying this principle, the Court rejected the insurance company – Respondent’s contention that liability had shifted due to a private sale agreement. It observed that contractual arrangements between the parties cannot override the statutory scheme designed to protect innocent third-party victims. Consequently, the insurance company – Respondent, being statutorily bound to indemnify the registered owner, was directed to compensate the deceased/injured, and the Hon’ble High Court’s order absolving the insurance company/Respondent was set aside.

30. Sanjit Singh Salwan and Ors. vs. Sardar Inderjit Singh Salwan and Ors.

Special Leave Petition (Civil) No. 29398 of 2024/2025 INSC 988

August 14, 2025

Arbitration – Trust – Dispute –– Arbitral award – Accepted by both parties – Interim Relief – Challenge of arbitral award – Estoppel by conduct. [S. 92, Code for Civil Procedure, 1908; S. 9, 37 Arbitration and Conciliation Act, 1996].

FACTS

The Appellants and Respondents are the trustees of a school, namely Guru Tegh Bahadur Trust. After certain disputes, the Respondents removed the Appellant as a trustee. Thereafter, the Respondents instituted a suit for perpetual injunction restraining the Appellants from interfering with the school’s management. The learned Civil Court, however, dismissed the suit as barred by section 92 of the Code of Civil Procedure, 1908 (CPC), which restricts litigation involving public trusts. Thereafter, an appeal was filed before the learned Sessions Court. During the pendency of the appeal, both parties agreed to refer the dispute to arbitration, appointing a sole arbitrator. The arbitrator passed an award detailing management arrangement for the Trust, which the parties jointly accepted and incorporated into a court decree (consent decree). The Session Court dismissed the appeal accordingly based on the consent decree. Thereafter, the Appellants took steps to carry out their part of the obligations; however, it was contended that the Respondents failed to carry out their side of the obligations. Accordingly, an application was filed under section 9 of the Arbitration and Conciliation Act, 1996 (Act) seeking interim reliefs. The Respondents, however, challenged the validity of the arbitral award and contended that the award was passed with respect to the affairs of the management of the Trust. It was, therefore, barred under section 92 of the CPC. The Commercial Court accepted the contention of the Respondents and quashed the arbitral award. Aggrieved, an appeal was filed under section 37 of the Act. The order of the Commercial Court was affirmed by the Hon’ble High Court.

Aggrieved, an appeal was preferred before the Hon’ble Supreme Court.

HELD

The Hon’ble Supreme Court held that the Respondent, having consciously submitted to arbitration during the pendency of the appeal, were estopped from later questioning its validity on grounds of non-arbitrability. The Hon’ble Court observed that the arbitral award was voluntarily accepted by both parties and had, on their joint request, been merged into a consent decree passed. Once such a decree had been passed, its binding force could not be nullified by subsequently raising technical objections under Section 92 of the Act. It was noted that the Respondents had not only acquiesced in the arbitration process but also derived benefits from the award, thereby precluding them from adopting an inconsistent stance. Reaffirming the principle that no party can blow hot and cold at the same time, the Court held that the Respondents’ conduct amounted to approbation and reprobation. Thus, the appeal was allowed and the orders of the High Court and Commercial Court were set aside.

31. Ramesh Chand (D) THR. LRS. vs. Suresh Chand and Anr.

2025 INSC 1059

September 01, 2025

Ownership through GPA/Will/Agreement to Sell – Not Valid Transfer of Title. [S.54, 53A, Transfer of Property Act, 1882; S. 63 Indian Succession Act, 1925; S. 68 Evidence Act, 1872]

FACTS

The Property in dispute was originally owned by Kundan Lal, the father of Appellant and Respondent No. 1. Respondent No. 1 asserted ownership on the strength of documents executed, namely an agreement to sell, a general power of attorney, an affidavit, a receipt of consideration, and a registered will. According to Respondent No. 1, Appellant was residing as a licensee and later became a trespasser. It was further alleged that Appellant wrongfully alienated half the property to the Respondent No. 2, a purchaser, and accordingly sought possession, mesne profits, declaration of title, and a mandatory injunction. Appellant contested the claim and filed a counterclaim stating that the property had been orally transferred to him in 1973 and that he had been in continuous possession ever since, and alleged that the documents relied upon by Respondent No. 1 were forged or otherwise invalid and emphasised that in an earlier suit, the Respondent No. 1 had admitted Kundan Lal’s ownership. Upon remand, the High Court again dismissed the appellant’s appeal, leading to the appeal before the Supreme Court.

HELD
The Supreme Court examined whether the documents relied upon by the Respondent No. 1 conferred any valid title. It was held that an Agreement to sell does not by itself transfer ownership but merely gives a right to seek specific performance. A General Power of Attorney only creates an agency and cannot confer ownership rights. The registered will was not proved in accordance with Section 63 of the Succession Act and Section 68 of the Evidence Act. Moreover, the will was surrounded by suspicious circumstances since the testator had four children, and no reasons were assigned for excluding three of them. The Court observed that mere registration of a will does not grant validity if legal proof is lacking. The Affidavit and receipt of consideration also did not confer ownership since title to immovable property worth more than one hundred rupees can only be transferred by a registered deed of conveyance. The Court further held that Respondent No. 1 cannot take the benefit of Section 53A of the Transfer of Property Act because he was not in possession of the property; indeed, the very filing of suit for possession showed that the possession remained with the Appellant. Consequently, the Respondent No. 1 failed to establish ownership or entitlement to possession. Upon Kundan Lal’s demise, succession opened to all his Class I heirs, and the Property must devolve accordingly. As regards Respondent No. 2, who had purchased half of the property from Respondent No. 1, the Court reiterated its earlier interim order that his rights would be protected to the extent of the share validly conveyed by Respondent No. 1. Beyond that, no independent rights could be claimed.

The Supreme Court accordingly allowed the appeal, set aside the judgments of the Trial Court and the High Court.

32. Gian Chand Garg vs. Harpal Singh & Anr.

Special Leave Petition (Criminal) No. 8050 of 2025

August 11, 2025

Settlement – between parties after conviction – Section 138 offence is compoundable at any stage. [S. 138 & 147, Negotiable Instrument Act, 1881]

FACTS

The complainant alleged that the Appellant had borrowed a sum and issued a cheque towards repayment, which was dishonoured for insufficiency of funds. After service of notice, a complaint under Section 138 of the Negotiable Instruments Act, 1881 (NI Act) was filed. The Judicial Magistrate convicted the Appellant and sentenced him to six months’ simple imprisonment and a fine of Rs. 1,000/-. The conviction was affirmed by the Sessions Court and later by the Punjab & Haryana High Court in revision. Subsequently, the parties entered into a compromise, where the complainant accepted settlement through demand draft and post-dated cheques. The Appellant sought modification of the High Court’s revisional order, which was dismissed as non-maintainable. Aggrieved, the Appellant approached the Supreme Court.

HELD

The Hon’ble Supreme Court reiterated that though dishonour of a cheque under Section 138 of the NI Act entails criminal liability, the offence is essentially civil in nature and has been made compoundable by Section 147 of the NI Act. Referring to earlier rulings, the Court proceedings cannot be allowed to continue. The Court observed that the complainant had accepted the compromise voluntarily and received payment in full settlement of the default sum. Accordingly, the conviction and sentence imposed on the Appellant could not stand.

The appeal was allowed, the High Court’s order was set aside, and the conviction and sentence of the Appellant were quashed.

33. Shanti Devi vs. Jagan Devi & Ors.

[2025] INSC 1105 (SC)

September 12, 2025

Limitation – Sale deed – Fraudulent and void ab initio – No cancellation required – Limitation governed by Article 65 (12 years) and not Article 59 (3 years) – Suit for possession filed within 12 years held maintainable. [S. 59, 65, Limitation Act, 1963; S. 54, Transfer of Property Act, 1882]

FACTS

The plaintiffs claimed one-third share in agricultural land and challenged a sale deed dated 14-06-1973 executed in favour of the defendant, alleging fraud, impersonation and absence of consideration. The Trial Court dismissed the suit as time-barred. The First Appellate Court decreed the suit, holding the deed void and the suit within limitation under Article 65. The High Court confirmed the decree but applied Article 59.

HELD

The Supreme Court held that where an instrument is void ab initio, no cancellation is required, and a simpliciter suit for possession based on title is governed by Article 65 (12 years). Since the plaintiff never executed the deed and no consideration was paid, the transaction was a nullity. The suit filed in 1984, being within 12 years from the 1973 deed, was held within the limitation. Appeal dismissed.

Cartoon Tax

Allied Laws

24. Indian Oil Corporation Limited and Ors. vs. Shree Niwas Ramgopal and Ors.

(SC) 2025 INSC 832 (SC)

July 14, 2025

Partnership Firm – Dealership agreement with oil company – Death of a partner – Continuation of the firm – Requirement of inclusion of all partners or NOC of partners not being included in the firm – Excessive and arbitrary demand by the oil company – Principle of fairness-Termination of agreement was held to be not valid. [S. 42, Partnership Act, 1932].

FACTS

The Respondent (partnership firm) was initially a sole proprietorship concern owned by one Mr. Kanhaiyalal Sonthalia, which was reconstituted as a partnership firm on November 24, 1989, by inducting two of his sons as partners. Thereafter, on May 11, 1990, the Respondent firm entered into a dealership agreement with the Petitioner oil company for retail distribution of kerosene. The dealership agreement contained a clause wherein, upon the death of any partner, the Respondent firm shall notify the Petitioner oil company about the particulars of the deceased’s legal heirs and that the Petitioner oil company shall have the right to continue, reconstitute, or terminate the dealership agreement. Mr. Kanhaiyala expired on November 29, 2011, leaving behind multiple legal heirs, amongst whom disputes arose regarding their rights in the partnership firm. Certain heirs sought induction into the partnership, while others claimed rights under an alleged testamentary disposition, leading to an unresolved internal dispute. Thereafter, as a via media, the surviving partners proposed a reconstitution of the firm by inducting one heir, namely Mr. Bijoy Sonthalia, in place of the deceased partner. The Petitioner oil company, however, relying on its internal guidelines, insisted that all legal heirs of the deceased partner either be inducted into the partnership or furnish individual no-objection certificates, failing which it would discontinue supply. The Respondent firm, however, failed to comply with the same and insisted that the proposed partnership may be considered. The Petitioner oil company, however, refused and stopped the supply of kerosene.

Aggrieved, a writ was filed by the Respondent firm before the Hon’ble Calcutta High Court (Single Bench), which held that the Petitioner oil company must continue supplies to the respondent firm until the dealership was lawfully reconstituted or validly terminated. Aggrieved, an appeal was preferred before the Division Bench of the High Court, which confirmed the decision of the Hon’ble Single Judge Bench. Thereafter, a Special Leave Petition was filed before the Hon’ble Supreme Court by the Petitioner oil company.

HELD

The Hon’ble Supreme Court observed that the partnership deed expressly provided for continuity of the firm notwithstanding the death of a partner, particularly as the firm consisted of more than two partners. Further, the Hon’ble Court held that the dealership agreement and the partnership deed, being binding contractual instruments, did not mandate the induction of all legal heirs of a deceased partner as a condition precedent for the continuation of the dealership. The Hon’ble Court further held that the insistence upon the inclusion of no-objection certificates from all legal heirs was an arbitrary and unreasonable requirement, having no foundation in the dealership agreement. The conduct of the Petitioner oil company in threatening discontinuance of supply without issuance of a formal termination order was found to be contrary to the principles of fairness. Before parting, the Hon’ble Court reiterated that the Petitioner oil company, being a state-owned authority, ought to have acted in the interest of consumers and the common people. Thus, the decision of the Hon’ble Calcutta High Court was upheld, and the SLP was dismissed.

25. Deep Shikha and Anr vs. National Insurance Company Ltd and Ors.

2025 INSC 675 (SC)

May 13, 2025

Compensation – Motor Accident – Death – Claim of compensation by daughter and mother of the deceased – Married daughter – Dependence on the deceased not proved – Substantial reduction of compensation – Mother, 70 years old – No other source of income – Dependence on the deceased proved – Compensation enhanced. [S. 140, 166, 168 Motor Vehicle Act, 1988].

FACTS

A claim Petition was filed before the Motor Accident Claims Tribunal (Tribunal) by Appellant No. 1 (daughter of the deceased) and Appellant No. 2 (mother of the deceased). On January 26, 2001, the deceased, one Mrs. Paras Sharma, was on her two-wheeler when she was hit by a moving truck that was being driven negligently. Mrs Sharma succumbed to her injuries, which led to a claim petition by the daughter and mother of the deceased before the Hon’ble Tribunal. It was urged by the Appellants that they were dependent on the deceased and, therefore, liable to compensation. The Hon’ble Tribunal awarded inter alia, ₹ 15 lakhs to the daughter of the deceased and ₹ 5,000/- to the mother of the deceased. Aggrieved by the order, cross appeals were filed by both parties before the Hon’ble Rajasthan High Court. The Hon’ble Court held that i.e. mother of the deceased was not liable to any compensation as she could not be considered as a legal heir as per section 140 of the Motor Vehicle Act, 1988 (Act). Further, the compensation granted to the daughter of the deceased was significantly reduced as she did not prove dependence on the deceased. Further, it was held that the daughter of the deceased was married, thereby justifying the reduction in compensation.

Aggrieved, an appeal was preferred before the Hon’ble Supreme Court.

HELD

The Hon’ble Supreme Court observed that the death of the deceased occurred due to negligence. The Hon’ble Supreme Court, relying on its earlier decision in the case of Manjuri Bera & Anr. vs. Oriental Insurance Co. Ltd. & Anr, (2007) 10 SCC 634, held that so far as the daughter of the deceased is concerned, the Hon’ble Rajasthan High Court was correct in reducing the compensation since she did not prove dependency on the deceased. However, as far as the mother of the deceased is concerned, the Hon’ble Court held that she was 70 years old with no independent source of income. Further, as per sections 166 and 168 of the Act, the mother was dependent on the deceased. Thus, on that basis, the Hon’ble Court directed the Respondents to pay to the mother of the deceased.

Thus, the appeal was partly allowed.

26. Satender Kumar Antil vs. Central Bureau of Investigation & Anr.

2025 INSC 909 (SC)

July 16, 2025

Service of Police Notices – Electronic Communication Not Permissible – Safeguarding Liberty – Distinction Between Investigation and Judicial Proceedings. [S. 35, BNSS, 2023 (formerly S. 41A CrPC, 1973)]

FACTS

The State of Haryana sought modification of the Supreme Court’s earlier order of January 21, 2025, which directed states/UTs to ensure that notices under Section 41A CrPC / Section 35 BNSS, 2023, be served only in the manner prescribed under the statutes, not through electronic means such as WhatsApp. The Applicant argued that electronic service should be allowed for efficiency, citing Sections 64, 71 and 530 BNSS, which permit electronic service for certain court summons and witness summons.

HELD

The Hon’ble Supreme Court held that legislative intent in BNSS, 2023, consciously excludes investigations (including notice under Section 35) from procedures permitted through electronic means, unlike court summons. Notices under Section 35 (police notice to appear) have an immediate bearing on personal liberty, and non-compliance can lead to arrest under Section 35(6). Hence, the service must protect rights laid down in Article 21 of the Constitution of India. Court summons (Sections 63,64,71) are judicial acts, where electronic service is explicitly allowed; Section 35 notices are executive acts, and the judicial procedure cannot be imported into them. BNSS permits electronic communication by investigating agencies only in limited contexts (e.g. Section 94 summons to produce documents, Section 193 forwarding Investigation reports), none affecting personal liberty. The omission of electronic service for Section 35 notices is deliberate and mandatory; introducing it would violate legislative intent.

Accordingly, the Application was dismissed; the prior order of January 21, 2025, stating police summons under Section 35 BNSS cannot be served via electronic communication was upheld.

27. Manohar & Ors. vs. State of Maharashtra & Ors.

2025 INSC 900 (SC)

July 28, 2025

Land Acquisition – Determination of Market Value – Use of Highest Bona Fide Sale Exemplar [S.18, 23(1A), 23(2), 28, 51A, Land Acquisition Act, 1984; Maharashtra Industrial Development Act, 1961]

FACTS

The Appellants, farmers from Village Pungala, Parbhani, owned land acquired in the early 1990s under the Maharashtra Industrial Development Act, 1961, for establishing Jintur Industrial Area. Land Acquisition Officer awarded ₹ 10,800/- per acre for acquiring their land. Appellants accepted under protest and filed a reference under Section 18 of the Land Acquisition Act, 1984, relying on 10 sale exemplars, the highest being the 31.03.1990 sale from Jintur at ₹ 72,900/- per acre. Reference Court ignored the highest exemplar without reasons, averaged lower-valued exemplars ₹ 40,000/- per acre, deducted 20 per cent, and fixed ₹ 32,000/- per acre for dry crop land. The High Court upheld this reward, giving contradictory findings on whether the highest exemplar was considered. Appellants approached the Supreme Court.

HELD

The Hon’ble Supreme Court observed that when multiple bona fide exemplars exist for similar lands, the highest exemplar should be adopted; averaging permission only when values are within a “narrow bandwidth” or have marginal variation. The Reference Court wrongly omitted the highest exemplar without reasons. The High Court compounded the error with contradictory observations. The 31.03.1990 exemplar was proximate to the notification date, from prime location land (near Jintur, Nashik-Nirmal Highway, with water facility) and bona fide under Section 51A of the Land Acquisition Act 1984. Large area acquisition warranted a 20% deduction from ₹ 72,900/- per acre = ₹ 58,320/- per acre. Appellants are entitled to enhanced compensation plus all statutory benefits under Section 23(1A), 23(2), and 28 of the Land Acquisition Act 1984.

Accordingly, Appeals were allowed, High Court and Reference Court orders were set aside; compensation was enhanced to ₹ 58,320/- per acre with solatium and interest.

28. Dimple Gupta vs. State of NCT & Ors.

FAO 359/2024 (Del)(HC)

April 29, 2025

Hindu Minor’s property – Sale of Minor’s Property – “Necessity” or “Evident Advantage” – Trial Court’s Refusal Set Aside. [S. 8, Hindu Minority and Guardianship Act, 1956]

FACTS

Appellant, widow of late Pankaj Gupta, is the mother and natural guardian of two minor children (aged 15 & 14). Property in dispute (No. 89, Jagriti Enclave, Delhi) belonged to her mother-in-law, Smt. Shakuntla Devi, who bequeathed it via Will to her son Pankaj Gupta and daughter Chhavi Gupta (Respondent No. 2). After Shakuntla Devi’s death, both her sons died within days; Appellant and her children inherited her late husband Pankaj Gupta’s share. Appellant sought the Court’s permission under Section 8 of the Hindu Minority and Guardianship Act, 1956, to sell her and her children’s share, citing financial necessity and intent to reinvest for the benefit of her minor children. The Trial Court, after interacting with minors and reviewing affidavits of assets, found that the petitioner is financially sound (with mutual funds, jewellery, waived school fees) and held no “necessity” or “evident advantage” proven and dismissed her petition. The Appellant filed an Appeal challenging the above Order of the Trial Court.

HELD

The Appellant has been caring for her children since her husband’s death; no evidence of mistrust from the minors. Sale of the current property and purchase of another in the joint names of Appellant and minors is legally permissible if for their benefit. Trial Court’s finding that no necessity existed was unsustainable; the law permits sale if in “evident advantage” to minors, even if dire necessity is absent. Respondent No. 2 (co-owner) is also willing to sell; the transaction is in the family’s interest.

Accordingly, the Appeal was allowed, Trial Court order was set aside.

Allied Laws

19. Kingswood Hotel Private Limited and Anr. vs. State of U.P. and Ors. Writ – C No. 28403 of 2024 (Allahabad High Court) December 9, 2024

Registration – Stamp duty – Corrected deed – Does not alter rights and liability of the original deed – Merely corrects the name of the lessee – Clerical error – No fresh conveyance – Only nominal stamp duty payable. [S. 4, Art. 34A of Schedule 1 – B, Indian Stamps Act, 1899; Art. 226, Constitution of India].

FACTS

A scheme was introduced by New Okhla Industrial Development Authority (Noida) for leasing out of commercial plots to builders and developers for a fixed term. As per the said scheme, it was mandatory for the developers to incorporate a Special Purpose Company (SPC), and only upon such incorporation would the allotment and execution of the lease deed be effected in favour of the SPC. In compliance with this requirement, Petitioner No. 1 (a Consortium) incorporated Petitioner No. 2 (the SPC) to avail the scheme. However, at the time of execution and registration of the lease deed, the commercial plots were inadvertently leased in favour of Petitioner No. 1, i.e. the Consortium, instead of Petitioner No. 2 – the SPC. Upon realising the mistake, Petitioner No. 1 approached the Registrar of Stamp (Respondent) along with a corrected lease deed reflecting the true and intended lessee. It was specifically submitted that the corrected lease deed merely rectified the earlier clerical error and did not constitute a fresh conveyance, and therefore, the same was liable for nominal stamp duty of R5/- as per Article 34A of Schedule 1-B of the Indian Stamp Act, 1899 (Act). However, the Respondent refused to register the corrected lease deed and instead treated the same as a fresh conveyance, thereby demanding full stamp duty as applicable to a new lease deed.

Aggrieved, a writ petition was filed under Article 226 of the Constitution before the Hon’ble Allahabad High court.

HELD

The Hon’ble Allahabad High Court observed that the correction deed did not alter the terms, area, or consideration payable of the original lease. Thus, it did not create any new right or liability. Further, the correction deed was not a fresh conveyance, but a rectification of a clerical error committed by NOIDA. Furthermore, it was observed that the original allotment was always intended in favour of the Special Purpose Company (SPC), and the mistake in the name was also acknowledged by NOIDA. The Hon’ble Court also emphasized that as per Section 4 of the Act, only the principal instrument attracts full stamp duty, and any ancillary or corrective instrument is liable for a nominal duty only. Therefore, the Petition was allowed, and the Respondent was directed to register the corrected deed after payment of R5/-.

20. Cadila Healthcare Limited vs. Roche Products (India) Private Limited and Ors.Commercial Suit No. 272 of 2016 (Bombay High Court) June 9, 2025

Commercial suit – Cause of action – Mere apprehension of a lawsuit by opposite party – Illusion and clever drafting – No cause of action on mere apprehension – Suit dismissed. [S. 41(b), Specific Relief Act; O. VII R. 11, Code of Civil Procedure, 1908].

FACTS

A commercial suit was instituted by Cadila Healthcare (Plaintiff) against Roche Products (India) Private Limited (Respondent/Applicant) seeking, inter alia, permanent injunction to restrain the Respondent from initiating any legal action against the Plaintiff, and in any manner interfering with the Plaintiff’s marketing of the drug named ‘Vivitra’. Succinctly, the Respondent had developed a drug named ‘Trastuzumab’ in 1990s which was patented and approved for curing certain kinds of cancer. However, the Respondent did not have the patent per se registered in India. Thereafter, sometime in 2014-15, certain manufacturers had obtained approval from the Drugs Controller General of India (DCGI) and launched their biosimilar version of the ‘Trastuzumab’ drug. Aggrieved by such approvals, the Respondent had filed a suit against the manufacturers and the DCGI before the Hon’ble Delhi High Court. It was the case of the Plaintiff that it also intended to sell a biosimilar version of the drug ‘Trastuzumab’ under the name ‘Vivitra’. However, anticipating legal actions by the Respondent, the Plaintiff filed a suit before the Hon’ble Bombay High Court in 2015.

Aggrieved, the Respondent filed a motion to dismiss the suit under Order VII, Rule 11 of the Code of Civil Procedure, 1908 before the Hon’ble Bombay High Court.

HELD

The Hon’ble Bombay High Court observed that the Plaintiff had merely speculated that the Respondent might initiate legal proceedings against it for selling/marketing the drug ‘Vivitra’. However, the Hon’ble Court held that a mere apprehension of litigation does not constitute a valid cause of action. Further, the Respondent had neither issued any legal notice nor taken any coercive steps against the Plaintiff, even though the Plaintiff had been marketing ‘Vivitra’ since the year 2015. Furthermore, the Hon’ble Court referred to section 41(b) of the Specific Relief Act, 1963 which prohibits the courts from granting injunctions to prevent someone from pursuing legal remedies. It was held that granting an injunction in such circumstances would amount to restraining a party from seeking legal remedies available under law, which was impermissible. The Court further observed that the plaint was cleverly drafted to camouflage the absence of a real dispute and to create an illusion of an existing cause of action, when in fact the Plaintiff merely anticipated litigation. Thus, the Hon’ble Court dismissed the suit of the Plaintiff and the motion to dismiss the suit filed by the Respondent was allowed.

21. Ramesh Mishrimal Jain vs. Avinash Vishwanath Patne & Anr. Civil Appeal No. 2549 of 2025 / 2025 INSC 213 (Supreme Court) February 14, 2025

Stamp duty – Agreement to sell – Agreement discusses possession details – To be treated as deemed conveyance – Stamp duty is levied on the instrument and not on the transaction. [S. 34, Art. 25, Explanation 1, Bombay Stamps Act 1958].

FACTS

The Appellant filed a suit for specific performance based on an agreement to sell dated 3rd September, 2003 relating to a property in Khed, Ratnagiri. The Appellant was in possession of the property as a tenant, and the agreement stated that ownership possession would be given only upon execution of the sale deed. The agreement was executed on a stamp paper worth ₹50. During the pendency of the suit, the Respondents filed an Application under Section 34 of the Bombay Stamp Act,1958 (Act) seeking to impound the agreement and recover deficit stamp duty of ₹44,000/- and penalty of ₹1,31,850/- was payable under Article 25, Explanation I of the Bombay Stamp Act, 1958. The learned Trial Court allowed the application and impounded the document. The Hon’ble High Bombay Court dismissed the Writ Petition filed against the trial court’s order. Aggrieved, an appeal was filed before the Hon’ble Supreme Court. It was argued that Explanation I did not apply since possession remained that of a tenant and no transfer of ownership possession occurred or was agreed until a sale deed was executed.

HELD

The Supreme Court held that stamp duty is levied on the instrument, not merely on the transaction. Under Explanation I to Article 25 of the Act, an agreement to sell shall be deemed a conveyance if possession is transferred or agreed to be transferred before, at, or after execution of such agreement without executing a formal conveyance. The Court found that even though the Appellant claimed to be in possession as a tenant, the agreement contemplated future transfer of ownership possession, which is sufficient to invoke Explanation I. Hence, the agreement was rightly treated as a deemed conveyance, and full stamp duty and penalty were rightly imposed.

Accordingly, the Orders of the Trial Court and High Court were upheld, and the Appeal was dismissed.

22. Cordial Foundation Private Limited and Ors. vs. Dr. Purushothama Bharathi MSA No. 10 of 2024 / 2025:KER:12630 (Kerala High Court) February 13, 2025

Real estate – Non-delivery of possession – Complaint – Compensation to be paid – Appeal – Application for waiver of pre-deposit during pendency of appeal – Mandatory provision for pre-deposit – Cannot be substituted by bank guarantee – Compensation is to be compulsorily paid. [S. 43(5), Real Estate (Regulation and Development) Act, 2016].

FACTS

The Respondent (Allottee) filed a complaint before the Adjudicating Officer under the Real Estate (Regulation and Development) Act, 2016 (Act), seeking compensation for non-delivery of possession. The Adjudicating Officer allowed the complaint and directed the Appellants (Promoters) to pay ₹1,69,80,000/- with 14.85% interest along with ₹25,000/- in costs. Aggrieved, the Appellant – Promoters filed an appeal before the Kerala Real Estate Appellate Tribunal and moved an Interim Application (I.A. No. 2 of 2024) seeking exemption from the mandatory pre-deposit required under the proviso to Section 43(5) of the Act. The Tribunal rejected their application and ordered to deposit the entire amount as fixed deposit in a nationalised bank. The Promoters challenged this order before the Hon’ble Kerala High Court.

HELD

The Hon’ble Kerala High Court relied on its earlier decision in the case of Artech Realtors Pvt. Ltd. vs. Savithri K. [2025 KHC Online 88], and held that the pre-deposit mandated by the proviso to Section 43(5) of Act is mandatory and cannot be waived or substituted by a bank guarantee or other form of security. The Court observed that the amount awarded by the Adjudicating Officer was explicitly termed as ‘compensation’, and therefore clearly falls within the purview of Section 71 and the proviso to Section 43(5) of the Act. Further, referring to the decision of the Hon’ble Supreme Court in the case of Newtech Promoters and Developers Pvt. Ltd. vs. State of U. P. [2021 (13) SCALE 466], the Hon’ble High Court emphasised that onerous obligations imposed on promoters by the Act cannot be diluted and that the statute mandates actual deposit and not a mere security. The Tribunal’s direction to make the deposit in a specific mode (i.e., fixed deposit in a nationalised bank) was deemed a matter of convenience in the interest of the Appellant Promoter and not a ground for exemption. Thus, the appeal was dismissed.

23. Krishna Kumar Gupta vs. Priti Gupta First Appeal No. 1116 of 2024 (Allahabad High Court) May 27, 2025

Stridhan – Independent application for return of stridhan – Application cannot be entertained. [S. 27, Hindu Marriage Act, 1955].

FACTS

The Respondent – wife had filed an application under Section 27 of the Hindu Marriage Act, 1955 (Act), seeking the return of stridhan given to her at the time of marriage. Upon considering the documentary evidence, including bills of jewellery and other items, the learned Trial Court directed the Appellant – husband to return the stridhan to the Respondent – wife. Aggrieved, an appeal was filed before the Hon’ble Allahabad High Court.

HELD

The Hon’ble High Court observed that the Respondent – wife had filed an independent application under Section 27 of the Act. It was noted that there was no ongoing matrimonial dispute between the parties at the time of filing the said application. Thus, as per the provisions of Section 27 of the Act, an application for the return of stridhan can be entertained only when matrimonial proceedings are pending under Sections 9 to 13, 13A, or 13B of the Act, or before the court that is passing a decree in such proceedings. In the absence of any pending matrimonial dispute under the Act, Section 27 does not vest the Court with the jurisdiction to entertain an independent application for the return of stridhan. Section 27 of the Act is intended to avoid multiplicity of litigation and to enable the wife to seek return of her stridhan within the existing matrimonial proceedings already brought before the Court for adjudication. The appeal of the husband was accordingly allowed.

Allied Laws

16 Union of India vs. M/s. GR – Gawa R (JV)
2025 Live Law (Del) 565
April 24, 2025

Arbitration – Condonation of delay – Basic documents like impugned order not attached – Application filed only to circumvent limitation period without filing all the enclosures / documents – Application non-est in the eyes of the law. [S. 34(3), Arbitration and Conciliation Act, 1996].

FACTS

An arbitral award was passed in favour of the Respondent on January 3, 2024, and was subsequently modified through a corrigendum dated March 2, 2024. The Applicant challenged the said award on June 20, 2024, with a delay of 18 days beyond the prescribed limitation period. The Respondent, however, contended that although the delay appeared to be of only 18 days, the initial filing by the Applicant was deliberately made without attaching essential documents such as the impugned arbitral award, e-court fee receipt, one-time process fee, affidavit of service, and other requisite enclosures. It was argued that such a filing was not merely defective but was a strategic attempt to circumvent the limitation period, and therefore, the application should be treated as non-est in the eyes of law. The Respondent also highlighted that the initial filing comprised only 146 pages, whereas the final filing contained 6,677 pages, further indicating that the earlier filing was not a bona fide attempt to institute proceedings. The Applicant, on the other hand, submitted that the delay was only of 18 days and deserved to be condoned, especially since the defects pointed out by the Registry were subsequently rectified.

HELD

The Hon’ble Delhi High Court after relying on its earlier decision in the case of Oil and Natural Gas Corporation Ltd. vs. Joint Venture of Sai Rama Engineering Enterprises & Megha Engineering and Infrastructures Ltd (2023 SCC OnLine Del 6088) held that the initial filing of application without attaching the basic documents like the impugned arbitral award was only an attempt to circumvent the provision of the limitation period. Therefore, the application deserved to be treated as non-est. The delay was therefore not condoned and the application was rejected.

17 Saurabh Mishra vs. State of U.P. through Principal Secretary of Medical and Family Welfare U.P. and Ors.
Writ Civil No. 10898 of 2024 / 2025 Live Law (AB) 211 May 27, 2025

Wills and Preferences – Appointment of Representative – Intellectual Disability of the patient – Presumption of capacity to appoint – Lacuna in the Act – Courts exercise jurisdiction of parens patria. [S. 4 , 5, 14, Mental Healthcare Act, 2017].

FACTS

An application was filed by the Petitioner under section 14 of the Mental Healthcare Act, 2017 (Act) before the Mansik Swasthya Punarvilokan Board, (Board / Respondent No. 2) seeking to be nominated as the representative of his aunt, who was suffering from a moderate intellectual disability assessed at approximately 75 per cent. It was contended by the Petitioner that he was residing with his aunt and was actively involved in her day-to-day care and welfare. In support of his application, a no-objection certificate was also issued by a close relative/sibling of the aunt, expressing consent to the Petitioner being appointed as her nominated representative under the Act. However, the Board rejected the application on the sole ground that the Petitioner was facing two criminal cases registered against him.

Aggrieved a writ petition was filed before the Hon’ble Allahabad High Court.

HELD

The Hon’ble Allahabad High Court held that the two criminal cases filed against the Petitioner were still at the admission stage, and the Petitioner must be treated as innocent until proven guilty. With respect to the Petitioner’s plea to be nominated as the representative of his aunt, the Court observed that, under Section 14 read with Sections 4 and 5 of the Act, there exists a presumption that persons suffering from mental illness have the decision-making capacity to appoint a nominated representative. Thus, the Act envisages a deemed capability. However, in cases involving significant intellectual disability, such as in the present matter, the wills and preferences of the individual cannot be ascertained. The Hon’ble Court noted that the Act does not provide any mechanism for appointing a representative where the person concerned is incapable of making such a decision due to their mental condition. Thus, there existed a legislative vacuum in the Act. Accordingly, the Court exercised its parens patriae jurisdiction and nominated the Petitioner as the representative of his
mentally ill aunt under the Act. The petition was, therefore, allowed.

Editor’s Note: This issue of the BCAJ carries an article under feature `Laws and Business’ on ‘Guardianship of Persons with Intellectual Disabilities’ which also covers the Mental Healthcare Act, 2017.

18 Madhu Gupta vs. Municipal Corporation of Delhi and Ors.
Writ Petition Civil 8214 of 2025 (Delhi) (HC)
May 30, 2025

Writ Petition – Not signed by the litigant – Signed only by the counsel of the litigant – Abuse of process of law – Cost – Petition dismissed. [A. 226, Constitution of India].

FACTS

A Petition was filed before the Hon’ble Delhi High Court with respect to illegal construction carried out by the Municipal Corporation of Delhi (Respondent). It was contended by the Respondent that the illegal construction in question was already being taken care by the Corporation and steps have already been taken to remove the same. Further, with respect to the Petition, it was contended by the Respondent that Petition was not signed by the litigant and only the counsel for the Petitioner had signed the Petition.

HELD

The Hon’ble Delhi High Court took serious note of the fact that the petition had not been signed by the Petitioner himself and bore only the signature of the counsel appearing on his behalf. The Court held that such a practice amounted to a clear abuse of the process of law and could not be permitted. Consequently, the Petition was dismissed and a cost of ₹50,000/- was imposed on the counsel of the Petitioner.

Allied Laws

11. The Correspondence, RBANMS Educational Institution vs. B. Gunashekar and Anr.

Special Leave Petition (Civil) No. 13679 of 2022 / 2025 INSC 490 16th April, 2025

Suit for Injunction – To restrain the owner from disposing of the property – Agreement to sell – Does not confer right, title, or interest in the property – Suit without cause of action – Suit dismissed.

Directions were also issued to registration authorities to report any cash transactions in the purchase of properties which was in upwards of ₹2,00,000/-. [Order VII, Rule 11(a) and (d), Code for Civil Procedure, 1908; S. 269ST, Income-tax Act, 1961].

FACTS

The Respondents (original Plaintiff) had filed a suit seeking a permanent injunction restraining the Appellant (Original Defendant) from creating any third-party interest over the suit property. The Appellant is an educational institution, established in 1873. Thereafter, in 1929, the Appellant purchased the suit property and has been in continuous possession since. The Respondents had alleged that they had entered into an agreement to sell with one third party (vendor) for the purchase of the suit property. Further, as per the agreement to sell, the Respondents had already paid ₹75,00,000/- to the vendor in cash. Therefore, the Appellant must refrain from manipulating the title deeds of the suit property and further restrained from disposing of the said suit property to any other person. The Appellant filed an application under Order VII, Rule 11(a) and (d) of the Code for Civil Procedure, 1908 (CPC) for seeking rejection of the suit filed by the Respondent on the ground that the Respondents are merely agreement holders and not the owners of the suit property and as such, an agreement to sell does not confer any right, title, interest on the prospective buyer. It was further contended by the Respondent that if the alleged agreement to sell exists, then the remedy would lie against the vendor with whom the agreement has been entered into. The Appellant also contended that the Respondent had a pattern of filing such suits in respect of valuable properties by producing alleged agreement to sell. The learned Trial Court, however, dismissed the application filed by the Appellant for dismissing the suit under Order VII, Rule 11(a) and (d) of the CPC. The learned Trial Court had opined that under Order VII, Rule 11(a) and (d) of the CPC, it must confine only to the averments made in the plaint without examining the defence of the Appellant. Further, the Respondent had cause of action against the Appellant. Aggrieved, a revision application was filed before the Hon’ble Karnataka High Court. The Hon’ble High Court concurred with the views of the learned Trial Court and rejected to dismiss the suit under Order VII of the CPC.

Aggrieved, a special leave petition was filed by the Appellant before the Hon’ble Supreme Court.

HELD

The Hon’ble Supreme Court, at the outset, observed the consistent pattern of filing suits by the Respondent in high-value properties. Further, it also noted that the vendors had not been made parties to the suit and the addresses were absent from the plaint. The Hon’ble Supreme Court held that as per section 54 of the Transfer of Property Act, 1882, an agreement to sell, cannot by itself create any right, title interest in the suit property. Thus, the Respondent did not have any cause of action against the Appellant. Therefore, the Hon’ble Court held that the suit ought to have been rejected for want of a cause of action.

Before parting, the Hon’ble Court raised doubts as to how the Respondent allegedly pay ₹75,00,000/- to the vendor in cash despite provisions of Section 269ST in the Income-tax Act, 1961 which debars any person from paying in cash above ₹2,00,000/-. Accordingly, the Hon’ble Court directed the Income-tax Department to take cognisance of the said matter. Further, directions were also issued to registration authorities to report any cash transactions in the purchase of properties which was in upwards of ₹2,00,000/-.

The appeal was accordingly allowed.

12. Angadi Chandranna vs. Shankar and Ors.

Civil Appeal No. 5401 of 2025 (SC) / 2025 INSC 532 22nd April, 2025

Joint Hindu Family – Suit Property – Self-acquired or Joint property – Partition of Joint Hindu Family – Partitioned suit property becomes the self-acquired property of that person. [S. 100, Code for Civil Procedure, 1908].

FACTS

A suit was instituted by Respondents No. 1 to 4 (Original Plaintiff/children of Defendant No. 2) for seeking partition and separate possession in the suit property. Briefly, Defendant No. 2 (along with his two brothers) had divided the joint family properties vide a registered partition deed after the death of their father. The suit property was partitioned in favour of one of the brothers. Thereafter, Defendant No. 2 acquired the said suit property (from his brother) via a purchase agreement deed and thereafter, sold it to one Angadi Chandrana (Defendant No. 1 / Appellant). It was contended by the Respondent No. 1 to 4 that the said suit property belonged to the Joint Hindu Family and was not an independent / self-acquired property of the Defendant No. 2. The learned Trial Court allowed the suit and held that the property was in fact belonging to the Joint Hindu Family and thus the property must be divided. An appeal was preferred by Defendant No. 1, wherein the first Appellate Authority allowed the appeal and reversed the finding of the learned Trial Court. Challenging the order, a second appeal was preferred by the Respondent No. 1 to 4 before the Hon’ble Karnataka High Court. The Hon’ble allowed the appeal and restored the order was of the learned Trial Court.

Aggrieved, an appeal was preferred before the Hon’ble Supreme Court.

HELD

The Hon’ble Supreme Court observed that all the properties of the Joint Hindu family were partitioned via a registered partition deed. Therefore, after partition, the properties which were so divided become the self-acquired property of that person. Further, the suit property was purchased by Defendant No. 2 (from his brother) by using his own funds and loans. The Hon’ble Court also noted that the mere existence of children in a Joint Hindu family cannot by itself make the father’s (Defendant No. 2) self-acquired property as joint property. The character of the property must be taken into consideration before determining the nature of the property. Thus, the appeal was allowed, and the original order of the learned Trial Court was set aside.

13. Logabai vs. Nil

AIR 2025 (NOC) 198 (MAD)

17th December, 2024

Guardian ship – Mentally retarded child – Father died in car accident – Mother also dead – Only Grandmother alive – Mentally fit to take care of the child – Grandmother appointed as the guardian and manager of the property. [A. 226, Constitution of India; S. 7, Guardian and Wards Act, 1890].

FACTS

A petition was filed for the appointment of the Petitioner as the legal guardian and manager of the properties of her granddaughter, Ms. Amudha Narmada. It was contended by the Petitioner that her granddaughter was a duly certified mentally retarded child by the Institute of Mental Health. As per the certificate, Ms. Amudha Narmada suffers from 70 per cent mental disability. It was the claim of the Petitioner that her granddaughter is under her care and custody. Further, the Petitioner is a 70-year-old woman who is unable to meet the expenses to maintain herself. Further, it was submitted that the father of the child had died in a car accident, and the learned Trial Court had allowed compensation to the child. However, the same cannot be withdrawn unless the court has appointed a legal guardian. It was further submitted that the mother of the child had also passed away and that there was no family member other than the Petitioner.

HELD

The Hon’ble Madras High Court, after going through all the claims, was satisfied that the child was indeed suffering from mental disability. Further, the child had no family member other than her grandmother (Petitioner), who is a mentally fit person to take care of the child. Therefore, the Hon’ble accepted the plea and appointed the Petitioner as the legal guardian and manager of the properties of the child.

The Petition was thus allowed.

14. Muhammed Kutty vs. Sub Registrar, Office of the Sub Registrar, Palakkad and Anr.

AIR 2025 Kerala 44 / W.P. (C) No. 35494 of 2024 27th November, 2024

Registration – Property – Settlement Deed – Registrar cannot make enquiry into the prior title deeds – Bound to register the deed [S. 34, 69(2), Registration Act, 1908; R. 67, Registration Rules (Kerala)].

FACTS

The Petitioner is one of the sons and legal heirs of one Mr. Abubacker Haji. After the death of the Petitioner’s father, the Petitioner and the remaining legal heirs decided to settle the property in favour of the wife of Mr. Haji (i.e. mother of the Petitioner). Accordingly, the legal heirs prepared a settlement deed and submitted the same for registration before the office of the registrar (Respondents). However, the Respondent refused to register the settlement deed and insisted that the Petitioner to provide a copy of the prior deed of the property i.e. to prove that the father of the Petitioner was in fact the owner of the property before he died.

Aggrieved, a petition was filed before the Hon’ble Kerala High Court (Ernakulam).

HELD

The Hon’ble Kerala High Court observed that as per S. 34 of the Registration Act, 1908 (Act), the powers of the Respondent are limited only to make an enquiry as to whether the document was in fact executed by the persons who purport to have executed the document. Further, the Hon’ble Court observed that as per Rule 67 of the Registration Rules, Kerala, the Respondent have no right to enquire into the validity of a document or to question the right of executant to execute a document or insist on the production of title deeds or prior document of the property except in the case of marriage document. Thus, the Respondent was directed to register the settlement deed.

The petition was therefore allowed.

15. Muruganandam vs. Muniyandi (died) through legal heirs.

2025 Live Law (SC) 549 / Civil Appeal No. 6543 of 2025 8th May, 2025

Suit for specific Performance – Sale Deed – Unregistered and unstamped – Admission of the sale deed – An Unregistered document can be taken into evidence in cases of specific performance or any other collateral proceedings. [S. 17, 49, Registration Act, 1908; S. 35, Indian Stamps Act, 1989].

FACTS

The Appellant (Original Plaintiff/buyer) and the Respondent (Original Defendant/seller) had entered into a sale agreement. As per the sale deed, certain payments were made by the buyer and in exchange, the seller had put the buyer in possession of the property. Thereafter, the entire payment consideration was paid by the buyer. It was the contention of the Appellant (buyer) that the Respondent (seller) was not taking any steps for the execution of the sale deed despite multiple requests. Thus, a suit for specific performance was instituted by the Appellant (buyer) for the execution of the sale deed. During the pendency of the suit, an interim application was filed by the buyer for admission of the original copy of the agreement for sale. It was contended by the buyer that the photocopy of the document was already attached along with the plaint; however, for genuine reasons, the original copy remained to be submitted before the Court. The learned Trial Court, however, rejected the said application on the ground that the document was unregistered and unstamped, and therefore the admission of the same was barred by section 17 of the Registration Act, 1908 (Act) and section 35 of the Indian Stamps Act 1989. Thereafter, a revision petition was filed by the buyer (Original Plaintiff/buyer) before the Hon’ble Madras High Court. However, the Hon’ble High Court held that the decision of the learned Trial Court does not need any interference.

Aggrieved, an appeal was preferred before the Hon’ble Supreme Court.

HELD

The Hon’ble Supreme Court held that although an unregistered document cannot be taken into admission as evidence, the provision to section 49 of the Act specifically allows the Courts to take into account an unregistered document in a suit for specific performance or any other collateral proceedings. Therefore, the decision of the Hon’ble High Court was set aside, and the learned Trial Court was directed to admit the unregistered document into evidence in the suit for specific performance.

The appeal was therefore allowed.

Allied Laws

6. Inder Singh vs. The State of Madhya Pradesh

Special Leave Petition (Civil) No. 6142 of 2024 (SC)

21st March, 2025

Condonation of delay – Mere technicalities –Substantial justice – Merits to be examined – Liberal approach – Delay of 1537 days is condoned. [S. 5, Limitation Act, 1963].

FACTS

The Appellant had instituted a suit for declaration of title of the suit property/land. The suit property consisted of 1.060 hectares of land situated in Madhya Pradesh. According to the Appellant, the said land was allotted to him in 1978. The Respondent refuted the claim of the Appellants and contended that inter alia, the said property was part of government land. The learned Trial Court, after going into the merits of the claims made by both parties, dismissed the suit. Aggrieved, an appeal was filed before the First Appellate Authority. The First Appellate Authority allowed the appeal and directed the State (Respondent) to hand over the suit property to the Appellant. The Respondent, thereafter, filed a review petition which was dismissed on the grounds of inordinate delay in filing the review petition. Thereafter, the State filed a regular appeal before the Hon’ble Madhya Pradesh High Court with a delay of 1537 days. The State attributed the delay towards review applications pending before the Appellate Authority and corona virus pandemic. The delay was accordingly, condoned.

Aggrieved, a special leave petition was filed by the Appellant before the Hon’ble Supreme Court.

HELD

The Hon’ble Supreme Court observed that the suit property, according to the State, was a government property allocated for public purposes. Further, the Hon’ble Court observed that the claims made by both parties required thorough examination. Therefore, the Hon’ble Court opined that the appeal preferred by the State should not be dismissed only on the grounds of delay when its merits needed examination. Further, the Hon’ble Court noted that though delay should normally not be excused without sufficient cause, mere technical grounds of delay should also not be used to undermine the merits of a case. Thus, a liberal approach must be adopted while condoning the delay. The Hon’ble Court also relied on its earlier decision in the case of Ramchandra Shankar Deodhar vs. State of Maharashtra (1 SCC 317). Thus, the decision of the High Court was upheld, and the appeal was dismissed.

7. Arun Rameshchand Arya vs. Parul Singh

Transfer Petition (Civil) No. 875 of 2024 (SC)

2nd February, 2025

Registration – Stamp duty – Suit Property – Compromise between parties – No stamp duty payable. [Art. 142, Constitution of India; S. 17, Registration Act, 1908].

FACTS

Two separate applications were filed by both, Petitioner – husband and Respondent – wife under Article 142 of the Constitution of India for dissolving their marriage by mutual consent. The only contention was with respect to the source of funds utilised by the parties for acquiring the suit property. However, post counselling sessions as mandated by the Hon’ble Court, the Petitioner–husband consented to relinquish his entire rights in the suit property in favour of the Respondent–wife. Therefore, the only question of law that remained to be answered by the Hon’ble Court was whether the Respondent–wife had to pay any stamp duty for the transfer of the said suit property in her name.

HELD

The Hon’ble Supreme Court observed that as per Section 17(2)(vi) of the Registration Act, 1908, no stamp duty is payable if any compromise relates to any immovable property for which the decree is prayed for. The Hon’ble Supreme Court noted that indeed the suit property was the subject matter before it. Thus, the Hon’ble Court, after relying on its earlier decision in the case of Mukesh vs. The State of Madhya Pradesh and Anr.(2024 SCC Online 3832) held that the Respondent–wife is not entitled to pay any stamp duty on the transfer of the property. The applications were accordingly disposed of.

8. Mohammad Salim and Ors. vs. Abdul Kayyum and Ors.

S.B. Civil Writ Petition No. 4561 of 2025 (Raj) (HC)

26th March, 2025

Registration – Unregistered document –Admissible as evidence – Collateral purpose – To be taken as evidence subject to payment of requisite stamp duty and penalty. [O. VIII, R. 1A (3), S. 151, Code for Civil Procedure, 1908; S. 17, Registration Act, 1908].

FACTS

A suit was instituted by the Respondent (original Plaintiff) for the declaration of title of the suit property. During the Trial Court proceedings, the Petitioners (Original Defendants) filed an application under Order VIII, Rule 1A (3) r.w.s. 151 of the Code for Civil Procedure, 1908 for admission of certain documents including one partition deed allegedly entered between the parties. The admission of the said partition deed was objected by the Respondent on the ground that the same is an unregistered document and thus, cannot be accepted as evidence. The Petitioner (Original Defendant) contended that the said document, though unregistered, can be accepted as evidence for collateral purposes. The Trial Court, however, rejected to take the partition deed on record.

Aggrieved, a writ was filed under Articles 226 and 227 of the Constitution before the Hon’ble Rajasthan High Court (Jodhpur Bench)

HELD

The Hon’ble Rajasthan High Court observed that the partition deed, indeed required proper registration as mandated by Section 17 of the Registration Act, 1908. However, the said unregistered document could be used as evidence for any collateral purpose.

Relying on the decision of the Hon’ble Supreme Court in the case of Yellapu Uma Maheswari and another vs. Buddha Jagadheeswararao and others, (16 SCC 787), the Hon’ble Rajasthan High Court held that the said partition deed shall be taken into evidence subject to payment of stamp duty, penalty, its proof thereof and relevancy. Thus, the Petition was allowed.

9. Amritpal Jagmohan Sethi vs. Haribhau Pundlik Ingole

Civil Appeal No. 4595-4596 of 2025 (SC)

1stApril, 2025

Mesne Profits – Eviction of tenant – Calculation of mesne profits – Date of decree till handover of possession of the property [O. XX, R. 12, S. 2 (12) Code for Civil Procedure Code, 1908; Maharashtra Rent Control Act, 1999].

FACTS

The Respondent (landlord) had filed a suit for eviction of the Appellant (tenant) under various provisions of the Maharashtra Rent Control Act, 1999. Accordingly, the learned Trial court had granted for eviction of the tenant. Thereafter, a decree was passed for the possession of the property. In the said decree, the learned Trial Court had inquired into the ‘mesne profit’ to be received by the landlord. According to the directions given by the Trial Court, the mesne profits were to be calculated from the institution of the eviction suit till the date of handover of the possession of the property.

The tenant challenged the said calculation before the Hon’ble Supreme Court. According to the tenant, the calculation of mesne profits ought to have been calculated from the date of the decree being passed till the date of handover of the possession of the property.

HELD

The Hon’ble Supreme Court observed that mesne profits, as per Section 2(12) of the Code for Civil Procedure, 1908, refers to profits earned by a person who is in wrongful possession of the property. In the present facts of the case, unless and until the final decree was passed, there existed a legal relationship of landlord-tenant between the parties.

It is only after the decree is passed that the landlord can be said to be in wrongful possession of a property. Thus, the calculation of mesne profits was modified from the date of the decree till the date of handover of possession of the property.

The appeal was, therefore, allowed.

10. Union of India vs. J.P. Singh

Criminal Appeal No. 1102 of 2025 (SC)

3rd March, 2025

Money Laundering — Retention of records and Electronic documents — Even if the person is not an accused in the complaint — Seizure of property to continue till disposal of the complaint. [S. 8, 17, 44 Prevention of Money Laundering, 2002 (PMLA)].

FACTS

Based on an Enforcement Case Information Report (ECIR) against the respondent, a search and seizure took place wherein electronic records, cash and other documents were seized. Subsequently, a complaint was filed by the Enforcement Department on which cognizance was taken by the special court.

On appeal by the respondent, the appellate authority and High Court took a view that the order dealing with seized property would cease to exist after 90 days. The Department filed an appeal before the Supreme Court.

HELD

On the contention of the Respondent that he was not named in the complaint, it was held that for the purpose of section 8(3) of PMLA, he was named in the ECIR based on which the complaint was made. Therefore, he was not required to be named as an accused in the complaint. Further, it was held that even after the competition of 90 days, the order under the amended section 8(3) of PMLA was to continue till the disposal of the complaint.

The Appeal was allowed.

Allied Laws

1. Sachin Jaiswal v. Hotel Alka Raje and Ors.

Special Leave Petition (Civil) No. 18717 of 2022

27 February, 2025

Partnership Firm — Contribution – Introduction of property into the firm – Stock/Asset of the firm – Perpetual Property of the firm – Transfer of property in the name of the Partnership Firm by way of a relinquishment deed is valid transfer. [S. 14, Partnership Act, 1932; Transfer of Property Act, 1882].

FACTS

One Mr. Bhairo Jaiswal (deceased) had purchased one plot in 1965. Thereafter, in 1971, the deceased entered into an oral partnership agreement with his brother Hanuman Jaiswal. The same was reduced to writing and ‘M/s. Hotel Alka Raje’ (Respondent No. 1/Partnership Firm) was formed in 1972 wherein, the deceased introduced the plot as part of the firm’s assets. The Partnership Firm subsequently constructed a building on the plot and began operating a hotel business. Due to old age, Mr. Bhairo Jaiswal decided to retire from the firm and, on 9th March, 1983, executed a relinquishment deed stating that the said plot was relinquished in favour of Respondent No. 1 (Partnership Firm) and that his legal heirs shall have no right, title and interest in the said plot. Mr Bhairo Jaiswal died on May 30, 2005. Thereafter, the Appellant (legal heir of Mr. Bhairo Jaiswal) filed a suit for declaration of title over the said plot. It was contended by the Appellant that the plot was purchased in the name of Bhairo Jaiswal. Further, a property cannot be transferred in the name of the Partnership Firm by way of a relinquishment deed. This was for the reason that as per the Transfer of Property Act, 1882, sale, mortgage, gift, and exchange are the only recognised modes of transfer. However, both the learned Trial Court and Hon’ble Allahabad High Court dismissed the suit of the Appellant.

Aggrieved, a special leave petition was filed before the Hon’ble Supreme Court.

HELD

The Hon’ble Supreme Court observed that the plot was introduced as the property of the Partnership Firm by Mr. Bhairo Jaiswal as his contribution to the Partnership Firm. Consequently, the plot became the property of the Partnership Firm and ceased to be the exclusive asset of Mr. Bhairo Jaiswal. Relying on its earlier order in the case of Addanki Narayanappa v. Bhaskara Krishnappa (1966 SCC OnLine SC 6) and Section 14 of the Partnership Act, 1932, the Hon’ble Court reiterated that any property introduced into the Partnership Firm as an asset or stock shall become a perpetual property of the Firm.

The petition was therefore, disallowed and the Order of the Hon’ble High Court was upheld.

2. S. Sasikala vs. The State of Tamil Nadu and Ors.

AIR 2025 (NOC) 154 (Mad)

23 May, 2024

Guardianship – Appointment – Unwell husband – Family unable to sustain – Only option to relive properties of the husband – Wife appointed legal guardian of the husband. [Art. 226, Constitution of India; S. 7, Guardian and Wards Act, 1890].

FACTS

A Writ Petition was filed before the Hon’ble Madras High Court (Single Judge Bench) by one Mrs. S. Sasikala seeking appointment as the guardian of her husband who was unwell and in a vegetative / comatose state. The Petitioner argued that the family was facing financial problems as hospital bills had escalated to several lakhs of rupees, leaving them with no option but to liquidate properties registered in her husband’s name. Therefore, she sought guardianship to facilitate the necessary sale and manage his assets in his best interest. The Hon’ble Court, however, dismissed the said appeal and asked the Petitioner to approach the civil court.

Aggrieved, an appeal was filed before the Division Bench of the Hon’ble Madras High Court.

HELD

The Hon’ble Division Bench, relying on the decision of the Hon’ble Kerala High Court in Shobha Balakrishnan & Anr. vs. State of Kerala [W.P. (C) No. 37278 of 2018], held that although Section 7 of the Guardian and Wards Act, 1890, only allows for the appointment of a legal guardian for minors, the High Court, under its powers conferred by Article 226 of the Constitution, can appoint a guardian in exceptional cases for an unwell person or someone in a comatose state.

The Petition was therefore allowed.

3. Trident Estate Private Limited v. The Office of Joint District Register and Ors.

AIR 2025 Bombay 59

23 October, 2024

Auction – Property – Sold to the highest bidder – Fair Market Value for determination stamp duty payable – Auction conducted and approved by the Hon’ble Supreme Court – Stamp duty authority cannot determine the value of the property – Bound to accept FMV at the price sold to the highest bidder by the Hon’ble Supreme Court. [S. 32A, 33, Maharashtra Stamps Act, 1958; Registration Act, 1908].

FACTS

The Petitioner had purchased a property through auction under the sale-cum-Monitoring Committee constituted by the Hon’ble Supreme Court for liquidation of assets of one Citrus Check Inn Limited and Royal Twinkle Star Club Limited. The Petitioner had emerged as the highest bidder for the said property at ₹ 2,51,00,000/-Accordingly, a sale certificate was issued to the Petitioner. Thereafter, the Petitioner approached the office of Joint District Registrar (Respondent No.1) for registration of the said property under the provisions of the Registration Act, 1908. The Petitioner paid five per cent stamp duty on the consideration price. Respondent No. 1, however, refused to register the property on the ground that the fair market value of the property was at Rs. 16,72,11,000/- and therefore, stamp duty was payable at the rate of five per cent on the fair market value and not consideration price. Accordingly, a demand of ₹83,60,550/- (on account of stamp duty deficit) and ₹23,41,000/- (towards penalty) was raised on the Petitioner.

Aggrieved, a Writ Petition was filed before the Hon’ble Bombay High Court.

HELD

The Hon’ble Bombay High Court observed that the auction was carried out by the Hon’ble Supreme Court (or at least under the aegis of the Hon’ble Court). Further, it was observed that the method followed by the Hon’ble Supreme Court is one of the most open and transparent forms of sale. Further, the auction-based sale involves careful deliberation and multiple steps, including the fixation of a minimum price, assessment of the property’s present value, and ensuring a transparent bidding process. Even then, the Hon’ble Supreme Court also have a right to cancel the entire bid if it is in their opinion, the process was tainted or the property was sold at a very low price. In the present case, the sale was approved by the Hon’ble Supreme Court. Therefore, when a sale is conducted by the Hon’ble Supreme Court, the stamp authority cannot sit on an appeal and proceed to determine the true market value of the property. Therefore, the demand and penalty were deleted.

The Petition was allowed.

4. Balakrishna G. and Ors v. Sub Registrar Jayanagar District (Kengeri), Bangalore and Ors.

AIR 2025 Karnataka 43

19 July, 2024

Auction of property – Sold to the highest bidder – Registration denied by Stamp Authority – Reason – ED directed Stamp Office not to register any sale without its permission – No authority with the ED to give direction to the Stamp authority office [S. 89(4), Registration Act, 1908; Prevention of Money Laundering Act, 2002; Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002].

FACTS

The Petitioner had purchased a property through a public auction conducted by the Bank (Respondent No. 3) under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) for liquidation of debt owed by one Acropetal Technologies Limited. Thereafter, the Petitioner approached the office of the Sub-Registrar (Respondent No. 1) for registration of the property on the strength of the sale certificate issued by the Bank (Respondent No. 3). However, Respondent No. 1 refused to register the said property on the ground that they had received one letter by the Enforcement Directorate (ED) (Respondent No. 2) directing the Sub-Registrar office not to register the said property without their permission.

Aggrieved, a Petition was filed before the Hon’ble Karnataka High Court (Bengaluru).

HELD

The Hon’ble Karnataka High Court after relying on a series of decisions held that the ED have no power under the provision of the Prevention of Money Laundering Act, 2002 (PMLA) to direct Respondent No. 1 to stop the registration of any property. Further, the Hon’ble Court also noted that the rights of a secured creditor under SARFAESI shall always prevail over the claim of ED under the PMLA Act. Further, the Hon’ble Court also observed that as per Section 89(4) of the Registration Act, 1908, it was incumbent upon Respondent No. 1 to register the property upon receipt of the sale certificate. Therefore, the Hon’ble Court directed Respondent No. 1 to register the said property in the name of the Petitioner.
The Petition was therefore allowed.

5. Palaniammal v. Thasi alias Sukkadan

AIR 2025 MADRAS 44

22 November, 2024

Settlement deed – Transfer of title and possession – Unilateral Cancellation deed executed – Challenged validity of Cancellation deed – Maintainability of suit – Suit did not seek declaration of title based on Settlement deed – Not required – Suit maintainable. [S. 31, 34, Specific Relief Act, 1963].

FACTS

A suit was filed for declaration of a ‘cancellation deed’ as null and void. A settlement deed was executed between the Plaintiffs (Appellants) and Defendants (Respondents) wherein, the title of the suit property was transferred over to the Plaintiff along with possession of the land. Thereafter, the Defendants cancelled the ‘settlement deed’ and unilaterally executed a ‘cancellation deed’ on various grounds. Therefore, a suit was filed for declaration of the ‘cancellation deed’ as null and void. However, it was contested by the Respondents, inter alia, that the suit was not maintainable since the Plaintiff had challenged only for declaration of the ‘cancellation deed’ as invalid without seeking any relief for declaration title based on the ‘settlement deed’..

HELD

The Hon’ble Madras High Court observed that the ‘settlement deed’ was mutually executed between the parties. Further, possession and title were given to the Plaintiff. The Hon’ble Court further noted that even after the execution of the unilateral ‘cancellation deed’, the Plaintiff were still in possession of the property. Therefore, the Hon’ble Court held that there was no need for the Plaintiff to seek relief for declaration of title based on the ‘settlement deed’. Therefore, the suit was maintainable.

The suit was therefore allowed.

Allied Laws

52. Sunkari Tirumala Rao and Ors. vs. Penki Aruna Kumari

2025 LiveLaw (SC) 99

17th January, 2025

Partnership Firm — Unregistered — Suit instituted by partners for recovery of money from another partner — Suit not maintainable — Registration of Partnership firm compulsory — Mandatory provision. [S. 69, Partnership Act, 1932].

FACTS

The Petitioners (Original Plaintiffs) had instituted a suit for recovery of money in their capacity as the partners of an unregistered partnership firm against the Respondent (Original Defendant), who was also a partner of the said unregistered firm. The Respondent had challenged the maintainability of the said suit on the ground that, as per section 69 of the Partnership Act, 1932 (Act), no suit can be filed by a partner of an unregistered firm. However, the learned Trial Court held that since the partnership firm had not commenced business, the Petitioners were entitled to file a suit for recovery of money under section 69 of the Act. In the revision proceedings before the Hon’ble Andhra Pradesh High Court at Amravati, the Hon’ble Court held that the provisions of section 69 are mandatory in nature, and a suit can only be filed by partners of a registered partnership firm.

Aggrieved, a special leave petition was filed before the Hon’ble Supreme Court.

HELD

The Hon’ble Supreme Court after relying on its earlier decision in the case of Seth Loonkaran Sethiya and Others vs. Mr. Ivan E. John and Others (1977) 1 SCC 379, along with other decisions, reiterated that provisions of section 69 are mandatory in nature and also apply to unregistered partnership firms that have not commenced their business. The Petition was, therefore, dismissed, and the order of the Hon’ble High Court was upheld.

53. Surendra G. Shankar and Anr. vs. Esque Finamark Pvt. Ltd. and Ors.

Civil Appeal No. 928 of 2025 (SC)

22nd January, 2025

Condonation of delay — Appeal — Appellate Court restricted to adjudicate the matter only on the delay aspect — Cannot adjudicate on merits.

FACTS

The Appellants had filed a complaint before the Maharashtra Real Estate Regulatory Authority (RERA) for possession of a flat. The said complaint was filed against the Respondent and one M/s. Macrotech Developers Ltd. (Respondent No. 2). Thereafter, Respondent No. 2 was discharged from the proceedings vide order dated 23rd July, 2019 citing no privity of contract between the Appellant and Macrotech Developers Ltd (Respondent No. 2). Thereafter, a final order was passed on 16th October, 2019 dismissing the complaint of the Appellant. Aggrieved, an appeal was preferred before the RERA Tribunal against the order dated 16th October, 2019. The Appellant also appealed against the order of the RERA dated 23rd July, 2019 (wherein Respondent No. 2 was discharged) along with an application for condonation of delay. However, the RERA Tribunal dismissed the delayed appeal. Thereafter, the appellants filed a second appeal before the Hon’ble Bombay High Court. The Hon’ble Bombay High Court condoned the delay and thereafter proceeded to decide the issue on merits, resulting in the dismissal of the appeal.

Aggrieved, an appeal was filed before the Hon’ble Supreme Court.

HELD

The Hon’ble Supreme Court held that once the Hon’ble High Court had condoned the delay of the Appellant, it ought to have restored the matter back to the file of the RERA Tribunal since the scope of appeal was limited to the condonation of delay. This was further strengthened by the fact that the RERA Tribunal had not commented / adjudicated on merits. Therefore, the decision of the Hon’ble High Court was set aside, and the matter was restored to the file of the RERA Tribunal with a direction to decide the appeal on merits without being prejudiced by the observations made by the Hon’ble High Court. The appeal was, therefore, allowed.

54. Central Bank of India vs. Smt. Prabha Jain and Ors.

2025 LiveLaw (SC) 103

9th January, 2025

Suit Property — Possession Debt Recovery Tribunal — Powers / jurisdiction — Possession can be given only to the borrower or possessor. [S. 17, 34, Securitisation and Reconstruction of Financial Assets and Enforcement of Security Act, 2002; Order VII, Rule 11, Code for Civil Procedure, 1908.].

FACTS

Respondent No. 1 (Ms. Prabha Jain, Original Plaintiff) had instituted a suit for possession of the suit property. According to Ms. Prabha Jain, she had inherited a 1/3rd share in the suit property after the death of her husband in 2008. However, the suit property was illegally sold by one Mr. Sumer Chand Jain (brother of the deceased husband, Appellant / Original Defendant) to one Mr. Parmeshwar Das Prajapati (Appellant / Original Defendant). Thereafter, Mr. Parmeshwar Das Prajapati executed a mortgage deed in favour of Central Bank of India (Appellant-Bank) for obtaining a loan. Thereafter, the Appellant-Bank took over the possession of the suit property under section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security (SARFAESI) Act, 2002 and published an advertisement for putting the suit property on auction. Consequently, Ms. Prabha Jain filed a suit to declare the said sale deed by Sumer Chand Jain to Mr. Parmeshwar Das Prajapati as illegal and to hand over the possession of the suit property to her. The Appellant-Bank, however, challenged the maintainability of the said suit on the ground that as per section 34 of the SARFAESI Act, no civil court has the jurisdiction to entertain any suit or proceedings in respect of matter which Debts Recovery Tribunal (DRT) or the Appellate Tribunal is empowered to. The said contention of the Appellant-Bank was accepted by the learned Civil Court, which was, thereafter, reversed by the Hon’ble Madhya Pradesh High Court.

Aggrieved, an appeal was filed before the Hon’ble Supreme Court by the Appellant-Bank.

HELD

The Hon’ble Madhya Pradesh High Court observed that the Original Plaintiff (Ms. Prabha Jain) had prayed for three reliefs before the learned Civil Court. The first two reliefs related to declaring the sale deed by Sumer Chand Jain to Parmeshwar Das Prajapati and the consequent mortgage deed in favour of Appellant-Bank as invalid. The third relief was with regard to handing over the possession of the suit property back to the Plaintiff. At the outset, the Hon’ble Court observed that the first two reliefs, undisputedly, were under the jurisdiction of a civil court and not under the DRT. With respect to the third relief, the Hon’ble Supreme Court observed that according to section 34 r.w.s. 17(3) of the SARFAESI Act, the DRT has some power to ‘restore’ the suit property to an individual who is a borrower or a possessor of the property. However, in order to ‘restore’ the suit property, Ms. Prabha Jain (Original Plaintiff) was neithera borrower nor a possessor of the suit property when the Appellant-Bank took over the possession of the property. Therefore, the Hon’ble Supreme Court confirmed that DRT had no jurisdiction to entertain the suit, and Ms. Prabha Jain had rightly instituted the suit before the civil court. The Hon’ble Supreme Court further noted that if a plaint/suit is filed before the civil court wherein, the Plaintiff has urged multiples reliefs (as in the present case), and if it is noticed that some of the reliefs are barred by law, then, the Civil Court cannot reject the entire plaint under Order VII, Rule 11 of the Code for Civil Procedure, 1908. In such a scenario, the Civil Court must address the issues / reliefs which are not barred by the law and avoid commenting on issues/reliefs which are barred by law. Before parting ways, the Hon’ble Court opined a need for the Reserve Bank of India to develop a standardised and practical framework for preparing title search reports (by the bank officials) before a loan has been sanctioned by the banks. Further, the Court opined that in the said framework, the liability of the erring bank official who had sanctioned the loan must also be determined.

The appeal was thus allowed.

55. Rakesh Brijal Jain vs. State of Maharashtra

CRA No. 379 of 2016 (Bom)(HC)

21st January, 2025

Offence of money laundering — Punishment for money — laundering — Allowing the Criminal Revision application the Court awarded exemplary cost ₹1 lakh each on complainant and Enforcement Director ( ED) for invoking criminal action and harassing the Developer with criminal action — Breach of agreement – Purchaser and Developer — Law Enforcement Agencies like ED should conduct themselves within parameters of law and that they cannot take law in to their own hands without application of mind and harass citizens. [S. 3, 4, Prevention of Money Laundering Act, 2002; Indian Penal Code 1860, S. 120B, 406, 418, 420]

FACTS

The police station forwarded the charge sheet to the Enforcement Director (ED). The ED lodged a criminal case against a developer. Criminal Revision Application was filed challenging the legality and validity of the order dated August 08, 2014, issuing process passed by the learned Special Judge, Mumbai under the Prevention of Money Laundering Act, 2002. The Criminal Revision Application sought setting aside of the order, principally on the ground that prima facie no offence whatsoever was made out under Sections 406, 418, 420 read with 120B Indian Penal Code, 1860.

HELD

Allowing the petition, the Court held that a mere breach of promise, agreement or contract does not, ipso facto, constitute an offence of criminal breach of trust without there being a clear case of entrustment. Clearly, the allegation / charge under Section 406 of the IPC has no basis. Once it is established that there is no cheating involved under the IPC then there are no proceeds of crime involved under Section 2(1)(u) of PMLA and therefore there is no Money Laundering involved under Section 3 of PMLA in the present case prosecution. ED has not made out any case whatsoever for proceeding against the Applicants before the Court under the PMLA or even under IPC. At the highest, if the complainant is aggrieved due to delay in receiving possession, his remedy lies in a Civil Court under the Sale Agreement, which he has already invoked. No offense of cheating or Money Laundering exists qua the prosecution, and ED has not made out any case whatsoever for proceeding against the Applicants before the Court under the PMLA or even under IPC. ED has supported the complainant’s false case without application of mind or without going through the record delineated hereinabove. The attachment of the two flats and garage purchased by the Applicant is cancelled.

56. Tomorrowland Limited vs. Housing and Urban Development Corporation Limited and Another

2025 LiveLaw (SC) 205

13th February, 2025

Director’s Responsibility — Dishonour of Cheque — Twin conditions — in charge and responsible of management of company. [S. 141, Negotiable Instruments Act, 1881]

FACTS

The case involves a contractual dispute between the Appellant and Respondent regarding the allotment of land for a 5-star hotel at Andrew’s Ganj, New Delhi. In 1990, the Ministry of Urban Development (MUD) decided to develop a 71-acre land parcel in Andrew’s Ganj through HUDCO. HUDCO invited bids, including for a 99-year lease of land to develop a 5-star hotel and an adjacent car park. Tomorrowland emerged as the highest bidder and was issued an allotment letter. Disputes arose between the Tomorrow land (Appellant) and HUDCO (Respondent).

A complaint was lodged against the Appellant and the company’s directors regarding the dishonour of a cheque under the Negotiable Instruments Act, 1881. Seeking to have the complaint quashed, the Appellant approached the High Court, arguing that the said-director had no role in the company’s daily operations and was not a signatory to the cheque in question. However, the High Court declined to intervene, ruling that the matter required further examination. Consequently, the appeal was dismissed, and the Court imposed a monetary cost on the Appellant. Dissatisfied with this decision, the Appellant filed the present appeal before the Hon’ble Supreme Court.

HELD

It was inter alia held that, there are twin requirements under sub-Section (1) of Section 141 of the 1881 Act. In the complaint, it must be alleged that the person who is sought to be held liable by virtue of vicarious liability, at the time when the offence was committed, was in charge of and was responsible to the company for the conduct of the business of the company. A Director who is in charge of the company and a Director who was responsible to the company for the conduct of the business are two different aspects. The requirement of law is that both the ingredients of sub-Section (1) of Section 141 of the 1881 Act must be incorporated in the complaint.

Appeal was allowed.

Allied Laws

47. Leela and Ors. vs. Murugananthan and Ors.

Civil Appeal No. 7578 of 2023

2025 LiveLaw (SC) 8

2nd January, 2025

Will — Validity — Necessary to prove execution — Mere registration does not guarantee validity. [S. 68, Indian Succession Act, 1925; S. 68, Indian Evidence Act, 1872].

FACTS

The Respondents (first wife and children of one late Mr. Balasubramaniya) instituted a suit for partition. The Appellants (second wife and her children) contested the said partition, claiming that the deceased had already executed an unregistered Will in their favour in 1989. The Respondents — first wife and children of the deceased — contended that the suit property should be partitioned among themselves and the children of the Appellant (children of the second wife), but excluding the Appellant herself (second wife), on the ground that she is an illegitimate wife. The learned Trial Court accepted the contention of the Respondent — the first wife and declined to accept the unregistered Will propounded by the Appellant-second wife on the ground that the same was non-genuine. The same was confirmed by the Hon’ble High Court of Madras.

Aggrieved, an appeal was filed before the Hon’ble Supreme Court.

HELD

The Hon’ble Supreme Court observed several inconsistencies in the Will propounded by the Appellant-second wife. Further, the Appellants failed to establish the execution of the Will as per section 63 of the Indian Succession Act, 1925. The Hon’ble Supreme Court, relying on its decision in the case of MoturuNalini Shah vs. Gainedi Kaliprasad (dead through legal heirs) (2023 SCC OnLine SC 1488) reiterated that mere registration of a Will (let alone an unregistered Will, as in this case) does not confer validity unless its execution is duly proved.

The appeal was therefore, dismissed.

48. Vidyasagar Prasad vs. UCO Bank and Anr.

AIR 2024 Supreme Court 5464

22nd October, 2024

Insolvency Proceedings — Recovery — Limitation period of three years — Acknowledgement of debt in Balance Sheet and Audit Report — Limitation period extended from last acknowledgement made. [S.7, 238A, Insolvency and Bankruptcy Code, 2016; S. 18, Limitation Act, 1963].

FACTS

The Appellant is a suspended Director of a Corporate Debtor (Respondent No. 2). The Corporate Debtor had availed a loan from UCO Bank (Respondent No. 1) and other consortium banks in 2012. The said loan was defaulted by the Corporate Debtor and was declared a Non-Performing Asset. Subsequently, in 2019, Respondent No. 1 – UCO Bank had filed an application under section 7 of the Insolvency and Bankruptcy Code, 2016 to initiate a corporate insolvency resolution process against the Corporate Debtor. It was contended by the Appellant-Director that the application was barred by limitation, as it was filed after the expiration of the three year limitation period, leaving no remedy available. However, the argument was rejected by the Hon’ble National Company Law Tribunal as well as Hon’ble National Law Company Appellate Tribunal. It was held by both the authorities that the debt had been duly acknowledged by the Corporate Debtor in its financial statements and Auditor’s report, thereby extending the limitation period in accordance with Section 18 of the Limitation Act, 1963 (Limitation Act).

Aggrieved, an appeal was filed before the Hon’ble Supreme Court.

HELD

The Hon’ble Supreme Court examined the balance sheet of the Corporate Debtor as of 31st March, 2017 and found a clear acknowledgement of the default in loan repayments. Further, the Court noted entries indicating the balance loan payable by the Corporate Debtor. The Court dismissed the argument that the balance sheet did not specifically name the creditor bank to whom the loan was owed, stating that such specificity was not required. Relying on a series of precedents, the Hon’ble Supreme Court held that entries in the balance sheet constituted an acknowledgement of debt as per Section 18 of the Limitation Act, 1963, thereby extending the limitation period for initiating recovery actions.

The Appeal was therefore dismissed.

49. Central Warehousing Corporation and Anr vs. Sidhartha Tiles & Sanitary Pvt Ltd.

SLP(c) No. 4940 of 2022 (SC)

21st October, 2024

Arbitration and Conciliation- Lease agreement —Dispute — To be resolved by arbitration mechanism only. [S. 11, Arbitration and Conciliation Act, 1996; Public Premises (Eviction of Unauthorised Occupants, 1971].

FACTS

A lease agreement was entered into between the Appellant — a statutory body incorporated under the Warehousing Corporations Act, 1962 and operating under the administrative control of the Ministry of Consumer Affairs and the Respondent — a company engaged in the business of trading. As per the lease agreement, the Appellants were to provide warehouse space to the Respondent-Company for a period of three years at a mutually agreed rate. The agreement included an arbitration clause for resolving disputes arising during the lease term. Subsequently, the Appellant unilaterally increased the lease rent and informed the Respondent that non-payment of the revised rate would result in eviction, and the Respondent’s occupancy being deemed illegal. In response, the Respondent approached the High Court under Section 11 of the Arbitration and Conciliation Act, 1996 (Arbitration Act), seeking the appointment of an arbitrator to resolve the dispute. The Appellant however, contended that the Respondent-Company was illegally occupying the storage premises and that the matter fell under the ambit of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 (Public Premises Act). The High Court declined to accept the contention of the Appellant and proceeded to appoint an arbitrator.

Aggrieved, an appeal was filed before the Hon’ble Supreme Court.

HELD

The Hon’ble Supreme Court held that the dispute arose between the parties during the existence of a lease agreement. Further, all the disputes emerging out of the said agreement must strictly be resolved through an Arbitration mechanism as per the said agreement. Rejecting the Appellant’s contention, the Court relied on its decision in SBI General Insurance Co. Ltd vs. KrishSpinning [2024 SCC OnLine SC 1754] and held that the provisions of the Public Premises Act cannot override the provisions of the Arbitration Act.

The appeal was therefore dismissed along with a cost of ₹50,000/- to the Appellant.

50. Purnima BhanuprasadGohil vs. State of Maharashtra and Ors.

AIR 2024 Bombay 370

3rd October, 2024

Registration — Settlement deed — Registration within four months from execution — Period for determination of stamp duty value by the stamp authority to be excluded. [S. 23, Registration Act, 1908; S. 34, Maharashtra Stamps Act, 1958].

FACTS

The Appellant and her ex-husband had executed a settlement deed on 20th December, 2011, following a long-drawn legal battle in the family court.

The said deed was deposited with the family court until both parties fulfilled their respective obligations. Subsequently, the family court issued a decree on 17th February, 2012. Subsequently, on 6th June, 2012, the Appellant filed an application before the Superintendent of Stamps for determination of stamp duty payable on the settlement deed for registration. The said application was processed by the authority on 28th August, 2012, and the stamp duty that was determined was paid within two days. Upon compliance with the settlement deed, the Appellant requested the family court to return the original deed on 12th September, 2012, for affixing the requisite stamps under the Bombay Stamp Act. It was received the following day. The Appellant then lodged the deed for registration on 16th November, 2012. However, the stamp authority refused to register the settlement deed on the ground that the deed was executed on 20th December, 2011, and as per Section 23 of the Registration Act, 1908, documents must be presented for registration within four months of execution.

Aggrieved, a petition was filed under Article 227 of the Constitution before the Hon’ble Bombay High Court.

HELD

The Hon’ble Bombay High Court held that from 20th December, 2011 (date of execution) till 17th February, 2012 (i.e. till the date of passing of decree), the period must be excluded as per the proviso to section 23 of the Registration Act. Further, relying on its earlier decision in the case of KritiJagdish vs. State of Maharashtra and Ors [Writ Petition No. 2662 of 2012], the Hon’ble Court held that for the purpose of calculating the period of four months, the period from 6th June, 2012 (date of application for determination of stamp duty) till 13th September, 2012 (receipt of settlement deed from the family court) must also be excluded. This was because such a period cannot be attributable to the Applicant. Therefore, after such period was excluded, it was observed that the Petitioner had lodged the settlement deed for registration within four months of execution.

The petition was therefore allowed.

51. KumudMahendra Parekh vs. National Insurance Company., Kochi and Ors.

AIR 2024 KERALA 189

17th July, 2024

Insurance — Medical insurance for travel —Hospitalisation — Claim of insurance — Mention of pre-existing disease in discharge papers —Non-disclosure of disease at the time of issuance of policy — Rejection of claim — Disease during childhood, 30 years ago and cured thereafter — No existing disease since last 30 years — Claim allowed. [S. 45, Overseas Medical Insurance for Trip].

FACTS

The Petitioner, a septuagenarian had availed medical insurance for her overseas travel after undergoing a detailed medical examination. During her trip, she fell ill with fever and shortness of breath, requiring hospitalisation for three days. Upon returning to India, she submitted an insurance claim, which the Respondent (insurance company) initially approved, and requested for hospitalisation documents for the claim processing. However, during the review, it was discovered that the discharge summary mentioned a history of bronchial asthma, which had not been disclosed at the time of availing medical insurance. Since the form specifically required the disclosure of any pre-existing diseases, the Respondent rejected the claim on the grounds that the Petitioner had withheld vital information regarding her medical history.

The Petitioner, however, maintained that she did not suffer from any existing disease. Further, discharge papers cannot be held as conclusive proof of any pre-existing disease. Furthermore, it was stated that the Petitioner suffered from bronchial asthma in her childhood and was cured almost 30 years ago therefore, the same was not needed to be disclosed. However, the Respondent, Grievance Cell of the Respondent as well as the Insurance Ombudsman, rejected the claim of the Petitioner.

Aggrieved, a petition was filed before the Hon’ble Kerala High Court (Eranakulam).

HELD

The Hon’ble Kerala High Court observed that, under the Overseas Mediclaim Insurance Policy for Business & Holiday Travel, a ‘pre-existing disease’ is defined as any ailment the insured had within 48 months prior to the issuance of the policy. It was undisputed that the Petitioner had bronchial asthma 30 years ago, well beyond the 48 month limit prescribed. Further, the condition had been cured, and therefore, there was no question of disclosure of any existing disease. Accordingly, the Hon’ble Court held that the insurance company was liable to accept the Petitioner’s claim.

The Petition was thus allowed.

Allied Laws

43 Rizwi Khan vs. Abdul Rashid and Ors.

AIR 2024 Jharkhand 167

12th July, 2024

Transfer of property — Gift deed — No title with the donor to start with — Illegal occupation over property — Gift deed invalid. [S. 122, Transfer of Property Act, 1882; O. 1, R. 10, Code for Civil Procedure, 1908].

FACTS

A suit was instituted by the Plaintiff (Rizvi Khan) for declaration of title over the suit property. The suit was filed on the strength of a gift deed executed by the donor (one Mr. Shamsher Ali, father of both Plaintiff and Respondents) in favour of the Plaintiff. The Respondents had argued, inter alia, that the said gift deed was null and void on the ground that the donor did not have a clear title over the suit property on the date of transfer of property.

HELD

The Hon’ble Jharkhand High Court observed that the suit property belonged to the state government, which was leased out to TISCO. Further, it was observed that the donor was illegally occupying the said land. Thus, relying on the legal maxim ‘Nemo dat quod non-habit’, i.e., one cannot give what he does not have, it was held that the gift deed was invalid.

The suit was, therefore, dismissed.

44 Parvati alias Parvati Mohapatra vs. Sadasiba Mohapatra (dead) and Ors.

AIR 2024 (NOC) 819 (ORI)

28th February, 2024

Succession — Void Marriage — Children from void marriage — Illegitimate children also have right over the property of parents. [S. 16, Hindu Marriage Act, 1955; S. 11, Hindu Succession Act, 1956].

FACTS

The Respondent (Original Plaintiff) had filed a suit for eviction of the Appellants (Original Defendant) from possession of the suit property. Plaintiff had contested that Defendant was staying with him for the last 30 years in the suit property. Thereafter, due to issues between the parties, the Plaintiff had asked the Defendant to vacate the property. The Defendant had contested the removal on the ground that the Defendant had been married (as per social norms) to the Plaintiff for the last 30 years and, therefore, she and their children had a legal right, title, and interest over the suit property and thus, cannot be evicted. Plaintiff had rebutted by stating that he was already married to somebody else and, therefore, Defendant was not his wife as per section 11 of the Hindu Marriage Act, 1956, and consequently, the children also did not possess any right, title and interest over the suit property. Thereafter, during the pendency, Plaintiff expired, and his legal heirs (children through his first wife) were made a party to the plaint. The Ld. Trial Court dismissed the plaint. Aggrieved, an appeal was filed before the Ld. division Bench. The Ld. Division Bench allowed the Plaintiff’s appeal.

Aggrieved, a second appeal was filed by the Defendant before the Hon’ble Orissa High Court.

HELD

On appeal, the Hon’ble Orissa High Court observed that the children of the Plaintiff and Defendant (Defendant 2 to 4) had become legal heirs to the suit property upon the death of the Plaintiff. Further, relying on section 11 of the Hindu Succession Act, 1956 and the decision of the Hon’ble Supreme Court in the case of Revanasiddapa and others vs. Mallikarjun and Others AIR 2023 Supreme Court 4707, it was held that Defendants 2 to 4 inherited right, title, and interest over the property even though they were born out of a void marriage.

The Appeal was, therefore, allowed.

45 Kripa Singh vs. GOI & Ors

2024 LiveLaw (SC) 970

21st November, 2024

Arbitration — Delay in filing appeal — Implications of the Limitation Act — Court of law to secure and protect appellants. [S.14, Limitation Act, 1963; S. 34, S. 37, Arbitration and Conciliation Act, 1996 (Act)].

FACTS

The appellant’s land was acquired by the Government vide an award. After receiving a certified copy of the award, the appellant filed an appeal before the High Court. Thereafter the appellant came to know about the appropriate action available, being the statutory remedy under Section 34 of the Act, and instituted proceedings under Section 34 of the said Act before the District Court.

The District Judge took up the application under Section 34 of the Act and dismissed the same on the ground that it was barred by limitation. An appeal under section 37 of the Act was also dismissed.

The appellant filed an appeal before the Supreme Court.

HELD

The substantive remedies under Sections 34 and / or 37 of the Act are by their very nature limited in their scope due to statutory prescription. It is necessary to interpret the limitation provisions liberally, or else, even that limited window to challenge an arbitral award will be lost. The remedies under Sections 34 and 37 of the Act are precious. Courts of law will keep in mind the need to secure and protect such a remedy while calculating the period of limitation for invoking these jurisdictions. Applying Section 14 of the Limitation Act, we hold that there is sufficient cause excluding the period commencing from the filing of the wrong appeal before the High Court to the filing of the correct appeal before the District Court will be excluded.

The Appeal was allowed.

46 Manohari R vs. The Deputy Tahsildar (Revenue Recovery) & Ors

2024 LiveLaw (Ker) 783

5th November, 2024

Writ Jurisdiction — Difference between Maintainability and Entertainability. [Art. 226, Constitution of India, S. 7 Kerala Revenue Recovery Act, 1968].

FACTS

The Appellant / Original Petitioner had challenged a notice issued under Section 7 of the Kerala Revenue Recovery Act, 1968 by filing a Writ Petition. The notice was issued by Respondent No.1, authorising the Village Officer, to seize the movable property of the Appellant for the defaulted amount of ₹1,10,096/- with interest due to the Kerala State Electricity Board (KSEB).

The Writ Petition was dismissed as not maintainable. Being aggrieved by the summary dismissal of the writ petition, the Petitioner filed appeal under Section 5 of the Kerala High Court Act, 1958.

HELD

There is a difference between the entertainability and maintainability of a writ petition. Even if the alternate remedy is available to the Petitioner, that cannot be a ground to hold the writ petition under Article 226 of the Constitution of India against an administrative authority as “not maintainable”. The powers under Article 226 of the Constitution of India can be exercised even if there exists an alternate remedy. However, it is in restricted circumstances, within well-defined parameters. As a matter of settled judicial practice, the jurisdiction under Article 226 of the Constitution of India is not exercised if there is an alternative efficacious remedy available and in such circumstances, the writ court may decline to “entertain” the writ petition. There is, therefore, a difference between maintainability and entertainability of a writ petition.

Therefore, the petition filed by the Appellant / Petitioner was maintainable. The impugned judgment was set aside, to decide whether the writ petition should be entertained.

The Appeal was allowed

Allied Laws

38 N Thajudeen vs. Tamil Nadu Khadi and Village Industries Board

Civil Appeal No. 6333 of 2013 (SC)

24th October, 2024

Gift — Valid gift deed — Unilaterally revoked — No rights for revocation in gift deed — Gift cannot be revoked. [S. 126, Transfer of Property Act, 1882].

FACTS

A suit was instituted by the Original Plaintiff / Respondent for declaration of title over the suit property. The suit was filed on the basis of a gift deed executed by the Original Defendant / Appellant (N. Thajudeen) in favour of the Respondent. According to the gift deed, the Appellant had gifted the suit property to the Respondent on the condition that the suit property shall be utilised only for the purpose of manufacturing Khadi lungi and Khadi yarn. Thereafter, somewhere in 1987, the Appellant had unilaterally revoked the gift deed by way of a revocation deed. In response, the Respondent instituted a suit before the Learned Trial Court, which was dismissed on the ground that the gift deed was not valid as it was never accepted by the Respondent. On further appeal, the District Court and Hon’ble High Court allowed the appeal on the ground that the gift was validly accepted, and further, in the absence of any provision for revocation of gift, a gift deed cannot be revoked.

Aggrieved, an appeal was filed before the Hon’ble Supreme Court.

HELD

The Hon’ble Supreme Court observed that the suit property was duly accepted, and possession was also taken by the Respondent. Further, the Respondent had also filed an application for mutation in the records of the property. Therefore, the gift deed was valid. Further, the Hon’ble Court observed that the gift deed had no mention of any rights with respect to the revocation of the gift deed. Further, the Appellant does not meet any of the exceptions carved out in section 126 of the Transfer of Property Act, 1882, for revocation of gift deed. Therefore, in the absence of any right of revocation reserved in the gift deed, a valid gift deed cannot be revoked.

The decision of the High Court was, therefore, upheld.

39 Akshay Verma vs. Sita Devi Verma

through legal heirs

AIR 2024 Rajasthan 136

4th April, 2024

Partnership Firm — Two partners — Death of one partner — Firm ceases to exist — Arbitration clause in the partnership deed — Valid and binding on the legal heirs / representative. [S. 42(c), Partnership Act, 1932; S. 11(6), Arbitration and Conciliation Act, 1996].

FACTS

An application was filed under section 11(6) of the Arbitration and Conciliation Act, 1996, by the Applicant (Akshay Verma) for the appointment of an arbitrator. The Applicant and Mrs. Sita Devi Verma (deceased / represented through legal heirs) were partners of one M/s. Verma and Company (a registered firm under the Partnership Act, 1932). During the lifetime of the Respondent, a dispute had arisen between the Applicant and Respondent when the Respondent Sita – Devi Verma addressed a communication to the Bank on 14th March, 2022 requesting closure of the accounts in the name of the firm. After the death of the Respondent — Mrs. Sita Devi Verma, the bank had sent a legal notice to the Applicant and the legal heirs of the Respondent for the repayment of the loan. It was the claim of the Applicant that, as per the partnership deed, all disputes had to be resolved by way of arbitration proceedings. On the other hand, the legal heirs of the Respondent stated that the partnership deed was executed between the Applicant and Respondent, and after the death of the Respondent, the partnership firm ceased to exist. The legal heirs had not become the partners of the firm either by way of operation of law or by any other act. Thus, the dispute, if any, cannot be said to be a dispute between the partners of the firm.

HELD

The Hon’ble Rajasthan High Court, relying on the decision of the Hon’ble Supreme Court in the case of Mohd. Laiquiddin and Another vs. Kamla Devi Mishra (Dead) by legal heirs and others [(2010) 2 SCC 407] held that in case where a firm has only two partners, the firm ceases to exist upon the death of one partner. This was held despite the fact that there was a clause in the partnership deed providing that death of any partner shall not have the effect of dissolving the firm. Therefore, the Hon’ble Rajasthan High Court held that the partnership firm ceased to exist on the death of the Respondent. However, the Hon’ble Court held that the arbitration clause contained in the partnership deed would still survive and bind the legal heirs/representatives of the deceased. Further, on the issue of non-arbitrability of the matter raised by the legal heir of the Respondent, the Hon’ble Court held that the facts suggested that the issue was arbitrable. Therefore, the Hon’ble Court proceeded to appoint an arbitrator.

40 Ramkalesh Mishra vs. Sunita alias Munni alias Sushila Krishnabhan Mishra and Ors.

AIR 2024 (NOC) 709 (MP)

2nd April, 2024

Succession — Widow — Remarriage — Not a valid ground for denying inheritance from first husband. [S. 24, Hindu Succession Act, 2005].

FACTS

A second appeal was preferred before the Hon’ble Madhya Pradesh High Court (Jabalpur Bench) for the removal of a share in the suit property of the Respondent. Mr. Rameshwar Prasad had two sons, Ramkalesh Mishra (Appellant) and Krishnabhan Mishra (deceased). The Appellant had preferred an appeal for the removal of any right/share of one Mrs. Sunita (Respondent/wife of Krishnabhan Mishra) in the property since she had solemnised a second marriage after the death of Krishnabhan Mishra. The Learned Trial Court, as well as the Appellate Court, dismissed the application of the Appellant (Ramkalesh Mishra).

HELD

On appeal, the Hon’ble Madhya Pradesh High Court held that subsequent to the deletion of Section 24 of the Hindu Succession Act, 1956, through the Hindu Succession (Amendment) Act, 2005, there was no restriction preventing a widowed woman from inheriting her share of the property (from her first husband) due to remarriage.

Therefore, the decision of the Appellate Court was upheld.

41 Punjab State Civil Supplies Corporation Limited and Anr vs. Sanman Rice Mills and Ors.

2024 LiveLaw (SC) 754

27th September, 2024

Arbitration — Possible view taken by the Tribunal — No illegality in award — Courts have limited scope of power. [S. 34, 37, Arbitration and Conciliation Act, 1996].

FACTS

The Appellant had entered into a contract with the Respondent for the supply of paddy mills. Thereafter, a dispute arose between the parties and the dispute was referred to the Arbitral Tribunal. The Tribunal passed an award in favour of the Appellant. Aggrieved, the Respondent filed an application under section 34 of the Arbitration and Conciliation Act, 1996 (Act) before the Hon’ble Punjab and Haryana High Court (Single Bench). The Hon’ble Court observed that there was no illegality in the award passed by the Tribunal. Therefore, the Hon’ble Court held that as per section 34 of the Act, there was no reason to interfere in the award passed by the Tribunal. Thereafter, an appeal was preferred under section 37 of the Act before the Hon’ble Punjab and Haryana High Court (Division Bench). The Hon’ble Court (Division bench) allowed the appeal, and the award of the Tribunal was set aside.

Aggrieved, a Special Leave Petition was preferred before the Hon’ble Supreme Court.

HELD

The Hon’ble Supreme Court observed that the scope of powers of a Court under sections 34 and 37 of the Act are very limited. Further, the Court observed that if an award is not reasonable or is a non-speaking one to a certain extent, even then, the Court cannot interfere with the award. Further, when two views are possible, and the tribunal has chosen one, the award remains valid. Therefore, the award was restored by the Hon’ble Supreme Court.

The appeal was, thus, allowed.

42 Dr. Shruti Sakharam Sorte, Nagpur and Ors vs. Anant Bajiro

Buradhkar and Ors.

AIR 2024 BOMBAY 299

29th April, 2024

Trust — Elections of the Committee — Challenge before Charity Commissioner — Change inquiry report awaited — Injunction — Not to carry out any official functions — Injunction bad in law — Injunction order without any reasons or findings – Elected committee cannot be injuncted to make decisions without any justifiable reasons. [S. 22, Maharashtra Public Trusts Act, 1950].

FACTS

A Petition was filed challenging the order of injunction passed by the Deputy Charity Commissioner, which restricted the Petitioner from making any policy decisions related to the administration of the Trust, including the employment conditions such as the appointment, suspension, and termination of Trust employees, until the conclusion of the change report inquiry. Pursuant to the directions of the Charity Commissioner, the election of the managing committee of the Trust had taken place. Aggrieved by the results, an application was filed by Respondents challenging the election procedure before the Charity Commissioner. Thus, an inquiry was initiated by the Commissioner, and a change report under section 22 of the Maharashtra Public Trust Acts, 1950 (Act) was awaited. In the meantime, the Charity Commissioner had injuncted the committee from making any policy decisions. Aggrieved by the injunction, the Petition was filed before the Hon’ble Bombay High Court (Nagpur Bench).

HELD

The Hon’ble Bombay High Court held that the Charity Commissioner had not recorded any reasons or given any findings to justify the injunction against a duly appointed managing committee from doing its democratic functions. The Hon’ble Court was also not impressed by the arguments that the committee was injuncted from functioning merely because a change inquiry report under section 22 of the Act was pending. Thus, the Petition was allowed, and the injunction order was cancelled.

Allied Laws

34. OPG Power Generation Pvt. Ltd. vs. Enexio Power Cooling Solution India Pvt. Ltd.

Civil Appeal No. 3981, 3982 of 2024 (SC)

20th September, 2024

Arbitration — Method of calculating period of limitation — Possible view taken by the Tribunal — No patent illegality found in the award — Award does not violate fundamental public policy. [S. 34, 37, Arbitration and Conciliation Act, 1996; S. 18, A. 58, Limitation Act, 1963]

FACTS

The Appellant had entered into a contract with the Respondent for the construction of a power plant. Thereafter, a dispute arose over the Appellant’s unpaid amount of ₹6.75 crores to the Respondent. The Respondent invoked the arbitration clause, while the Appellant filed counterclaims. The Appellant alleged that ₹6.75 crores were deducted from the Respondent on account of liquidated damages, delayed project completion and towards customs duty paid by the Appellant. However, the Arbitral Tribunal rejected most of the Appellant’s counterclaims, ruling that they were barred by the statute of limitations. Aggrieved, the Appellant challenged the award of the Arbitral Tribunal before the Hon’ble Madras Hogh Court (Single Bench) under section 34 of the Arbitration and Conciliation Act, 1996 (Act). The Hon’ble Court held, inter alia, that the award passed by the Arbitral Tribunal suffered from patent illegality and was against the public policy of India since it adopted different dates to calculate the period of limitation for the claim and the counterclaim, which was not justified, given that both issues stemmed from the same contractual relationship. Aggrieved, an appeal was preferred before the Hon’ble Madras High Court (Division Bench). The Hon’ble Court (Division Bench) observed that the view taken by the Tribunal with regard to the dates for a period of limitation was a possible view. Therefore, there was no patent illegality in the award passed by the Tribunal. Thus, as per section 34 of the Act, the Hon’ble Court refused to interfere with the award passed by the Tribunal. The award of the Tribunal was accordingly restored.

Aggrieved, a Special Leave Petition was preferred before the Hon’ble Supreme Court.

HELD

The Hon’ble Supreme Court held that an arbitral award, even if inadequately reasoned, need not be set aside under Section 34 of the Act, provided it does not display any perversity. The Court emphasised that as long as there is no irrationality or serious legal flaw, the award should stand, with courts having the discretion to clarify or elaborate on the reasoning rather than dismiss it altogether. Further, with respect to the issue of the award being violative to the public policy of India [section 34(2)(b)(ii) of the Act], the Hon’ble Supreme Court held that for an award to be set aside, the violation must affect a fundamental policy of Indian law. Further, minor infractions of the law are not sufficient to render an award invalid.

Thus, the award of the Arbitral Tribunal was upheld.

35. Directorate of Enforcement vs. Rahil Chovatia

CRL.M.C. 5482/2022 (Delhi)

18th September, 2024

Money Laundering — Alleged massive scam in the country — Proceeds of crime / money routed through various layers of entities- Arrest on the ground of mere assumption — Bail granted. [S. 439(2), 482, Code of Criminal Procedure, 1973]

FACTS

A First Information Report (FIR) was filed against unidentified persons, marking the beginning of an investigation that allegedly unearthed a massive scam operating in the country. It revealed an extensive scheme of money laundering involving money being looted from the public through various mobile applications on the pretext of high returns on investments. According to the Petitioner, the money received from the public (i.e., Proceeds of Crime (PoC)) of approximately 250 crores were collected in the shell companies (first layer of entities). Thereafter, the money was layered and routed to several other companies (second layer of entities). Ultimately, the money was transferred out of the country under the guise of payments for imports before passing through a third layer of money laundering. During the investigation, the Respondent was arrested. It was alleged that the Respondent, director of a company (third layer of entity), had received funds from the first and second layer of entities. The Respondent had filed a bail application, which was granted by the learned Trial Court. Aggrieved, a petition was filed before the Hon’ble Delhi High Court for the cancellation of bail of the Respondent.

HELD

At the outset, the Hon’ble Delhi High Court highlighted the distinction between setting aside an unjust or illegal order and the cancellation of bail. Further, relying on the decision of the Hon’ble Supreme Court in the case of Madanlal Chaudhary vs. Union of India [(2022) SCC OnLine (SC) 929], the Hon’ble Delhi High Court reiterated that the ingredients constituting an offence of money laundering are to be strictly construed. Furthermore, the Hon’ble Court noted that the proceeds of crime which were allegedly received by the Respondent was merely an assumption made by the Petitioner. Therefore, the order of the Trial Court was upheld. The Petition was thus, dismissed.

36. Pramod vs. The Secretary, The Sultanpet Diocese Society and Anr.

2024 LiveLaw (Ker) 597

25th September, 2024

Eviction — Unpaid Rent — Fundamental duty — Cannot seek the protection of law from eviction — Rent must be duly paid. [S. 151, Code for Civil Procedure, Code, 1908]

FACTS

The Petitioners (Original Defendants) are the tenants of the Respondent. A suit was instituted for eviction and realization of unpaid rent from the Petitioners. The suit was admitted by the Trial Court. Thereafter, an interim application was filed by the Respondent (landlord) for payment of unpaid rent. The Court, under section 151 of the Code for Civil Procedure, 1908, accepted the interim application and directed the Petitioner to deposit the unpaid rent. Aggrieved by the interim application, a Petition (OP) was filed before the Hon’ble Kerala High Court (Ernakulam).

HELD

The Hon’ble Kerala High Court noted that the Petitioners had failed to discharge their fundamental obligation as tenants, i.e. paying rent to the Respondent. Further, the Hon’ble Court held that, a tenant who neglects this essential duty cannot expect the protection of the courts in matters of eviction. Furthermore, the Court also noted that a landlord holds the ultimate title to the property, and the tenant’s right to remain in possession hinges entirely on the payment of rent. Furthermore, the Court emphasised that permitting the tenant to prolong legal proceedings in such a scenario would amount to nothing less than an undue burden and harassment of the landlord.

Therefore, the Petition (OP) was dismissed.

37. The Catholic Diocese of Gorakhpur through its President vs. Bhola Deceased and Ors.

Second Appeal No. 461 of 2014 (Allahabad)

10th September, 2024

Transfer of property — Affidavit — No transfer of land through affidavit — Transfer only through recognised modes such as sale, gift, lease, mortgage and exchange. [S. 2(l), 8, 10, 26, The Urban Land (Ceiling and Regulation) Act, 1976; S. 118, Transfer of Property Act, 1882]

FACTS

The Respondent (Original Plaintiff) had instituted a suit for claiming his ‘bhumidari’ (ownership) rights over the disputed property against the Appellants, namely the Catholic Diocese (lessee) and the State of Uttar Pradesh (lessor). The State of Uttar Pradesh had leased the disputed property to the Catholic Diocese for the construction of a hospital. It was contended by the Plaintiff that the property was illegally acquired by the State of Uttar Pradesh, and hence, the consequent lease deed in favour of the Catholic Diocese was also illegal. Further, in support of the same, it was stated that the said property was never declared as surplus / vacant as per the provision of the Urban Land (Ceiling and Regulation) Act, 1976 (Urban Land Act). The Learned Trial Court, however, held that the Plaintiff had himself relinquished his title by submitting an affidavit before the Learned District Magistrate, and it was only thereafter, that the property was handed over to the State of Uttar Pradesh. Aggrieved, an appeal was preferred before the First Appellate Authority. The First Appellate Authority allowed the appeal and held that the Plaintiff was the owner of the property. Further, any constructions made by the Catholic Diocese (lessee) were directed to be removed at once.

Aggrieved, a second appeal was preferred before the Hon’ble Allahabad High Court.

HELD

The Hon’ble Allahabad High Court outrightly dismissed the contention of the Appellants that the property was transferred or the rights in the property were relinquished based on admissions made in affidavits by the Plaintiff. The Hon’ble Court held that rights in property can only be transferred as per the procedure established in the Transfer of Property Act, 1882, or under the Registration Act, 1908. Therefore, the Hon’ble Court held that the State of Uttar Pradesh had never acquired the title of the property legally, and had deprived the Plaintiff of his land for more than 32 years. The appeal was, therefore, dismissed with a cost of RTen lakhs on the Appellant. The order of the First Appellate Authority was upheld.

Allied Laws

29 Sri Bhaskar Debbarmaand Ors vs. State of Tripura and Ors

AIR 2024 (NOC) 640 (TRI)

22nd May, 2024

Electronic evidence — Certification-Condition Precedent — Mandatory Requirement. [S. 65B, Indian Evidence Act, 1872].

FACTS

A Petition was filed under Article 226 of the Constitution before the Hon’ble Tripura High Court challenging the actions of a Learned District Magistrate (D.M.) who conducted a raid at a marriage hall during the COVID-19 pandemic. The Petitioners were accused of violating strict lockdown protocols by holding a wedding beyond curfew hours. The Petitioner further claimed that the Learned D.M., accompanied by a team of over a hundred members, illegally raided the venue, abused his authority by mistreating guests, making unlawful arrests, and forcibly dispersing the gathering. The Petitioners further alleged that the entire incident was recorded on video, shared widely on social media, and is now presented as evidence before the Hon’ble Court in the form of a Compact Disk (CD). However, it was argued by the Respondents that the said CD was not certified as per the compulsory mandate of section 65B and section 65B(4) of the Indian Evidence Act, 1872 (Evidence Act).

HELD

The Hon’ble Court, relying on the decision of the Hon’ble Supreme Court in the case of Arjun Panditrao Kothkar vs. Kailash Kushanrao Gorantyaland Ors [(2020) 7 SCC 1], held that certification of electronic evidence under Section 65B(4) of the Evidence Act is a condition precedent and under no circumstances provisions of section 65B of the Evidence Act can be diluted. Therefore, the CD cannot be taken into evidence.

The Petition was, thus, dismissed.

30 Chitta Ranjan Meher and Ors. vs. Soudamini Meher

AIR 2024 Orissa 118

14th May, 2024

Registration — Part Performance of contract — Unregistered agreement to sale- Payment of stamp duty along with penalty — Cannot cure the defect of non-registration. [S. 53A, Transfer of Property Act, 1882; S. 35, Indian Stamps Act, 1899; S. 17(1-A), Registration Act, 1908].

FACTS

The Appellants (Original Plaintiff) had entered into two agreements to sell two properties to the Respondent (Original Defendant). The Respondent paid the agreed consideration, and possession of the properties was handed over. However, since the properties were subject to consolidation, and the proposed sale could lead to fragmentation, the Appellants submitted applications under Section 34 of the Orissa Consolidation of Holdings and Prevention of Fragmentation of Land Act, 1972, seeking permission from the consolidation authority. The agreements stipulated that the deeds of conveyance would be executed once this permission was obtained. Unfortunately, the permission could not be secured within the agreed time frame. Subsequently, the Appellants filed a suit seeking a declaration that the two agreements should be declared null, void, and inoperative. In response, the Respondent filed a counterclaim for specific performance of the contract. The agreements, being not properly stamped, were impounded by the Court, but the Respondent remedied this by paying the requisite stamp duty and penalty under section 35 of the Indian Stamps Act, 1899 (Stamps Act). The Learned Trial Court held that since the Respondent had paid the stamp duty and penalty, she was the rightful owner of the suit properties, leading to the dismissal of the Appellants’ application. This decision was subsequently upheld by the Learned District Court.

Aggrieved, a second appeal was preferred before the Hon’ble Orissa High Court (Cuttack Bench).

HELD

The Hon’ble Orissa High Court observed that the Appellants had handed over the possession of the suit property to the Respondent. Further, the respondent duly made the payment. Therefore, the counterclaim of the Respondent was in the nature of part performance (of the agreements to sell) as per the provisions of section 53A of the Transfer of Property Act, 1882 (TOPA) and not that of specific performance. The Hon’ble Court held that payment of stamp duty and penalty as per section 35 of the Stamps Act cannot cure the defect of non-registration as provided in Section 17(1-A) of the Registration Act, 1908 (Registration Act). Further, there is no provision by which it can be held that mere payment of stamp duty or penalty would validate the contract for the purpose of section 53A of the TOPA, thereby overcoming the bar of section 17(1-A) of the Registration Act. The Hon’ble Court, therefore, held that the counterclaim of part performance could not be entertained, and the appeal of the Original Plaintiff seeking for nullity of the agreement to sell was confirmed.

The appeal was, thus, allowed.

31 Shabna Abdullah vs. Union of India and Ors.

Criminal Appeal No. 3082 of 2024 Supreme Court

20th August, 2024

Judicial discipline — Earlier decision of co-ordinate Bench — Subsequent co-ordinate Bench cannot come to an alternate finding- Ought to have referred to larger Bench. [A. 22(5), Constitution of India; S. 3, Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974].

FACTS

Mr. Abdul Rao (detenue and brother-in-law of the Petitioner) was arrested along with other co-accused under section 3 of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 for allegedly sending contraband gold concealed in compressors of refrigerators along with unaccompanied baggage. The defence and the other co-accused were served with detention orders and grounds of detention. However, they were not supplied with material information, such as audio recordings of the voice messages pertaining to the WhatsApp conversations relied upon by the Detaining Authority for making such arrests. Therefore, a Writ Petition was filed before the Hon’ble Kerala High Court by the other co-accused, challenging the non-supply of critical information, which led to the arrests of the co-accused. The Hon’ble Kerala High Court (Division Bench) held that the non-supply of information vitally affected the rights of the accused under Article 22(5) of the Constitution, and thus the said detention was bad in law. Similarly, the sister-in-law of the detenue (i.e., Petitioner) had also filed a Writ Petition before the Hon’ble Kerala High Court. However, the Hon’ble Kerala High Court (Division Bench) dismissed the said Petition.

Aggrieved, an appeal was preferred before the Hon’ble Supreme Court.

HELD

The Hon’ble Supreme Court held that when the same grounds for detention and the same material were relied upon by the detaining authority, which the Hon’ble Kerala High Court (Division Bench) had rejected, another Division Bench of the same Court should not have disregarded the conclusion and come to an alternate finding. Further, the Hon’ble Supreme Court also noted that the subsequent Division Bench ought to have referred the matter to the larger Bench if they were of the view that the earlier decision was not correct in law. Therefore, the appeal was allowed, and the detention was revoked.

32 The President vs. The State Information Commissioner

AIR 2024 Madras 239

6th June, 2024

Right to Information — Co-operative Society — Does not fall within the ambit of public Authority [S.2(h), Right to Information Act, 2005].

FACTS

Respondent No. 4, Mr. K. Jeeva, is a member of Petitioner’s Co-operative Society. Mr. Jeeva had filed a Right to Information (RTI) application before Respondent No. 3 (i.e., Deputy Registrar of Co-operative Society seeking information regarding loans extended by Petitioner-Co-operative Society to farmers between 2015 and 2021. Respondent No. 3 forwarded the application to the Petitioner-Co-operative Society and requested it to furnish the details of the same, to the extent possible, to Mr. Jeeva. Aggrieved by such a shocking request, Mr. Jeeva filed an appeal before the Joint Registrar of Co-operative Society (Respondent No. 2), requesting it to submit the relevant information regarding the Petitioner-Co-operative Society. Respondent No. 2, however, forwarded the application to Respondent No. 3 since Respondent No. 3 was the competent authority to provide the necessary information. Respondent No. 3 once again sent the application to the Petitioner-Co-operative Society with the same request. Aggrieved by the action of Respondent No. 2 and Respondent No. 3, Mr. Jeeva filed a second appeal before the State Information Commissioner (Respondent No. 1). The State Information Commissioner directed the Petitioner- Society to provide all the information sought by Mr. Jeeva.

Aggrieved by the order, a Petition was filed before the Hon’ble Madras High Court under Article 226 of the Constitution.

HELD

The Hon’ble Madras Court observed that the Petitioner-Society was registered as a society under the Tamil Nadu Co-operative Societies Act, 1983, and was an autonomous body. Further, as per section 2(h) of the Right to Information Act, 2005, a society does not fall within the definition of public authority. Therefore, relying on the decision of the Hon’ble Supreme Court in the case of Thalappalam Service Cooperative Bank Ltd. and Others vs. The State of Kerala and Others [2013 (7) MLJ 407 (SC)], the Hon’ble Court held that Co-operative Societies do fall under the ambit of the RTI Act.

Thus, the Petition was allowed, and the order of the State Information Commissioner was set aside.

33 C/M Arya KanyaPathshala Samiti and Ors. vs. State of U.P. and Ors.

AIR 2024 Allahabad 238

25th April, 2024

Society Registration — Election for Committee Members — Election result placed before Registrar for recognition- Election invalidated by Registrar — No jurisdiction to invalidate elections — Ought to have referred to prescribed authority. [S. 25(2), Societies Registration Act, 1860].

FACTS

The Petitioner is a society registered under the Societies Registration Act 1860 (Act). Following a resolution passed on 30th October, 2021, the Society held elections to appoint members to the committee of management. The results of these elections were then submitted to the Assistant Registrar for official recognition. However, the Registrar declared the results invalid under section 25(2) of the Act, following a complaint from the Society’s President, who claimed that the resolution had not been signed by her.

Aggrieved by the Order, a Petition was filed before the Hon’ble Allahabad High Court under Article 226 of the Constitution.

HELD

The Hon’ble Allahabad High Court noted that the Registrar failed to provide the Petitioner an opportunity to present their case before declaring the elections invalid. Further, the decision was made solely on the basis of the President’s complaint without gathering any supporting facts. The Court also observed that, under section 25(2) of the Act, the Registrar does not have the authority to cancel or invalidate an election. Instead, the matter should have been referred to the prescribed authority in accordance with section 25(2). Thus, the Hon’ble Court set aside the Registrar’s order.

The Petition was allowed.

Allied Laws

Shankar Vithobai Desai and Ors vs. Gauri Associates and Anr.

Comm. Arbitration Application (L) No. 21070 of 2023 (Bom HC)

16th July, 2024

24. Arbitration — Development Agreement between Society and Firm — Dispute — Individual members of the society cannot invoke Arbitration clause — [S. 11, Arbitration and Conciliation Act, 1996].

FACTS

A Development Agreement (DA) was executed between society and the Respondent (i.e., Gauri Associates). The Applicants (thirteen individual members) are among the forty members of the society. A dispute arose between the Applicants and the Respondent. Therefore, the Applicants, issued a letter / notice to the Society and to the Respondent invoking arbitration clause in the DA. Interestingly, the Society had not authorised / consented to the Applicants on whose behalf the said notice was issued.

An application was filed before the Hon’ble Bombay High Court by the thirteen individual members of the society, on behalf of the society for the appointment of an Arbitrator.

HELD

The Hon’ble Bombay High Court observed that the DA was executed between the Society and the Respondent and not between individual members of the Society and the Respondent. Further, the Hon’ble Court relied on the decision of the Hon’ble Bombay High Court in the case of Ketan Champaklal Divecha vs. DGS Township Pvt Ltd (2024 SCC OnLine Bombay 10), wherein, it was held that individual members of the society give up their desire and identity by submitting to the collective will of the housing society. Therefore, the Court held that individual members of the Society could not invoke the arbitration clause as they were not the signatories of the DA.

The Application was thus, dismissed.

Ram Briksha Singh and Ors vs. Ramashray Singh and Ors.
Civil Miscellaneous Jurisdiction 1824 of 2018 (Patna HC)
11th July, 2024

25. Evidence — Certified copy of sale deed — Public document — Relevance of sale deed — Maintainability of a certified copy of sale deeds as a public document — [S. 74, 75, 76 Indian Evidence Act, 1872; S. 57(5), Registration Act, 1908].

FACTS

The Respondent (Original Plaintiff) had instituted a suit for title against Petitioners (Original Defendants). It was the case of the Plaintiffs, that a mortgage deed was executed between the Plaintiff and Defendant. However, after the Plaintiff repaid the money, the Defendants refused to re-convey the property. Consequently, the Plaintiff filed a suit against the Defendant. During the pendency of the suit, the Plaintiff filed an application to admit a certified copy of the sale deed executed by the Plaintiff in favour of a third party, as evidence in the form of a public document. However, the Defendants objected by arguing that the said sale deed was irrelevant and could not be considered as a public document. The Learned Trial Court, after examining the facts, admitted the sale deed and marked it as an exhibit.

Aggrieved, a Petition was filed before the Hon’ble Patna High Court under Article 227 of the Constitution.

HELD

The Hon’ble Patna High Court, at the outset, observed that merely marking a document as an exhibit does not infer that the said document is admissible evidence. Further, the aggrieved party is not barred by objecting to its admissibility when the document is marked as exhibit. Further, relying on the decision of the Hon’ble

Supreme Court in the case of Appaiya vs. Andimuthu Thangapandi and Ors (Civil Appeal No. 14630 of 2015, S.L.P. (C) No. 10013 of 2015) and relying on sections 74 to 76 of Indian Evidence Act, 1872 read with section 57(5) of the Registration Act, 1908 the Hon’ble Court held that certified copy of a registered sale deed would fall under the category of public document and the same can be admitted into evidence. However, the Hon’ble Court cautioned that the certified copy would only prove the contents of the original document and not be proof of execution of the original document.

Thus, the Petition was dismissed.

Late Shivraj Reddy (Through his Legal Heir) and Anr. vs. S. Raghuraj Reddy and Ors.

AIR 2024 Supreme Court 2897

16th May, 2024

26. Partnership Firm — Partnership at will — Death of a Partner — Automatic termination of Partnership Firm [S. 42(c), Partnership Act, 1932; S. 3, Limitation Act, 1963].

FACTS

A suit was instituted in 1996 for the dissolution of the Partnership Firm and rendition of accounts by Respondent No. 1 (Original Plaintiff). The Respondent No. 1 along with Defendants No. 2 to 4 and one Mr. Late Balraj Reddy had constituted a Partnership Firm (i.e. Defendant No. 1, the firm) in 1978. The Learned Trial Court allowed the suit and passed a decree dated 26th October, 1998. Subsequently, an appeal was filed before the Hon’ble Andhra Pradesh High Court (Single Bench) by the Defendant No.1 (the Firm) and the Defendant No. 2 (Appellant). The Hon’ble Court observed that the one Mr. Balraj Reddy (partner of the firm) had expired in the year 1984. Therefore, as per section 42(c) of the Partnership Act, 1992 (Act), the said Partnership firm stood automatically dissolved. Thus, the original suit which was filed by Respondent No.1 in 1996 for rendition of accounts, was barred by limitation. Aggrieved by the Order, an appeal was filed before the Division Bench of the Hon’ble Andhra Pradesh High Court. The Division Court reversed the decision passed by the Hon’ble Single Bench on the ground that the issue of limitation was never raised during the proceedings before the Learned Trial Court.

Aggrieved, an appeal was filed before the Hon’ble Supreme Court.

HELD

The Hon’ble Supreme Court observed that the Partnership was at will. Further, it was not disputed that one partner, namely Mr. Balraj Reddy had expired in 1984. Therefore, relying on section 42(c) of the Act, the Court held that the Partnership Firm stood automatically dissolved and thus, the Original Suit (of 1996) was barred by limitation. Coming to the question of the limitation issue which was raised for the first time before the Hon’ble High Court, the Hon’ble Supreme Court held that even if the plea of limitation is not taken up as a defense, the Court is bound to dismiss the suit if it is barred by limitation. Furthermore, relying on the decision of the Hon’ble Supreme Court in the case of V.M. Salagaocar and Bros vs. Board of Trustees of Port of Mormugao and Anr[(2005) 4 SCC 613], the Hon’ble Court reiterated that it is the duty of the Courts not to proceed with the application if it is made beyond the period of limitation prescribed.

Thus, the Petition was allowed, and the decision of the Hon’ble Andhra Pradesh High Court (Single Bench) was restored.

Mool Chandra vs. UOI & Anr

Civil Appeal No. 8435-8436 of 2024 (SC) 5th August, 2024

27. Condonation of Delay — Delay of 425 days — Tribunal rejected the appeal for condonation of delay — High Court affirmed the order of Tribunal — On SLP Hon’ble Supreme Court condoned the delay — It is not the length of delay that would be required to be considered while examining the plea for condonation of delay rather the cause for the delay — Directed the Tribunal to decide on merits. [S. 21, Central Administrative Tribunal Act, 1985].

FACTS

The Appellant was appointed to Indian Statistical Services in 1982. He was suspended on 13th October, 1997, on account of desertion of his family for another woman. There was ongoing litigation between the Department and the assessee for reinstatement, promotion, and financial benefits. In one instance the Appellant was unaware that his counsel had withdrawn the application directing the Respondent to dispose of his review petition. It came to his notice much later and he immediately filed a Miscellaneous Application against the same. This was rejected by the Tribunal on account of the delay of 425 days. The High Court affirmed the order of the Tribunal.

On SLP to the Supreme Court.

HELD

No litigant stands to benefit in approaching the courts belatedly. It is not the length of delay that would be required to be considered while examining the plea for condonation of delay, it is the cause for the delay which has been propounded that will have to be examined. If the cause for delay falls within the four corners of “sufficient cause”, irrespective of the length of delay same deserves to be condoned. However, if the cause shown is insufficient, irrespective of the period of delay, the same would not be condoned.

Ramkripal Meena vs. Directorate of Enforcement SLP(Crl) No. 3205 of 2024 Supreme Court 30th June, 2024

28. Money Laundering — Bail granted in the predicated offense — But arrest by Enforcement Directorate under PMLA — Section 45 of PMLA is relaxed — Conditions imposed. [S. 45, Prevention of Money Laundering Act, 2002; S. 120-B, 302, 365, 406, 420, Indian Penal Code, 1860].

FACTS

The Petitioner was accused of leakage of question paper and use of unfair means in the Rajasthan Eligibility Examination for Teachers (REET) exam 2021. The Petitioner was working as a manager of the school and had access to the strong room from where the Petitioner had allegedly stolen one copy of the question paper and leaked it. The Hon’ble Supreme Court, however, had granted bail to the Petitioner vide order dated 18th January, 2023 subject to various conditions on the predicated offense mentioned in the First Information Report (FIR). Subsequently, the Respondent arrested the Petitioner again on 21st June, 2023, based on First Information Report No. 298/2021 (Second FIR). The Second FIR was registered under Sections 302, 365, and 120B of the IPC and Sections 3(2)(v) of the Scheduled Castes and Schedule Tribes (Prevention of Atrocities) Act, 1989 (SC/ST Act). However, the Petitioner was not charge-sheeted under the SC/ST Act by the Respondent. Thus, the only Scheduled offense against the Petitioner under the Prevention of Money Laundering Act (PMLA) was with respect to Section 420 of the IPC.

HELD

The Hon’ble Supreme Court noted that the Petitioner was in custody for over a year, and the only offense against him was under section 420 of the IPC. Further ₹1.06 crore out of the sum of ₹1.2 crore were recovered. Further, on a specific query asked by the Court, the Counsel of the Respondent informed the Hon’ble Court that the case was pending at the stage of framing of charges, and twenty- four witnesses are yet to be examined, which would take a considerable amount of time. Thus, taking into consideration the time spent by the Petitioner in custody, along with the progress of the case, apart from the fact that the Petitioner was already on bail in the predicate offense, the Hon’ble Supreme Court held that rigors of section 45 of PMLA have to be relaxed. Further, directed the passport to be submitted before the Special Court with a list of assets and bank accounts that can be seized by the Enforcement Directorate.

Thus, the Petitioner was granted bail.

Allied Laws

20 Central Bank of India vs. Shanmugavelu

AIR 2024 Supreme Court 962

2nd February, 2024

Auction of property — Highest bidder — Earnest money paid — Unable to pay the balance — Sale terminated by the bank — Earnest money forfeited by the bank — Banks not liable to refund earnest money. [R. 9(5) Security Interest (Enforcement) Rules, 2002; S. 73, 74, Indian Contracts Act, 1872].

FACTS

A property was set up for auction by the Appellant Bank under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Act, 2022 (SARFAESI Act). The Respondent emerged as the highest bidder and purchased the property after paying 25 per cent as earnest money. However, he was unable to pay the remaining 75 per cent of the balance amount owing to a delay in acquiring the loan. Thus, the Appellant Bank cancelled the auction sale and refused to refund the earnest money as per the provisions of Rule 9(5) of the Security Interest (Enforcement) Rules, 2002 (SARFAESI Rules). Aggrieved by the refusal of refund money and cancellation of the sale, the Respondent filed an application before the Debt Recovery Tribunal. The Tribunal held that the Respondent was entitled to refuse the refund of the earnest money. However, the same was limited only to the extent of loss or damage caused to the Appellant Bank as envisaged in sections 73 and 74 of the Indian Contracts Act, 1872 (Contracts Act). Therefore, the Appellant Bank was directed to refund the earnest money after deducting a minuscule amount as expenditure/loss incurred. Aggrieved, the Appellant bank approached the Madras High Court. However, the decision of the Tribunal was confirmed by the High Court with a slight enhancement of expenditure/loss amount.

Aggrieved by the decision of the High Court, an appeal was filed before the Supreme Court (Three-Judge Bench).

HELD

The Supreme Court held that the provisions of sections 73 and 74 of the Contracts Act do not apply to the auction process conducted under the SARFAESI Act. Further, the Court also noted that the SARFAESI Act was a special legislation which overrides the general legislation. Furthermore, the Court also held that Rule 9(5) of the SARFAESI Rules cannot be read down just because of its harsher consequence. Thus, the appeal filed by the Appellant Bank was allowed and the order of the Madras High Court was set aside.

21 N.H.A.I vs. Hindustan Construction Company Ltd

2024 LiveLaw (SC) 361

7th May, 2023

Arbitration — Majority Award — Appeal to courts only if an award is in violation of the public policy of India — Courts cannot sit in appeal over Arbitral Tribunal’s interpretation of contract [S. 34, 37, Arbitration and Conciliation Act, 1996].

FACTS

The Appellant had awarded a four hundred crore contract to the Respondent for road construction in the Allahabad Bypass project. Thereafter, a dispute arose between the parties and the parties were referred to an Arbitral Tribunal (Tribunal). The Arbitral Tribunal after taking into consideration the contract agreement and the facts of the case, passed an award (2:1) in favour of the Respondent and directed the Appellant to pay additional cost to the Respondent. Aggrieved by the award of the Arbitral Tribunal, a petition under section 34 of the Arbitration and Conciliation Act, 1996 (Act) was filed before the Delhi High Court (Single Judge Bench). The High Court, however, dismissed the appeal on the ground that the view taken by the majority needed no interference from the Court. Aggrieved, an appeal was filed under section 37 of the Act before the Division Bench of the Delhi High Court. The appeal was, however, dismissed by the Hon’ble Court on similar grounds.

Aggrieved by the order of the Delhi High Court (both, Division and Single Bench), an appeal was preferred before the Supreme Court.

HELD

The Supreme Court, at the outset, observed that the jurisdiction of the courts is very limited under section 34 of the Act, and the restrictions are even greater while adjudicating cases under 37 of the Act. The Supreme Court, concurring with decisions of the Delhi High Court, held that only when the award is in conflict with the public policy of India, the Court would be justified in interfering with the arbitral award. Further, when a court is applying the ‘public policy’ test to an arbitration award, it does not act as a court of appeal over the findings and interpretation of the arbitrator.

Thus, the award of the Tribunal was confirmed.

22 Dell International Service India Pvt Ltd vs. Adeel Feroze and Ors

W.P. (C) 4733 of 2024 (SC)

2nd July, 2023

Evidence — Admissibility of electronic data/evidence — Mandatory Certification required — [S. 65B, Indian Evidence Act, 1872].

FACTS

A plea was filed by the Respondent before the Consumer Dispute Redressal Commission (District Commission) against the Petitioner. The Learned District Commission had refused to condone the delay by the Petitioner in filing its written submission. The counsel for the Petitioner had contended before the District Commission that he had not received the copy of the entire complaint along with all the annexures and it was received by him much later. However, the Learned District Commission after going through postal receipts of the documents held that the application of condonation of delay of the Petitioner was not bonafide. Thus, an appeal was filed by the Petitioner before the Delhi State Consumer Dispute Redressal Commission (State Commission). The State Commission also dismissed the appeal on the ground that the condonation of delay application was not bonafide.

Aggrieved, a Petition was filed under Articles 226 and 227 of the Constitution before the Delhi High Court.

HELD

The Petitioner in its plea before the Delhi High Court demonstrated by way of screenshots of WhatsApp chats between the Petitioner and the Respondent regarding the missing annexures of the complaint copy. However, the Delhi High Court observed that the said screenshots of WhatsApp chats were not certified as mandated by section 65B of the Indian Evidence Act, 1872. Therefore, the Hon’ble Court held that the screenshots cannot be taken into evidence.

Thus, the Petition was dismissed and the orders of the District and State Commission were not interfered with.

23 Bano Saiyed Parwaz vs. Chief Controlling Revenue Authority and Inspector General of Registration and Controller of Stamps and Ors.

2024 LiveLaw (SC) 426

17th May, 2024

Stamp Duty — Registration – Conveyance deed — Stamp duty paid — Fraud — Cancellation thereof – Refund Application — Cancellation Deed — Cancellation deed executed after making application of refund — Mere technicalities — Refund granted. [S. 47, 48, Maharashtra Stamps Act, 1958.].

FACTS

A conveyance deed, for purchase of property was executed by the Appellant and the vendor on 13th May, 2014. The stamp duty was duly paid by the Appellant on the same day. Thereafter, the Appellant came to know that the property was already sold by the vendor to some other party. Therefore, she (Appellant) decided to cancel the conveyance deed. On 22nd October, 2014, the appellant filed an application before the stamp duty authority (Respondent) seeking a refund for the stamp duty already paid by her on 13th May, 2014. However, she was unable to execute a cancellation deed due to the non-availability of the vendor. It was only with the help of law enforcement that the Appellant was able to execute a cancellation deed on 13th November, 2014 (i.e. six months and one day after registration of the original conveyance deed). The Respondent refused the application on the ground that the said cancellation deed was time-barred as per the provision laid down in section 48 of the Maharashtra Stamp Act, 1958 (Act). Further, the cancellation deed was executed after the application for refund was made. Aggrieved, a writ was filed before the Bombay High Court. The disallowed the petition.

Aggrieved, a Special Leave Petition was filed before the Hon’ble Supreme Court.

HELD

The Hon’ble Supreme Court observed that the Appellant had immediately filed for a refund as soon as she gained knowledge of the fraud. Further, she was unable to execute the cancellation deed due to the unavailability of the vendor, and the same was done only with the help of law enforcement. Thus, there was no lax approach on the part of the Appellant. Therefore, the Supreme Court held that the Respondent was not justified in denying a refund to the Appellant on mere technicalities. The Court further held that since the application was filed before six months (though registration was done after six months), the Appellant was not time-barred as per section 48 of the Act.

Thus, the Petition was allowed, and the Respondent was directed to refund the stamp duty.

Allied Laws

16 Atanu Mondal vs.The State of West Bengal and Ors.

AIR 2024 Calcutta 144

9th January, 2024

Auction of property — Sale Certificate issued by Bank officer — Market Value higher than bid value — Bank Officer deemed to be a Revenue Officer — Stamp duty payable on Bid value and not Market value. [S. 47A, Stamps Act, 1899].

FACTS

A property was set up for auction by the United Bank under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Act, 2022 (SARFAESI Act). The Appellant emerged as the highest bidder and purchased the property at ₹39,00,000/-. The Authorised Officer of the bank issued a sale certificate to appellant after payment was made by the appellant. However, during registration of the said property, the stamp duty officer ascertained the market value of the property at ₹1,71,19,140/- and directed the Appellant to pay stamp duty at 6 per cent on the ascertained market value of the property as against the purchased value. Aggrieved, the appellant filed a writ petition before the Hon’ble Calcutta High Court (Single Bench). The Hon’ble Court dismissing the petition, held that the registration authority was empowered under section 47A of the Stamps Act, 1899 (Stamps Act) to determine the correct market value of the property and calculate the stamp duty payable thereon.

Aggrieved by the said order, an appeal was filed before the division bench of the Hon’ble Calcutta High Court.

HELD

The Hon’ble Court observed that the property was sold in an auction by the bank under the provisions of the SARFAESI Act. Further, an Authorised Officer of the bank conducting such a sale shall be deemed to be a Revenue Officer and a certificate issued by him shall be evidence of sale. Furthermore, the Court noted that such a sale by a revenue officer is exempted from the provision of section 47A of the Stamps Act. Furthermore, the Court also noted the market value of the property is a changing concept and the value fetched after it is sold in the open market pursuant to advertisement and publication, the invitation of bids shall be exempted from scrutiny under the Stamps Act. Thus, the appeal was allowed.

17 Sivarajan vs. Jagadamma

AIR 2024 (NOC) 372 (KER)

6th December, 2023

Will or Gift Deed — Entire property rights transferred — Only life interest was reserved to reside — Gift deed — No saleable rights after property transferred / gifted. [S. 63, Succession Act, 1925; S. 122, Transfer of Property Rights, 1882].

FACTS

The Plaintiff (Respondent- Jagadamma) had instituted a suit for declaration of title and peaceful possession of property against the Defendant (Appellant – Sivarajan). The Plaintiff, relying on a gift deed, had contested that the property in dispute was allegedly gifted to her by her mother. Whereas, Defendant had contested that the said property was sold to her by the mother of Plaintiff through a conveyance deed. Further, the Defendant also contested that the alleged gift deed was actually a Will and not a gift deed. Furthermore, the Defendant also contested that the time period for instituting the said suit began immediately after the death of her mother. Thus, since the suit was instituted after a period of three years from the death of the mother, the Defendant contended that the said suit was barred by limitation as per the provisions of the Article 58 of the Schedule of the Limitations Act, 1963 (Act).

HELD

The Hon’ble Kerala High Court observed that the alleged deed / Will gave the entire rights of the property to the Plaintiff. Further, only life interest was reserved by the mother of the Plaintiff to reside in the house until death. Thus, the Hon’ble Court concluded after relying on section 122 of Transfer of Property Rights, 1882 that the document was in fact a gift deed and not a Will. Further, the Hon’ble Court held that once the property was gifted to the Plaintiff, she (mother) had no saleable interest in the property and thus, the conveyance deed would not have any legal effect. Furthermore, the Hon’ble Court held that the period of limitation shall be as per the provisions of Article 65 (providing limitation period for suit for possession based on title) of the Schedule of the Act, i.e., a period of twelve years from the date of death of the mother and not as per Article 58 (providing limitation period for suit for obtaining a declaration) of the Act.

Thus, the appeal of the Defendant was dismissed.

18 Ramesh Tiwary vs. Sheo Kumari Devi

AIR 2024 (NOC) 393 Patna

3rd May, 2023

Power of Attorney — Attorney holder cannot depose for the acts of Principal — Spouse of the parties to the suit — Can depose as a witness to the extent of personal knowledge. [O. 3, R. 1 and 2, Code for Civil Procedure, 1908; S.120, Indian Evidence Act, 1872].

FACTS

The Respondent (Original Plaintiff) had instituted a suit against the Appellant (Original Defendant) for declaration of title over a property. Since the Plaintiff was an eighty-year-old woman suffering from various diseases, she had executed a power of attorney in favour of her husband (Respondent no. 2) to adduce evidence on her behalf. The Appellant, however, objected by relying on Order 3, Rules 1 and 2 of the Code for Civil Procedure, 1908 (CPC) that a power of attorney holder can adduce evidence or depose for the principal only in respect of acts done by the attorney holder in pursuance to said power. Further, the Appellant also argued that an attorney holder cannot depose on behalf of the principal in respect of acts done by the principal itself or where the principal is the only person who has personal knowledge about the facts. However, the Learned Trial Court dismissed the objections of the Appellant and allowed Respondent No. 2 to adduce evidence on behalf of her wife (Original Plaintiff).

Aggrieved by the said dismissal, a Civil Miscellaneous Application was filed under Article 227 of the Constitution before the Hon’ble Patna High Court.

HELD

The Hon’ble Patna High Court observed that Order 3, Rules 1 and 2 of the CPC restricted an attorney holder to adduce evidence only in respect of acts done by itself. However, the Hon’ble Court also noted that section 120 of the Indian Evidence Act, 1872 empowers the spouse of the parties to the suit to depose as a witness. Therefore, the Hon’ble Court held that Respondent No. 2 cannot adduce evidence in place of his wife (Original Plaintiff) but can adduce evidence as a witness only to the extent of his personal knowledge.

Thus, the Miscellaneous Application was partially allowed.

19 People Welfare Society vs. State Information Commissioner and Ors.

AIR 2024 Bombay 54 (Nagpur Bench)

1st March, 2024

Right to Information — Supply of Information — Public Trust running educational institution from government fund/grant — Substantial grant — Duty bound to provide information about the educational institution — Charity Commissioner is not bound to supply information regarding Public Trust — [S. 2(h), 4, 6 – Right to Information Act, 2005; S. 18, Maharashtra Public Trust Act,1950].

FACTS

The moot question which was referred to the full bench of the Hon’ble Bombay High Court (Nagpur Bench) was whether a public trust registered under the provisions of Maharashtra Public Trusts Act, 1950, which is running an educational institution and receiving a grant from the state is duty bound to supply information sought from it under the provisions of Right to Information Act (RTI Act)?

HELD

The Hon’ble Bombay High Court held that if the information solicited under the RTI Act is regarding the Public Trust, which has not received substantial government largesse to implement the aims of the Public Trust, then, in that case, there is no obligation to supply information if that Public Trust does not fall within the ambit of section 2(h) of the RTI Act. Further, the Hon’ble Court also held that in case the information is solicited in respect of an educational trust or other institution, which is run by that Public Trust, in case financial support from the government is found to be substantial, (which is a plea to be decided by the Information Commissioner), information relating to such Educational or other Institutions can be directed to be supplied. Furthermore, the Charity Commissioner would also not be legally obliged to supply such information, which may be collected by him, in respect of the Public Trust, under the provisions of the Maharashtra Public Trusts Act, 1950 in case such information falls under the exempted category mentioned in Section 8(j) of the RTI Act and the demand does not have statutory backing.

20 Vivek Jain vs. Deputy Commissioner vs. Ors

2024 LiveLaw (Kar) 248

4th June, 2024

Gift Deed — Father to son — Property — Gift cannot be cancelled for failure to maintain if no condition is specified in the Gift deed to maintain father. [S. 23, Maintenance and Welfare of Parents and Senior Citizen Act, 2007].

FACTS

Respondent No. 3 (father) had gifted a property by way of a gift deed to his son (Respondent No. 4). Thus, Respondent No. 4 became a lawful owner of the property. Subsequently, Respondent No. 4 sold the property by way of a sale deed to the Petitioner. Two years after the sale deed, the father (Respondent No. 3) filed an application before the Learned Assistant Commissioner under section 23 of the Maintenance and Welfare of Parents and Senior Citizen Act, 2007 (Act) to set aside the gift deed and the subsequent sale deed. The Learned Assistant Commissioner observed that the son (Respondent No. 4) had failed to maintain his father, thus, he cancelled the said gift deed and subsequent sale deed.

Aggrieved by the said order, a Petition was filed by the Purchaser of the property (the Petitioner) before the Hon’ble Karnataka High Court.

HELD

The Hon’ble Karnataka High Court observed that section 23 of the Act mandates for a condition to be mentioned in the gift deed for maintaining the father. Thus, in absence of any such condition mentioned in the gift deed, the Hon’ble Court quashed the order of the Learned Assistant Commissioner.

The Petition was allowed.

Allied Laws

11 Bar Of Indian Lawyers Through its President Jasbir Singh Malik vs. D.K. Gandhi PS National Institute of Communicable Diseases

2024 Live Law (SC) 372

14th May, 2024

Advocates — Professionals — Highly skilled — Success depends on various factors — Cannot be compared with business — Cannot be held for deficiency of service. [S. 2(1)(o), Consumer Protection Act, 1986]

FACTS

The Appellant, an advocate was hired by Mr. DK Gandhi (Respondent) for legal services. Disputes arose between them and the Respondent filed a consumer complaint before the district forum for deficiency in services. The District forum decided the complaint in favour of the respondent. The State Commission held that the services of lawyers /advocates did not fall within the ambit of “service” defined under section 2(1)(o) of the CP Act, 1986. The NCDRC, however in the Revision Application preferred by the respondent passed the impugned order holding that if there was any deficiency in service rendered by the Advocates / Lawyers, a complaint under the CP Act would be maintainable.

Being aggrieved by the said impugned order passed by the NCDRC, the present set of appeals has been filed by the Bar of Indian Lawyers, Delhi High Court Bar Association, Bar Council of India.

HELD

With regard to the nature of the work of a professional, which requires a high level of education, training and proficiency and which involves skilled and specialized kind of mental work, operating in the specialized spheres, where achieving success would depend upon many other factors beyond a man’s control, a Professional cannot be treated equally or at par with a Businessman or a Trader or a Service provider of products or goods as contemplated in the CP Act.

The appeal is allowed.

12 Umesh Kumar Gupta vs. Collector Rewa

AIR 2024 MADHYA PRADESH 57

12th January, 2024

Borrower — Non-performing assets — Financial institutions can invoke arbitration clauses as well as recourse under SARFAESI. [S. 11, 14, 35, 37 Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI); S.36, Arbitration and Conciliation Act, 1996 (ACA)].

FACTS

The Petitioner is a borrower while respondent No. 2 is a financial institution which had extended a loan facility to the petitioner and to secure the same, the petitioner had mortgaged a certain piece of land. Petitioner defaulted in repayment of the loan leading to the loan account becoming NPA and the financial institution took recourse under SARFAESI. During the SARFAESI proceedings, the Petitioner objected stating that the financial institution had already invoked the arbitration clause in the agreement between the petitioner-borrower and financial institution whereafter award had been passed in favour of the financial institution. The objection was rejected and hence this Petition.

HELD

No doubt Section 11 of the SARFAESI Act mandates disputes to be resolved by way of conciliation and arbitration. Section 35 of the SARFAESI Act stipulates that provisions of the SARFAESI Act shall have overriding effect over anything inconsistent with any other law for the time being in force or any instrument having effect by virtue of any such law. Section 37 prescribes that the provisions of the SARFAESI Act are mandated to take effect in addition to and not in derogation of several statutes. Meaning thereby that the overriding effect of the SARFAESI Act mandated in Section 35 of the SARFAESI Act is diluted to a considerable extent by Section 37 of the SARFAESI Act by providing that the provisions of SARFAESI Act would be in addition to and not in derogation of various enactments referred to in Section 37 of the SARFAESI Act, and also any other law for the time being in force, including Arbitration and Conciliation Act. Hence, no fault can be found with the respondent financial institution invoking Section 14 of the SARFAESI Act by approaching the District Magistrate, Rewa.

13 Binita Dhruv Karia vs. Aashna Dhruv Karia

AIR 2024 (NOC) 194 (BOM)

2nd May, 2023

Guardian — Appointment of Guardian — Mental retardation not covered under “mental illness” — No remedy other than Writ — Mother was allowed to be appointed as the guardian of her major daughter to manage the properties for the well-being of her daughter. [S. 7, Guardians and Wards Act, 1890].

FACTS

The Petitioner is the mother of the ward, a major and sought to be appointed as her legal Guardian. Since the ward was the joint owner of immovable property, it was necessary for the Petitioner to be appointed as the guardian to make decisions for the well-being of her child who suffered from mental retardation. However, there was no remedy other than filing this Writ Petition.

HELD

The child was suffering from mental retardation which is not considered a “mental illness” under section 2(s) of the Mental Health Act, 2017 and the Guardians and Wards Act, 1890 only allows for the appointment of a Guardian for minors. Having considered the peculiar facts, the mother / petitioner was allowed to be appointed as the guardian of her major daughter to manage the properties for the well-being of her daughter as the said properties were jointly owned by her daughter.

The Petition was allowed.

14 Maya Gopinath vs. Anoop S. B. & Anr

SLP (Civil) 13398 of 2022

24th April, 2024

Hindu Law — Stridhan — Wife’s absolute property — Husband has no rights.

FACTS

The Appellant was the wife of the Respondent. On the occasion of their marriage, she was gifted with gold and cash by her family, which was misappropriated by her husband to clear old liabilities. The couple drifted apart and she filed a case for recovery of her assets. The trial court held in favour of the appellant. The High Court reversed the order on the requirement of evidence.

Aggrieved by the said order, an appeal was filed before the Hon’ble Supreme Court.

HELD

The Hon’ble Supreme Court observed that the Stridhan is an absolute property of the wife and the husband has no title. The same can be used by the husband in times of distress and it is his duty to restore the same. In the interest of justice and the passage of time, as compensation for the gold and cash, the apex court directed the husband to pay a sum of R25 lakhs within six months.

15 Shonali Dighe vs. Ashita Tham and others

AIR 2024 (NOC) 242 (BOM)

8th November, 2023

Will — Execution of Will — Under suspicious circumstances — Probate not granted. [S. 63, Succession Act, 1925; S. 68, Evidence Act, 1872].

FACTS

On 20th June, 2003, Mr. Bipin Gupta executed a Will while undergoing treatment for renal failure and hip fracture in Bombay Hospital which is the subject matter of the present suit proceedings. The two Executors named in the Will were Mr. Vasant Sardal and Mr. Behram Ardeshir whereas Will was attested by Mr. Santosh Raje and Mr. Anil Sardal as attesting witnesses. By this Will, Mr. Bipin Gupta bequeathed his entire estate to charity to the exclusion of his family members/legal heirs and indirectly to the Executors. On 04th September, 2003, Mr. Bipin Gupta expired in Flat No. 2, Firdaus Building. The Executors and the attesting witnesses without informing any of his family members took his body for cremation. Neighbours informed the Defendants (family members) about the demise of Mr. Bipin Gupta.

Disputes arose among the parties, the said petition was filed by Mr. Vasant Sardal one of the executors of the Will.

HELD

The Court made several observations such as the doctor treating the deceased is not an attesting witness, the bequest was obscure and in the name of a charitable trust controlled by the executors, the executor and witnesses were related parties, no evidence of who drafted the Will, signatures on each page were not identical and unnatural exclusion of heirs of the testators also raised suspicion.

Hence, the Will was held to be not genuine and the petition was dismissed.

Allied Laws

6 Venkataraman Krishnamurthy and another vs. Lodha Crown Buildmart Private Limited.

2024 SCC OnLine SC 182

Date of order: 22nd February, 2024

Agreement to sale — Agreement clauses included terms for termination — Court bound by the terms of the agreement — Courts cannot unilaterally rewrite terms of agreements [S. 2(g), S. 2(h) Indian Contract Act, 1872].

FACTS

The Appellants intended to purchase an apartment located in Mumbai from the Respondent-developer company. The parties entered into an agreement to sell. As per the said agreement to sale, the Respondent was to construct the property, get necessary approvals / certifications from the Government and deliver the possession of the apartment to the Appellants on said date, failing which, the Appellants had the option to cancel the agreement with full compensation along with interest at 12 per cent per annum. The Respondent failed to deliver the possession of the said apartment owing to certain circumstances. The Appellants, therefore, terminated the contract and requested for a full refund along with interest as per the terms of the agreement. The Respondent, however, denied the termination of the agreement. Aggrieved, the Appellants approached the National Consumers Dispute Redressal Commission (NCDRC). The Ld. NCDRCnoted that though there was a minor delay by the Respondent in handing over the possession of the apartment, the same was not unreasonable. Further, the Ld. NCDRC held the Respondent was to hand over the possession of the apartment within a stipulated time period and if the Appellants wished to terminate the agreement, the Respondent was entitled to deduct the earnest money and interest was restricted to 6 per cent per annum.

Aggrieved by the said order, an appeal was filed before the Hon’ble Supreme Court.

HELD

The Hon’ble Supreme Court observed that the parties had entered into an agreement outlining remedies in case the Respondent failed to hand over possession. Thus, the Hon’ble Supreme Court held that the Ld. NCDRC couldn’t overstep its jurisdiction by rewriting the terms of the agreement of the parties. Further, the Hon’ble Court overturned the decision of the Ld. NCDRC and directed the Respondent to compensate the Appellants as per the terms of the agreement.

7 R. Hemalatha vs. Kashthuri

AIR 2023 Supreme Court 1895

Date of order: 10th April, 2023

Admissibility of Evidence — Suit for Specific Performance — Unregistered Agreement to Sale — Compulsorily registrable document after State Amendment — Effect of non-registration — Can be taken into evidence in a suit for Specific Performance [S. 17, 49, The Registration Act, 1908; S. 17, Tamil Nadu Amendment Act, 2012].

FACTS

The Respondent (Original Plaintiff) instituted a suit for the specific performance of an agreement to sell against the Appellant (Original Defendant). However, the agreement to sale entered between the parties was unregistered. Thus, the preliminary issue which was framed before the Ld. Trial Court pertained to the admissibility of the agreement to sell as evidence. The Ld. Trial Court opined that in view of the Tamil Nadu Amendment Act, 2012, (Amendment Act), an amendment was made to section 17 of the Indian Registration Act, 1908, (Act) whereby, an agreement to sale was made compulsorily registrable. Thus, the Ld. Trial court held that the said agreement to sale cannot be admitted as evidence. Aggrieved, the Original Plaintiff filed an appeal before the Hon’ble Madras High Court. The Hon’ble Court, after relying on section 49(1) of the Act, held that even though the said agreement to sale was unregistered, it can still be taken into evidence considering it was a suit instituted for specific performance.

Aggrieved, an appeal was filed by the Original Defendant before the Hon’ble Supreme Court.

HELD

The Hon’ble Supreme Court observed that though section 17 of the Act was amended by the Amendment Act of Tamil Nadu to make registration compulsory of an agreement to sale, there was no such corresponding amendment made to section 49 of the Act. Further, the Hon’ble Court also noted that an unregistered document affecting any immovable property and which is required to be registered as per section 17 of the Act, may be taken into evidence in a suit instituted for specific performance (subject to section 17(IA) of the Act) under Chapter-II of Specific Relief Act, 1877. Thus, the order of the Hon’ble Madras High Court was upheld.

8 Leela Devi vs. Amar Chand

AIR 2023 Rajasthan 109

Date of order: 2nd May, 2023

Admissibility of Evidence — Suit for partition — Family arrangement between parties — Effect of unstamped and unregistered family arrangement — Admissible evidence — Not liable to be stamped or registered [S. 17, The Registration Act, 1908; S. 2(xx), Rajasthan Stamps Act, 1999].

FACTS

The Petitioner (Plaintiff) had instituted a suit for partition before the Ld. Trial Court. The Defendant had filed a written statement alleging that the parties, being family members, had entered into a family agreement and the properties were partitioned accordingly. The Plaintiff, however, disputed the admission of the said family agreement into evidence, citing that the alleged family agreement was actually a partition deed and the same was neither stamped nor registered. The Ld. Trial Court, however, refused to accept the contentions of the Plaintiff and admitted the family agreement into evidence.

Aggrieved, the Plaintiff filed a writ under Articles 226 and 227 of the Constitution before the Hon’ble Rajasthan High Court.

HELD

The Hon’ble Rajasthan High Court observed that the parties had entered into an oral family agreement which was later reduced to writing. Further, the family agreement was entered in order to resolve the ongoing dispute between the parties and it did not create any new right or title. Thus, the Hon’ble Court held that the alleged document was to be treated as a family arrangement and admitted as evidence. Furthermore, the Hon’ble Court also noted that the family arrangement was neither liable to be stamped according to section 2(xx) of the Rajasthan Stamps Act, 1999 nor liable to be registered under section 17 of the Registration Act, 1908. Thus, the decision of the Ld. Trial Court was upheld.

9 Purni Devi and Anr vs. Babu Ram and Anr

2024 LiveLaw (SC) 273

Date of order: 2nd April, 2024

Limitation — Suit for possession — Execution — Application of execution before a wrong court — Subsequent filing before a correct court — No mala fide intention — Genuine apprehension — Time spent in wrong court to be excluded from limitation period [S. 14, Limitation Act, 1963].

FACTS

The predecessor in interest of the Plaintiff / Appellant had instituted a suit for possession against the Respondent, resulting in a favourable order from the Hon’ble Jammu and Kashmir High Court. However, while filing the application for execution of a decree, the Plaintiff had mistakenly filed it before the wrong District Court [Tehsildar (Settlement), Hiranagar]. Upon realising the error, the Plaintiff immediately filed a fresh application for execution of the decree before the correct District court [Court of Munsiff, Hiranagar]. However, the Ld. District Court rejected the said application on the grounds that the application was filed beyond the period of limitation of three years. On appeal, the Hon’ble Jammu and Kashmir High Court confirmed the decision of the Ld. District Court.

Aggrieved, a Special Leave Petition was filed before the Hon’ble Supreme Court.

HELD

The Hon’ble Supreme Court observed that there was some delay beyond the limitation period of three years. However, the Hon’ble Court also noted that filing of execution application before the wrong forum was not under any mala fide intention. Further, the Plaintiff had acted in good faith and with genuine apprehension.

Therefore, relying on section 14 of the Limitation Act, 1963, the Hon’ble Court held that time spent contesting bona fide litigation at the wrong forum shall be excluded when calculating the limitation period. Thus, the decision of the Hon’ble Jammu and Kashmir High Court was overturned.

10 Annapurna B. Uppin and Ors. vs. Malsiddappa and Anr.

2024 LiveLaw (SC) 284

Date of order: 5th April, 2024

Partnership firm — Loan advanced to firm — Unable to repay the loan — Deceased Partner — Commercial transaction — Outside of the purview of consumer laws — Legal heirs of the partner not liable to repay the loan [S. 63, Partnership Act, 1932, Consumer Protection Act, 1986].

FACTS

The Respondent had advanced a loan to a partnership firm. The firm was, however, unable to repay the said loan. Aggrieved, the Respondent approached the National Consumer Disputes Redressal Commission (NCDRC) for deficiency in service. The Ld. NCDRC ordered the Appellant and the legal heirs of the second deceased partner to repay the said loan along with interest.
Aggrieved by the said order, a Special Leave Petition was filed before the Hon’ble Supreme Court.

HELD

The Hon’ble Supreme observed that the loan was given for deriving interest on the principal loan amount. Therefore, the said transaction was in the nature of an investment for deriving profits / gains. Thus, the said transaction is of commercial nature and outside the purview of the Consumer Protection Act, 1986. Therefore, the Hon’ble Court held that Ld. NCDRC did not have the jurisdiction to adjudicate the matter in the first place. Further, the Hon’ble Court also observed that out of the two partners who were running the firm, the managing partner had expired one year after the loan was received. Therefore, the partnership firm ceased to exist from the date of the death of the managing partner. The Hon’ble Court held that after the death of a partner, the liability of the deceased partner does not pass on to its legal heirs. Thus, the decision of the Ld. NCDRC was set aside.

Allied Laws

55 In Re: Interplay between Arbitration Agreements under the Arbitration and Conciliation Act, 1996 and the Indian Stamp Act, 1899

AIR 2024 Supreme Court 1

Date of Order: 13th December, 2023

Arbitration Agreement — Unstamped agreement or insufficiently stamped agreement — Validity- Reference to a larger Bench — Curable defect — Enforceable- Principle of severability — Doctrine of competence — Agreement neither void nor voidable — [S. 7, 8, 11, Arbitration and Conciliation Act, 1996; S. 33, 35, Indian Stamps Act, 1899; S. 2(g), Indian Contract Act, 1872].

FACTS

An arbitral agreement between two or more parties is an underlying contract usually in the form of a clause in an original agreement / contract or a separate arbitral agreement based on the original agreement. This original agreement, thus, is an instrument which is mandated to be stamped under the Indian Stamps Act, 1899 (Stamp Act). Whenever an application is made before a court for the appointment of an arbitrator under section 8 of the Arbitration and Conciliation Act, 1996, an argument is normally made that the original agreement is not sufficiently stamped and thus, the arbitration agreement (or clauses) is inadmissible before the court. This issue was discussed at length before the Hon’ble Supreme Court before a five-member bench in the case of N.N. Global Mercantile Pvt Ltd vs. Indo Unique Flame Ltd & Ors [(2023) 7 SCC 1]. The Hon’ble Court in a 3:2 majority held that an unstamped arbitral agreement is void and thus lacked legal enforceability.

However, in a curative petition filed in one of the arbitration cases, the correctness of this decision was questioned. Subsequently, the question was referred to a larger bench. The primary issue which was referred to the seven-member bench of the Hon’ble Supreme Court was to ascertain the validity of an arbitration agreement if the underlying contract was unstamped or insufficiently stamped.

HELD

The Hon’ble Supreme Court observed that agreements which are inadequately stamped or are unstamped are deemed inadmissible in evidence as per Section 35 of the Stamp Act. However, such agreements are not automatically void, void ab initio, or unenforceable. The Hon’ble Court held that an instrument which is unstamped or insufficiently stamped would be inadmissible in evidence, however the same is a curable defect and that in itself does not make the agreement void or unenforceable. Further, relying on the principle of severability of an arbitration agreement and doctrine of competence-competence, the Court further held that objections regarding the stamping of the agreement fall under the jurisdiction of the Arbitral Tribunal and not judicial courts.

56 K. Loganathan vs. A. Elaango

AIR 2024 Madras 10

Date of Order: 2nd November, 2023

Evidence — Suit for recovery of money —Application for admission of electronic evidence — Non-production of 65B certificate — Mandatory provision- Curable defect- Production of Certificate- Any time before completion of Trial. [S. 65B, Indian Evidence Act, 1872; O.7 R. 14(3) Code for Civil Procedure, 1908].

FACTS

The Petitioner / Plaintiff instituted a suit against the Respondent in City Civil Court for recovery of money from Respondents. The Petitioner alleged that he had given a loan to Respondent which has not been repaid. The Petitioner, filed an application before the court to take on record, as additional evidence, certain electronic data such as a CD Compact, call history recordings and transcriptions wherein, the Respondent had confirmed the non-repayment of the loan. However, due to the non-production of the certificate mandated under s. 65B of the Indian Evidence Act, 1872 (Act), the Ld. Trial court rejected the said application of the Petitioner.

Aggrieved, the Plaintiff filed a civil revision petition under Article 227 of the Constitution before the Hon’ble Madras High Court.

HELD

The Hon’ble Madras High Court observed that the production of the certificate mandated under section 65B of the Act is a mandatory provision. However, the Court held that non-production of the certificate is a curable defect. This defect can be cured any time before the trial is over. Thus, the order of the Trial Court dismissing the application of the plaintiff was overturned.

57 Ashwani Sharad Pendese and Anr vs. Registrar of Hindu Marriage

AIR 2024 Rajasthan 23

Date of Order: 7th December, 2023

Registration of Marriage — Hindu — Husband, a resident of foreign residence — Denial of registration — Not mandatory that couple should be of Indian citizens [S. 5, 8, Hindu Marriage Act, 1955; S. 8, Rajasthan Compulsory Registration of Marriages, 2009, Article 14, Constitution of India.].

FACTS

The petitioners are a married couple. The wife (Petitioner No-1) is a Hindu and a resident of India, while the husband (Petitioner-2) is a Hindu residing in Belgium and frequently travels to India. The Petitioners are married as per Hindu rites and have a valid certificate of marriage from Arya Samaj, Ajmer. The Petitioners had submitted an application before the Hindu Marriage Registrar (Respondent) in order to get their marriage registered. However, the Respondent refused to register the marriage on the grounds that the husband was not a citizen of India.

Aggrieved, the Petitioner filed a Writ Petition under Article 226 of the Constitution before the Hon’ble Rajasthan High Court.

HELD

The Hon’ble Rajasthan High Court held that the Respondent cannot refuse to register the marriage of the Petitioner solely on the ground that the husband was a foreign national. Further, the Hon’ble Court held that the action of denying registration was violative of Article 14 of the Constitution. Thus, the Court ordered to accept the registration application of the Petitioners.

58 Sanyunkta Sangarsh Samiti and Anr vs. The State of Maharashtra and Ors

AIR 2024 Supreme Court 204

Date of Order: 15th December, 2023

Slum Rehabilitation Scheme- Allotment of flats- Settlement deed between residents and developers to allot flats — Private Agreement — Allotment as per the mandate of Slum Rehabilitation Authority — Public Policy- Lottery-based allotment. [S.3B, Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971; Development Control Regulation, Maharashtra Regional Town Planning Act, 1966; Circular No. 162 of Slum Rehabilitation Authority].

FACTS

The Slum Rehabilitation Authority of Maharashtra (SRA) proposed a scheme to rehabilitate nearly 1,800 slum dwellers under the Slum Rehabilitation Scheme (SRS), governed under the Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971. As per this Scheme, more than 70 per cent of the slum dwellers were to form a cooperative housing society and show their willingness to join the SRS. Thus, the slum dwellers unitedly formed a cooperative housing society (Respondents). The SRA had chosen a developer of Respondent’s choice for the construction of low-cost houses. However, shortly after the construction began, the project was stalled due to interference caused by a small section of slum dwellers (Appellants). The Appellants formed their own minority housing society. The Appellants and the developer initiated a legal battle which ended in a settlement deed whereby, the developer was to allot flats/houses to the Appellants. Despite a settlement deed between Appellants and developer, the SRA denied allotment of houses as per the settlement deed and proceeded with its own policy of lottery-based allotment. Aggrieved, the Appellants filed a petition before the Hon’ble Bombay High Court. The Hon’ble Bombay High Court dismissed the petition.

An appeal was filed before the Hon’ble Supreme Court.

HELD

The Hon’ble Supreme Court observed that the SRA was bound by its own established policies and rules in order to prevail over public policy. Further, as per the mandate of SRA, the allotment of houses has to be done as per a lottery system. Thus, private agreements between parties cannot be enforced in SRS since it is against the mandate of SRA. The appeal was thus dismissed.

59 S. Rajaseekaran vs. Union of India and Ors.

AIR 2024 Supreme Court 583

Date of Order: 12th January, 2024

Motor Vehicles — Hit-and-Run cases — Compensation under scheme — Effective Implementation — Direction issued [S. 145(d). 161(3), The Motor Vehicle Act, 1988].

FACTS

The Petitioner, a leading orthopaedic surgeon, filed a writ petition under Article 32 of the Constitution for effective implementation of s. 161 of The Motor Vehicle Act, 1988 (Act) which dealt with grant of compensation in cases of hit-and-run cases. According to s. 161 of the Act, an accident involving a motor vehicle can be considered a hit-and-run accident, provided the identity of the vehicle that caused the accident cannot be ascertained despite reasonable efforts. The victims or the legal representatives of such victims are entitled to compensation after making the necessary application before a Claims Enquiry Officer. However, it was discovered that a small percentage of victims or their legal representatives have actually sought compensation over the years. This was because the victims or their legal representatives were not made aware of compensation rights.

HELD

The Hon’ble Supreme Court after examining various reports including the annual report of the General Insurance Council for the financial year 2022-23 issued directions for the implementation of the scheme prescribed under s. 161 of the Act. The Hon’ble Court held that if the identity of the vehicle that caused the accident is not ascertainable after making reasonable efforts, the police officer in charge must inform the victims or their legal representatives about the scheme of compensation. Further, within one month of the accident, the officer-in-charge must forward the First Accident Report (FAR) to the Claims Enquiry Officer as per Clause 21(1) ofthe Scheme. Furthermore, the Hon’ble Court also held that a Monitoring Committee at the district level should be formed, comprising the Secretary of the District Legal Service Authority, the district’s Claims Enquiry Officer, and a police officer of Deputy Superintendent rank or above nominated by the District Superintendent of Police. The Committee shall meet at least once every two months to monitor the implementation of the Scheme in the district and the compliance with the aforesaid directions.

Allied Laws

50 Late Kalu Gapliya (Through Legal Heirs) vs. Seeta Nathu and others

AIR 2023 (NOC) 820 (MP)(HC)

Date of Order: 8th August, 2023

Evidence — Land Dispute — Ownership — Adoption Deed between Petitioner and father of Respondents — Thumb impression of Respondents suggesting consent — Denial — Application in Trial court for verification of thumb impression by expert – Rejection of application — Failure to show expert aware of thumb impression of Respondents as mandated — Thumb impression unique — Cannot be forged easily — Rejection of application erroneous. [S. 45, 47, Indian Evidence Act, 1872].

FACTS

The Petitioner and Respondent were involved in a legal dispute over land ownership. The Petitioner claimed that he had absolute ownership in the suit property and as such, the recordings of the Respondent’s name in the land revenue records were illegal. The Petitioner, in the Trial court, relied upon an adoption deed entered between him and the erstwhile owner of the suit property (father of Respondents) in order to prove absolute ownership of the suit property. The Petitioner further claimed that the adoption deed consisted of thumb impressions of the Respondents, indicating their consent to the adoption deed. The Respondents, however, in the trial court denied the existence of any such adoption deed and further maintained that they had not put any thumb impression on such alleged adoption deed. Thus, in order to prove the genuineness of the adoption deed, the Petitioner filed an application before the trial court under section 45 of the Indian Evidence Act, 1872 (Evidence Act) for examination of the thumb impression of the Respondents. However, the Ld. Trial court rejected the application, citing the Petitioner’s failure to confirm whether the handwriting expert was familiar with the Respondent’s thumb impressions, as required by section 47 of the Evidence Act.

A Writ petition was filed before the Hon’ble Madhya Pradesh High Court (Indore Bench) challenging the said rejection.

HELD

The Hon’ble Madhya Pradesh High Court observed that in order to verify the thumb impression of the Respondents and to prove the genuineness of the adoption deed thereof, it was necessary to appoint a handwriting expert. Relying on the decision of the Hon’ble Supreme Court in the case of Lachhmi Narain Singh (D) through Lrs and Ors vs. Sarjug Singh (Dead) through Lrs and Ors [AIR 2021 SC 3873], the Hon’ble High Court held that the reasoning given by the Ld. Trial court for rejection of the application of the Petitioner was misplaced. Further, since the thumb impression of every person is different, its forgery is nearly impossible. Thus, it was not necessary for a handwriting expert to be personally aware of the thumb impression of the Respondents. An examination of its correctness can be made regardless. Furthermore, the Hon’ble High court also noted that section 47 of the Evidence Act merely talks about relevancy and it does not control section 45 of the Evidence Act.

The application of the Petitioner before the Ld. Trial court was thus allowed.

51 Ghanshyam Gautam & Anr vs. Late Usha Rani (Through Legal Heirs)

SLP (Criminal) 3289 of 2018

Date of Order: 4th January, 2024

Negotiable Instrument — Conviction — Subsequent settlement between parties — Settlement Deed — Conviction order to be quashed. [S. 138, Negotiable Instruments Act, 1881].

FACTS

The Petitioner and Respondent were involved in a legal dispute which resulted in the conviction of the Petitioner and subsequent sentencing under section 138 of the Negotiable Instruments Act, 1881 (NI ACT) by the Hon’ble Himachal Pradesh High Court (Shimla Bench). The Petitioner filed an appeal before the Hon’ble Supreme Court. However, before the matter was called for hearing before the Hon’ble Court, the parties had already settled their dispute and filed their compromise deed. According to the compromise deed, the Respondent was to receive a stipulated amount as a full and final settlement and was to bear the fine which was imposed by the Ld. Trial court.

HELD

The Hon’ble Supreme Court held since the settlement had been reached between the parties and that the complainant (Respondent) had signed the deed accepting a particular amount in full and final settlement and the fine amount awarded by the Ld. Trial court, the proceedings under Section 138 of the NI Act needed to be quashed.

The appeal was allowed and the order of the Hon’ble Himachal Pradesh High Court was quashed.

52 Revanasiddappa & Anr vs. Mallikarjun & Ors. AIR 2023 Supreme Court 4707

Date of Order: 1st September, 2023

Succession — Children born out of void or voidable marriage — Illegitimacy — Rights in ancestral Property — Illegitimate children on par with legitimate children — Rights in self-acquired property as well as ancestral property — Illegitimate children not a coparcener in the Hindu Mitakshara Joint Family. [S. 11, 16, Hindu Marriage Act, 1955; S. 6, Hindu Succession Act, 1956].

FACTS

The Appellants are illegitimate children of one Shri Shivasharanappa. The Respondents are the first wife and children of Shri Shivasharanappa. The Respondents had filed a suit for partition alleging that the marriage between the first wife (i.e. the Respondent herself) and Shri Shivasharanappa was subsisting when Shri Shivasharanappa married the second wife (i.e. mother of Appellants). The Respondents thus, alleged that since the first marriage was subsisting at the time of the second marriage, the children born out of the second marriage are illegitimate and not entitled to share in the ancestral property. The Hon’ble Supreme Court opined that the matter be referred to a larger bench for consideration.

HELD

The Hon’ble Supreme Court held that an illegitimate child is entitled to both, self-acquired and ancestral property of parents, after ascertaining the rights of such parent as per the mandate prescribed under section 6 of the Hindu Succession Act, 1956. However, such a child does not ipso facto become a coparcener in the Hindu Mitakshara Joint Family which is governed by Mitakshara Law.

53 Late Dhani Ram (Through Legal Heirs) vs. Shiv Singh

AIR 2023 Supreme Court 4787

Date of Order: 6th October, 2023

Will — Mere registration — Cannot dispel all suspicion to genuineness — Witnesses — Unable to confirm whether signed in presence of testatrix — Invalid Will. [S. 63, Indian Succession Act, 1925; S. 68, 71, Indian Evidence Act, 1872].

FACTS

One Mrs. Leela Devi, passed away on 10th December, 1987, with her husband already predeceased. Dhani Ram (Appellant), was Leela Devi’s brother’s son. He claimed ownership of the properties of Leela Devi after her death by relying on a registered Will. Shiv Singh (Respondent), was the son of the brother of the predeceased husband. The Respondent contested the genuineness of the said Will. The Ld. Trial court invalidated the said Will and granted the Respondent possession of the properties. In appeal, however, the Ld. District judge reversed the decision of the Ld. Trial court and validated the Will.

In the second appeal, filed by the Respondent, the Hon’ble Himachal Pradesh High Court again invalidated the Will and thereby, restored the decision of the Ld. Trial Court.

The Appellant filed an appeal before the Hon’ble Supreme Court.

HELD

The Hon’ble Supreme Court observed that the attesting witnesses of the said Will did not fulfil the requirements stipulated under Section 63(c) of the Indian Succession Act, 1925 (ISA) to prove the genuineness and validity of the Will. Both witnesses failed to confirm that they signed the Will in the presence of the testatrix, a key requirement under Section 63(c) of the ISA. Moreover, one witness claimed that the testatrix had signed the Will in his presence, while the other denied the same. The Hon’ble Supreme Court held that the mere registration of a Will does prove its genuineness. Thus, the decision of the Hon’ble Himachal Pradesh High Court was upheld.

The appeal was thus dismissed.

54 Vikrant Kapila and Anr vs. Pankaja Panda and Ors

AIR 2023 Supreme Court 5579

Date of Order: 10th October, 2023

Succession — Testamentary or Intestate Succession — Alleged Will- Existence denied by contesting party — Genuineness of the Will not dealt with at Trial Stage- Straightway assumption of the Will to be genuine by Trial and High court, unacceptable — Remanded back to determine the genuineness of the alleged Will- Subsequently, Trial court to decide whether testamentary or intestate succession. [S. 63, Indian Succession Act, 1925; O. XII R. 6, O. XV R. 1,2 O. 8 R. 5, Code of Civil Procedure Code, 1908; S. 17, 58, 68, Indian Evidence Act, 1872].

FACTS

The Appellant and respondents were involved in a legal dispute over the partition of the suit property through inheritance. The suit property belonged to one Mrs. Sheila Kapila (Hindu woman), who died in the year 1999. The Appellant (grandson of the deceased) averred that the suit property must be divided as per the alleged Will. However, the Respondents (original plaintiff, grandson of the deceased) denied the existence of any such Will and averred that suit property must be divided as per intestate succession (i.e., the principle of devolution). The Ld. Trial court passed an order without conducting a proper trial. In appeal, the Hon’ble Delhi High Court confirmed the decision of the Ld. Trial court on the premise that the Will was genuine and was never contested.

On appeal to the Hon’ble Supreme Court.

HELD

The Hon’ble Supreme Court observed that the order passed by the Ld. Trial court without conducting a proper trial to ascertain the genuineness of Will was unjustified. Further, the Hon’ble court observed that the Ld. Trial court could not have passed an order without conducting a proper trial by taking discretionary jurisdiction under Order XII, Rule 6, read with Order XV, Rule 1 of the Code for Civil Procedure, 1908. Thus, the Hon’ble Supreme Court stated that since there was no explicit admission by the parties contesting the matter regarding the existence of the will, the presumption of the will’s existence made in the order and confirmed by the Hon’ble Delhi High Court was deemed unlawful. The Hon’ble Supreme Court further noted that in order to constitute a valid admission, the same should be unconditional, unequivocal and unambiguous. The matter was thus, remanded back to the Ld. Trial court for fresh adjudication and the order of the Hon’ble High Court was set aside.

Allied Laws

45 IFFCO Tokio General Insurance Co. Ltd vs. Geeta Devi and others

AIR 2023 Supreme Court 5545

Date of Order: 30th October, 2023

Compensation — Right of recovery — Death due to negligent driving of employee — Fake driver’s license — Failure on the part of the insurance company to plea — Failure on the part of the insurance company to prove wilful breach of insurance policy by the insured — Insurance policy did not mandate to confirm every license with RTO authorities — Liable to compensate for damages. [S. 149, 168, Motor Vehicle Act, 1988].

FACTS

In 2010, Mr. Dharambir died in a road accident, when his motorcycle was hit by a truck driver who was driving negligently. Dependents (Respondents) of the deceased sought compensation from the insurance company of the truck (Petitioner). The Tribunal held that the insurance company was liable but later discovered that the driving license of the truck driver was fake. Thus, the Tribunal directed the Petitioner to deposit the awarded amount with the liberty to recover the same from the present owners of the truck. Aggrieved, the Petitioner approached the Hon’ble Delhi High Court. The Hon’ble High Court ruled that the insurance company couldn’t recover compensation from the current truck owner as the Petitioner neither pleaded nor proved that the insured (vehicle owner) did not take adequate steps to verify the genuineness of the driving licence and in the absence of such a plea on its part, it cannot be said that there was a breach of contract.

The Petitioner filed a Special Leave Petition before the Hon’ble Supreme Court.

HELD

The Hon’ble Supreme Court observed that employers relying on a driver’s license from a seemingly competent authority cannot be expected to independently verify every license with the RTO authority. Further, the court observed that such a condition was not mandated in an insurance policy. The Hon’ble Supreme Court also observed that Petitioner failed to prove that there was a wilful breach of insurance policy on the part of the insured. The Court concluded that the insurance company lacked the right to recover compensation, given the absence of pleading and proof for a willful breach.

Thus, the decision of the Hon’ble Delhi High Court was upheld.

 

46 Prataap Snacks Ltd vs. Royal Marketing

AIR 2023 Madhya Pradesh 173

Date of Order: 28th July, 2023

Arbitration and Conciliation — Super-Stockiest agreement with provision for arbitration — Application for appointment of arbitrator -Instrument neither registered nor stamped — Cannot be considered as a contract — Application dismissed. [S. 7, 11(6), Arbitration and Conciliation Act, 1996; S. 35, Indian Stamps Act, 1899].

FACTS

The Petitioner, a registered company entered into a super-stockist agreement with the Respondent, a Telangana-based proprietor firm, appointing the proprietor firm as a non-exclusive distributor. The Petitioner alleged that despite purchasing materials from the Petitioner, the Respondent failed to pay the outstanding amount. The agreement included a provision for dispute resolution through discussion and subsequently through formal arbitration proceedings. The Petitioner proposed a retired High Court Judge as the sole arbitrator. With no response from the Respondent, the Petitioner filed an application before the court to seek a resolution.

HELD

The Hon’ble Madhya Pradesh High Court observed that the Petitioner had not submitted the original or certified copy of the agreement. Furthermore, the photocopy of the agreement which was provided was unregistered and unstamped. Relying on the decision of the Hon’ble Supreme Court in the case of N.N. Global Mercantile Private Limited vs. Indo Unique Flame Ltd [(2023) SCC Online SC 495], the Hon’ble Madhya Pradesh High Court held that the instrument which attracts the stamp duty may contain an arbitration clause and if it is not stamped or insufficiently stamped, the same cannot be said to be a contract which could be enforced. It is further held that the arbitration agreement which attracts the stamp duty, if not stamped or insufficiently stamped cannot be acted upon given Section 35 of the Indian Stamps Act.

Thus, the Arbitration application was dismissed.

 

47 Sri Basavegowda vs. The State of Karnataka

Writ Petition No. 10872 of 2023 (Karnataka High Court at Bengaluru)

Date of Order: 20th December, 2023

Gratuity — Appointed as daily wage employee — Services regularised subsequently — Retirement after 42 years — Denied gratuity for the time spent as a non-regularised employee — Daily wage employee same as Regular employee – Entitled to full gratuity for services of 42 years. [S. 2(e), 14, Payment of Gratuity Act, 1972].

FACTS

The Petitioner, a septuagenarian, joined the services of a Government High School on 18th November, 1971, as a Group-D employee. The Petitioner had joined as a daily wage employee until his services were regularised on 1st January, 1990. He retired on 31st May, 2013, after serving for 42 years in the Government school. However, the gratuity entitlement during the period when the petitioner served as a daily wage worker was denied, with gratuity being granted only from the date of service regularization. Thus, he filed a writ petition before the Hon’ble Karnataka High Court.

HELD

The Hon’ble Karnataka High Court after interpreting section 2(e) and 14 of the Payment of Gratuity Act, 1972 held that a daily wage employee is within the definition of an employee. Thus, there is no distinction between a regular employee and a daily wage employee. The Hon’ble Karnataka High Court relied on the decisions of the Hon’ble Supreme Court in the case of Nagar Ayukt Nagar Nigam, Kanpur vs. Mujib Ullah Khan [(2019) 6 SCC 103] and Netram Sahu vs. State of Chhattisgarh [(2018) 5 SCC 430) and directed the Respondent to pay gratuity to the Petitioner for his entire period of service i.e. for 42 years along with interest.

The Petition was allowed.

 

48 Nitin Shambhukumar Kasliwal vs. Debt Recovery Tribunal

Writ Petition No. 26333 of 2023 (Karnataka High Court at Bengaluru)

Date of Order: 6th December, 2023

Impounding of Passport — Power is available only to Passport Authority or Constitutional Courts – Impounding by Debt Recovery Tribunal — No authority — Passport impounded to be immediately released. [S. 10, The Passport Act, 1967].

FACTS

On 16th April, 2015, the Hon’ble Debt Recovery Tribunal ordered impounding of the passport of the Petitioner following the initiation of a case against him by lender banks. The petitioner was granted temporary access to his passport whenever he travelled abroad for business purposes, subject to the submission of a duly filed application and appropriate travel itineraries. On 2nd December, 2016, the Petitioner sought the release of his passport as he had to renew it before its validity expired. However, his application was rejected. The Petitioner, thus, filed an application under Articles 226 and 227 of the Constitution before the Hon’ble Karnataka High Court (Bengaluru Bench) seeking an order instructing the Hon’ble Debt Recovery Tribunal (Respondent) to release the petitioner’s passport for passport renewal.

HELD

The Hon’ble Karnataka High Court after referring to the decision of the Hon’ble Supreme Court in the case of Suresh Nanda vs. CBI [(2008) 3 SCC 674] held that as per section 10 of the Passport Act, 1967, only the Passport Authority of India has the powers to impound or seize a passport of a citizen. The Debt Recovery Tribunal had no power to order the impounding of the passport. The Hon’ble Karnataka High Court also observed that neither the police nor the courts (other than constitutional courts) have the power to seize or impound the passports of citizens. Thus, the Hon’ble Court ordered the release of the passport by the Respondent.

The Petition was allowed.

 

49 Amol Vaman Tilve vs. Goa State Information Commission and others

AIR 2023 Bombay 382

Date of Order: 21st September, 2023

Right to Information — Failure to provide information within statutory timeline — First Appeal – Directed to provide information — Failure to provide information — Second Appeal — Directed to provide information and awarded cost — Petition before High Court — Consistently failed to provide information — Penalty justified. [S. 4, 20, Right to Information Act, 2005].

FACTS

Respondent had filed an application seeking information under provisions of the Right to Information Act, 2005. However, the Petitioner failed to provide the relevant information within the prescribed timeline. The Respondent instituted the first appeal after her application was deemed to have been rejected. In the first appeal, the Petitioner was directed to give the information as per the said application. However, despite directions, the Petitioner did not bother to provide the information. The Respondent, thus, filed a second appeal to the Global State Information Commission (GSIC). The Ld. GSIC allowed the appeal in favour of Respondent and imposed a penalty on the Petitioner. The Petitioner challenged this order before the Hon’ble Bombay High Court (Goa Bench) by invoking provisions of articles 226 and 227 of the Constitution.

HELD

The Hon’ble Bombay High Court held that the Petitioner had consistently failed to perform its statutory duties. The Hon’ble court further held that various allegations put forth by the Petitioner such as Respondent acting under mala-fide intentions were vague and baseless. Furthermore, the Court observed that the Petitioner was seeking excuses of the corona virus and nationwide lockdown in March 2020, which were not acceptable. Thus, the Hon’ble Bombay High Court upheld the order of the GSIC and directed the Petitioner to pay the penalty ordered by the Ld. GSIC.

The Petition was dismissed.

Allied Laws

41 Cox and Kings Ltd vs. SAP India Pvt Ltd

[2023] 157 taxmann.com 142 (SC)

Date of Order: 6th December, 2023

Arbitration — The validity of the ‘group companies’ doctrine — non-signatory parties can be bound by an arbitration agreement [Arbitration and Conciliation Act, 1996, 1 S. 2, S. 7].

FACTS

Five judges of the Hon’ble Supreme Court were called upon to determine the validity of the ‘Group of Companies’ doctrine in the jurisprudence of Indian arbitration. The challenge was to figure out whether there can be reconciliation between the group of companies’ doctrine and well-settled legal principles of corporate law and contract law.

HELD

The definition of “parties” under Section 2(1)(h) read with Section 7 of the Arbitration and Conciliation Act, 1996 (ACA) includes both the signatory as well as non-signatory parties. The conduct of the non-signatory parties could be an indicator of their consent to be bound by the arbitration agreement. The requirement of a written arbitration agreement under Section 7 of the ACA does not exclude the possibility of binding non-signatory parties. Under the Arbitration Act, the concept of a “party” is distinct and different from the concept of “persons claiming through or under” a party to the arbitration agreement.

The underlying basis for the application of the group of companies doctrine rests on maintaining the corporate separateness of the group companies while determining the common intention of the parties to bind the non-signatory party to the arbitration agreement. The group of companies doctrine has an independent existence as a principle of law which stems from a harmonious reading of Section 2(1)(h) along with Section 7 of the ACA. Further, to apply the group of companies doctrine, the courts or tribunals, as the case may be, have to consider all the cumulative factors laid down in Oil and Natural Gas Corporation Ltd vs. Discovery Enterprises (2022) 8 SCC 42. Resultantly, the principle of a single economic unit cannot be the sole basis for invoking the group of companies doctrine.

The group of companies doctrine should be retained in the Indian arbitration jurisprudence considering its utility in determining the intention of the parties in the context of complex transactions involving multiple parties and multiple agreements. At the referral stage, the referral court should leave it for the arbitral tribunal to decide whether the non-signatory is bound by the arbitration agreement; and in the course of this judgment, any authoritative determination given by this Court pertaining to the
group of companies doctrine should not be interpretedto exclude the application of other doctrines and principles for binding non-signatories to the arbitration agreement.

42 Vijay vs. UOI & Ors

CA No. 4910 of 2023 (SC)

Date of Order: 29th November, 2023

Secondary Evidence — Admissibility — Agreement for sale — Executed prior to the amendment — Allowed [Indian Stamp Act, 1899, S. 35].

FACTS

The Original Plaintiff and Defendant entered into an agreement to sell a property on 4th February, 1998, and pursuant to that, Plaintiff was allegedly put in possession of the property by the Defendant. When the Defendant denied the existence of such an agreement, Plaintiff filed a suit for specific performance of the contract. In the said suit, Plaintiff moved an application to file a copy of the agreement to sell, among other documents, as secondary evidence. Initially, the said application was allowed but when the Defendant sought a review of the order, the Court held that secondary evidence of an agreement to sell could not be allowed as it was not executed on a proper stamp, thus barred under section 35 of the Indian Stamp Act, 1899 (Stamp Act). Subsequently, the Plaintiff filed a Writ Petition challenging the review order and the Constitutional validity of Section 35 of the Stamp Act. The High Court upheld the validity of the said section and the order of the Review Court.

On Appeal.

HELD

The Explanation deeming certain ‘agreements to sell’ as conveyance (and thus making them liable to be stamped as conveyance) inserted in Article 23 of Schedule I-A contained in the Stamp Act (vide MP Amendment Act, 1990) creates a new obligation for the party and, therefore, cannot be given retrospective application. Thus, it will not affect the agreement(s) executed before such amendments. Hence, the documents in question were not required to be stamped at the relevant period to attract the bar of Section 35 of the Stamp Act. Thus, a copy of a document can be adduced as secondary evidence if other legal requirements are met.

The Appeal was allowed.

43 Manu Gupta vs. Sujata Sharma & Ors

RFA (OS) 13 of 2016 (Del)(HC)

Date of Order: 4th December, 2023

Hindu Undivided Family — Right of a female coparcener to be Karta — Held Yes. [Hindu Succession Act, 1956, S. 6].

FACTS

The Appeal was preferred by the appellant / Manu Gupta (defendant No.1 in the main Suit), against the Judgement whereby the Suit for Declaration for declaring the plaintiff (respondent No.1 herein) as the Karta of Late Shri D.R. Gupta and Sons, HUF, has been allowed.

On an appeal.

HELD

The explicit language of Section 6 of the 2005 Amendment Act makes it abundantly clear that though the reference in the Preamble may be to inheritance, but conferring “same” rights would include all other rights that a coparcener has, which includes a woman’s right to be a Karta. Thus, if a woman can be a coparcener but not a Karta of HUF, would be giving an interpretation that would not only be anomalous but also against the stated Object of the introduction of the Amendment.

The appeal was dismissed.

44 Anumolu Nageswara Rao vs. AVRL Narasimha Rao

AIR 2023 TELANGANA 178 (FB)

Date of Order: 27th June, 2023

Rights of adoptee — Right of a coparcener — In the family of birth — Ceases on adoption — unless partition before adoption. [Hindu Adoption and Maintenance Act, 1956, S. 12].

FACTS

A full bench was constituted to address the question of whether the rights of a coparcener in the joint possession and enjoyment of the property is a clear vesting of title in the coparcener even before partition, and can he be said to be short of rights of a full owner or whether his rights would get crystallized into definite share only on an actual partition, and whether by virtue of the proviso (b) to Section 12 of the Adoption Act, the undivided interest in the property of a coparcener will not, on his adoption, be divested, but will continue to vest in him even after his adoption.

HELD

On adoption by another family, the adoptee becomes a coparcener of the adoptive family and ceases to have any connection with the family of his birth. He / she ceases to perform funeral ceremonies and loses all rights of inheritance as completely as if he / she had never been born. Court held that the child ceases to be a coparcener of the family of his / her birth and forgoes interest in the ancestral property in the family of his birth. Only if a partition has taken place before the adoption and property is allotted to his share or self-acquired, obtained by will, inherited from his natural father or other ancestor or collateral which is not coparcenary property held along with other coparceners and property held by him as sole surviving coparcener, he carries that property with him to the adoptive family with corresponding obligations.

Allied Laws

36 Paramjota vs. Deputy Director of Consolidation & Ors

AIR 2023 ALLAHABAD 222

Date of Order: 8th August, 2023

Adoption — Adoption Deed is sufficient — Rituals are not necessary — Adopted child entitled to property on parent renouncing the world.[Hindu Adoption and Maintenance Act, 1965, S. 11, 15 and 16]

FACTS

Amidst a land dispute, a consolidation officer entered the name of the adopted son (Mahadeo) of one Mr Bholla, who renounced the world for Sanyas, in the revenue records.

This was disputed by the Petitioner; the Consolidation officer rejected the objections filed by the Petitioner.

On filing the Writ Petition.

HELD

CA ceremony is not necessary to prove that Mr Mahadeo is the adopted son of Mr Bhalla, especially since the adoption deed is registered. Subsequentnotarized deed revoking the adoption has no legal consequences. Further, since the father has renounced the world by becoming a Sanyasi, the property would devolve on his adopted son.

The Writ Petition was dismissed.

37 Usha Kumari vs. Santha Kumari

AIR 2023 KERALA 161

Date of Order: 26th June, 2023

Evidence — Submissions in court — Public document — Cannot be treated as secondary evidence. [Indian Evidence Act, 1872, S. 74]

FACTS

There was a dispute among the members of the family. A suit for partition was filed by one of the members. The defendants filed their written statements wherein the disputed gift deeds were annexed. The suit was dismissed for want of prosecution.

On appeal, inter alia, a question arose i.e., whether a written statement in a suit, is a public document falling under section 74 of the Indian Evidence Act?

HELD

Pleadings of the parties to the litigation, once filed in a court, become a part of the public records maintained by the Court and hence fall within the ambit of “public documents”. The same cannot be considered as secondary evidence.

The Appeal is allowed.

38 Akza Rajan vs. Rajan M S

AIR 2023 KERALA 166

Date of Order: 12th April, 2023

Maintenance of Daughters — Father responsible for daughter’s marriage even if they are Christians. [Hindu Adoption and Maintenance Act, 1956, S. 20; Transfer of Property Act, 1882, S. 39]

FACTS

The Petitioner is the daughter of the Respondent. The Respondent-father neglected the Petitioner’s mother and sold her jewellery to buy certain assets. The Respondent was trying to alienate the immovable property and hence Petitioner filed for a temporary injunction. The said injunction was denied by the Family Court.

On a Writ Petition.

HELD

Drawing a reference to the codified Hindu law that the maintenance of an unmarried daughter is a duty of the father, it was held that such a duty is applicable to all fathers irrespective of their religion. The Court secured a reasonable sum for the wedding expense of the Petitioner by way of charge on the immovable property and also held that the injunction could be lifted if the respondent furnished the sum by way of a fixed deposit or other mode.

The Writ Petition is allowed.

39 Rajesh Kumar Sahu vs. Manish Kumar Sahu

AIR 2023 MADHYA PRADESH 862

Date of Order: 26th June, 2023

Succession — Unregistered document “Abhiswikrati Patra” — Cannot be construed as a Will — Any unregistered document transferring title of more than Rs.100 is required to be registered. [Registration Act, 1908, S. 17(2)(v)]

FACTS

The Petitioner/original defendant objected to the admissibility of an unregistered and unstamped document before the Trial Court. The Trial Court rejected the objection and held the document to be a Will.

On a Writ Petition.

HELD

The unregistered and unstamped document is a “Abhiswikrati Patra”. Although the document transfers certain rights to his son, it is mentioned that a Will would be executed separately. Therefore, the said document could not be considered as a Will.

Further, as the document was intended to transfer a right and title of property valued more than Rs.100, such a document is mandatorily required to be registered otherwise it would not be taken on record.

The Writ petition is allowed.

40 G Venkatesh vs. Bridge Federation of India

AIR 2023 MADRAS 296

Date of Order: 7th August, 2023

Overseas Citizen of India Cardholder — Bridge player — Eligible to play in National Championships but cannot represent India internationally — Policy decision by the Central Government- Writ petition is held to be not maintainable. [Citizenship Act, 1955, S. 7A, 7B, Constitution of India, Article, 226]

FACTS

The Writ Petitioner is an Overseas Citizen of India (OCI) who desired to represent the Respondent internationally. He received a letter of rejection stating he would only be eligible to play in national championships and cannot represent the nation.

On a Writ Petition.

HELD

The Respondent is affiliated with the Central Government and is governed by the National Sports Development Code of India, 2011. A policy decision taken by the Central Government to only allow Indians to represent India in international sports cannot be interfered with Courts. Further, the rejection of the Petitioner was on the basis of two Circulars. As the said Circulars were not challenged in the Petition, the Petition becomes non-maintainable.

The Writ Petition is dismissed.

Allied Laws

27. Dheeraj Singh vs. Greater Noida Industrial Development Authority & others AIR 2023 Supreme Court 3110

4th July, 2023

Cross Objection — Cross Objections have the same trapping as a Regular Appeal — Not considered by the High Court — Matter remanded to High Court for fresh adjudication. [O. 41, R. 22, Code of Civil Procedure, 1908; S. 14, 17, Land Acquisition Act, 1894].

FACTS

The State of Uttar Pradesh (Respondent) had acquired the land of the Appellants under the provisions of the Land Acquisition Act, 1894 and paid compensation for the same. The Ld. District Judge granted further compensation. Aggrieved by the same, the Respondent filed an appeal in the High Court of Allahabad (High Court). Subsequently, the appellants filed a cross objection in the High Court. The Hon’ble High Court confirmed the order of the Ld. District Judge. It was the contention of the Appellants before the Hon’ble Supreme Court that the Cross Objection filed by them (Appellants) was not considered by the Hon’ble High Court.

HELD  

The Hon’ble Supreme Court observed that the Hon’ble High Court failed to consider the Cross Objections filed by the Appellants. The Court further held, relying on Order 41, Rule 22 of the Code for Civil Procedure, 1908, that Cross Objections have all the trappings of a regular appeal. Thus, the matter was remanded to the High Court for fresh adjudication.

28. Manoj Kumar Jain and another vs. UOI AIR 2023 (NOC) 580 (CAL)

9th June, 2023

Look out Circular — Economic Offence — Issuance of Look Out Circular by the bank for non-re-payment of loans — Apprehension that Petitioner would flee the country — Petitioner was not declared a fraudster or economic offender — Constant efforts of settlement of dues — Lookout circular for every borrower incorrect — Lookout Circular quashed. [Art. 226, Constitution of India, O. VI, Rule 17, The Code of Civil Procedure, 1908].

FACTS

The Petitioners were de-boarded from the plane by the Immigration Authority. The Petitioners were informed about the lookout circular issued against them and, thus, the petitioners filed a writ petition challenging the lookout circular. The Petitioner had failed to repay the loan obtained for the expansion of the business. The lookout circular issued by the lender bank was on the apprehension that the petitioner might flee the country and thereby frustrate the whole process of settlement of dues.

HELD     

The Hon’ble Calcutta High Court held that lookout circulars have to be issued in only exceptional cases and cannot be issued at the slightest provocation. The Hon’ble High Court also observed that Petitioner made efforts in the process of settlement of loans by actually paying loans to the other banks in the consortium. Further, the lender bank also had securities of the Petitioner and further realised some of the outstanding by realising the property of the Petitioner. The Hon’ble Court also observed that Petitioner was allowed to travel by the CBI court and there was no complaint with respect to Petitioner not complying with conditions. The court held that Petitioner was not declared a fraud or economic offender and his travel to the UK was for his son’s education. Thus, the lookout circular was quashed.

29. V Narayanasamy vs. Vanchikodi AIR 2023 (NOC) 631 (MAD)
19th April, 2023

Condonation of Delay — Delay of 1,835 days — Negligence of earlier Counsel — Not a sufficient ground — Condonation denied. [S. 5, Limitation Act of 1963].

FACTS

The Petitioner / Plaintiff had filed a suit to declare the title of the property of the Petitioner and a relief of permanent injunction before the lower court. However, the complaint was returned by the Registry for rectifying certain defects and a time of one month was given to the petitioner. The Plaintiff, however, failed to comply with the time period of one month. The lower court dismissed the petition on the ground that no prima facie case was made by the plaintiff and there were no sufficient reasons to condone the delay of the plaintiff. The plaintiff, after a delay of 1,835 days, approached the Madras High Court for the same.

HELD

The Hon’ble Madras High Court held that merely stating that earlier counsel was negligent and did not inform the plaintiff regarding the proceedings of the suit, was not a sufficient reason to condone the delay of 1,835 days. Thus, the Hon’ble High Court upheld the order of the lower court. The Petition was dismissed with no costs.

30. Revanasiddappa & Anr vs. Mallikarjun & Ors Civil Appeal No. 2844 of 2022

1st September, 2023

Hindu Undivided Family — Children born of void or voidable marriage — Have a right in their parent’s share in the Hindu Undivided Family. (Hindu Marriage Act, 1955, S. 16, Hindu Succession Act, 1956, S. 2, S. 6).

FACTS

Section 16(1) of the Hindu Marriage Act, 1955 provides that even if a marriage is null and void, any child born out of such marriage who would have been legitimate if the marriage had been valid, shall be considered to be a legitimate child. However, Section 16(3) of the Hindu Marriage Act 1955 states such children are entitled to inherit only their parents’ property and will have no right over the other coparcenary shares. On this background, a question of law arose before the three-judge bench of the Hon’ble Supreme Court, whether children born out of void or voidable marriage will have a right in their parent’s share in the undivided family property, as Section 16 of the Hindu Marriage Act 1955 confers legitimacy to children who are born out of invalid marriages.

HELD

The provisions of the Hindu Succession Act, 1956 have to be harmonised with the mandate in Section 16(3) of the Hindu Marriage Act, 1955 which indicates that a child who is conferred with legitimacy will not be entitled to rights in or to the property of any person other than the parents. Therefore, the children born of such marriages will be entitled to a right to their parent’s share in the Hindu Undivided Family.

(Editor’s Note: Refer to Laws and Business where this decision and the subject have been discussed).

31. Bhagyanathan Nadar vs. Vishwanathan Nadar and others AIR 2023 (NOC) 568 (KER)

13th April, 2023

Settlement deed — Cancellation unilaterally — No legal effect — Not enforceable by law — A gift deed once executed cannot be revoked. (Specific Relief Act, 1963, S. 34; Transfer of Property Act, 1882, S. 5, S. 123).

FACTS

A settlement deed was executed by the owner of a property in favour of the Original plaintiffs. The deed of settlement did not provide for any power to revoke the settlement. A dispute arose between the parties and the settlement deed was cancelled. The donee / Original Plaintiffs, inter alia, challenged the cancellation deed before the lower court. The lower court, considering all the facts, held in favour of the Original plaintiffs.

On appeal, the first appellate court held in favour of the Original Plaintiffs and dismissed the appeal of the Original Defendants.

On the second appeal

HELD

The Hon’ble Kerala High Court held that the settlement deed was valid and binding. After the acceptance of the gift, if the donor wants to revoke the gift by resorting to Section 126 of the Transfer of Property Act, 1882, the donor will have to institute a suit for the same. A gift can be cancelled only if the gift is the one executed in contemplation of section 126 of the Transfer of Property Act, 1882 and not otherwise. There is no such agreement between the donor and donee to suspend or revoke the gift. It also provides that a gift which parties agree shall be revocable wholly or in part on the mere will of the donor, is void wholly or in part as the case may be. So a gift deed once executed cannot be revoked and even if such contingencies as contemplated under Section 126 of Transfer of Properties Act, 1882 are in existence in the deed, a suit has to be filed for cancellation.

Therefore the settlement deed is valid and the second appeal is dismissed.

Allied Laws

32 A.S. Rawat vs. Dawa Tashi

AIR 2023 Delhi 252

Date of Order: 13th March, 2023

RTI — Filed by non-citizen — Public Information Officer denied on account of non-citizenship — RTI available to citizens as well as non-citizens. [Ss. 3, 6, 7(1), Right to Information Act, 2005; Article 21, Constitution of India].

FACTS

The Respondent / Right to Information (RTI) Applicant had requested information concerning various aspects such as his employment confirmation letter, children’s education allowance, and all India LTC benefits. In response, the Public Information Officer (PIO) / Petitioner stated that the RTI applicant did not have the right to use the provisions of the RTI Act, 2005, since he was a Tibetan and not a citizen of India. The appeal against this decision was denied. However, in a subsequent appeal to the Central Information Commission (CIC), the CIC ruled that the PIO ought to have provided the requested information to the Applicant. The CIC also found that the PIO’s actions were driven by ill intent and baseless suspicions about the applicant’s citizenship. As a result, the Commission imposed a penalty of ₹25,000 on the PIO.

The PIO filed a Writ Petition before the High Court against the order of the CIC.

HELD

The Hon’ble Delhi High Court held that the RTI is accessible to both Indian citizens as well as non-citizens, and refusing this right to non-citizens would be in conflict with both the Constitution of India and the RTI Act. Thus, the Hon’ble court directed the PIO to comply with the PIL filed by the Respondent. However, the Court quashed the penalty of R25,000 imposed on the PIO, stating that the actions of the PIO were not mala fide or ill-intended.

33 Sree Rengaraaj Steel and Alloys Limited vs. MSTC  Limited

AIR 2023 Madras 278

Date of Order: 25th January, 2023

Limitation — Self-serving and unilateral payment made by the creditor — Cannot be constituted as an acknowledgement of debt or cannot extend the time period of calculating limitation period. [S. 3, 19, The Limitation Act, 1963].

FACTS

The Respondent/ Plaintiff filed a suit for recovery of a sum of money from the Appellant. The Appellant and the Respondent had a contract whereby, the Appellant was liable to pay money in exchange for goods along with interest if the Appellant failed to pay within a grace period of 175 days. The Appellant failed to pay within the grace period of 175 days. The Appellant contested that the suit filed by the Plaintiff was after the expiry of the period of limitation, and thus, the suit was liable to be dismissed. The Trial Court, in its finding, held that the last transaction (which took place on 6th July, 1996) was made by the creditor as payment for adjustment of the demurrage deposit and thus, held that the suit was filed within the limitation period.

On Appeal.

HELD

The Hon’ble Madras High Court held that self-serving adjustment of account by the creditor, in the ledger maintained by the Plaintiff cannot be considered as an acknowledgement of debt (as contemplated by section 19 of the Limitation Act, 1963) when it is admitted that no payment as such was received towards the debt or liability as per the ledger account. Thus, the suit filed by the Plaintiff was barred by limitation. The order of the Trial Court was set aside and the original suit was dismissed.

34 Debkanta Chakrabarti vs. State of West Bengal and others

AIR 2023 Calcutta 287

Date of Order: 28th June, 2023

Succession — Membership of Co-operative society — Heritable — Not automatic in the absence of a nominee — Legal heir required to produce probate, letter of administration or succession certificate. [Ss. 70, 92, West Bengal Co-operative Societies Act, 2006].

FACTS

The father of the Appellant was inducted as a shareholder / member of a cooperative society on 16th June, 1975. A deed of lease was executed between them on 20th September, 1990, to grant the leasehold right of the piece of land to the said member. His name was mutated in the government record of rights. He had since been possessing the land, by constructing a residential house and staying therein. The said person died on 18th July, 1997. The Appellant’s claim is that he and his mother, being the son and wife of the deceased person, are the only legal heirs and successors of the deceased. Therefore, the mother of the Appellant made an application to the Society, on 5th November, 1997, for the transfer of the share of her deceased husband in the Society, in the names of herself and the Appellant, so that they may be inducted as members in the Society, in place of the deceased member. However, the Appellant’s mother died on 10th January, 2018. It is the further case of the Appellant that since the death of his father, he has duly remitted all the expenses and charges payable to the Society, in a manner similar to an existing member. Appellant by his letters requested the Society to record his name as a member of the Society, by virtue of his being the only legal heir of the erstwhile member, since deceased. His letters not being acted upon by Society, the Appellant resorted to lodging his grievance to the registrar and assistant registrar of the co-operative societies. In response, the Society replied that the interest of the deceased member, i.e., the father of the present Appellant, shall be disposed of in accordance with the provisions laid down in Section 70 of the West Bengal Co-operative Societies Act, 2006 (Act) and the rules framed thereunder.

Aggrieved by this, the Appellant filed a Writ Petition before the Single bench of the Calcutta High Court, which was dismissed. Appeal was filed before the division bench.

HELD

According to Section 92 of the Act, even a nominee has to follow the procedure mentioned in the Act to be inducted as a member of a housing cooperative society. Shares of a cooperative society are heritable and transferable immovable property, and the Appellant does have a right to inherit the same. However, the Appellant is not named as a nominee by his father, and hence, the automatic transfer of interest does not arise. The Appellant should have produced either probate or letters of administration or succession certificate from a competent court of law, as per Section 70 of the said Act.

The appeal was dismissed.

35 Guruprasad Tah vs. Ashoke Kumar Tah and others

AIR 2023 Calcutta 267

Date of Order: 26th April, 2023

Succession — Will — Genuineness of Will in doubt — First Will was revoked — Second Will in favour of executor — Testator was not well at the time of Second Will — Signatures not proper — Witnesses were persons of the executor — Will was not a product of a free and fair mind.

FACTS

Ashok Kumar Tah (Respondent) filed an application for a grant of probate of a Will dated 4th July, 1983, executed by his father Gourpada Tah in respect of his property. Ashok was named as the executor in the Will. Gourpada, during his lifetime, executed two Wills. The first Will was executed on 3rd June, 1964. The said Will was revoked by the later Will dated 4th July, 1983. Ashok is claiming property under the Will dated 4th July, 1983.

The Trial Court allowed the application for a grant of probate. The trial Court was satisfied with the due execution and attestation of the Will by two attesting witnesses.

On an appeal by Guruprasad Tah (Appellant), the eldest son of the deceased.

HELD

There are several reasons to doubt the genuineness of the Will as it is made in suspicious circumstances. The Will is a second Will which revokes the First Will. At the time of the execution of the Second Will, the testator was physically ill and mentally frail. It was incumbent upon the executor and the attesting witnesses to establish the mental ability and physical fitness of the executor to execute the Will. There is no evidence that, at the registration, the testator was in a position to travel to the office for registration. Further, there is no evidence that the Will was registered at the residence of the testator. One of the attesting witnesses stated that he had not seen the other attesting witness at the registry office. The signature of the testator appears to be shaky and at the right-hand corner of the Will instead of the bottom of each page. Also, there is no endorsement in the Will that the sub registrar had explained the contents of the Will to the testator. It appears that the executor had a prominent role in the execution of the Will, and all the witnesses also appear to be the persons of the executor. Hence, it cannot be said that the Will was a product of the free and fair mind of the testator.

The appeal is allowed, and the probate proceedings fail.

Allied Laws

14. 
Duty to Court – Advocates not to cite wrong judgments & mislead the
Court – No excuse for lawyers for not cross-checking status of judgments – Task
of an advocate is perhaps more onerous – Duty to the court, duty of fidelity to
the law, if anything, it is higher now. [Principles of Law, Code of Ethics for
Professionals]

Heena Nikhil Dharia vs. Kokilaben Kirtikumar Nayak NOTICE
OF MOTION (L) NO. 3117 of 2016 (Bom) (HC) (unreported)

The learned judge has cited several instances where the
learned counsel appearing for one of the parties cited judgements as being
binding authority even though the said judgements had been overruled.

The learned Judge records with “profound sadness” that before
pronouncing the judgement, he specifically asked the counsel whether he still
maintained that the judgements cited by him were good law and that the counsel
confirmed that he did and that both are binding precedents. “It was clear that
Mr. Shah was completely unaware of the appeal court orders, and, too, the
subsequent orders in Sajanbir Singh Anand,”

As Lord Denning MR in Randel vs. W. (1996) 3 All E. R. 657
observed:

“The Code which obligates the Advocate to disregard the instructions
of his client, if they conflict with his duty to the Court, is not a code of
law — it is a code of honour. If he breaks it, he is offending against the
rules of the profession and is subject to its discipline.”

The Judge made it clear that whatever may have been the
position in the past, there is today no excuse for the casual and careless
approach of Advocates given the fact that all judgements are available in
online databases.

Conveying the message that, Don’t make the Court lose its
way, the Court stated :

“Judges need the Bar and look to it for a dispassionate
guidance through the law’s thickets. When we are encouraged instead to lose our
way, that need is fatally imperilled,”

15. 
Family – Does not include mother of unmarried deceased employee – Entire
pension to be payable to widow of employee – However, the assets may be
distributed amongst mother and widow, if employee died intestate [Employees
Provident Fund and Miscellaneous Provisions Act, 1952; Section 6A – Family
Pension Scheme, 1964; Cl. 4(ii)].

Nitu vs. Sheela Rani And Ors AIR 2016 SUPREME COURT 4552

The learned counsel appearing for the appellant-widow
submitted that the appellant-widow is the only person who is entitled to the
pension as per the provisions of the Family Pension Scheme. It was also
submitted that pension is paid in pursuance of the afore-stated Scheme and
therefore, pension cannot be treated as other assets of the deceased and
according to the provisions of the Scheme, only the appellant-widow is entitled
to the pension.

On the other hand, the learned counsel appearing for the
respondent-mother submitted that she being a class-I heir of a Hindu of the
deceased who died intestate, she is entitled to one-half share of the
properties of the deceased, as he was survived by his widow and the mother.

The learned counsel appearing for the State supported the
case of the appellant-widow and submitted that in the Scheme, the term “family”
has been defined and in the instant case, the widow of the deceased is the only
person who is entitled to pension and therefore, the impugned order deserves to
be quashed and set aside so that the entire amount of pension can be paid to
the appellant.

Clause 4(ii) of the Scheme defines the term “family”, which
reads as under :-

4(ii). “Family” for the purpose of this scheme includes the
following relatives of the officer:-

–    wife, in the case of a male officer;

–    husband, in the case of a female officer;

–    minor sons;

–    unmarried minor daughters;

–    widowed/legally divorced daughters; and the
parents of an unmarried officer.”

So far as the respondent mother is concerned, she has not
been included in the definition of the term “family” for the reason that as per
the provisions of sub-clause (f), parents of an unmarried officer would be a
part of the family and therefore, the respondent mother would not be included
in the family of deceased as he was married.

So far as the provisions of the Hindu Succession Act, 1956,
are concerned, it is true that the properties of a Hindu, who dies intestate
would first of all go to the persons enumerated in class I of the schedule as
per the provisions of Section 8 of the said Act and therefore, so far as the
properties of the deceased are concerned, they would be divided among the
respondent mother and the appellant wife, provided there is no other family
member of late Shri Yash Pal alive, who would fall within class 1 heirs, but
the position in this case, with regard to pension, is different.

16. 
Legal Practitioners – Publicity for Judges and Legal Practitioners must
not be encouraged – Amounts to breach of Professional Ethics and Professional
Conduct – Only the name of High Court should be used by Print Media and not the
names of Judges or the legal Practitioners. [Constitution of India – Art 217,
Advocates Act, 1961, Section 35; Law Reports Act, 1875, S.4]

S. Baskar Mathuram vs. The State of Tamil Nadu and Ors.
AIR 2016 MADRAS 178

The whole basis for seeking extravagant reliefs through
filing a Writ Petition appears to be an act of obtaining gaining popularity and
publicity, so that the law practitioner filing such a writ, could attract more
number of clients.

Such a practice would amount to an unethical practice of
soliciting one’s work. If the code of conduct prescribed by the Bar Counsel is
not adhered to, whether directly or indirectly, it must attract corrective actions.

Hence, the Registrar was directed to initiate necessary
action for breach of Code of Ethics and Professional Behaviour.

The court also directed the Registrar (Administration) to
request the Print, Electronic and Media House, not to publish the individual
names of the Judges, unless it is so essentially required. The reason being,
every Judge of the High Court is carrying on with his work sitting in a
particular division/roster as assigned by the Hon’ble Chief Justice. The Judges
do perform their duties dispassionately and to the extent possible by not
allowing their individual notions and philosophies to be a guiding factor in
deciding the causes brought before them. Therefore, we feel that the names of
the Judges should not be published and on the other hand, the name of the High Court alone should be published.

17. 
Limitation on filing suit – Suit instituted within 3 years of attaining
majority – Not barred by limitation – Plaintiffs even though majors were not
managers/karta of Joint
family – Not capable of discharging without concurrence of other members of the
family [Hindu Minority and Guardianship Act, 1956; Section 8, Limitation Act,
1963; Section 7, Constitution – Article 60, 109, 110, 113]

Narayan vs. Babasaheb and Ors. AIR 2016 SUPREME COURT 1666

The Hon’ble Court was of the considered opinion that a quondam
minor Plaintiff challenging the transfer of an immovable property made by
his guardian in contravention of section 8(1)(2) of the Hindu Minority and
Guardianship Act 1956 which states the powers of a natural guardian, and who
seeks possession of property can file the Suit only within the limitation
prescribed under Article 60 of the Limitation Act and Articles 109, 110 or 113
of the Limitation Act are not applicable to the facts of the case.

In view of the above discussion, the limitation to file the
present Suit is governed by Article 60 of the Limitation Act and the limitation
is 3 years from the date of attaining majority. When once the Court arrives at
a conclusion that Article 60 of the Act applies and the limitation is 3 years,
the crucial question is, when there are several Plaintiffs, what is the
reckoning date of limitation?

A reading of section 7 of the Limitation Act, 1963, makes it
clear that when one of several persons who are jointly entitled to institute a
suit or make an application for the execution of the decree and a discharge can
be given without the concurrence of such person, time will run against all of
them but when no such discharge can be given, time will not run against all of
them until one of them becomes capable of giving discharge.

In the case on hand, the 1st Plaintiff was 20
years old, the 2nd Defendant was still a minor and the Plaintiffs 3,
4 and 5, who are married daughters, were aged 29, 27 and 25 respectively on the
date of institution of the Suit in the year 1989. As per Explanation 2 of
section 7 of the Limitation Act, 1963, the manager of a Hindu undivided family
governed by Mithakshara law shall be deemed to be capable of giving a
discharge without concurrence of other members of family only if he is in
management of the joint family property. In this case, Plaintiffs 3 to 5 though
major as on the date of institution of Suit will not fall under Explanation 2
of Section 7 of the Limitation Act as they are not the manager or Karta
of the joint family.

The 1st Plaintiff was 20 years old as on the date
of institution of the Suit and there is no evidence forthcoming to arrive at a
different conclusion with regard to the age of the 1st Plaintiff. In
that view of the matter, the Suit was instituted well within three years of
limitation from the date of attaining majority as envisaged under Article 60 of
the Limitation Act.

Hence, in view of the above discussion, the Court held that
the appeal was devoid of merits and it deemed it appropriate to dismiss the
appeal.

18. 
Registered Document – Operates from date of its execution – Not from the
date of its Registration  [Registration
Act, 1908; Section 47]

Principal Secretary, Government of Karnataka and Ors. vs. Ragini Narayan and Ors. AIR 2016 Supreme Court 4545

One of the Disputes which arose was with respect to the date
from which the document is said to start to operate when the document
registration was on a date subsequent to date of execution.

It was contended that the
Deed of Nomination dated 16.01.1995 was not a valid document. It was pointed
out that the amended deed based on Resolution dated 10.12.1994 was not
registered, by the date 16.01.1995 as the registration is said to have been
done only on 30.01.1995. As such, delegation of power in favour of the
Plaintiff on 16.01.1995 is not valid. It was vehemently argued that since the
amendment registered on 30.01.1995 was a non-starter as such the same was non-effective.

Section 47 of Registration Act, 1908 reads as under:

Time from which registered document operates. – A registered
document shall operate from the time at which it would have commenced to
operate if no registration thereof had been required or made, and not from the
time of its registration.

In view of the above provision of law, the
Hon’ble Court held that if there is a document registered on a subsequent date,
it starts to operate from the date of execution and not from the date of
registration.

Allied Laws

1.      
Naina Kala Sharma and Ors. vs.
Deepak Kumar Rai AIR 2018 (NOC) 4 (SIK.)

 

Hindu Law – Coparcenary – Suit for
Partition – Cannot demand share in Father’s property when self acquired. [Hindu
Succession Act, 1956 S.6]

 

The case of the Appellants is that the
Appellant No. 1 was married to the Respondent in the year 1993 and Appellants
No. 2 and 3 were born from the wedlock. A property(suit land) was gifted to
Appellant no. 1 by her father.

 

The issue was whether the Appellants no. 2
and 3 have any right, title or interest over the Suit land and the building
constructed thereon?

 

It was argued that the Mitakshara concept of
coparcenary is based on the notion of the birthright of son, son’s son and
son’s son’s son.

 

It was observed by the Court that the
daughter has also been made coparcener by virtue of Hindu Succession
(Amendment) Act, 2005.

 

It was held that the Law laid down in
Mitakshara in regard to father’s right of disposition of his self acquired
property, held that the father of a joint Hindu family governed by Mitakshara
law has full and uncontrolled powers of disposition over his self-acquired immovable
property and his male issue could not interfere with these rights in any way.

 

Hence, no rights were conferred to
Appellants No. 2 and 3 for partition, in view of the property being the self
acquired property of the Respondent.

 

2.      
Naveen Kumar vs. Vijay Kumar
And Ors Civil Appeal No. 1427 of 2018 (Arising out of SLP (C) No.18943 of 2016)
(SC)

 

Owner – As appearing on records – Liable to
pay compensation. [Motor Vehicles Act, 1988, S.2(30)]

 

In the present case, an accident had taken
place where the Tribunal had granted an award holding the first
respondent(original owner/first owner) responsible together with the driver. It
was contended that there were a series of transfers which took place, however,
the name in the records were not changed/altered.

 

It was observed by the apex court that the
expression ‘Owner’ in section 2(30), it is the person in whose name the motor
vehicle stands registered who, for the purposes of the Act, would be treated as
the ‘owner’. However, where a person is a minor, the guardian of the minor
would be treated as the owner. In a situation such as the present where the
registered owner has purported to transfer the vehicle but continues to be
reflected in the records of the registering authority as the owner of the
vehicle, he would not stand absolved of liability.

 

The principle underlying the provisions of
section 2(30) is that the victim of a motor accident or, in the case of a
death, the legal heirs of the deceased victim should not be left in a state of
uncertainty. A claimant for compensation ought not to be burdened with
following a trail of successive transfers, which are not registered with the
registering authority. To hold otherwise would be to defeat the salutary object
and purpose of the Act. Hence, the interpretation to be placed must facilitate
the fulfilment of the object of the law.

 

It was held that since in the present case,
the First respondent was the ‘owner’ of the vehicle involved in the accident
within the meaning of section 2(30), the liability to pay compensation stands
fastened upon him.

 

3.      
Gurbax Singh vs. Harminderjit
Singh AIR 2018 (NOC) 136 (P. & H.)

 

Registration – Period of Lease –
Admissibility. [Transfer Of Property Act, 1882, S.106, 107]

 

It was contended that since the lease
agreement was not specifically shown to be for a period of more than one year,
it was therefore not required to be compulsorily registered.

 

It was observed that a perusal of section
107 of the T. P. Act shows that any instrument by which a lease of immovable
property is created, either from year to year, or for any term exceeding one
year, or by which a yearly rent is reserved, must only be a registered
instrument.

 

Any other lease may either be by way of a
registered instrument or even by oral agreement accompanied by delivery of
possession. The proviso to section 107 does stipulate that the State Government
may by notification in the official gazette direct that leases of immovable
property other than leases from year to year or even for any term exceeding one
year or reserving an yearly rent, may be made by unregistered instrument, or
orally, even without delivery of possession. However, no notification issued by
the Government of Punjab has been brought to the notice of this Court by
learned counsel for the appellant, by which any lease as is required to be
registered u/s. 107, is exempted from being so registered.

 

In the facts of the case, since there was a
rent increase every 15 years by 3%, it was deemed that the lease agreement was
executed for a term exceeding 1 year and hence was supposed to be compulsorily
registered.

 

4.      
The State of Jharkhand and Ors.
vs. Lalita Devi Kejriwal and Ors. AIR 2018 JHARKHAND 7

 

Registration – Where properties are
situated. [Registration Act, 1908 (S.30)]

 

It was held that the registration of
properties in Mumbai, which were situated in Ranchi, was in utter violation of
section 30 of the Indian Registration Act 1908 as amended by Bihar Amended Act,
1991. By virtue of this amendment in Indian Registration Act, 1908, the
documents of sale or transfer of the properties must be registered at the place
where the immovable property is situated.

 

5.      
The State of Jharkhand and Ors.
vs. Lalita Devi Kejriwal and Ors. AIR 2018 JHARKHAND 7

 

Sale – Late mutation of name – Non-joinder
of co-sharer – Unregistered Letter – Invalid [Transfer of Property  Act, 1882, S.47]

 

It was observed that mutation of the names
after registration did not take place for as long as a period of 5 years.
Further, a letter written by the owner of the plots in question was also relied
upon, of which no evidence was provided. Neither the co-sharers joined as
parties to the suit. After taking into consideration the factual matrix as
above, it was held that the sale deed was not valid.


Allied Laws

1. Advocate – Professional Misconduct – Advocate cannot file an affidavit in his own name on behalf of his client. [Advocates Act, 1961, Section 30, S ection 35]

Baljeet Singh vs. Pratap Singh and Others. AIR 2017 ALLAHABAD 165

The simple issue before the Hon’ble court was whether the counsel for the appellant before the lower appellate court could have filed the affidavit in support of the present appeal as a family friend?

It was observed that an advocate gets his right to practise in a court only u/s. 30 of the Act. ‘Practise’ in itself means to appear on behalf of his client before a Court or Tribunal in the best interest of his client. Practise, however, certainly does not give liberty to an advocate to identify himself with his client and step into the shoes of his client, so far as the rights of his client are concerned.

It was held by the Hon’ble Court that the said counsel who filed the affidavit is guilty of professional misconduct in identifying himself with his client and filing an affidavit in support of the appeal, but considering that he himself expresses that he had acted under naivety and has submitted an unconditional apology, the matter may not be referred to the Disciplinary Committee of the State Bar Council.

2. Evidence – Admissibility of evidence during the appellate proceedings. [Evidence Act, 1872, Section 65B(4)].

Sonu alias Amar vs. State of Haryana AIR 2017 SUPREME COURT 3441

An objection w.r.t. electronic record being not admissible unless it was accompanied by a certificate was raised in the appellate proceedings.

The only issue is the permissibility of an objection regarding inadmissibility of evidence at the Appeal stage. Admittedly, no objection was taken when the CDRs were adduced in evidence before the Trial Court. It does not appear from the record that any such objection was taken even at the appellate stage before the High Court.

It was observed that objections as to admissibility of documents in evidence may be classified into two classes: (i) an objection that the document which is sought to be proved is itself inadmissible in evidence; and (ii) where the objection does not dispute the admissibility of the document in evidence but is directed towards the mode of proof alleging the same to be irregular or insufficient.

It was held by the Hon’ble Court that it is clear that an objection relating to the mode or method of proof has to be raised at the time of marking of the document as an exhibit and not later. Objections regarding admissibility of documents which are per se inadmissible can be taken even at the appellate stage. Admissibility of a document which is inherently inadmissible is an issue which can be taken up at the appellate stage because it is a fundamental issue. The mode or method of proof is procedural and objections, if not taken at the trial, cannot be permitted at the appellate stage.

3. HUF – Ancestral property – Deemed to be joint – Unless proved otherwise. [Hindu Law]

Adiveppa & Ors. vs. Bhimappa & Anr. CIVIL APPEAL No. 11220 OF 2017 SUPREME COURT (www.itatonline.org)

The disputes were regarding ownership and extent of the shares held by the Appellants (Plaintiffs) in the agricultural lands.

It was alleged that while some properties were ancestral while others were self-acquired and hence the Plaintiffs (Appellants) have 4/9th share in the ancestral properties as members of the family. The Respondents (Defendants) denied the plaintiffs’ claim and averred inter alia that all the suit properties were ancestral properties. It was alleged by the Respondents that during the lifetime of the father of the plaintiff, an oral partition had taken place amongst the family members in relation to the all the suit properties pursuant to which all family members were placed in possession of their respective shares.

It was held by the Hon’ble Court that it is a settled principle of Hindu law that there lies a legal presumption that every Hindu family is joint in food, worship and estate and in the absence of any proof of division, such legal presumption continues to operate in the family. The burden, therefore, lies upon the member who after admitting the existence of jointness in the family properties asserts his claim that some properties out of entire lot of ancestral properties are his self-acquired property. Since the Plaintiffs themselves had based their case by admitting the existence of joint family nucleus and also could not prove with any documentary evidence that the suit properties described were their self-acquired properties, the appeal was dismissed.

4. Search/Survey – Undated cheques for collection of differential duty – Illegal. [Central Excise Act, 1944, Section 12F]

Digipro Import & Export Pvt. Ltd. vs. Union of India & Ors. 2017 (350) E.L.T. 145 (Del.).

Five undated cheques totalling to Rs. 1.25 crore were collected from the Petitioner by the officers of the Anti-Evasion Wing, Commissioner of Central Excise, Delhi-I during a Search/Survey conducted under the Central Excise Act, 1944.

The only issue was whether such an act of the department of collecting ‘undated cheques’ constituting the differential duty liability during the process of a visit/search or survey was sustainable.

The Hon’ble Court relying on various decisions held that there was no provision of law or any notification or any circular that permitted the officers who visited the Petitioner’s business premises to collect undated cheques which purportedly constitute the differential duty. It must be realised that the officers of the Anti-Evasion Wing of the Central Excise Department have to function within the four corners of the law. They are bound by not only the Central Excise Act and the Rules made thereunder but all the notifications/circulars/instructions issued from time to time including those issued by the CBEC. There is no scope at all to collect duty and that too without even quantifying the extent of duty evasion.

5. Rectification of mistake apparent – Within 6 months – Date of Order not to be seen. [Central Excise Act, 1944 –Section 35C, Section 37C]

Liladhar T. Khushlani vs. Commissioner of Customs 2017 (351) E.L.T. 36 (Guj.)

The short question, which was posed for consideration was, whether for the purpose of filing the rectification application, period of limitation of six months would commence from the date of the order, which is sought to be rectified or from the date of receipt of the order sought to be reviewed/rectified by the concerned assesse under the Central Excise Act, 1944?

It was held by the Hon’ble court that unless and until a party to the appeal is in a position to go through and study the order it would not be possible, nor can it be envisaged, that a party can claim to be aggrieved by the mistake apparent from the record. Hence, even on this count, the period of limitation has to be read and understood so as to mean from the date of the receipt of the order. In the result, the impugned order passed by the learned CESTAT was quashed and set aside.

Allied Laws

11.  Delay in filing objections – Period of
Limitation only applicable to the initial filing of objections and not to
re-filing. [Arbitration and Conciliation Act, 1996; Section 34]

 

Northern Railway vs. Pioneer Publicity
Corporation Pvt. Ltd. (2017) 11 Supreme Court Cases 234

 

There
was a refusal to condone the delay of 65 days in re-filing the objections u/s.
34 of the Arbitration and Conciliation Act, 1996 (Act). Admittedly, the
objections originally were filed within the time stipulated u/s. 34 of the Act.
However, since there were objections, time was granted by the Deputy Registrar
of the High Court to remove the objections within a period of 7 days. This was not
done. Eventually, the appellant re-filed the matter where there was a delay of
65 days.

 

The
Court held that section has no Application in re-filing the Petition but only
applies to the initial filing of the objections u/s. 34 of the Act.

 

12.  Hindu Law 
–   Joint   Hindu  
Family   –   Family Settlement
– Outsider can be a party to such family settlement. [Transfer of Property Act,
1882; Section5]

 

Thimma Reddy vs.
Chandrashekara Reddy and Ors. AIR 2018 KARNATAKA 54

 

The
plaintiffs 1 – 3(sons of first defendant) and plaintiffs 4 – 5 (sons of second
defendant) pleaded that their grandfather owned a number of immovable
properties. He died intestate. No partition had taken place during his
lifetime. On 8.9.1986 there took place a partition among defendants 1 to 3 and
in this partition, properties described in schedule ‘C’ properties fell to the
share of third defendant. But, the third defendant was a stranger to the
family. Since he was not a member of the joint family, he was not entitled to
share. The defendants 1 and 2 colluded with the third defendant and entered
into a partition and thus the schedule ‘C’ property was allotted to him. This
allotment of ‘C’ schedule property to third defendant was alleged to be
illegal.

 

Reliance
was placed on the Supreme Court’s decision of Kale and others vs. Deputy
Director of Consolidation and others AIR 1976 SC 807, wherein it was
observed that it is absolutely clear that the word ‘family’ cannot be construed
in a narrow sense so as to confine the parties to the family arrangement only
to persons who have a legal title to the property.

 

It was
held by the High Court that it is clear that a family settlement or arrangement
need not be necessarily among the members of joint family having a right of
succession, but even an outsider to the family can be given a share.
Requirement is that such an arrangement must be fair and bona fide.

 

13.
Mesne Profits –Property not renovated by lessee – Damages to be paid to lessor
on service of notice.
[Transfer of Property Act, 1882; Sec. 108]

 

The General Manager, Bharat Sanchar Nigam
Limited (BSNL) vs. Radhika Chettri AIR 2018 (NOC) 285 (SIK.)

 

Respondent,
the lessor, is the absolute owner of the flat. The said property was leased out
to the Appellant, the lessee, for a monthly rent for a period of 5 years. A
Clause existed in the Lease Deed that the lessee shall have the option of
renewing the lease of the said premises for further periods, on giving notice
of such intention, to the lessor at least three months prior to expiration of
the lease. The lessee, however, failed to take necessary steps as provided,
hence on expiry of the lease period, the respondent’s husband vide letter, and
requested the appellant to either increase the house rent by 30% or to vacate
the occupied premises. The appellant, vide letter intimated the respondent that
the suit property would be handed over and the said letter be treated as
“Notice” of three months. That, on checking the suit premises it was
found to be in a dilapidated condition which the appellant was bound to repair
before handing over.

 

In view
of sections108(h) & (m), the court held that T.P. Act requires that damages
caused to the suit property be made good within three months, which was not
complied with in the instant case. The term “mesne profit” includes
not only the profits which the person in wrongful possession actually received,
but also those which he might have received with ordinary diligence, but does
not include profits due to improvements made by person in wrongful possession.
Given a wider connotation it would mean that which the Appellant has lost on
account of the wrongful act of the Respondent, in other words the amount the
Respondent might reasonably be expected to have made, had he been in
possession. Hence, the Respondent is entitled to mesne profits.

 

14.  Property – Right of a Female – Scope and
Object of  Section14(1).   [Hindu 
Succession  Act,  1956; Section
14(1)]

 

Daulatarao Ramachandra Jadhav and Ors. vs.
Janabai Anandarao Jadhav and Ors. AIR 2018 KARNATAKA 62

 

It was
observed by the High Court in regard to section 14(1) that under the Hindu
Succession Act, it is clear that section 14(1) has a very wide and extensive
application and has to be read in a comprehensive manner as the Act overrides
old law governing the properties of the female. The Act confers full heritable
capacity and absolute ownership on the female heir. This section dispenses with
the traditional limitations of conferring limited estate on the female Hindu to
hold and transmit the property. It should be borne in mind that under Hindu Law
which in operation prior to the coming into force of this Act, a woman’s
ownership of property was hedged in by certain delimitations on her right of
disposal and also on her testamentary power in respect of that property and
also with reference to her absolute ownership. By virtue of interpretation of
the provision u/s. 14 of the Hindu Succession Act, in the enactment, the above
said barricades have been completely removed and the Act presupposes if any
property possessed by a female Hindu whether acquired before or after
commencement of the Act becomes absolute property of the said lady, if the said
property was given in recognition of her pre-existing right.

 

15.
Will – Attestation – Two witnesses mandatory – May not be present at the same
time. [Evidence Act, 1872; Section 68]

 

Sanjeev Juneja vs. State
and Ors. AIR 2018 DELHI 79

 

The Hon’ble High Court held
that the law requires attestation by minimum two witnesses, it is not mandatory
that both must have been present at the time when the testator executed the
document, the presence of the testator being more important when the witnesses
attest and further that, for proof of such execution and attestation, the
testimony of only one of such witnesses is enough, that also only if such
witness is alive and available.

Allied Laws

6. Union of
India and Ors. vs. Manju Lata Tiwari AIR 2018 PATNA 28           

 Adhaar Card –
Sufficient identity proof. [Government Savings Bank Act, 1873, S.4-A]

A widow wanted
a refund of the money deposited in the savings account with the post office
deposited by her late husband who had not made it either a joint account or
declare the wife as the nominee. When a demand or claim was made by the wife,
it was rejected after quoting various rules.

It was
contended that the Post Office Savings Bank Manual Volume-I stated that in
absence of a nomination there was no occasion to release any amount up to Rs.
one lakh or above without production of a succession certificate or a probate
of a Will or letter of administration, and hence the widow was not entitled to
the refund.

The Court
observed that there were enough official evidences available including the
so-called Aadhar Card, which is being used for large number of Government
dealings for measure of identification. Aadhar Card is also being used for the
purposes of disbursement of funds by the Central Government to the so-called
beneficiaries, then why a hapless widow has to go through the rigmarole of
litigation, spend time, money and energy for years together by moving a civil
Court before she can beget her rightful claim of her deposit left behind by her
husband on this technicality is not appreciated by this Court.

In view of the
above, the Hon’ble Supreme Court held that the guidelines mentioned in the Post
Office Savings Bank Manual Volume-I, are only directive and the same cannot be
used for unnecessary harassment of a bona fide depositor or a legal heir.

7. Danamma
alias Suman Surpur and another vs. Amar and Ors. AIR 2018 SUPREME COURT 721

Hindu Law –
Coparcenary – Daughter – Suit for Partition – Entitled to share in property
since birth – Even though amendment came into effect after such birth. [Hindu
Succession Act, 1956 S.6]

A suit was
filed for partition for a share in the property, by the daughters of the
deceased. However, this suit was filed in the year 2002 i.e. 1 year after the
death.

It was observed
that, S.6, as amended, stipulates that on and from the commencement of the
amended Act, 2005, the daughter of a coparcener shall by birth become a
coparcener in her own right in the same manner as the son. It is apparent that
the status conferred upon sons under the old Section and the old Hindu Law was
to treat them as coparceners since birth. The amended provision now statutorily
recognises the rights of coparceners of daughters as well since birth. The
section uses the words in the same manner as the son. It should therefore be
apparent that both the sons and the daughters of a coparcener have been
conferred the right of becoming coparceners by birth. It is the very factum of
birth in a coparcenary that creates the coparcenary, and therefore the sons and
daughters of a coparcener become coparceners by virtue of birth. Devolution of
coparcenary property is the later stage of and a consequence of death of a
coparcener. The first stage of a coparcenary is obviously its creation as
explained above, and as is well recognised. One of the incidents of coparcenary
is the right of a coparcener to seek a severance of status. Hence, the rights
of coparceners emanate and flow from birth (now including daughters) as is
evident from sub-s (1)(a) and (b) of S.6.

In light of the
observation made, the Hon’ble Court held that, in the present case, the rights
of the appellants i.e. the daughters had crystalised when the amendment came
into effect. Hence, even the daughters would be entitled to 1/5th
share in the property.

8. Jayant Verma
and Ors. vs. Union of India (UOI) and Ors. AIR 2018 SUPREME COURT 1079

 Precedent –
Exparte judgment without discussion is Per incurium hence not binding.

The issue was
whether one of the judgements relied upon were binding on the Court.

It was observed
that where such a matter is not argued at all by the Respondent, and the
judgement is one of reversal, it would be hazardous to state that the law can
be declared on an ex parte appraisal of the facts and the law, as
demonstrated before the Court by the Appellant’s counsel alone. That apart,
where there is a detailed judgement of the High Court dealing with several
authorities, and it is reversed in a cryptic fashion without dealing with any
of them, the per incuriam doctrine kicks in, and the judgement loses
binding force, because of the manner in which it deals with the proposition of
law in question. Also, the ratio decidendi of a judgement is the
principle of law adopted, having regard to the line of reasoning of the Judge
which alone binds in future cases. Such principle can only be laid down after a
discussion of the relevant provisions and the case law on the subject. If only
one side is heard and a judgement is reversed, without any line of reasoning,
and certain conclusions alone are arrived at, without any reference to any case
law, it would be difficult to hold that such a judgement would be binding and
the same has to be followed.

In view of the
same, it was held by the Hon’ble court that such judgment was not binding on
them.

9. SRD Nutrients Private Limited vs. Commissioner
of Central Excise, Guwahati (2018) 1 Supreme Court Cases 105

Precedent –
Judicial Discipline – Reference to Larger Bench in case of contradicting views.

It was observed
by the Hon’ble Court that when a view was taken by one bench of the CESTAT Tribunal
on one issue then another view or a contrary view cannot be taken by the
co-ordinate bench of the CESTAT Tribunal. Judicial discipline warranted
reference of the matter to the Larger Bench.

In view of the
same, the Hon’ble Court held that it is also trite that when two views are
possible, one which favours the Assessees has to be adopted.


10. B. Sunitha vs. The State of Telengana
and Ors. (2018) 1 Supreme Court Cases 638

Professional Misconduct – Advocate –
Percentage of decretal amount. [Contract Act, 1872; S.23]

The proceedings
were initiated by the Respondent who is an advocate in whose favour the
Appellant executed a cheque allegedly towards his fee. The cheque was
dishonoured. The stand of the Appellant is that section 138 of the Act is not
attracted as there was no legally enforceable debt, as fee claimed was
exorbitant and against law. The Appellant having already paid a part of the
fee, stated that fee could not be demanded on percentage of amount awarded as
compensation to the Appellant which was in violation of the Advocate Fee Rules
and Ethics.

It was argued
that charging percentage of decretal amount by an advocate is hit by section 23
of the Contract Act being against professional ethics and public policy and
hence the cheque issued by the Appellant could not be treated as being in
discharge of any liability by the Appellant.

It was observed
that mere issuance of cheque by the client may not debar him from contesting
the liability. If liability is disputed, the advocate has to independently
prove the contract. Claim based on percentage of subject matter in litigation
cannot be the basis of a complaint u/s. 138 of the Act. Having committed a
serious professional misconduct, the Respondent i.e. the Advocate, could not be
allowed to avoid the adverse consequences which he may suffer for his
professional misconduct. The issue of professional misconduct may be dealt with at appropriate forum.

It was held by
the Hon’ble Court that the claim of the Respondent advocate being against
public policy and being an act of professional misconduct, proceedings in the
complaint filed by him have to be held to be abuse of the process of law and
have to be quashed.

Allied Laws

5. Precedent –
Contrary decisions of co-ordinate benches – Decision with better of reasoning
to be chosen [Central Excise Act, 1944; Section 11AC].

CCE vs. Otis Elevator Co. (I) Ltd. 2017(345) E.L.T. 512
(Bom.)(HC)

The issue in the case was with respect to application of a
provision retrospectively or prospectively. While resolving the issue, several
case laws were quoted where contrary views were expressed. However, one of the
case laws did not have threadbare discussion or reasoning.

Relying on the decision of the Court in the case of Kamleshkumar
Ishwardas Patel vs. Union of India, 1994 Mh.L.J. 1669 (FB), it was held
that when the Court is confronted with contrary decisions of higher courts,
both being binding on the subordinate courts by reason of their hierarchy, the
courts have to undertake the unpleasant task of choosing that one which appears
to be one with better reasoning.

6. Advocate, no
Objection Certificate of earlier Advocate not required – Appointment of New
Advocate – Party to litigation has absolute right to appoint advocate of
choice. [Constitution of India; Art.225, Advocate Act, 1961. Section 35]

Karnataka Power Transmission Corporation Ltd. Mysore vs.
M. Rajashekar and others. AIR 2017 Kar. 1

The issue in question was whether a new Advocate’s
Vakalatnama can be accepted in the absence of a no objection certificate from
the earlier advocate?

It was held that a party to the litigation has an absolute
right to appoint an advocate of his choice, to terminate his services and to
appoint a new advocate. A party has the freedom to change its advocate at any
time and for whatever reason.

However, fairness demands that the party should inform his advocate
already on record, though this is not a condition precedent to appoint a new
advocate. There is nothing known as an irrevocable Vakalatnama. The right of a
party to withdraw the authorisation given is an absolute one. On discharging
the advocate, the party has the right to have the case file returned to him.
However, if the advocate, on being discharged, has a genuine claim against the
client relating to the fee payable to him, the appropriate course for him is to
return the brief and to agitate his claim in an appropriate forum, in
accordance with law.

Hence the Registry will not ask for ‘No Objection’ of an
advocate already on record, to accept the Vakalatnama filed by a new advocate.

7. Evidence –
Newspaper Report – Only hearsay Evidence – Editor to be examined. [Evidence
Act, 1872; Section 3]

Govind Rhukhdu Ji Sirvi vs. Ranjana Baghel (Smt.) AIR 2017
Madhya Pradesh 41.

The election result of the Respondent was called in question
on several grounds w.r.t. malpractices before the Court. One of the ground was
that the respondent visited a village where she, by way of gratification of
voters, distributed currency notes of Rs.1,000/-. Photographs of the incident
were taken and distributed to various daily newspapers.

In the matter at hand, it was alleged that the respondent had
distributed currency notes which amounted to corrupt practices. The Petitioner
adduced the newspaper reports, ocular evidence and the photographs.

However, this allegation was denied by the respondent’s
Counsel on the ground that a news item as such is no evidence in the eyes of
law. Hence, the evidence should not be admissible.

It was held that a newspaper report by itself is no evidence
of its contents and that such evidence is only hearsay evidence. To prove the
contents of the newspaper reports, the reporter, editor or the publisher who
can testify as to how, when, from where and in what manner the material
published in the newspaper was collected should be examined.

8. Power of
Attorney executed outside India – Power of Attorney notarised in accordance
with law – Document to be admissible and not impoundable [Registration
Act,1908; Section 85].

Active Promoters Pvt. Ltd. vs. Assotech Reality Pvt. Ltd.
& Another AIR 2017 Punjab and Haryana 41

A Revision petition was filed before the court in a suit for
specific performance of the sale agreement. The Petitioner had moved an
application for the impounding of the special power of attorney, having been
executed outside India.

Plaintiff-Respondent filed
a suit for specific performance of the sale agreement under which the
Defendant-petitioner had agreed to sell his land. A written agreement was
executed between the parties for which the defendant-petitioner received
earnest money as well.

When the Defendant failed
to execute the sale deed, the Plaintiff filed Civil suit seeking specific
performance of the agreement to sell. Suit was at the stage of the Plaintiff’s
evidence. When the evidence of a special power of attorney was furnished, no
objection was raised for months and an issue was raised thereafter for
impounding the special power of attorney.

It was held that since the document, which was notarised by
the Notary Public of State of Florida, strictly in accordance with the laws of
America, met the requirements of law contained in section 85 and section 32 of
the Indian Evidence Act, and since no objection had been raised by the
opposition w.r.t the admission of the evidence at the inception, the evidence was
admissible.

However, any plea w.r.t. the evidentiary value could be
raised at the appropriate stage. Hence, the Special Power of Attorney was not
to be impounded by the Court.

9. Judgment – To
be pronounced in open Court, signed and dated – Mere declaration does not
amount to judgment. [Criminal Procedure Code, 1974; Section 353]

Ajay Singh and Another vs. State of Chhattisgarh and
Another AIR 2017 Supreme Court 310.

The issue was whether the Trial Court could pass an order
acquitting the accused as per a judgment typed separately.

The issue in the Trial Court was with respect to dowry death,
cruelty, etc., wherein finally the Judge passed a judgment stating in
the Order sheet that recorded that the accused persons had been acquitted as
per the judgment separately typed, signed and dated.

A complaint was filed before the Registry of the High Court,
appropriate action was taken and all the cases before the concerned Trial Judge
were transferred before the High Court for re-hearing.

Hence, two issues cropped up namely, whether the Trial Judge
had really passed an order for acquittal and whether the High Court had the
power to transfer the cases adjudicated upon by the Trial Court already, for
rehearing.

On verification, it was held that the Trial Court had not
pronounced any judgment in the open court.

According to section 353, the process and method of passing a
judgment is defined, wherein it specifies that a judgment has to be pronounced
in the Open Court, either immediately after the trial or at some subsequent
day, with prior notice given to the Parties. Section 363 provides that a copy
of judgment should be given to the accused and the other persons.

It was held that, the provisions clearly spelt
out that it was imperative on the part of the learned Trial Judge to pronounce
the judgment in the open court by delivering the whole of the judgment or by
reading out the whole the judgment or by reading out the operative part and
explaining the substance of the judgment.

Allied Laws

16. 
Foreign Decree – Execution in India. [Code of Civil Procedure, 1908,
Sections 13, 44].

 

In the present
case, the primary contention raised is that the parties are foreign nationals
and the direction by the Canada Court can only be executed at Canada and not in
India.

 

Hanifa
Kalangattu vs. Shaista Khan AIR 2017 KERALA 217

 

It was contended that, as per section 44A of
the Code of Civil Procedure, a decree of the foreign Court can be executed only
if the certified copy of decree of any of the Superior Courts of any
reciprocating territory has been filed before the District Court. However,
there was no material to indicate that Canada is a reciprocating territory which
would enable the said foreign judgment to be enforced and executed by this
Court.

 

It was held by the High Court of Kerela that
since no materials were produced either before the Family Court or before this
Court to indicate that Canada is a reciprocating territory as far as Government
of India is concerned, in the absence of any such material, there is a clear
bar of jurisdiction for entertaining the execution petition which has been
totally ignored by the Court below.

 

17.  Hindu female dying intestate – Inheritance
after death of her second husband – Devolution of Property – To go back to
husband’s heirs when not self acquired [Hindu Succession Act, 1956; Sections
14, 15, 16]

 

Suldeep (Through Legal heir) vs. Hira Lal
and Ors. AIR 2017 CHHATTISGARH 164

 

The only issue which was to be adjudicated
here was whether the property in question would devolve upon the heirs of the
deceased second wife or upon the heirs of the deceased husband, who was the
owner of the property.

 

The facts of the case are that the plaintiff
instituted a suit for declaration of title and vacant possession of the suit
property (house and hotel) by submitting, inter alia, that his father
was the owner of it and after his death, it was inherited by him. It is pleaded
that defendant No.1, the second wife of the deceased father (since deceased,
now represented by her legal representatives) was his father’s servant as she
was working as such in his hotel business and used to take care of him whenever
he fell ill. It was pleaded in the plaint that defendant was put in  possession over the suit property only for
its proper care where she was
residing with her son, the defendant No. 2, who has thrown his bag and baggage from the suit property.
Therefore, the plaintiff has been constrained in filing the suit in the instant
nature.

 

The Supreme
Court held that the Source of acquisition of such property was supposed to be
seen before the general rules of succession would apply. Since in the present
case, the defendant no.2(Son) was outside the wedlock of the defendant no.1 and
the deceased father, in such a situation, the interest of defendant
no.1(deceased wife), who expired intestate, shall be reverted to her deceased
husband’s heirs by virtue of clause (b) of sub-section (2) of section 15 of the
Act of 1956. The property in question is admittedly not the self-acquired
property of the said defendant no.1(deceased wife), and therefore, the general
rules of succession defined in sub-section (1) of section 15 of the Act of 1956
would not be attracted. Consequently, her interest would be devolved upon her
deceased husband’s heirs, i.e., the plaintiff and his sister and, not from
heirs of the deceased wife’s first husband, i.e., the present appellant
Son(Defendant No.1), as per the provisions prescribed u/s. 15(2)(b) of the Act
of 1956.

 

18.  Land – Valuation of part of the building can
be made without the land attached to such building. [Land Acquisition Act,
1894; Sections 3, 23, 49]

 

State of Maharashtra and Ors. vs.
Reliance Industries Ltd. and Ors. AIR 2017 SUPREME COURT 4490

 

The question which arose for consideration
was whether, under the Land Acquisition Act, 1894 (the ‘Act’), acquisition of
Part of the building can be made without acquiring land underneath such
building.

 

The Supreme Court, while deciding the issue
of whether acquisition of any building or part thereof de hors the
underlying land or not, held that when land and building once married becomes
one unit, neither land nor building can thereafter be valued separately. The
expression “land” includes benefits to arise out of land and, things
attached to the earth or permanently fastened to anything attached to the
earth. But this would not come in the way of determining the valuation of a
particular floor, all the aspects of the owner’s interest and the bundle of
other rights can be taken into consideration including support provided by the
land and value of the land in the locality etc. Value of the part of the
building can also be accordingly assessed.

 

19.  Tenancy – Tenancy not to automatically get
terminated even though the property is forfeited [Smugglers And Foreign
Exchange Manipulators (Forfeiture Of Property) Act, 1976; Section 3]

 

Domnic Alex Fernandes (D) through L.Rs.
and Ors. vs. Union of India (UOI) and Ors. AIR 2017 SUPREME COURT 4007

 

The question for consideration was whether
tenancy of a property, ownership of which is acquired by a person to whom the
Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976
(SAFEMA) applied, would be treated as “illegally acquired property”
within the meaning of section 3(1)(c) of SAFEMA and can be subjected to
forfeiture under the provisions thereof, due to which the said tenancy would be
terminated.

 

The Supreme Court held that rights of a bona
fide tenant, not having any relation with the person to whom the provisions
of SAFEMA apply, will not stand automatically terminated by forfeiture of
property and vesting thereof in the Central Government. Such forfeiture will
extinguish the rights of the person to whom the Act applies i.e. the owner of
the property or his/her relative or associate having nexus with him/her in
relation to the said property.

 

20.  Will – Licence cannot be granted merely on
the basis of will, without being legal heir of manufacturer or partner in firm
– Legal Successor – Construed to be read in a restricted sense [Succession Act,
(39 of 1925) Section  63 ]

 

Dharam Chand vs. Dharam Paul and Ors. AIR
2017 JAMMU AND KASHMIR 138

 

The issue in the appeal was whether a
person’s name can be incorporated as a co-licensee since the person had
acquired the status of a legal successor-in-interest of the deceased licensee,
based on a will followed by a Probate and letter of administration, as granted
in his favour by a competent Court.

 

It was observed that a subsequent Circular,
dated 27.03.1971, provided that in case of an existing manufacturer or a
surviving partner of a licenced unit, besides his son(s), wife or wives may
also be admitted as additional partners. It was further decided that where a
manufacturer or a partner of the firm has no son(s) or wife, only his legal
successor(s) would be entitled to be admitted as partner(s) or additional
partner(s), as the case may be.

 

The Supreme Court held that the subsequent
Circular was to regulate the entry of other persons in the existing licensed
units so as to safeguard the legitimate interest of the successor-members of
the family of the existing manufacturers and to prevent mala fide
trading in such licences or their transfer to outsiders.

 

On the basis of the principle of ejusdem
generi, the word ‘legal successor’ had to be given a restricted meaning
bearing in mind the objective/basic policy behind issuance of the subsequent
communication to safeguard the legitimate interest of the successor-members of
the family of the existing manufacturer and to prevent mala fide trading in
such licences or their transfer to outsiders through backdoor methods, to mean
that person who is in some way related to the licensee and would succeed in the
absence of wife or son. _

Allied Laws

21. Condonation of Delay – Delay of 3671 days – No reason to decline
benefit merely due to delay in filing of appeal when in similar cases benefit
was derived by similar concerns [Land Acquisition Act, 1894; Sections 4, 5, 18,
54]

 

K.
Subbarayudu and Ors. vs. The Special Deputy Collector (Land Acquisition) (2017)
12 Supreme Court Cases 840

 

The issue was
whether the lower authority could decline the benefit available to the
appellant only due to the reason of delay of 3,671 days in filing an appeal.

 

It was observed
by the Court that, when the concerned court has exercised its discretion either
condoning or declining to condone the delay, normally the superior court will
not interfere in exercise of such discretion. The true guide is whether the
litigant has acted with due diligence. Since the Appellants/claimants are the
agriculturists whose lands were acquired and when similarly situated
agriculturists were given a higher rate of compensation, there is no reason to
decline the same to the Appellants. Merely on the ground of delay, such benefit
cannot be denied to the Appellants. Accordingly, the delay was condoned.

 

22. Family Settlement Limitation – Suit challenging the deed of family
settlement after period of 9 years of deed of family settlement was held to be
barred by limitation. [Limitation Act (36 of 1963, Art. 157)]

 

Jose
Floriano Cristovam Pinto and Ors. vs. Michelle N. Pinto Souza and Ors. AIR 2017
BOMBAY 263

 

One of the
issues to be decided was whether a suit filed for repudiation of the deed of
family settlement after a gap of 9 years be allowed?

 

It was held
that there was substantial delay and laches on part of Respondents to
approach Court in seeking the repudiation of the Deed of Family Settlement of
2005 in a suit of 2014 and on that premise, could not have secured the
plaintiffs with the relief of injunction and also that the appellants could
well have disposed off other properties between this period of filing the suit
and the deed of settlement and in that context of apathy and inaction of the
plaintiffs did not entitle them to the relief of injunction, hence deed of
family arrangement cannot be held to be invalid.

 

23. Interpretation – Deed and documents – The terms of the contract will
have to be understood in the way the parties wanted and intended them to be.
[Arbitration and Conciliation Act, 1996, Section 34]

 

Bharat
Aluminium Company vs. Kaiser Aluminium Technical Services Inc. (2016) 4 Supreme
Court Cases 126

 

The only issue
was whether the parties, by agreement, express or implied, have excluded wholly
or partly, Part I of the Arbitration Act, where Art. 17 mentions that English
law would be applicable and Art. 20 mentions that Indian Law would be
applicable.

 

In the facts of
the present case, disputes arose out of an agreement which was executed. The
same were referred to arbitration in England where the arbitral Tribunal made
two awards in favour of the Respondent. The Appellant filed applications, u/s.
34 of the Arbitration Act before the District Judge, Bilaspur, which were
dismissed. Aggrieved, the Appellant filed appeal before the High Court of
Chhattisgarh. The High Court dismissed the appeal.

 

It was observed
by the Supreme Court that the parties have agreed in expressed terms that the
law of arbitration would be English Arbitration Law. In the case before us,
being a contract executed between the two parties, the court cannot adopt an
approach for interpreting a statute. The terms of the contract will have to be
understood in the way the parties wanted and intended them to be. In that
context, particularly in agreements of arbitration, where party autonomy is the
grundnorm, how the parties worked out the agreement, is one of the
indicators to decipher the intention, apart from the plain or grammatical
meaning of the expressions and the use of the expressions at the proper places
in the agreement. Contextually, it may be noted that in the present case, the
Respondent had invoked the provisions of English law for the purpose of the
initiation of the unsettled disputes. In view of the above, the Supreme Court
held that the arbitration agreement was not governed by the Indian Law.

 

24. Jurisdiction – on jurisdiction is mandatory – At any stage of the
proceeding, issue of jurisdiction which goes to the root of the matter has to
be tried once it is brought to the notice of the court– Remanded. [CODE OF
CIVIL PROCEDURE, 1908; ORDER I, RULE 8]

 

S.N.D.P.
Sakhayogam vs. Kerala Atmavidya Sangham (2017) 8 Supreme Court Cases 830

 

One of the
issues were whether the Plaintiff, who is a juristic person, i.e.,
“Society” is entitled to invoke the provisions of Order 1 Rule 8 of
the Code for filing a suit in a “representative capacity” i.e.
whether the Lower authority had the jurisdiction to try such a suit.

 

The facts of
the present case deal with the fact that the Plaintiff treated their suit to be
in the nature of a “representative suit” within the meaning of Order
1 Rule 8 and, therefore, applied to the Trial Court under Rule 8 of the Code
seeking permission to prosecute the suit in the representative capacity. This
permission appears to have been granted to the Plaintiff by the Trial Court
without any objection from the side of the Defendants and, therefore, Issue No.
1 was answered in Plaintiff’s favour.

 

The Court held
that the Trial Court was expected to decide several material questions, namely,
whether the Plaintiff, who is a juristic person, i.e., “Society” is
entitled to invoke the provisions of Order 1 Rule 8 of the Code for filing a
suit in a “representative capacity”. In other words, the Trial Court
should have examined the question as to whether the expression
“person” occurring in Rule 8 also includes “juristic
person”. Secondly, if the Plaintiff is held entitled to file such suit,
whether the facts pleaded and the reliefs claimed in the plaint can be said to
be in the nature of representative character so as to satisfy the ingredients
of Order 1 Rule 8 of the Code which are meant essentially for the benefit of public
at large for grant of any relief and lastly, if the facts pleaded and the
reliefs claimed in the plaint do not satisfy the requirements of Order 1 Rule 8
of the Code for grant of relief to the public at large then whether such suit
is capable of being tried as a regular suit on behalf of the Plaintiff for
granting reliefs in their personal capacity, because the suit relates to
ownership of land, namely, who is the owner of the suit land. Since there was
neither any discussion much less finding on any of the aforesaid issues by any
of the Courts below, though these questions directly and substantially arose in
the case, we are of the considered opinion that it would be just and proper and
in the interest of justice to remand the case to the Trial Court to answer
these issues and then decide the suit depending upon the answer in accordance
with law.

 

The Hon’ble
Court observed that the issue of jurisdiction which goes to the root of the
case if found involved has to be tried at any stage if the proceedings once
brought to the notice of the Court.

 

25. Nominee – Not entitled to withdraw from bank especially when dispute
raised by another legal heir [Banking Regulation Act, 1949, Section 45ZA]

 

Vishwanath
Yadav and Ors. vs. Kashinath Yadav and Ors. AIR 2017 BOMBAY 258

 

The questions
for consideration was whether a nominee can recover the amounts from the Bank
on behalf of all the legal representatives when the legal representatives
themselves have put up a claim to recover such amount from the concerned Bank and
whether such amounts can be claimed only after the Inventory Proceedings are
initiated.

 

It was observed
by the Court that it is clear that whenever a depositor appoints his nominee
and the depositor dies before the maturity of the fixed deposit for release,
the nominee so appointed would certainly be entitled to collect the amount
payable on such fixed deposit amount on its maturity for release. However, that
would not take away the right of the legal heirs of the deceased depositor from
claiming right to the amount standing to the credit of the deceased depositor
in accordance with the provisions of law of succession in force. This is so
because a nominee is merely a representative of the lawful successor of the
deceased depositor to receive the payment on the maturity of the deposit for
release. The nominee does not step in the shoes of the legal heirs merely on
account of nomination by a depositor.

 

In view of the observations
made, it was held that merely relying upon section 45ZA of the Banking Regulations
Act, it cannot be contended that he is entitled to withdraw the amounts
specially when the Appellants have raised a dispute in the present case. It was
also held, taking into account the second issue, that the amounts can be
withdrawn only after Inventory Proceedings.

Allied Laws

11.  Evidence – Doubt that the exported goods were
overpriced cannot be sustained – No business interests between the parties
hence held to be at arm’s length price – Monies received through banking
channel – Cannot be held as hawala. [Customs Act, 1962 – Sections 114, 114A,
127A, 127B, 14, 17, 156, 28]

UOI vs. Padmini Polymers Ltd. and Ors.
2017 (353) E.L.T. 25 (Del.)

The ground on which the impugned order was
challenged is that the settlement commission had erred in overlooking the fact
that during settlement proceedings, it is not for the petitioner to establish
respondent’s guilt beyond reasonable doubt; instead it was for the license
holder to establish its innocence apropos the issues raised in the show
cause notice.

It was held that in the absence of
sufficient proof being led, Revenue’s doubt about the FOB value of the goods
cannot be sustained. It has not substantiated its contention that the exported
goods were overpriced. Furthermore, there was nothing on record to conclude
that there were business interests between Respondent and its importers in
Singapore, United States and USA so as to doubt that the transactions between
them were not in the normal course of trade or that it was not a transaction at
arms’ length. Hence, the declared FOB would have to be accepted.

Since Revenue has not led any evidence to
indicate either a ‘Hawala’ transaction or a back flow of money to Respondent
through illegal means regarding the value of the exported goods, the export
transaction cannot be viewed with suspicion. In any case, all monies were received by
Respondent through the banking channels as have been so certified by its
bankers through remittance certificates. In view of the same, the petition was
dismissed.

12. Interest – No
provision in Act to pay – Govt. to pay interest on currency seized at the time
of refund of such amount. [Central Excise Act]

R.H.L. Profiles Ltd. vs. Commr. of Cus.,
Ex. and Service Tax, Kanpur 2017 (352) E.L.T. 349 (All.)

The only issue was whether the Tribunal was
justified in rejecting the claim of interest on the amount refunded on the
ground that there was no provision for paying interest on such amount?

 It was observed that nowhere the Government
can enrich itself at the cost of the others. The Government cannot deny payment
of interest merely for the reason that there is no express statutory provision
for payment of interest on the refund of excess amount/tax collected by the
Revenue.

It was held that the amount which was
illegally confiscated by the Revenue and was ultimately refunded, the
assessee-appellant was entitled to interest and that the department is under
obligation to pay the same.

13.
Money Laundering – Attachment of money alleged to be proceeds of illegal
transactions – No link between sum of money attached and the alleged proceeds
of crime – Fixed deposit receipt to be returned together with the accretions.
[Section 5, PMLA, 2002]

 Satish Estate Pvt. Ltd. vs. Union of
India 2017 (353) E.L.T. 21 (P & H)

The Petitioner owns a piece of land which it
sought to sell to TI Ltd. TI Ltd. advanced a sum of Rs. 25 lakh towards earnest
money by two cheques. Disputes and differences arose between the petitioner and
TI Ltd. TI Ltd. filed an FIR against the petitioner for offences inter alia
u/s. 420 of the Indian Penal Code. However, the suit and the FIR filed by TI
Ltd. came to an end and the petitioner forfeited the earnest money of Rs. 25
lakh.

TI Ltd. had entered into another agreement
with a third party for the sale of an entirely different property for a total
consideration of Rs. 3.61 crore and advance/earnest money was paid by third
party of a sum of Rs.11 lakh and Rs. 3.50 crore, respectively, where also,
differences and disputes arose due to which the third party filed an FIR
against TI Ltd. and for the sale of an entirely different property and charges
were framed pursuant to that FIR against the respondent under Sections 420,
467, 468 and 471 of the Indian Penal Code.

The petitioners had forfeited an amount of
Rs.25 lakh, in respect of which the Enforcement Directorate had passed a
provisional attachement order against the director of the petitioner and not
against the petitioner directly.

It was stated that the amount of Rs. 25 lakh
paid to the petitioners by TI Ltd. was from the proceeds of crime i.e. from the
sale of the land to the third party consequent to which the an FIR had been
filed by the third party against TI Ltd., and hence, such amount of Rs. 25 lakh
was to be attached.

The petitioner sought an order for the
return of the sum of Rs. 25 lakh which stood attached by the Directorate of
Enforcement in exercise of powers under the Prevention of Money Laundering Act,
2002.

It was held that the director was not a
party to the transaction in his personal capacity but only as a Director of the
petitioner. The maintainability of such proceedings itself is doubtful.
Secondly, there was no connection between the land which was a subject matter
of the agreement between the petitioner and the Respondent on the one hand, and
the land that was a subject matter of the agreement between the Respondent and
the third party entered on the other hand. Since there was no link between the
said sum of Rs. 25 lakh and the alleged proceeds of crime namely the sum of Rs.
3.61 crore received by Respondent from third party. In the circumstances, the
petition was allowed.

 The FDR was directed to be returned together
with the accretions thereto, if any. It was clarified that in the event of any
evidence being obtained by the respondents in respect of the said sum of Rs. 25
lakh, they are always at liberty to take necessary action in accordance with
law.

14. Money
Laundering – Person in possession of proceeds of crime – Not charged with
offence of crime [PMLA, 2002; Sections 3, 
24]

 Jafar Mohammed Hasanfatta and Ors. vs.
Deputy Director and Ors. 2017 (353) E.L.T. 55 (Guj.)

The allegation against each of the
petitioner is of commission of offence u/s. 3 of PMLA, which is punishable u/s.
4 of PMLA. Section 3 describes the offence of money-laundering where whosoever
directly or indirectly attempts to indulge or knowingly assists or knowingly is
a party or is actually involved in any process or activity connected with the
proceeds of crime including its concealment, possession, acquisition or use and
projecting or claiming it as untainted property shall be guilty of offence of
money-laundering.

It was held
that section 24 shows legislative intent of attachment and confiscation of
proceeds of crime by presuming involvement of proceeds of crime in money
laundering irrespective of whether the person concerned is or not charged with
the offence of money laundering. Thus, there shall be a legal presumption in
any proceeding relating to proceeds of crime under PMLA that such proceeds of
crime are involved in money-laundering. Burden would be on the person concerned
to show to the contrary.

However, section 24 clearly indicates that
even a person in possession or connected with any proceeds of crime may or may
not be charged with the offence of money laundering. Whether a person shall be
charged with money laundering or not shall thus depend only upon satisfying the
requirements of Section 3 of PMLA.

In the instant
case, neither there was anything to raise a presumption of fact or law that any
of the petitioners was aware that the monies received in their bank accounts
through banking channels were ‘proceeds of crime’ derived from any ‘scheduled
offence’, nor is there anything to further presume that the petitioners were
intentionally projecting or claiming any proceeds of crime as untainted one. In
absence of the same, offence of money laundering u/s. 3 of PMLA even on prima
facie basis would not be attracted.

15. Tenancy – Devolution – Brother – Not
family nor heir. [Hindu Succession Act, 1956, S.3(a), S.15(2)(b)].

Durga Prasad vs. Narayan Ramchandani (D)
thr. AIR 2017 SUPREME COURT 915

In the present case, the suit property was
taken on rent by the father-in-law of deceased tenant-Lalita that is Hem Ram
Sharma and after his death, his son Baldev (husband of Lalita) became tenant of
the suit property. Upon his death, Lalita became the tenant of the suit
property. The Appellant is the brother of deceased Lalita, who was the tenant
of the Respondent herein. Upon death of Lalita, in terms of section 15(2)(b) of
the Hindu Succession Act, in the absence of any son or daughter of deceased
Lalita, the tenancy would devolve upon the heirs of her husband. Since the
Appellant is the brother of deceased Lalita and does not fall under the
category of ‘heir’ of Lalita’s husband, the tenancy of the suit property will
not devolve on him nor can he be called as an ‘heir’ u/s. 3(a) of the U.P. Act
XIII of 1972.

Section 3(g) defines ‘family’, in relation
to landlord which includes the spouse that is husband or wife of a person, male
lineal descendants which means his or her son, son’s son, son’s son’s son and
so on, parents, grandparents, unmarried, widowed, divorced daughter or
granddaughter, etc.

The definition given in the Clause is an
inclusive one and is supposed to be construed in its technical meaning which
implies that,what is not given has to be excluded as not forming part of the
family of landlord or tenant.

Therefore, sisters and brothers of landlord
and tenant are excluded from his/her family. In the facts of the present case,
the Appellant being brother of deceased tenant cannot be held to be the
‘family’ as the inclusive list given under the Act clearly omits “brother
and sister” and the same cannot be read therein as the list has to be read
and interpreted strictly. _

Allied Laws

Contempt –
Protecting fair name of judiciary also extends to protecting registry from
false and unfair allegations. [Contempt of Courts Act, 1971 – Section 2(c), 14]

 Suo Motu Contempt Petition AIR 2017
SUPREME COURT 3836

 The advocate on record contended in an
extremely agitated manner that a great manipulation had occurred in the
Registry of the Court, in order to favour the opposite party with the objective
of “Bench Hunt”. Alleging that unscrupulous litigants aimed to bench
hunt, the Advocate on record also alleged the involvement of the registry
stating that in deviation from normal Rule of listing the matter before regular
bench, and indulging in constituting a special bench at the eleventh hour is
non-conventional and mischievous act on part of Registry.

It was observed that the contemnor was an
Advocate-on-Record, practicing in that capacity since the year 2009 – not a
novice in the field. He had been representing prestigious institutions, State
Government and Authorities and is obviously quite familiar with the practices
of the Court. He cannot be said to be oblivious to the fact that no bench is
constituted by the Registry, but by the Chief Justice of this Court. Thus, in
an indirect manner, an imputation was impliedly made even against the Chief
Justice, though in the garb of a virulent attack on the Registry.

The contempt jurisdiction is not only to
protect the reputation of the concerned Judge so that he can administer Justice
fearlessly and fairly, but also to protect “the fair name of the
judiciary”. The protection, in a manner of speaking, extends even to the
Registry in the performance of its task, and false and unfair allegations which
seek to impede the working of the Registry and thus the administration of
Justice, made with oblique motives, cannot be tolerated.

It was held that the allegations sought to
be made against the Registry with insinuations directed even against the
Judges, led to the prima facie satisfaction, that the Advocate-on-Record
had committed contempt in the face of the Court, by making such insinuations
and allegations and hence the contemnor was not permitted to practice as an
Advocate-on-Record, for a period of one month from the date of the order.

Joint Property –
Income from joint property used for purchasing property – Joint property.
[Hindu Law]

Pana Devi and Ors. vs. Ayodhaya Prasad
and Ors. AIR 2017 PATNA 145

A partition 
suit  was filed to claim a share
in the property.

The issue was whether the property was
purchased out of the income of the joint property or from the individual’s own
income, since if the property was from the income of individual’s own income,
the plaintiffs would be entitled to get a larger share in the property.

The Honourable Court held that since there
was no reliable evidence to show that there was separate source of income as
claimed by the plaintiffs, the property was considered to be acquired out of
the income of the Joint Property and hence, such property would also be treated
as the joint property.

License to drive
Light Motor Vehicle – Can also drive transport vehicle – Should be of same
class. [Motor Vehicles Act, 1988, Sections 
2(10), 2(21), 2(15), 2(47), 2(48), 3, and 10]

Mukund Dewangan vs. Oriental Insurance
Company Limited AIR 2017 SUPREME COURT 3668

The issue was, what was the meaning to be
given to the definition of “light motor vehicle” as defined in
section 2(21) of the Motor Vehicles Act? Whether transport vehicles were
excluded from it?

It was held by the Honourable Court that
‘Light motor vehicle’ as defined in section 2(21) of the Act would include a
transport vehicle as per the weight prescribed in section 2(21) read with
sections 2(15) and 2(48). Such transport vehicles are not excluded from the
definition of the light motor vehicle. There is no requirement to obtain
separate endorsement to drive transport vehicle, and if a driver is holding
licence to drive light motor vehicle, he can drive transport vehicle of such
class without any endorsement to that effect.

Power of Attorney
holder can appear as witness [Evidence Act, 1872 –Section 118]

Radha Sharan Dubey and Ors. vs. Ram Niwas
and Ors. AIR 2017 (NOC) 828 (ALL.)

The founder trustees had created trust
through their Power of Attorney. The power of attorney was present in the
office of the sub-registrar and had admitted execution of the trust deed. The
trustees had executed separate power of attorneys in favour of the power of
attorney holder which were duly registered, before execution of the trust deed.
Thus, the Power of Attorney had power to depose, having personal knowledge of
the affairs of the trust. His oral deposition cannot be ignored for the fact of
being Power of Attorney holder of the trustees.

The question which arose for determination
before the Court was, as to whether the oral deposition of Power of Attorney
can be ignored only on the ground that he was only Power of Attorney Holder of
the plaintiff trust and, therefore, he had no personal knowledge of the facts
deposed.

It was held that a comprehensive reading of
the procedure as provided under Order III Rule 1 and 2 of Civil Procedure Code
indicates that it does not deal with the merit of the evidence to be adduced in
a civil proceeding as to who may testify or depose. A careful reading of the
Order III Rule 1 CPC further shows that it does not deal with the power of the
General Power of Attorney to depose or the right of the Principal to authorise
his Power of Attorney to depose in his favour. There was also no prohibition
under the Evidence Act for a Power of Attorney to appear and depose on behalf
of his principal. The Power of Attorney Holder is a competent witness and is
entitled to appear as such. His evidence cannot be refused to be taken into consideration
merely on the ground that the parties to the suit i.e. the plaintiff or
defendant choose not to appear in the witness-box. Section 118 of the Evidence
Act provides the category of persons who are incapable of being witness in a
legal proceeding. The Power of Attorney does not fall in any of the said
categories. By cross-examination of the Power of Attorney, it can be seen
whether he has personal knowledge about the facts in controversy. The
evidentiary value of his deposition may be determined after due consideration
of his answer in the cross-examination.

It was thus concluded that the Power of
Attorney Holder was a competent witness and was entitled to appear as such, his
deposition will be read in evidence on record.

Surety – Liability
of surety co-extensive – Prerogative of decree holder as to against which
judgment debtors he should proceed against. [Chit Funds Act 1982, Section 25;
Contract Act 1872, Section 128].

Punyamurthula Venkata Viswa Sundara Rao
vs. Margadarsi Chit Fund Pvt. Ltd. and Ors. AIR 2017 (NOC) 774 (HYD.) (HC)

Civil revision petitions were filed to
execute an order passed against all the judgement debtors in the Arbitration
proceedings. The decree holder represented by its Principal Officer obtained
the award against the principal debtor and all the judgement debtors.

The simple issue which came up for
consideration was whether the decree holder has to proceed against all the
judgement debtors, who are guarantors, by claiming proportionate amount
decreed.

The
Honourable Court held that the law is well settled i.e. the decree holder has
an option to proceed against either the principal debtor or any of the
guarantors or against all of them. The liability of a surety is co-extensive
with that of the principal debtor, unless it is otherwise provided by the
contract, as section 128 of the Indian Contract Act is clearly worded. Hence,
it was concluded that it is completely the prerogative of the decree holder, as
to against whom he should proceed, for realising the debt. _

Allied Laws

26  Arbitration – Main agreement not registered – Arbitration clause cannot be acted upon.
[Arbitration and Conciliation Act, 1996 Section 7, 11, 37, 38]

Ansal Properties and Infrastructure Limited vs. Jhamru Chandaram and Ors. AIR 2017 RAJASTHAN 52

An application was filed before the court u/s. 11 of the Arbitration and
Conciliation Act, 1996, praying for appointment of the sole Arbitrator
to adjudicate its dispute with the respondents. Applicant signed two
MOUs. However, it was contested that the MOU had been annulled.

It was argued that an arbitral agreement within the MoU/agreement to sale, even if an unregistered document, can be used as evidence for collateral purpose as provided in proviso to section 49 of the Registration Act and is severable from the main contract.

The question which arose was whether any unstamped or insufficiently stamped agreement/MoU for sale containing clause can be acted upon.

It was held that the question as to insufficiency of stamp duty in view of section 16 of the Act should be left to be decided by the Arbitrator, cannot be countenanced and has to be rejected in view of clear law laid down by the Supreme Court in SMS Tea Estates Pvt. Ltd. which mandates that such a issue has to be decided in the application u/s. 11 of the Act itself.

27   Interrogation – Presence of Counsel – Only to avoid coercion, if any. [Customs Act, 1962, Section 108]

Sangit Agarwal vs. The Director General, Directorate of Revenue Intelligence and Ors . 2017 (356) E.L.T. 518 (Del.)

A prayer as to permit the interrogation in presence of the interrogatee’s Advocate who would sit at a visible distance not at audible range, was made by the petitioner.

It was observed that a lawyer has no role to play whatsoever during the interrogation, except to be at a distance beyond hearing range to ensure that no coercive methods were used during the interrogation.

It was accordingly directed that the petitioners’ advocate should be allowed to be present during the interrogation of the petitioners. He/they should be made to sit at a distance beyond hearing range, but within visible distance and the lawyer must be prepared to be present whenever the petitioners are called upon to attend such interrogation.

28  Power of Attorney – Intimation not given after death – Not valid to act as power of attorney. [Mines and Minerals Act, 1957 (Section 13, R.25A)]

State of Odisha vs. Government of India and Ors. AIR 2017 (NOC) 1023 (ORI.)

The question for consideration was whether the intimation of the death of the grantee was given to the State Government immediately after his death, but there was no document to support the said contention, there could be grant of additional time for fulfillment of statutory compliance, to the power of attorney holder, as the period of lease had already expired.

It was observed that Rule 25-A of the Mineral Concession Rules, 1960 provides that where an applicant for grant or renewal of mining lease dies before the order granting him mining lease, the application for grant of mining lease shall be deemed to have been made by his legal representatives. The question of the power of attorney acting on behalf of the grantee as legal representative would arise only when intimation of the death of the grantee is given to the State Government. Without such intimation having been given, it would be presumed that the power of attorney continued to act as power of attorney on behalf of a deceased person. A power of attorney can act on behalf of a living person, be it a natural person or juristic person. Once a person, who has given power of attorney, is no more there, the question of power of attorney continuing to act on behalf of such deceased person, would not arise. Had it been a case of the legal representative of the grantee having informed the State Government of the death of the grantee, and then proceeded with the matter as legal representative of the grantee, then the position would have been different. Such is not the case in hand.

In view of the above, it was held that there was no merit in the case of legal heir of the grantee for grant of additional time for fulfillment of statutory compliance.

29  Nominee – No beneficial ownership over persons entitled to inheritance [Companies Act, 1956, Section 109A]

Shakti Yezdani and Another vs. Jayanand Jayant Salgaonkar and Ors. (2017) 200 Comp case 143
(Bom) (HC)

The questions for consideration was whether a nominee of a holder of shares or securities is entitled to the beneficial ownership of such shares or securities to the exclusion of the other persons entitled to inherit the estate of the holder as per the law of succession.

It was observed by the Court that as per the consistent view taken by the Apex Court under various provisions held that the nominee does not get an absolute title to the property subject matter of the nomination. The reason is by its very nature when a share holder or a deposit holder or other, makes a nomination during his lifetime, he does not transfer his interest in favour of the nominee. It is always held that the nomination does not override the law in relation to testamentary or intestate succession. The provisions regarding nomination are made with a view to ensure that the estate or the rights of the deceased, subject matter of nomination are protected till the legal representatives of the deceased take appropriate steps. The object of the provisions of the Companies act is not to either provide a mode of succession or to deal with succession. The object of section109A is to ensure that the deceased shareholder is represented by someone.

In view of the same, it was held that the so called vesting u/s.109A does not create a third mode of succession and the nominee does not get a beneficial ownership of such shares or securities to the exclusion of the other persons entitled to inherit the estate.

30  Recovery of tax arrears – No charge on defaulter’s property – Hence no liability of the purchaser of such defaulter’s property. [Tamil Nadu Sales Tax, 1959, Section 24(2)]

Noor M. Saied vs. Commercial Tax Officer, Chennai. 2018 (9) G.S.T.L (Mad.)

A Sale was effected in a public auction, where the petitioner was a successful bidder. Admittedly, there was no charge on the property in question for the alleged sale tax arrears. At a later point in time, the respondent sent a notice to the petitioner that the sales tax arrears was to be paid by the petitioner, which was earlier payable by the Seller or the defaulter.

The issue to be decided was whether the petitioner can be proceeded against for Sales tax arrears payable by the defaulter.

It was held that, since there was no charge on the property and there was no doubt about the purchase made by the Petitioner being bonafide, hence the petitioner cannot be proceeded against for the recovery of the sales tax arrears payable by the defaulter. The court is of the firm view that the writ petition is allowed and that the impugned notice is unsustainable in law and is set aside. _

Allied Laws

24. Family & Personal Laws –
Family arrangement /settlement in respect of immovable property worth more than
Rs. 100, when orally made, no registration is required and is admissible in
evidence but when reduced in writing same has to be registered- but even if
unregisterd, same can be used as corroborative evidence. [Sections 17 & 49
of the Registration Act, 1908.]

Subraya M.N. vs. Vittala M.N. And Others (2016) 8 scc 705 (sc).

The Appellant-Defendant and the Respondents- Plaintiffs are
the sons of one late Narayana. The suit scheduled property comprises of item
No. 1 measuring 1.00 acre; item No. 2 measuring 0.25 acre. Appellant-Defendant
claimed that so far as item Nos. 1 and 2 are concerned, Plaintiffs have sold
their shares – 0.50 acre of land to the Defendant and the third Plaintiff as
per sale deed dated 28.04.1976 and Plaintiffs have no right to claim partition
in respect of item Nos. 1 and 2. It is further averred that there was a
panchayat in the village on 18.03.1995 wherein Plaintiff Nos. 3 and 4 and Defendant
participated and it was agreed between the parties that the Defendant will give
Rs. 50,000/- to the Plaintiff Nos. 3 and 4 and Defendant will have all rights
over item Nos. 1 and 2. The trial court as well as the High Court held that in
the absence of any conveyance deed, it cannot be established that Plaintiff
Nos. 3 and 4 have forfeited their rights in respect of item Nos. 1 and 2 of the
suit scheduled property. The Supreme court reversing the order of trial court
and high court held that in the facts and circumstances of this case and the
conduct of the parties, Panchayat resolution appears to record the family
settlement already arrived at between the parties. There is no provision of law
requiring family settlements to be reduced to writing and registered, though
when reduced to writing the question of registration may arise. Binding family
arrangements dealing with immovable property worth more than rupees hundred can
be made orally and when so made, no question of registration arises. If,
however, it is reduced to the form of writing with the purpose that the terms
should be evidenced by it, it required registration and without registration it
is inadmissible; but the said family arrangement can be used as corroborative
piece of evidence for showing or explaining the conduct of the parties. In the
present case, panchayat resolution reduced into writing, though not registered
can be used as a piece of evidence explaining the settlement arrived at and the
conduct of the parties in receiving the money from the Defendant in lieu of
relinquishing their interest in item Nos. 1 and 2.

25. Nomination under Companies Act,
1956 will not override succession [Sections 109A and 109B of Companies Act,
1956].

Shakti Yezdani & Ors vs. Jayanand Jayant Salgaonkar and
Ors. Appeal No. 313 Of 2015 & Appeal No. 311 of 2015 dtd 1.12.2016
(Bom,)(HC)

The questions to be decided by the division bench of the
Bombay High Court were as under:

(i)    Whether a nominee of a holder of shares or
securities appointed u/s. 109A of the Companies Act, 1956 read with the
Bye-laws under the Depositories Act, 1996 is entitled to the beneficial
ownership of such shares or securities to the exclusion of all other persons
who are entitled to inherit the estate of the holder as per the law of succession?

(ii)   Whether a nominee of a holder of shares or
securities on the basis of the nomination made under the provisions of the
Companies Act, 1956 read with the Bye-laws under the Depositories Act, 1996 is
entitled to all rights in respect of such shares or securities to the exclusion
of all other persons or whether he continues to hold the securities in trust
and in a capacity as a beneficiary for the legal representatives who are
entitled to inherit securities or shares under the law of inheritance ?

(iii)  Whether a bequest made in a Will executed in
accordance with the Indian Succession Act, 1925 in respect of shares or
securities of the deceased supersedes the nomination made under the provisions
of Sections 109A and Bye-Law No. 9.11 framed under the Depositories Act,
1996?.”

The Bombay High court held as under:

(i)    The Apex Court in the case of Indrani
Wahi vs. Registrar of Co-op. Societies and Others (2016) 6 SCC 440
considered the provisions of nomination under Sections 69 and 70 of the West
Bengal Co-operative Societies Act, 1983 and came to the conclusion that where a
member of a Co-operative Society nominates a person in consonance with the
provisions of the Rules framed under the West Bengal Act of 1983, the
Co-operative Society is mandated to transfer all the shares or interest of such
member in the name of the nominee. This view was taken by the Apex Court in the
light of the express provisions of section 80 of the said Act of 1983 read with
Rule 127 of the Rules of 1987 framed under the West Bengal Act of 1983.
Sections 79 and 80 of the said Act of 1983 appear to be different from the
provisions relating to the nomination in the Maharashtra Cooperative Societies
Act, 1960. After issuing the directions to the Co-operative Society to transfer
the shares of the deceased member in the name of the Appellant who was a
nominee, the Apex Court specifically observed that it will be open for other
members of the family of the deceased member to pursue their case of succession
or inheritance in consonance with law. Thus, the conclusion drawn by the Apex
Court was that a Cooperative Society is bound by the nomination made by the
member. In case of such nomination, the Society has no option except to
transfer the shares in the name of the nominee after the death of the member.

     However, those who are claiming
inheritance will be entitled to pursue their remedies and claim title in the
shares on the basis of inheritance. Thus, the conclusion drawn by the Apex
Court was not that the nomination binds the legal representatives of the
deceased shareholder or a member of the Society or that it overrides the law of
succession.

(ii)   Even assuming that the format of the
nomination requires attestation as required by a will under the Indian
Succession Act, 1925, the nomination does not become a testamentary
disposition.

(iii)  The provisions relating to nominations under
the various enactments have been consistently interpreted by the Apex Court by
holding that the nominee does not get absolute title to the property subject
matter of the nomination.

     The reason is by its very nature, when a
shareholder or a deposit holder or an insurance policy holder or a member of a
Co-operative Society makes a nomination during his life time, he does not
transfer his interest in favour of the nominee. It is always held that the
nomination does not override the law in relation to testamentary or intestate
succession. The provisions regarding nomination are made with a view to ensure
that the estate or the rights of the deceased subject matter of the nomination
are protected till thelegal representatives of the deceased take appropriate
steps.

None of the provisions of the aforesaid Statutes providing
for nominations deal with the succession, testamentary or non-testamentary.

(iv)  The object of the provisions of the Companies
Act is not to either provide a mode of succession or to deal with succession.
The object of the Section 109A is to ensure that the deceased shareholder is
represented by someone as the value of the shares is subject to market forces.

      Various advantages keep on accruing to
shareholders. For example, allotment of bonus shares. There are general
meetings held of the companies in which a shareholder is required to be
represented. The provision is enacted to ensure that the commerce does not
suffer due to delay on the part of the legal heirs in establishing their rights
of succession and claiming the shares of a company.

(v)   The so called vesting u/s. 109A does not
create a third mode of succession. It is not intended to create a third mode of
succession. The Companies Act has nothing to do with the law of succession.

(vi) The
first question is answered in the negative and the third question in the
affirmative. The second question is answered accordingly.

Editor’s Note – A reference may be made to the Feature Laws
and Business published in the May 2015 issue of the BCAJ in which this subject
is analysed.

26. Sales Tax – Minor admitted to
benefits of partnership not liable for dues of the firm. [Sections  25, 30 of Indian Partnership Act, Section 21
of Kerala General Sales Tax Act, 1963]

J. Rajmohan Pillai vs. District Collector, Kollam &
Ors (2016) 93 vst 397(ker)

The petitioner, while he was a minor was inducted as a
partner of the firm M/s. Malabar Cashew and Allied Products with effect from
01/01/1975. The partnership was reconstituted on 01/01/1976 by which the
petitioner and three other minors were excluded from the partnership. The firm
was liable to pay sales tax dues and accordingly, revenue recovery proceedings
were initiated by the 1st respondent. The 1st respondent
proceeded on the basis that the petitioner, being a partner, was also liable
for the arrears of sales tax dues and accordingly, steps were taken against the
petitioner u/s. 65 of the Revenue Recovery Act.

The Kerala High Court held that when a firm is liable, each
of the partners in the firm are jointly and severally liable for the amount due
until he retires. It is very clear from the provisions of the Act, that a minor
can only be admitted to the benefits of the partnership and cannot become
liable to the debts or the loss of the partnership. It is trite, that a minor
cannot be made liable for the liability of the firm. The District Collector had
referred to sections 30(7), 35 and 25 of the Partnership Act to impose a
liability on the petitioner. Section 30 of the Partnership Act, relates to
admitting a minor to the benefits of partnership. The Statute indicates that
though a minor may not be a partner of the firm, he may be admitted to the
benefits of the partnership. Though the minor’s share is liable for the acts of
the firm, but the minor is not personally liable for any such act.

27. Investigation and Enquiry –
Summons under Customs Act – Presence of counsel during interrogation of
Petitioner – To be within visible range but beyond hearing range – Counsel must
be prepared to be present for every summons made. [Customs Act, 1971; Section
108]

Vijay Sajnani vs. Union
Of India 2017 (345) E.L.T. 323 (S.C.)

Section 108 of the Custom’s Act gives the power
to summon any person to give any evidence or produce documents. The section
also states, that the person so summoned, is bound to state the truth upon any
subject, on inquiry. The section had no mention of whether the counsel of the
person so summoned would be able to witness such inquiry/interrogation.
However, in the present case, the Supreme Court had allowed the Counsel of the
petitioners to be present during the interrogation of the petitioners. But this
allowance was subject to the counsel being present at a reasonable and visible
distance, beyond hearing range, during such interrogation It was also directed
that the petitioner’s counsel should always be prepared to be present whenever
the petitioners are called upon to attend such interrogation.

Allied Laws

10. Books of Accounts – Entries in
loose papers – Incriminating materials seized in raids conducted on industries
– Not maintained in the regular course of business – Not admissible [Evidence
Act (1 of 1872), Section 34; Criminal Procedure Code (2 of 1974), Section  156].

Common Cause (A Registered Society) and Ors. vs. Union of
India (UOI) and Ors. AIR 2017 SUPREME COURT 540

There was a raid on some industries by the C.B.I., followed
by another raid by the Income tax Department, which reportedly led to recovery
of incriminating documents.

The Court stated that loose sheets of papers should be in the
form of “Books of Account”. While defining the term ‘books of account’, it
stated that entries in loose papers/sheets are irrelevant and not admissible
u/s. 34 of the Evidence Act, and that, a book is a book of account and such a
book of account should be regularly kept in the course of business.

The Court also stated that the value of entries in the books
of account shall not alone be sufficient evidence to charge any person with
liability, even if they are relevant and admissible. They are only
corroborative evidence. It is incumbent upon the person relying upon those entries
to prove that they are in accordance with the facts.

It was held that loose sheets of papers are wholly irrelevant
as evidence being not admissible u/s. 34 so as to constitute evidence with
respect to the transactions mentioned therein having no evidentiary value.

11. Consumer – Trust not a Person
and hence not a Consumer – Complaint filed under Consumer Protection Act – Not
maintainable. [Consumer Protection Act (68 of 1986); Section 2]

Pratibha Pratisthan and Ors. vs. Manager, Canara Bank and
Ors. AIR 2017 SUPREME COURT 1303

The issue in question was whether a complaint can be filed by
a trust under the provisions of Consumer Protection Act, 1986?

Section 2 (c) of the Act provided for the various reasons why
anyone could file a complaint.

However, a Complainant is defined u/s. 2 (b) of the Consumer
Protection Act, 1986, which states that a complainant could be a consumer, any
voluntary consumer association registered under the Companies Act, 1956, the
Central Government or the State Government, one or more consumers or the legal
heirs of a Consumer.

The inclusion of a trust was not apparent from the bare
reading of the text of the Section.

Section 2(d) defines consumer, where it describes the
activities performed by a ‘Person’, which would term him/her as a consumer. No
mention of a Trust or any other form of person is mentioned.

To have complete understanding, even the definition of
‘Person’ u/s. 2(m) of the Act was considered where it is declared that Person
does not include Trust.

It was then held by the Supreme Court that on perusal of the
above mentioned provisions, it is clear that a Trust is not a person and
therefore not a consumer. Consequently, it cannot be a complainant and cannot
file a consumer dispute under the provisions of the Act.

12. Evidence – Subsequent events
during litigation – Having direct bearing on the issue can be considered by the
Court even if it is brought before the Court for the first time[Evidence Act,
1872; Section 56].

Dinshaw Rusi Mehta vs. State of Maharashtra AIR 2017
Supreme Court 1557

The appeal came up before the Supreme Court out of the Writ
petition filed before the Hon’ble High Court. The brief facts of the issue to
appreciate the matter at hand will show that there was one Public and Charitable
Trust called the ‘Parsi Lying in Hospital’ (PLIH) located in Fort, Mumbai. PLIH
owned a land which had been allotted by the Secretary of State for India, for a
period of 99 years by executing an indenture of Lease, for setting up a
charitable hospital in Bombay.

In the year 1924, PHIL resolved to transfer the said land to
another Public Trust called the ‘Bombay Parsi Punchayat’ (BPP) vide High Court
Order. Insofar as the management of the hospital was concerned, a management
committee used to look after its day to day management. Some Trustees of BPP
were also the Trustees of PLIH.

The hospital continued for a few years and remained closed
for various years for various reasons. The Trust decided to re-start the
hospital in collaboration with one company called the ‘Krimson Health Ventures
Private Limited’(KHPL), which is an expert at running and managing hospitals.

The Trustees applied to the Charity Commissioner, the
approval for which was granted to execute the lease deed and the work to be
started by KHPL.

The Hon’ble High Court dismissed the Writ petition filed
against the approval granted.

The appeal filed before the Supreme Court was against the
order of the High Court.

During the pendency of the
litigation before the Supreme Court, KHPL, in whose favour the land had been
transferred for setting up a new hospital, vide their letter to
BPP/PLIH, informed them of the disinterest of KHPL in continuing the project
for the reasons mentioned in the letter.

It was held by the Court that, since, the subsequent events
brought to the notice of the Court, have a direct bearing over the controversy
involved in the case, they deserve to be taken note of for deciding the appeal
before them.

13.
Property Inheritance – Property from husband or father in law cannot be
alienated by unregistered compromise decree in favour of sister’s son –
Property to revert back to husband’s legal heirs. [Hindu Succession Act, (30 of
1956), Section 15(2)(b); Registration Act, (16 of 1908), Section 17]

Hari Ram and Another vs. Madan Lal and AnotherAIR 2017
PUNJAB AND HARYANA69

An ancestral property which was inherited by 4 sons having
1/4th share  each. One of the son’s wife
(Defendant no.2), after the death of her husband, voluntarily executed a decree
in favour of her sister’s son (Defendant no.1) transferring the property to
him.

The other 3 sons (Plaintiffs) contested the said transfer on
the ground that the compromise decree was supposed to be registered u/s. 17 of
the Registration Act, 1908, which was not done. Secondly, in view of section
15(2)(b) of the Hindu Succession Act, the property, after the death of
defendant no.2 (wife), would revert back to the legal heirs of her husband,
since the wife’s sister’s son would not even have the remote chance of
succession and only the successors of the Husband would be entitled to receive
the property in question.

The High Court held that the decree having purportedly
created a legal right in defendant no.2 for the first time. Defendant no.2 did
not have any pre-existing right in the property. The right created for the 1st
time was of a value of more than Rs.100 and hence was legally required to be
registered, which was not done in the present case. Connectivity of Defendant
no.1 vis-a-vis defendant no.2 being sister’s son having no such remote
chance of succession to the property left by defendant no. 2 was also
established. Hence the order was passed in favour of the plaintiffs.

14. Power of Attorney – No existing
obligation nor any obligation created in favour of agent by the principal – Can
be revoked by principal even if the title suggests document to be irrevocable.
[Power of Attorney Act, (7 of1882, Section 2; Contract Act, (9 of 1872),
Section 202]

Siddareddy Venkatanagaraja Reddy vs. Shahamat Ali Khan AIR
2017 HYDERABAD 59.

The principal (defendant), in order to meet his necessities
and to discharge the liabilities, intended to sell dwelling units including
land apurtenant. The principal being pre-occupied, requested the General Power
of Attorney holder (GPA-Plaintiff) to act for him and on his behalf, to do all
the acts, deed and things necessary and as stipulated under the General Power
of Attorney.

However, the GPA nowhere mentioned that the same is supported by
consideration or with reciprocal remunerative obligation of anything incurred
by the agent. Section 201 of the Contract Act states that an agency is
terminated by the principal by revoking his authority, etc. Section 202
states that, if the agent himself has an interest in the property which forms
the subject matter of the agency, the agency cannot, in the absence of express
contract, be terminated to the prejudice of such interest.

The High Court held that in the present case, as
per the facts, it falls u/s. 201 and not section 202 of the Contract Act, since
there is nothing to show the interest of the agent in the subject matter, i.e.
there was nothing to show any consideration or obligation of the agent involved
to be fulfilled by the principal with any express contract therefrom to make it
irrevocable. Even though the nomenclature mentions it to be irrevocable, the
wording does not make the GPA irrevocable for the principal got always absolute
power to revoke.

Allied Laws

1.    Advocate – Duty of Advocate – Bring to the notice of the Tribunal, any pendency of appeal filed in the Supreme Court and other material facts – Non-disclosure leads to obtainment of the Tribunal’s order by fraud – Void-ab-initio.[Central Excise Act, 1944, Section 35C(2)]

Dewsoft Overseas (P) Ltd. vs. Commissioner of Service Tax, New Delhi 2016 (341) E.L.T. 321 (Tri – Del.)

As per facts on record, the dispute related to classification of the services provided by the appellant. The Tribunal vide its Final Order, by adopting the Larger Bench decision in the case of Great Lakes Institute of Management Ltd., rejected the appeal on merits. Thereafter, the said order of the Tribunal was appealed against by the appellant before the Hon’ble Supreme Court, who vide their order, granted leave to appeal in the matter. It is seen that the Hon’ble Supreme Court was also pleased to grant stay of recovery of penalty, subject to the appellants depositing the service tax along with interest within a period of two months.

Prior to the filing of appeal before the Hon’ble Supreme Court, the appellant had also moved an application for rectification of mistake before the Tribunal in terms of section 35C(2) of the Central Excise Act, 1944 on the ground that the Tribunal disposed of the appeal only on merits and did not consider the plea of limitation raised before it. It was contended that the non-consideration of limitation issue amounted to mistake on the part of the Tribunal, thus requiring rectification. The fact of filing of application for rectification before the Tribunal was also disclosed before the Hon’ble Supreme Court in the memo of appeal filed before the Hon’ble Apex Court.

The Assessee failed to bring to the notice of the Tribunal during the course of proceedings of the Miscellaneous Application, about the pendency of the appeal filed by the Assessee in the Apex Court. The Assessee had also failed to produce the material fact about the payment of service tax done on the directions of the Apex Court.

The Revenue’s case is limited to the point that the order of the Tribunal was obtained by fraud since the material facts were not disclosed before the Tribunal by the Assessee, even after being aware of the same, since the same law firm was handling the matter in appeal before the Supreme Court.

It was held by the Apex Court that the Advocate was under legal duty to bring to the notice of the Bench, at the time of disposal of Miscellaneous application, the above factual developments irrespective of the fact as to whether the Tribunal in that case would have decided or not decided the Miscellaneous application. It is a well-settled principle that one who comes to the Court seeking justice must come with clean hands. The fraud vitiates everything and the fact of non-disclosure of the order of the Hon’ble Supreme Court has the effect of making the order in Miscellaneous Application void ab initio.

Intentionally or unintentionally, the fact remains that the Bench was not appraised of the order of the Hon’ble Supreme Court. Non-disclosure of the relevant facts and obtaining of a favourable order by not bringing the relevant facts to the notice of the Bench abuses the due process of law and vitiates the very order so obtained. As such, the Court deemed it fit to recall the order passed.

2.    Document – Memorandum of Partition – Creating or affecting the rights of any party – Required to be mandatorily registered – If unregistered – Inadmissible as evidence [Contract Act 1872, Section 8; Registration Act 1908, Section 17; Stamp Act 1899, Section 35]

Bhanwari Devi vs. Arvind Kumar and Ors. AIR 2016 RAJASTHAN 198 (Jaipur Bench)

Brief facts stated that a suit was filed by the petitioner for possession of the property on the ground that a property along with other properties came into the possession of the petitioner’s father-in-law, as a result of a family settlement between her father-in-law and the father-in-law’s son.

However, it was contested by the defendant-respondent that the document in question cannot be presented as evidence as it was not registered and no stamp duty had been paid.

The question to be resolved by the Hon’ble Court was whether the said document was a mere memorandum of the partition already done, stating the events which is factual in its nature, and would be an admissible evidence? Or whether the document was in the nature of giving rise to a title or right or any extinguishment of a right, by itself, hence attracting the provisions of the Registration Act, 1809, whereby the registration was compulsory and in case of non-registration, could not be admissible as evidence in the court of law?

The Court held that from the language used in the document, the court was convinced that the document was not merely a memorandum or record of a prior partition/family settlement/family arrangement but it was an instrument of partition requiring compulsory registration and for want of registration it was inadmissible in evidence and it could not be admitted in evidence.

3.    Ejusdem Generis – Principle cannot be applied ignoring the natural meaning of the words used by the Legislature. [West Bengal Value Added Tax Act, 2003; Section 2(11)]

Tata Motors Finance Limited, ICICI Bank Limited and Family Credit Limited and Another vs. Assistant Commissioner of Sales Tax, Joint Commissioner of Sales Tax and Assistant Commissioner of Sales Tax Salt Lake Charge and Others [2016] 88 VST 227 (Cal) (HC)

Petitioners were a banking company and non-banking finance company. Petitioners granted loans to persons intending to purchase vehicles against hypothecation of vehicles by way of security under loan-cum-hypothecation agreements. The Tribunal held that Petitioners were dealers as per definition u/s. 2(11) of the West Bengal Value Added Tax Act. Hence, the present Petitions.    

The question which required consideration by the court was, whether in respect of disposal of vehicle for recovery of loan, petitioners were liable for tax as dealers as per definition in section 2(11) of Act?

Under section 2(11), the term ‘Dealer’ was defined as under:

“‘Dealer’ means any person who carries on the business of selling or purchasing goods.
(b) Government, a local authority, a statutory body, a trust or other body corporate…etc”

Since the section was clear, the principles of Ejusdem Generis need not be resorted to.

It was held by the Court that the word used in clause(b) particularly the word “a trust” does not appear nor was shown to have anything in common with the preceding word “a statutory body”. Similarly, the word “body corporate” was not shown to have any common characteristic with the preceding word “trust”. The theory of ‘ejusdem generis’ cannot be applied in construing clause(b) of sub-section11 of section 2 of the aforesaid Act.

4.    Precedent – Reference made by the co-ordinate bench to a larger bench – Would not amount to stay of earlier verdict – nor would it amount to the earlier verdict being inoperative. [Constitution of India, Article 141; Section 140, Section 163A, Motor Vehicles Act, 1988]

New India Assurance Co. Ltd. vs. Vinod C.s. & Ors.air 2016 (Noc) 766 (H.p.)

The main issue was whether a person would be entitled to take shelter u/s. 163A of the Motor Vehicles Act, 1988, where the person involved in the accident, was a victim due to his own rash and negligent actions or due to someone else’s acts or some other reason.

Various cases were cited before the Honourable Court wherein the issue that under sub-section (4) of section 140, there is a specific bar, whereby the concerned party (owner or insurance company) is precluded from defeating a claim raised u/s. 140 of the Act, by ‘pleading and establishing’, ‘wrongful act’, ‘neglect’ or ‘default’, but there is no such or similar prohibiting clause in section 163A of the Act. It was mentioned that the earlier verdict was not accepted by the later bench and hence was placed before the learned Chief Justice of India for referring the matter to a larger Bench for a correct interpretation of the scope of section 163A of the Motor Vehicles Act, 1988.

It was held by the High Court that merely because a verdict of the earlier bench is doubted by a subsequent co-ordinate bench, the earlier order does not become inoperative. It would also not amount to stay of the earlier verdict.

Unless and until the earlier decision is varied, it remains intact and the reference made by the subsequent co-ordinate bench cannot have any adverse consequence insofar as the declaration of the law is concerned.

Allied Laws

19. 
Appellate Tribunal – Reasoned Order – Order should refer to all factual
aspects, rival contentions and legal provisions – Reasons to be assigned for
the basis of any conclusion reached. [Section 254(1)]

Gandhar Oil Refinery vs. Commissioner of Customs (Import)
2016 (342) E.L.T. 31 (Bom.) (HC)

The Tribunal, in the present case had, not beyond one
paragraph, adverted to factual exercise and no details had been mentioned.

The High Court held that the Tribunal should focus on the
core issue, must refer to all factual matters, including any findings by the
laboratories after a test of the samples, the rival contentions and whether the
legal provisions, including, the Rules having a bearing or impact on the same
should be clearly indicated. The Tribunal must assign reasons for the
conclusion it reaches either way.       

20. 
Contempt of Court – Serious and unsubstantiated allegations of
corruption and bias against Judiciary – Cannot be termed as Fair Criticism –
Affidavits filed for apology not deemed bonafide – Imprisonment upto 6 months
and upto Rs. 2,000 fine for contempt. [Contempt of Courts Act, 1971; Sections
2(c), 5, 12]

Het Ram Beniwal And Others vs. Raghuveer Singh And Others
Air 2016 Supreme Court 4940

The 4 appellants, of whom 2 were advocates, addressed a huge
gathering of their party workers in front of the Collectorate, when some of the
accused were granted anticipatory bail, who were allegedly involved in the
murder of a prominent trade union activist.

While addressing the gathering, the appellants made
scandalous and derogatory statements against the High Court and its Judges
stating how the system of Judiciary failed in rendering justice and people have
lost their faith and confidence in the Judiciary, the rule was of the Rich
People in the Judiciary and that there was the influence of money behind the
anticipatory bail of the accused.

The appellants, when questioned in Court by filing a
petition, contented that the statements only attributed to ‘Fair Criticism’
which would not amount to Contempt of Court as mentioned in section 5 of the
Contempt of Courts Act, 1971, which states that Fair Criticism of Judicial act
was not contempt. It was also contended that Criticism of class bias and
improper administration of justice cannot be considered to be contempt.

The Ld. Amicus Curiae, assisting the Court, submitted
that vituperative comments undermining the Judiciary would amount to contempt
and that, an apology through an Affidavit was made only for the purpose of
avoiding punishment and was not bonafide.

The Supreme Court in the current case held that Judges need
not be protected and that they can protect themselves but it is the right and
interest of public in the due administration of justice that have to be
protected. Vilification of Judges would lead to the destruction of the system
of administration of justice. The statements of the appellants are not only
derogatory but also have the propensity of lowering the authority of the Court.
Accusing Judges of corruption results in denigration of the institution which
has an effect of lowering the confidence of the public in the system of
administration of justice. Hence, the appellants are not entitled to take
shelter u/s. 5.

The Court also states that every citizen has a fundamental
right to speech, guaranteed under Article 19 of the Constitution of India.
Contempt of Court is one of the restrictions of such right.

Dismissing the appeal, the court subjected the appellants to
an amount of Rs.2,000/- only as fine without any imprisonment.

21. 
Family – The term ‘family’ includes a married daughter for her to have a
right to evict the tenant from the building [Regulation of Letting, Rent and
Regulation Act, 1972; Section 3(g)].

Gulshera Khanam vs. Aftab Ahmad Air 2016 9 Supreme Court
414

Dr. Ahsan Ahmad was the
original owner of the building who died intestate. On his death, the entire
estate devolved upon his wife(appellant), 2 sons and 4 daughters as per the
shares defined in the Hanafi Law of Inheritance. Dr. Naheed Parveen being the
daughter, received her share accordingly and became the co-owner along with
other co-sharers.

Section 3(g) of the Regulation of Letting, Rent and
Regulation Act, 1972 clearly states in sub-section(iii) that “family includes
any unmarried or widowed or divorced or judicially separated daughter or
daughter of a male lineal descendent as may have been normally residing with
him or her” which clearly shows the intention of the legislation to exclude a
married daughter from the purview of the definition of ‘Family’ as defined under
the Act.

However, the Supreme Court took a different view by
interpreting the lines included in section 3(g) which are stated in the end as,
“and includes, in relation to a landlord, any female having a legal right of
residence in that building”. It was held that since the daughter got a legal
right in the building in the form of a share devolved on her as per the
Mohamedan law i.e. the Hanafi Law of Inheritance, the term ‘Family’ includes a
Married daughter.

22.  Interpretation-Binding precedents – If two
decisions of Supreme Court, being contrary to each other, are passed – The
later decision will be binding. [Sick Industrial Companies (Special Provisions)
Act, 1985; Section 22]

A.K. Mohta vs. Karnataka State Financial Corpn. [2016] 198
Comp Cas 286 (Karn.)(HC)

The issue was w.r.t. whether guarantors can be protected from
legal ‘proceedings’ whereas the section clearly mentions the word ‘suit’
against which the guarantors could claim protection u/s. 22 and not against
‘proceedings’.

Relevant portion of the section states, “and no suit for the recovery of money or for the
enforcement of any security against the industrial company or of any guarantee
in respect of any loans or advance granted to the industrial company”.

The court had placed reliance on one Supreme Court case law
(2003) where it stated that Legislature appeared to have knowingly used two
differently expressions in section 22(1) w.r.t. ‘proceeding’ and ‘suit
wherein the expression ‘proceeding’ would not include the expression ‘suit’ and
vice versa w.r.t to protection of Guarantors under the said Act.

The counsel however,
relied upon one Supreme Court Judgment (2007) which held that section 22(1)
would have to be interpreted to include the expression ‘proceeding’ also in
view of the legislature’s intention to protect the sick industries.

A peculiar fact was that, the earlier decision had not been
taken into consideration for the purpose of arriving at the judgment passed by
the Supreme Court in the later year (2007) and a larger bench did not have an
occasion to lay down the correct position of law.

The High Court in the current case held that if two decisions
of the Supreme Court on a question of law cannot be reconciled and if both
Benches of the Supreme Court consist of equal number of Judges, the later of
the two decisions should be followed by the lower Courts/Authorities.

23. Interpretation – Binding
precedents – Binding  effect of order –
Order even if void, would continue to be in force until set aside by court of
competent jurisdiction.

Anita International vs. Tungabadra Sugar Works Mazdoor
Sangh and Ors. (2016) 9 Supreme Court Cases 44

It was held that parties to lis(a suit pending) or any
third party cannot themselves determine the voidness of any order without
approaching a competent court for setting it aside since not following the same
would amount to disobedience of court’s order which would entail punishment.

The Hon’ble Supreme Court held that even if the
order/notification is void/voidable, the party aggrieved by the same cannot
decide that the said order/notification is not binding upon it. It has to
approach the competent court for seeking such declaration. The order may
hypothetically be a nullity and even if its invalidity is challenged before the
court in a given circumstance, the court may refuse to quash the same on
various grounds including the standing of the petitioner or on the ground of
delay or on the doctrine of waiver or any other legal reason.

Allied Laws

15 Arbitral Tribunal –
Arbitration clause can be read separately from the Agreement – Agreement should
at least be stamped. [Arbitration and Concilliation Act, (26 of 1996); Section
16(1)(a)]

Baleshwar Sharma vs. Nageshwar Pandey AIR 2017 DELHI 84

The issue involved in the matter was whether an arbitrator
can be appointed as per the clause mentioned in the MOU involving a property
situated in Goa. However, the validity of the MOU along with the legality
w.r.t. the MOU being non-registered was challenged by the Respondent.

The Delhi High Court held that the issue to be considered by
the Court was whether the MOU dated 24th May, 2014, is required to
be duly stamped and registered for the Court to further proceed in the matter.
If the document is not required to be compulsorily registered, then the Court
can proceed to appoint an Arbitrator and leave all the questions regarding the
validity of the MOU to be decided in the arbitral proceedings. If, on the other
hand, the Court is of the view that the document is required to be compulsorily
registered, then clearly the Court will have to insist with the requirement of
the law being complied with.

First, there has to be a determination as to the stamp duty
payable on the MoU in question. Thereafter, the question of registration of
that document would arise.

It was held that having regard to
section 16(1)(a) of the Arbitration and Conciliation Act, the Court can delink
the arbitration agreement from the main document as an agreement independent of
the other terms of the document. The only exception would be if the Respondent
in the application demonstrates the agreement itself is void and unenforceable.
It is at that stage that the Court will consider the objection before
proceeding to appoint an Arbitrator. In the facts of the present case, it was
held that the MOU be sent to the Collector of Stamps of Goa for a proper
determination of the stamp duty payable thereon. Once the stamp duty and
penalty so determined is paid by the Petitioner to the concerned authority in
Goa in the manner as prescribed, the Court will take up further issues
including whether the said document is forged or fabricated as contended by the
Respondent, and further whether, if the answer to the said question is in the
negative, the said document requires compulsory registration. The petitions
were accordingly adjourned sine die.

16
Ex-Parte decision – Factual Position not considered – Original Authority
has decided ex-parte cannot operate as estoppel and the
Department cannot refuse to consider the factual position. [Constitution of
India, Art. 226]

Raagam Exports vs. Assistant
Commissioner of Customs, Tirupur 2017 (347) E.L.T. 249 (Mad.)

The issue faced by the
Hon’ble Madras Court was whether the dismissal of the petitioner’s appeal as
not maintainable by the Commissioner (Appeals) would disentitle the petitioner
to the relief sought for. Secondly, whether the Department could refuse to consider
the petitioner’s case when admittedly the Original Authority did not examine as
to whether the Bank Realization Certificate (BRC) was submitted within the time
permitted.

Even though the show cause
notices were received, the petitioner did not respond to the show cause
notices, resulting in an order of recovery of drawback in Order-in-Original.

Challenging the said order, the
petitioner preferred an appeal before the Commissioner (Appeals) and in the
memorandum of grounds of appeal, the petitioner specifically contended that
they had submitted all the original BRC to the Deputy Comm. and therefore the
entire demand is not sustainable.

However, it was contended that the appeal preferred was
time-barred and hence not maintainable. The net result being the order of the Original Authority having been confirmed, the
petitioner is not entitled to the relief sought for.

It was held commenting upon the non-submission/belated
submission of the BRC, that it should be held to be without jurisdiction, since
the Commissioner (Appeals) could not have rendered the findings on merits when
the appeal itself is held to be not maintainable.

Secondly, since the Original Authority proceeded ex parte and
concluded that the petitioner has not produced the BRC, it is clear that at no
point of time, the petitioner’s case was adjudicated by the authority to
ascertain as to whether the BRC was produced by the petitioner. Therefore,
merely because the Original Authority has decided ex-parte cannot
operate as estoppel and the Department cannot refuse to consider the
factual position, especially when the petitioner has prima facie
established before this Court that they have produced the BRC before the
concerned authority. Hence, the High Court held that the finding rendered by
the Commissioner(Appeals) as well as the respondent, the petitioner’s request
for considering their drawback claim should be independently adjudicated by the
authority.

17 Gift Deed – Transfer
without prior partition through valid documents – Invalid and void [Hindu Law,
Registration Act 1908; Section 17].

Sabitri Devi and Ors. vs. Lakhan and Ors AIR 2017 PATNA 85

The only issue that arose was whether a Joint family property
can be transferred via a gift deed, when there is partition done through
an unregistered document.

The plaintiff filed the simple suit for partition claiming
half share in the suit property. The defendant’s case is that there had been
partition between the parties earlier during the lifetime of Laldas (Defendant).

It was held by the Patna High Court that so far as genealogy
is concerned, there is no dispute. According to Hindu law, the family will be
presumed to be joint unless it is proved that there was partition. Since the
presumption is in favour of the plaintiff, it is for the defendants to adduce
reliable evidence in support of their case that there had been partition
between the parties by metes and bounds. Both the parties have adduced their
respective evidences in support of their cases.

Considering the documentary evidences i.e. the Dajbandi,
it is recited that the parties by the following Dajbandi i.e., separate takhta
came in possession and they are entitled to get their names mutated. Therefore,
the Dajbandi clearly speaks that partition was effected by separating
the lands by Dajbandi and the parties came in possession and this
document is evidencing this Dajbandi i.e. partition. The parties got
their separate possession and are entitled to mutate their names, it cannot in
any way be termed as memorandum of partition. Rather, it is a partition deed
and by this deed i.e. Dajbandi, the partition was effected by metes and
bounds. It is a settled principle of law that a document by which partition is
effected is compulsorily registrable and if it is not registered, then it is
inadmissible in evidence.

Now, if the Dajbandi i.e. documentary evidence adduced
by the defendants goes i.e. inadmissible and, therefore, cannot be looked into
nor can be considered, there is no other evidence to prove that there had been
previous partition. Moreover, as stated above, no other mode of partition has
been pleaded by the defendant.

So far as the gift deed is concerned, it was held by the
Hon’ble Court that, since there had been no partition between the parties and
there is unity of title and possession, so, the coparcener cannot transfer by
way of gift his share without the consent of the other coparcener. Since there
was unity of title and possession between the parties and there had been no
partition, the so-called gift deed, even if executed by Laldas, is a
void document and no valid title, interest and possession will pass on the
defendants.

18 Tribunal – Manner of
Disposal – Not to be in a manner to have more disposal but to have better
adjudication. [Central Excise Act, 1944; Section  35B, Section 35C]

Madhusudan Industries Ltd.
vs. Union of India 2017 (347) E.L.T. 249 (Mad.)

The only issue was whether the
Tribunal could dismiss the appeal on the ground that the annexures accompanying
the Memorandum of Appeal were not legible.

It was pointed out by the Petitioner that in the facts of the
present case, at the relevant point of time, the petitioner had submitted all
the relevant documents on which it proposes to rely upon. However, due to lapse
of time the documents have faded. It was submitted that fading up of the
documents on account of lapse of time would not be tantamount to the petitioner
not having produced the documents on which it places reliance.

It was submitted that in any case, on account of
non-production of the documents, at best, the Tribunal can draw an adverse
inference but the appeal cannot be dismissed on the ground of
non-maintainability.

The Hon’ble Court, while
holding that the interim relief granted by the Customs, Excise and Service Tax
Appellate Tribunal shall continue, the Hon’ble Court also stated that it is
hoped that the Tribunal shall keep in mind the fact that the Courts and the
Tribunals are respected for the matters which they adjudicate and not the
matters which they dispose of. While the Tribunal is required to endeavour to
decide as many cases as possible, disposal of appeals in such a cavalier
fashion would only give rise to more litigation and would not bring an end to
the same.

Video Conference – Permissibility – Request for video conference
by witness or party. [Code of Civil Procedure, 1908 – Rule 3, Rule 4]

International Planned Parenthood Federation (IPPF) vs.
Madhu Bala Nath AIR 2016 DELHI 71

In the present case, an application was filed under Order
XVIII Rules 3 & 4 of the Code of Civil Procedure for permitting the
recording of the statement of a witness through video conferencing.

This application was
rejected by the learned Single Judge on the reason that a witness who is a
resident of U.K simply feels that witness need not come to India in judicial
proceedings for recording of evidence. This is an unacceptable practice, more
so when admittedly the witness as per the statement made today before this
Court on behalf of counsel for the defendant is travelling over the world to many
countries/locations.

It was argued by the opposing counsel that video-
conferencing could not be allowed as the rights of an accused, under Article 21
of the Constitution of India, cannot be subjected to a procedure involving
“virtual reality”. Such an argument displays ignorance of the concept
of virtual reality and also of video-conferencing. Virtual reality is a state
where one is made to feel, hear or imagine what does not really exist.
Video-conferencing has nothing to do with virtual reality.

It was held by the Hon’ble
Court that the learned Single Judge, in the impugned order, has taken a very
narrow view of the matter. Merely because a witness is travelling over the
world and/or may have the financial resources to travel to India does not necessarily
imply that the Court must insist upon the witness personally coming to the
Court for the purpose of deposing before the Court and/or her
cross-examination.

The term
“personally”, if given a strict and restrictive interpretation would
mean that the accused had to be physically present in court. In fact, the
minority judgement in this case so holds. It has, however, been held by the
majority that the section had to be considered in the light of the
revolutionary changes in technology of communication and transmission and the
marked improvement in facilities for legal aid in the country. It was held, by
the majority, that it was not necessary that in all cases the accused must
answer by personally remaining present in court.

There may be circumstances or situations where physical presence of a
witness may be necessary and required by the Court. In such situations, it
would be obligatory on the witness to be present in Court. Where a witness or a
party requests that the evidence of a witness may be recorded through video
conferencing, the Court should be liberal in granting such a prayer. There may
be situations where a witness even though within the city may still want the
evidence to be recorded through video conferencing in order to save time or avoid
inconvenience, and the Court should take a pragmatic view.

In the present case, the request was felt to be
reasonable and the the view that the learned Single Judge erred in dismissing
the application.

Allied Laws

9.  Abatement of decree in case of death of sole
defendant – Decree passed in ignorance of such death – Held to be null and
void. [Code of Civil Procedure, 1908, Order XXII].

Angadi Srinivasa and Ors. vs. M. Girija AIR 2016 Karn. 176 (HC)

The substantial question of law raised for consideration before the
Karnataka High Court was “whether the decree passed by the Lower Appellate Court, in ignorance of the death of the
respondent before it is sustainable
in law?”

The husband and father of the
appellants – Angadi Srinivasa, was the sole defendant. The suit was filed by
the respondent herein for passing a decree of ejectment against Sri Angadi
Srinivasa and for delivery of vacant possession of the suit premises. The
defendant/respondent died on 25.12.2010. Death of the respondent was not
informed and the legal representatives of the deceased were not brought on
record by the appellant. Upon hearing the arguments, the appeal was allowed and
the judgment and decree passed by the Trial Court was set aside and the suit
was decreed with costs. The defendant was directed to vacate and hand over
vacant possession of the suit property to the plaintiff within a period of
three months and pay damages.

Learned advocate contended that as the sole defendant, who was the
sole respondent in the appeal died during the pendency of the appeal before the
Lower Appellate Court and his L.Rs. having not been brought on record, the
Lower Appellate Court has committed illegality in allowing the appeal and
setting aside the decree of dismissal of the suit passed by the Trial Court.

Learned advocate for the defendant, on the other hand, contended
that the defendant having failed to appear and file written statement to the
suit, that in view of the provision made as per Order 22 Rule 4(4) CPC, the
impugned decree is sustainable.

In the case of MOHD. SAFDAR SHAREEF (DIED) PER L.RS. AND OTHERS
vs. MOHAMMED ALI (DIED) PER L.R. 1993(1) ALT 522, it was held as under:

“The appeal which has abated by
operation of law, cannot be revived and the decree which has become a nullity
being a decree against a dead person, cannot also be revived. Therefore, the
inescapable result of the above discussion is that the appeal before the
learned single Judge has become abated and the decree passed by him is a
nullity.”

In the present case, the appellant in the Lower Appellate Court had
not sought the exemption in terms of sub-Rule (4) of Rule 4 of Order 22 CPC,
prior to the pronouncement of the judgment. The sole respondent having died
during the pendency of the appeal before the Lower Appellate Court and as his
legal representatives were not brought on record, the appeal abated and hence,
the decree passed by the Lower Appellate Court being against a dead person was
a nullity.

In the result, appeal was allowed and the impugned judgment and
decree were declared as null and void.

10.  Gift Deed – Revocation of gift based on
unwillingness of daughter to maintain the mother – No condition for maintenance
mentioned in deed – Revocation not proper. [Transfer Of Property Act, 1882;
Section 126,44; Maintenance And Welfare Of Parents And Senior Citizens Act
2007, Section 23]

Jagmeet Kaur Pannu, Jammu vs. Ranjit Kaur Pannu AIR 2016 P &
H 210 (HC)

The revision petition was filed in the High Court against the order
passed by the Tribunal constituted under the Maintenance and Welfare of Parents
and Senior Citizens Act, 2007 (in short the ‘Act’) directing that the gift
executed by the mother in favour of the daughter is voidable at her instance
and hence ordered to be voided.

The Tribunal relied on the assertion of the mother that the daughter
was not behaving with her properly and abused her with filthy language and
treated these assertions as justifying the demand for the document being
declared null and void.

The High Court held that u/s. 23 of Maintenance And Welfare Of
Parents And Senior Citizens Act 2007, the relevant part being stated as under:

If the transferee refuses or fails to provide such amenities and
physical needs as required, the said transfer of property shall be deemed to
have been made by fraud or coercion or under undue influence and shall at the
option of the transferor be declared void by the Tribunal.

Section 126 of the Transfer of Property Act deals with a rule of
public policy that a person who transfers a right to the property cannot set
down his own volition as a basis for his revocation.

There have been views held from decisions of several courts that if
a gift deed is clear and operative to transfer the right of property to another
but also contains expression of desire by the donor that the donee will
maintain the person, the expression contained in a gift deed must be treated as
pious wish and the sheer fact that the donee did not fulfill the condition,
cannot vitiate the gift.

In the present case, order passed by the Tribunal is based only on
the assertion made by the mother that “the daughter is not behaving with
her properly and abused her and used filthy language to her several times on
telephone”. No judicial exercise has been undertaken by the Tribunal to
examine whether the documents contained any condition and whether there had
been any demand made by the mother on the daughter that provided the proof for
the Tribunal to render a finding that the transferee refused to provide such
amenities and physical needs.

Hence the order of the Tribunal was set aside.

11.  Interpretation of Statutes – Use of Comma
before the word ‘AND’ –Disjunctive and not Conjunctive [Karnataka Stamp Act,
1957, Section 33]

Gajanan Ramachandra Velangi vs. Teegala Vijaya Irappa and Ors..
AIR 2016 Karn. 163 (HC)

While adjudicating the matter whether an Arbitral Tribunal has the
power to impound documents, not duly stamped, an issue of interpretation came
up before the court where it was contended that the word ‘and’ occurring in
section 33(1) of The Karnataka Stamp Act, 1957, should be understood in a
conjunctive sense, and hence, mere authority to receive evidence is not
sufficient, but the said person should also be in-charge of a public office to
get the power to impound any document. He submitted that an Arbitral Tribunal
cannot be said to be a person in-charge of a public office, and therefore, it
has no power to impound any document u/s. 33 of the Act.

Relevant extract of section 33(1) of the Act is as under :

33. Examination and impounding of instruments.–(1) Every person
having by law or consent of parties authority to receive evidence, and every
person in-charge of a public office, except an officer of police, before whom
any instrument, chargeable in his opinion, with duty, is produced or comes in
the performance of his functions, shall, if it appears to him that such
instrument is not duly stamped, impound the same.

It was held by the Court that the use of comma before the word ‘and’
occurring therein indicates that the word ‘and’ should be understood in a
disjunctive sense. It is not necessary in law that the said person should also
be in-charge of a public office.

The appeal was devoid of merit and was accordingly dismissed.

12.  Right to Information – No exemption from
disclosure when information relates to Corruption and violation of Human [Right
to Information Act, 2005, Section 24(4)]

Subhash v. State Information Commission, Haryana and Ors. (AIR
2016 P & H 203) (HC)

a. The petitioner sought for information w.r.t.
the issue of corruption (i.e. cases registered against the officers, action
taken against such officers, benefits withdrawn or given to such officers, etc.)
against the officers under  Right to
Information Act, 2005.

b.
Accordingly a Writ Petition has been filed against the order of
Respondent-Commissioner who denied information to the petitioner on the ground
that information sought was qualified to be ‘personal information’ u/s. 8(1)(j)
of the Right To Information Act, 2005 and a finding was recorded that the
information which was sought was primarily between the employee and employer
and therefore the disclosure of which had no relationship to any public authority
or public interest and hence was not required to be disclosed.

Held that reliance upon the judgment of Girish Ramachandra
Deshpande vs. CIC & Ors, 2012(8) SCR 1097 in facts and circumstances of
the case was not justified, since it related to information being sought w.r.t.
‘Personal Information’ which would amount to unwarranted invasion of privacy of
private individual as per section 8(1)(j) of the Right to Information Act(supra),
which gives an exemption from disclosure of personal information which has no
relation to any public activity or interest. However, the Central Public
Information Officer or the State Public Information Officer or the Appellate
Authority, if satisfied, that the larger public interest justifies the
disclosure of such information, they may disclose such information.

Reliance was placed in the case
of First Appellate Authority-cum-Additional Director General of Police and
another vs. Chief Information Commissioner, Haryana and another AIR 2011
(Punjab) 168, where it was held that information pertaining to corruption
is relevant and cannot be denied. In the said case, the Division Bench held
that notification u/s. 24(4) of the Act would not exempt the information which
pertains to corruption since the Act itself provided that the notification
could not include the allegation of corruption and human rights violations.

In the present case, keeping in view the above principles laid down
in First Appellate Authority-cum-Additional Director General of Police’s case (supra)
and fact that the judgment of the Apex Court in Girish Ramchandra Deshpande’s
case (supra) is not applicable in the facts and circumstance of the
present case and hence the impugned order is quashed.

13.  Stamp Act – Valuation of Property–Market
value at the time of registration of the property should be considered and not
at the time of Agreement of Sale – Long time of litigation shall not affect
market value of instrument. [Indian Stamp Act, 1899 – Sections 17, 2(12), 27,
3, 47A]

Manoj Kumar Mishra vs. State of Bihar and Ors. AIR 2016 PATNA 155
(HC)

The point which is to be decided by the High Court, “whether
the valuation should be assessed on the market rate prevailing at the time of
registration of the sale deed or when the parties entered into agreement to sale.”

The respondent for the State submitted that u/s. 47. A of the Stamp
Act the petitioner is liable to pay the stamp duty on the present market value
of the property and for considering the stamp duty and registration fee, the
valuation mentioned in the agreement is irrelevant.

The counsel for the petitioner submitted that the petitioner is
liable to pay the stamp duty on the basis of the valuation mentioned in the
agreement between the parties as per the decision of the Division Bench in this
Court in Brij Nandan Singh vs. The State of Bihar & Ors. 2006 (3) PLJR
538.

It was held that from a composite reading of sections 3, 17 and 27
of Indian Stamp Act, 1899, it becomes clear that the valuation given in an
instrument is not the conclusive valuation and the registering authority is not
bound by the valuation mentioned in the deed sought to be registered.

It is settled principles of law that a taxing statute has to be
construed as it is. All the contingencies that the matter was under litigation
and the value of the property by that time became high cannot be taken into
account for interpreting the provisions of a taxing statute.

In the case of the Hon’ble Supreme Court in State of Rajasthan
and Others vs. Khandaka Jain Jewellers, (2007) 14 SCC 339, court decided
the question “whether the valuation should be assessed on the market rate
prevailing at the time of registration of the sale deed or when the parties
entered into agreement to sale” and in answer to this question considering
sections 2(12), 3, 17, 27 and 47-A of the Rajasthan Amendment of Stamp Act held
that a taxing statute has to be construed strictly and hence the plea that the
instrument took a long time to get a decree for execution against the vendor
that consideration cannot weigh with the court for interpreting the provisions
of the taxing statutes. Therefore, simply because the matter has been in the
litigation for a long time that cannot be a consideration to accept the market
value of the instrument when the agreement to sale was entered. The valuation
is to be seen at the time when registration is made.

In view of the decision of the Supreme Court,
the Division Bench decision of this Court Brij Nandan Singh (supra) is
no longer a good law as has been impliedly overruled. Accordingly, the writ
application was dismissed. _

Allied Laws

Doctrine of Merger – Dismissal of
appeal by High Court – Thereafter, Tribunal’s order merged with High Court’s
Order.

Ratnadip Shipping Pvt.
Ltd. vs. Commr. of Cus. (General) 2017 (345) E.L.T. 148 (Trib. – Mum)

The only issue in the
present case was whether the Revenue could file a Miscellaneous application for
the implementation of the Tribunal’s order after it had filed an appeal to the
High Court which was dismissed.

The Tribunal held that the
Tribunal’s order stood merged with the Hon’ble High Court’s order. After the
Hon’ble High Court’s order, this Tribunal cannot pass any order for
implementation as the Hon’ble High Court’s order is
in force and this Tribunal has no jurisdiction to pass any order after the
Hon’ble High Court’s order. Therefore, the present miscellaneous application
has become infructuous, hence dismissed.

Foreign Court – Order executable
under the Civil Procedure Code. [Code of Civil Procedure, 1908 – Sections 13,
35(3), and 44A]

Alcon Electronics Pvt.
Ltd. vs. Celem S.A. of FOS 34320 Roujan, France and Ors. AIR 2017 SUPREME COURT
1

In the present case, the
English Court dismissed the claims of the Appellant w.r.t. the ground raised of
infringement of rights of the Appellant and further directed it to pay the
costs of application to the Respondents. The Appellant agreed to pay the costs
and sought for some time.

When the Respondents filed
a petition for execution of the decree of the Foreign Court in India, the
Appellant opposed it in an application on the ground that the order of English
Court was not executable. The executing Court dismissed the same which was
confirmed by the High Court. Hence, the Appellant filed the present appeal before
the Supreme Court.

The Court analysed whether
an order passed by a foreign court fell within Exceptions to Section 13 of
Code. It observed that a “foreign judgement” is defined under section
2(6) as judgment of a foreign court. “Judgement” as per section 2(9)
of Code of Civil Procedure means the statement given by the Judge on the
grounds of a decree or an order. Order is defined u/s. 2(14) of Code of Civil
Procedure as a formal expression of any decision of the Civil Court which is
not a ‘decree’. Explanation 2 to section 44A(3) says “decree” with
reference to a superior Court means any ‘decree’ or ‘judgment’. As per the
plain reading of the definition ‘Judgement’ means the statement given by the
Judge on the grounds of decree or order and order is a formal expression of a
Court. Thus, “decree” includes judgement and “judgement”
includes “order”. On conjoint reading of ‘decree’, ‘judgement’ and
‘order’ from any angle, the order passed by the English Court falls within the
definition of ‘Order’ and therefore, it is a judgement and thus becomes a
“decree” as per Explanation to section 44A(3) of Code of Civil
Procedure.

It was held by the Supreme Court that in the case of the
judgment passed by the foreign court, Indian Courts are very much entitled to
address the issue for execution of the interest amount. The right to 8%
interest as per the Judgments Act, 1838 of UK can be recognised and as well as
implemented in India. Therefore, the Execution Petition filed by the
Respondents for execution of the order passed by the English Court was
maintainable under the relevant provisions.

Fundamental Duty – To safeguard the
public properties from illegalities – By every citizen. [Constitution of India;
Art. 51A; Bombay Police Act, 1951 – Section 33; Maharashtra Municipal
Corporations Act, 1949, Section 244; Maharashtra Prevention of Defacement of
Property Act, 1995, Sections 2, 3]

 

Suswarajya Foundation
vs. The Collector, Satara AIR 2017 (NOC) 521 (Bom.)(HC)

 

A PIL was filed w.r.t.
every town and city in the State of Maharashtra having a large number of
illegal banners/hoardings/posters, etc., displayed mainly by political
leaders/workers.

 

The definition of
‘Defacement’ as contained in the Maharashtra Prevention of Defacement of
Property Act, 1995 (The ‘Act’) to better understand the act is as under:

“S.2(b): ‘defacement’
includes impairing or interfering with the appearance or beauty, damaging
disfiguring, spoiling or injuring in any way whatsoever and the word
“deface” shall be construed accordingly;”

Section 3 of the Act also
provides for imprisonment of 3 months in case a person defaces any place open
to public view.

The Court held that the
citizens including political workers and leaders follow the mandate of Article
51A of the Constitution of India by safeguarding the public properties from
such illegalities.

Commenting on the duties
of citizens and political parties, the Court laid down the directions to be
followed as under:

–  There
shall be a senior inspector who shall be responsible for the implementation of
the provisions of the Act.

–  The
Officers or the Committees, as the case may be, shall be responsible for
expeditious removal of illegal hoardings, banners, flexes, temporary arches,
posters etc.

–  The Senior Inspector of Police or the Officer
In-charge of the concerned local police station shall extend adequate police
protection and police help to the Municipal staff and Municipal officials while
taking action of removal of the illegal hoardings, banners etc.

–  Minimum two armed constables shall accompany
the municipal officials and the staff at the time of removal of illegal
hoardings, banners, flexes, temporary arches, posters etc.;

–  Even on receiving any oral information, the
officer-in-charge shall be under an obligation to take appropriate action.

–  Anonymous complaints shall be entertained on
the toll free numbers. If the citizens find that no action is being taken on
the basis of the complaints made on toll free numbers, it will be open for them
to make a complaint in writing to the Nodal Officers of the Municipal
Authorities as well as the Nodal Revenue Officers of the State Government who
shall take action on the basis of such complaints;

The court thus provided
interim relief in the manner above in the case.

Gift Deed – Subsequent revocation of
the deed is void and invalid [Transfer of Property Act, 1882; Section 126].

Syamala Raja Kumari and
Ors. vs. Alla Seetharavamma and Ors.AIR 2017 HYDERABAD86

The only issue was whether
a gift deed transferred unconditionally in favour of someone can be revoked
subsequently?

One Mr. Narapa Reddy
executed a gift settlement deed in favour of the plaintiffs (his daughters) and
his wife out of love and affection. Under the said document, life interest
right was retained by the donor and after the death of donor, his wife was to
enjoy the property without any right of alienation till her death and
thereafter, the donees-plaintiffs could enjoy the property with absolute
rights. But subsequently, the donor executed a revocation deed by giving the
reason that the plaintiffs were not taking care of him and his wife and they
were not visiting his house and they had lost his confidence and so, he revoked
the gift settlement deed executed. The donor executed another revocation deed
wherein he mentioned that the plaintiffs obtained the gift settlement deed by
misrepresenting him. But the said fact is not mentioned in the earlier
revocation deed. Thereafter, the donor’s wife died.

Section 126 of the
Transfer of Property Act was reproduced to show that the donor and donee may
agree that on the happening of any specified event which does not depend on the
Will of the donor, a gift shall be suspended or revoked; but a gift, which the
parties agree shall be revocable wholly or in part, at the mere will of the
donor, is void wholly or in part, as the case may be.

The Court held that the
plaintiffs would get absolute rights in respect of the property. By executing
the said gift settlement deed, the donor had divested his right in the property
so he could not unilaterally execute any revocation deed for revoking the gift
settlement deed executed by him in favour of the plaintiffs.

The revocation deeds
executed by the donor were not binding on the plaintiffs as the said deeds were
not valid. Once the donor had no right to revoke the gift settlement deed
validly executed by him in favour of the plaintiffs, he cannot alienate the
property.

Succession – Class I legal heir to
have a better title than the nominee – Absence of Will paved way for following
the course of succession over the rules of nomination. [Hindu Succession Act,
Chapter IV, Schedule u/s. 8]

Sham Singh vs. Kashmir
Kaur and Ors. AIR 2017 (NOC)473(P.&H.)

The husband of the plaintiff
namely Darshan Singh (deceased) had deposited a sum of Rs. 50,000/- in the post
office of Village Tibber, under Kisan Vikas Patra Scheme. Appellant-defendant
No. 1 (Sham Shingh), who was the son of the real sister of Darshan Singh
(deceased) had withdrawn Rs. 1 lakh on maturity of the said Kisan Vikas Patra
scheme from the post office. It was pleaded by the plaintiff-respondent i.e.
widow of the depositor, that Sham Singh was not entitled to and had no right to
withdraw the amount.

The court observed that
where the Will propounded by the appellant is concerned, the same has not been
brought on record of this case by the appellant nor any evidence to prove the
execution of the said Will, has been produced.

The Court ultimately held
that even though appellant-defendant was appointed as a nominee by
deceased-Darshan Singh, it is a settled principle of the law that the
nomination cannot alter the course of succession as per the provisions of Hindu
Succession Act.

The nomination only
indicates the hand which is authorised to receive the amount on payment of
which the post office was to get a valid discharge of its liability but the
legal heirs of deceased are entitled to claim the said amount in accordance
with law of succession governing them.

The fact that the
plaintiff-respondent is the widow of deceased-Darshan Singh is not disputed
that, so she being his widow was his class I legal heir and was certainly
entitled to the amount received by Sham Singh from the post office on maturity
of the Kisan Vikas Patras purchased by her deceased husband Darshan Singh.

ALLIED LAWS

5. Hindu Law – Alienation by Karta
– Co-parcenor son has no right to challenge the sale made.

 

Kehar Singh (D) thr. L.Rs. and Ors. vs. Nachittar Kaur and
Ors. AIR 2018 Supreme Court 3907

 

The suit filed by the son of the defendant which was founded
on the premise that the suit property i.e. the property based on which the suit
is filed, was and still continues to be ancestral property.

 

In the facts of the case, the Karta (defendant) has sold a
property, which was alleged to be without authority and without consent of the
other members of the Hindu Undivided Family. The plaintiff alleged that his
father (defendant) had no right to sell the suit land without obtaining the
Plaintiff’s consent, which he never gave to his father for sale of the suit
land, that there was no legal necessity of the family which could permit the
defendant to sell the suit land. The only question which was left for
adjudication was that the said sale made by the defendant was not valid since
the approval of the other co-parcenors was not acquired.

 

The Court observed that a Hindu father as such has special
powers of alienating coparcenary property, which no other coparcener has. Such
father could sell or mortgage ancestral property, whether movable or immovable,
including the interest of his sons, grandsons and great-grandsons therein, for
the payment of his own debt, provided the debt was an antecedent debt, and was
not incurred for immoral or illegal purposes.

 

In substance, there should exist a legal necessity due to
which the said property was sold. The legal necessity was defined.

 

It was held that since the said sale was done within the
purview of the powers available to a father to sell ancestral property for the
purposes specified and not for immoral or illegal purposes, hence the said sale
done by the father (karta) was valid.

 

6. Legal Representative –
Remarried widow – Can be a claimant. [Motor Vehicles Act, 1988; Section2(11)]

 

National Insurance Company Ltd. and Ors. vs. Nidhi Goel and
Ors. AIR (2018) Punjab And Haryana 161

 

In this case the legal representatives of the deceased
petitioner died to the rash and negligent driving of the respondents. The
Learned Tribunal awarded a compensation of Rs. 12,89,500 to the claimants along
with interest @ 9% p.a. to the claimants.

 

It was contended that no compensation is payable to the widow
as she got re-married within about three months of the death of her husband. It
was the case that once the widow had remarried, she ceased to be dependent upon
the deceased. Moreover, after her remarriage she became dependent upon the
person who married her and, therefore, there was no question of paying
compensation for her maintenance during her life-time.

 

The Court observed that a
reference, however, can be made to section 2(11) of the Code of Civil
Procedure, 1908, for its definition where said term means a person who in law
represents the estate of a deceased person, and includes any person who
intermeddles with the estate of deceased and where a party sues or is sued in a
representative character the person on whom the estate devolves on the death of
the party so suing or sued. After the death of her husband, the widow continues
to represent his estate irrespective of her re-marriage because she inherits
part of the estate of her deceased husband. Thus, such widow is included in the
definition of “legal representative” as reproduced above and, thus,
can maintain a petition u/s. 166 of the Act even after her re-marriage.

 

It was held by the Hon’ble Court that the widow of the
deceased person is also entitled to claim compensation. It is beyond the pale
of doubt that the Act is a social welfare legislation and should be interpreted
so as to fulfill the objective with which it was enacted. If the proposition
put forward that a remarried widow is not entitled to get any compensation, it
would militate against the right of a widow to re-marry. This would not be in
public interest or in the interest of the society at large.

 

7. 
Natural Justice – Specific request for a date – AO ought to have giving
such opportunity of personal hearing.

 

Vetrivel Constructions vs. Commercial Tax Officer, Perambur
Assessment Circle 2018 (15) G.S.T.L. 527 (Mad.)

 

The main contention was that the impugned assessment orders
were passed in violation of the principles of natural justice as the respondent
failed to provide an opportunity of personal hearing, inspite of asking for the
same.

 

The petitioner submitted that the respondent having informed
the petitioner that they can avail the opportunity of personal hearing through
their show cause notice dated 29.12.2015, ought to have given such hearing to
the petitioner, especially when the petitioner has specifically requested for
giving such opportunity through their letters dated 31.12.2016 and 11.01.2017.
He further contended that the conclusion arrived by the respondent based on web
report is again in violation of principles of natural justice as the petitioner
was not furnished with those details of the report.

 

The respondent submitted that the petitioner was given an
opportunity of hearing by giving a show cause notice and the impugned orders of
assessment were passed after considering the reply given by the petitioner.
Therefore, he contended that there is no violation of principles of natural
justice warranting interference by this court.

 

The Court set aside the matter to the AO for fresh
consideration on the premise that the department circular mentioned as under;

 

“Fair opportunity is to be given to the assessee and
judicial consideration given to the representations, evidences and materials
furnished by him. But personal hearing need not be given unless the status
requires it (e.g. Section 22(2) or the assessee asks for it.”

 

The Court, while setting aside the matter, also relied upon
the decision reported in (2010) 33 VST 333 (Mad), it has been observed
as follows;

 

“the provision of section 16(1)(a) of the said Act has to
be construed in accordance with the said circular which is by way of
contemporanea expositio. So when a specific demand is made for personal hearing
the reasonable opportunity of showing cause should include the same in the
interest of fairness in procedure.”

 

8. Release Deed – Inadequate stamp
duty paid – Objection to admissibility to be decided when objection raised.
[Evidence Act, 1872; Section 61; Stamp Act, 1899; Section 35]

 

Sudhanshu Shekhar Shukla
vs. Meenakshi Trivedi and Ors. AIR (2018) Chattisgarh 139

 

There was a consent letter whereby rights in a property were
relinquished by few of the sharers in favour of the plaintiff. However, this
consent letter, when brought into evidence, was objected to with respect to its
admissibility under the Evidence Act. 

     

An application u/s. 35 of the Stamp Act was filed reiterating
the pleading of the plaintiff of relinquishment deed dated 20.06.1996 and it
was stated that the said relinquishment deed was executed only on Rs. 10/-
Stamp which is an unregistered document. It was also pleaded that the value of
the property for which the relinquishment deed operates is more than Rs. 100/-,
therefore, as per the Article 55 Schedule 1 A of the Act, 1899 of the Stamp
Act, the stamp duty would be attracted over the value of the property. It was
further pleaded that since the document was insufficiently stamped as such it
could not be admitted u/s.35 of the Act, 1899.

 

Further it was also pleaded that the document is also unregistered one,
therefore, is inadmissible by virtue of section 17 (1) of the Indian
Registration Act, 1908 (hereinafter referred to as ‘the Act, 1908).

 

The lower authority held that whether it is registered or
not, the admissibility of the same would be decided at the time of final
hearing of the case.

The only question before the Hon’ble Court was whether the
document dated 20.06.1996 i.e. the deed of relinquishment is admissible in
evidence or not for want of proper stamp duty and registration.

 

The Court held that the trial Court was directed to decide
the admissibility of the document sought to be exhibited by the plaintiff in
terms of the observation made in this order at the time of taking evidence and
cannot be postponed. If the trial Court finds that the document is
insufficiently stamped and is tendered in evidence then the Court is duty bound
to impound the same and in order to decide the levy of stamp, the document is
required to be sent to the Collector as per sections 33, 35, 38 & 40 of the
Indian Stamp Act, 1899.

 

9. 
Will – No proof of execution and attestation – Natural Succession.
[Succession Act, 1925, Section 63(c)]

 

Didar Singh vs. Gram Panchayat of Village, Meghowal and Ors.
AIR 2018 Punjab And Haryana 172

 

A Will was executed which was disputed by the respondent.

 

The Will propounded by the plaintiff was stated to be forged
and fabricated.

The Court observed that the provisions of the Act envisaged
three situations: one Will has to be attested by two or more witnesses and each
of them had seen the testator to either append his signatures or thumb
impressions or mark or has seen the other person sign the Will in the presence
and by the direction of the testator, or has received from the testator a
personal acknowledgment of his signature or mark, or the signature of such
other person; and third situation, each of the witnesses signed in the presence
of the testator.

 

The Court further observed that the trial Court had discarded
the Will but the Lower Appellate Court reversed the finding by holding that
Will had been proved. However, the aforementioned finding may not be
sustainable as the witnesses of the Will did not depose in terms of provisions
of section 63(c) of Indian Succession Act. There is not a single iota of
statement that he appended the signature on the Will on the instructions of
deceased Chanan Singh. In the impugned Will, no reasons were assigned as to why
Chanan Singh had dis-inherited his line of natural succession, i.e., brother,
Class-II heir or with regard to previous Will.

 

The Court held that since Will set up by the defendants has
been disbelieved by this Court as a necessary corollary, suit property would
devolve upon appellant(s) by natural succession being Class II heir.

Allied Laws

1.       Evidence – Admissibility of electronic
evidence without certification as required under the provision of the
Act–Valid. [Evidence Act, 1872; Section 64B]

 

Shafhi Mohammad vs. The State of Himachal
Pradesh SLP (CRL.) No. 2302 of 2017 dt. 30/1/2018 (SC)

 

An apprehension was expressed on the
question of applicability of conditions u/s. 
65B(4) of the Evidence Act to the effect that if a statement was given
in evidence, a certificate was required in terms of the said provision from a
person occupying a responsible position in relation to operation of the
relevant device or the management of relevant activities.

 

It was argued
that if the electronic evidence was relevant and produced by a person who was
not in custody of the device from which the electronic document was generated,
requirement of such certificate could not be mandatory, since if this is not so
permitted, it will be denial of justice to the person who is in possession of
authentic evidence/witness but on account of manner of proving, such document
is kept out of consideration by the court in absence of the certificate.

 

The Court
clarified the legal position on the subject of the admissibility of the electronic
evidence, especially by a party who is not in possession of device from which
the document is produced. It held that such party cannot be required to produce
certificate u/s. 65B(4) of the Evidence Act. The applicability of requirement
of certificate being procedural can be relaxed by Court wherever interest of
justice so justifies.

 

2.      
Co-Operative Housing Societies
– Voluntary Donation by members of Housing Societies at the time of sale – Even
though voluntary – Can be read as voluntarily with pressure – Illegal.
[Maharashtra Co-operative Societies Act]

 

Alankar Sahkari Griha Rachana Sanstha
Maryadit, through Chairman S.K. vs. Atul Mahadev Bhagat and Anr. Writ Petition
No. 4457 of 2014 dt. 31/08/2018 (Bom.)(HC). www.itatonline.org

 

The facts of
the case are that a donation of Rs. 5,00,000/- was made by the respondents to
the Petitioner society. It was alleged by the Respondent that the amount
of  Rs. 5,00,000/- was paid for the
purpose of regularising the transfer of plot to a third party by the respondents.

 

The Petitioner
pointed out that there has been admission on the part of the Respondents with
respect to the amount of Rs. 5,00,000/- being a donation.

 

It was held
that, after the completion of construction of the bungalow, the Respondents
were in need of money and therefore they decided to sell the plot. On the
background of such facts, a person facing financial difficulties will not
donate an amount of Rs.5,00,000/- to the housing Society. Even though in the
present case, the Respondents have given admission that they paid Rs.5,00,000/-
towards donation to the Petitioner-society, it cannot be further read that it
was paid voluntarily without any pressure.

 

Hence, it was
concluded that the amount paid was not donation but money was a transfer fee paid
out of compulsion and it was not a voluntary payment.

 

3.      
Natural Justice – Additional
Evidence – Chance for rebuttal. [CPC, 1908; O.41, R. 27]

 

Akhilesh Singh vs. Lal Babu Singh and Ors.
(2018)4 SCC659

 

A suit seeking
partition of their share in joint family properties was filed by the sons of
the grandfather of the Appellant. The suit was decreed and the Respondents
aggrieved, preferred an appeal. Various applications were filed for accepting
additional evidence. Since, nobody had appeared on behalf of the Appellant, the
High Court proceeded with the hearing of the appeal and relying on additional
evidence set aside the judgment and decree of the Trial Court. Aggrieved by
such order, the present appeal was preferred. It was held by the Court that the
Appellate Court before which any statement in sale deeds was relied ought to
have given an opportunity to lead evidence in rebuttal or to explain the
admission. Opportunity to explain the admission contained in the sale deeds was
necessary to be given to the contesting party. Accordingly, the High Court
order was set aside.

 

4.      
Precedent – Matter pending
before the Supreme Court – No stay granted neither set aside – Law laid down by
the co-ordinate Bench to be followed.

 

Industrial Mineral Co. (IMC) vs. Commissioner
of Custom. 2018 (15) G.S.T.L. 249 (Mad.) (HC)

 

In the present
case, the adjudicating authority had mentioned that the case on hand is similar
to another case, passed by the Customs, Excise & Service Tax Appellate
Tribunal, where the said case has been questioned by the Department, before the
Hon’ble Supreme Court and that the issue is yet to reach a finality.

 

The Court was
of the view that when the order passed by the Tribunal has not been stayed or
set aside by the Hon’ble Supreme Court, it is the bounden duty of the
adjudicating authority to follow the law laid down by the Tribunal. Since a
binding decision has not been followed by the adjudicating authority in this
case, this Court can interfere straightaway without relegating the assessee to
file an appeal. Accordingly, the order
passed by the Tribunal was quashed.

 

ALLIED LAWS

1.      
Appeal – Ground before lower
authorities – Issue could not be adjudicated at appellate stage [Code of Civil
Procedure, 1908; Order 41, Rule 22]

 

Gunamma
(D) by L.R. vs. Shevantibai (D) by L.R. and Ors. (2018) 15 SCC 599

 

An issue was raised before
the court which was not raised before the lower authorities.

 

It was observed that the
filing of cross-objection is an optional course of action and not mandatory.
While the same may be correct, Under Order XLI Rule 22 of the Code of Civil
Procedure, 1908 a contest can also be made to a finding adverse to a party
though the decree may be in his favour. No contest to the findings of the
learned first appellate Court was made in the Second Appeal before the High
Court.

 

It was held that it was not
appropriate to go into the said question in the present proceedings under
Article 136 of the Constitution of India.

 

2.               
Evidence – Confessional
Statements after repeated interrogation – Recovery of incriminating material –
Held to be not voluntary and hence invalid [Constitution of India; Article
20(3)]

 

Ashish
Jain and Ors. vs. Makrand Singh and Ors. AIR 2019 SC 546

 

In a criminal appeal before
the honourable Supreme Court, it was observed that all the confessions by the
accused persons were made after interrogation, but the mode of this
interrogation did not appear to be of normal character, inasmuch as
investigating officer had deposed that the accused persons were grilled and
interrogated multiple times before extracting the confessions which lead to the
recovery of the ornaments, cash, weapons and key.

 

It was held that the
confessions that led to the recovery of the incriminating material were not
voluntary, but caused by inducement, pressure or coercion. Once a confessional
statement of the accused on facts is found to be involuntary, it is hit by
Article 20(3) of the Constitution, rendering such a confession inadmissible.
There is an embargo on accepting self-incriminatory evidence, but if it leads
to the recovery of material objects in relation to a crime, it is most often
taken to hold evidentiary value as per the circumstances of each case. However,
if such a statement is made under undue pressure and compulsion from the
investigating officer, as in the present matter, the evidentiary value of such
a statement leading to the recovery is nullified. It was opined that the
recovery of the stolen ornaments, etc., in the matter were based on involuntary
statements, which effectively negates the incriminating circumstance based on
such recovery and severely undermines the prosecution case.

 

The criminal appeal was
dismissed and the order of acquittal was upheld.

 

3.      
Hindu Law – Partition –
Memorandum of Settlement entered into after partition – Admissible in evidence
for collateral purpose provided the document is impounded, stamp duty is paid
together with penalty. [Registration Act, 1908 – Section 17]

 

Sita Ram
Bhama vs. Ramvatar Bhama (2018) 15 SCC 130

 

The facts of the case state
that Plaintiff and Respondent are brothers being sons of Late Mr. D. Mr. D on
25.10.1992 decided to divide his self-acquired movable and immovable properties
between the Plaintiff and the Defendant. The father D, however, did not execute
any settlement deed. D died on 10.09.1993 and thereafter on 09.09.1994, the
Plaintiff and the Defendant recorded a memorandum of settlement as decided by
their father regarding his self-acquired properties. The memorandum of
settlement was signed by mother of the parties as well two sisters had signed
as witnesses. The Plaintiff filed suit for partition.

 

The Defendant pleaded that
there was no cause of action for the Plaintiff to file a partition suit since
the partition had already taken place and a memorandum showed that the
partition had taken place.

 

The lower authorities
accepted the case of the Defendant that the parties which were in joint family
have been divided, there was nothing joint between the parties,  and hence there is no cause of action for the
Plaintiff for filing the suit for partition.

 

In
appeal, the Defendant contended that the memorandum of settlement was a family
settlement deed and a relinquishment document which was not admissible as
evidence, being inadequately stamped and not being registered. The High Court
upheld the view that so called family settlement takes away the share of the
sisters and mother, therefore, the same was compulsorily registrable. The
plaintiff is in appeal against the same.

 

The Hon’ble Apex Court,
while dealing with whether the memorandum of settlement could have been
accepted by the trial court in evidence or whether trial court had rightly
taken the view that the said document was inadmissible, held that the
memorandum of settlement was compulsorily registrable. However, it may be
admissible in evidence for collateral purpose provided the Appellant gets the
document impounded and pays the stamp duty together with penalty.

 

4.      
Natural Justice – Hearing
both sides to a Writ petition mandatory. [Constitution of India; Article 14,
226]

 

Johra and
Ors. vs. State of Haryana and Ors. AIR 2019 SC 542.

 

The High Court, in a writ
petition filed before it observed that they do not deem it necessary to issue
any notice to any of the private Respondents except to the State and its Authorities
considering the nature of the order they intend to pass for the disposal of the
writ petition.

In an SLP filed before the
Supreme Court, the Court observed that when a person is made a party to the
judicial proceedings in relation to a dispute, such person has a legitimate
right to raise an objection that before passing any order in such proceedings,
he should be at least heard and his views/stand in relation to the subject
matter of the proceedings be taken into consideration. The Court is duty bound
to hear all such person(s) by giving them an opportunity to place their stand.

 

It was held by the Supreme
Court that the High Court issued some mandatory directions to the State in
relation to the subject-matter of the proceedings but it was done without
hearing the Appellants (Respondents in the writ petition before the High
Court). It is for this reason, the impugned order was set aside.  

 

Allied Laws

25. 
Hindu law — Joint family property – Co-sharer can only alienate to the
extent before partition which is the undivided interest of the coparceners in
the joint property – Sale of specific portion of property can only be done
after partition has been effected

 

Parmal Singh and Ors. vs. Ghanshyam and
Ors. AIR 2019 Madhya Pradesh 131

 

The plaintiffs had filed a suit against the
defendants for declaration of title and permanent injunction against the sale
of a specific part of the joint family property. A sale deed was executed by
defendant No. 1 in favour of defendant No. 2 and, thereafter, by defendant No.
2 in favour of defendant No. 3. Defendant No. 3 has purchased the land in
dispute from defendant No. 2 by registered sale deed dated 21st
August, 1997 after making payment of the entire consideration amount and he has
also been placed in possession.

 

The question that arose was whether specific
portion of the land could be sold without partition or not?

 

It was held that when the property in
dispute is joint in nature, then although the co-sharer can sell the property
to the extent of his share, he cannot sell the specific piece of land. All that
a co-sharer purchases at the execution of sale is the undivided interest of the
coparcener in the joint property. No title to any defined share in the property
was acquired and hence was not entitled to joint possession from the date of
his purchase. The rights could only be worked out by a suit for partition and
his right to possession would date from the period when a specific allotment
was made in his favour. Accordingly, it was directed that in case if the
defendant Nos. 1, 2 and 3 file a suit for partition within a period of three
months, then the purchaser shall continue to remain in possession of the land
purchased by him till the actual partition is done. The specific piece of land
would be decided only after the partition is done.

 

26. 
Limitation – Alienation of property by natural guardian – Prayer to set
aside such alienation to be within 3 years by minor / legal representative
[Hindu Minority and Guardianship Act, 1956, S. 8; Limitation Act, 1965, Art.
60]

 

Murugan and Ors. vs. Kesava Gounder (Dead)
thr. L.Rs. and Ors. AIR 2019 Supreme Court 2696

 

Mr. B executed a sale deed on behalf of his
minor son P. The plaintiffs were cousins of Mr. B. Their case was that Mr. B
had no authority to execute a sale deed on behalf of his minor son P and that
the same was voidable and prayed that the plaintiffs were entitled for
declaration and possession of the properties from the defendants. The issue was
whether the sale deed executed could be set aside even after a lapse of three
years from the date of death of the minor?

 

The Appellate Court held that since the
minor son P died in 1986, the suit to set aside sale deeds and for possession
should have been filed within three years of his death. The suit filed in 1992
was barred by limitation. For this, the Appellate Court relied on article 60 of
Limitation Act.

 

The plaintiffs filed a second appeal in the
High Court. The Court held that the alienations made by Mr. B could be
construed only as voidable alienations and not void alienations. The High Court
held that the Plaintiffs’ suit ought to have been filed within three years as
per article 60 of the Limitation Act. The Court dismissed the second appeal.
Aggrieved by the judgement, an appeal was filed in the Supreme Court.

 

The Supreme Court held that the first
Appellate Court and the High Court had rightly held that limitation for the
suit was governed by article 60 and the suit was clearly barred by time.

 

The Court observed that in case of
alienation by natural guardian in contravention of section 8 of the Hindu
Minority and Guardianship Act, 1956 a sale deed was voidable. Alienations,
which were voidable, at the instance of a minor or on his behalf, were required
to be set aside before relief for possession could be claimed by the
plaintiffs. The suit filed on behalf of the plaintiffs without seeking a prayer
for setting aside the sale deed was, thus, not properly framed and could not
have been decreed. When a registered sale deed was voidable, it was valid till
it was avoided in accordance with the law. Rights conferred by a registered
sale deed were good enough against the whole world and the sale could be
avoided in case property sold was of a minor by a natural guardian at the
instance of the minor or any person claiming under him. A document which was
voidable had to be actually set aside before taking its legal effect.

 

In the present case, it was necessary for a
person claiming through the minor to bring an action within the period of
limitation, i.e., within three years from the date of death of the minor, to
get the sale deed executed by Mr. B set aside. The sale deed executed by Mr. B
was not repudiated or avoided within the period of limitation as prescribed by
the law. Accordingly, the appeal filed by the plaintiffs was dismissed.

 

27. 
Partition – Deed of partition or a memorandum showing list of past
partition – To be determined with reference to recitals therein and not by its
title for the purpose of determining the applicability of stamp [Indian Stamp
Act, 1899, S. 35]

 

Koyya Ganga Venkata Satya Bhaskara Rao and
Ors. vs. Koyya Rama Krishnudu and Ors. AIR 2019 Andhra Pradesh

 

An issue arose when a document purported to
be a memorandum of past partition was attached as an annexure to the plaint by
the plaintiff. The defendants objected to the tendering of a deed of partition
as evidence since the said document was not stamped and registered and hence
inadmissible in evidence. The AR for the plaintiffs argued that the document
was a mere memorandum of past partition and not a deed of partition, hence no
registration or stamp was required due to which the said document should have
been admissible.

 

The trial Court, having referred to the
contents of the document as well as the precedents cited before it, upheld the
objection of the defendants and recorded a finding that the document in
question was a deed of partition and was liable to be charged with required
stamp duty. The aggrieved plaintiffs preferred revision.

 

The short question was whether the document
in question was a deed of partition chargeable with duty or a memorandum of
partition, or a partition list evidencing a transaction of past partition?

 

It was observed that the nature of a
document had to be determined with reference to the recitals therein and the
substance of the transaction embodied in the instrument and not with reference
to the title, caption or name given to the instrument. The name or the caption
given to the document is not determinative and the nature or character or the
substance of the transaction contained in the document is the only determinative
factor.

 

From the perusal of the said document, it
was understood that the recitals therein made it manifest that under the very
document the immovable properties were permanently partitioned once and for
all.

 

It was held that the said document was a
Deed of Partition and not a Memorandum of Partition showing a list of past
partition. Accordingly, it was held that since the document was not stamped, it
could not be admitted even for collateral purpose unless the required stamp
duty and penalty collectable on the instrument were paid and collected.

 

28. 
Recusal – Litigant cannot insist on a judge to not hear the case – Judge
can recuse himself by choice but not at the request of the litigant

 

Seema Sapra
vs. Court on its own motion [2019]; Writ Petition No. 13 of 2018; Dated: 14th
August, 2019

 

During the course of the hearing, the
appellant-in-person made an oral request that the bench ought to recuse from
hearing the matter which fact was noted. While dealing with the gravamen of the
apprehension of the appellant as to why she has insisted for recusal of one of
the judges, the Court observed that the apprehension of the appellant is
founded on the allegation that she may not get justice from the bench as one of
the judges was well acquainted with the advocates who incidentally are members
of the Supreme Court Bar Association against whom personal allegations have
been made by her in the accompanying writ petition.

 

In respect of the limited point of recusal,
the Court held that indubitably it is always open for a judge to recuse at his
own volition from a case entrusted to him by the Chief justice. But recusing at
the asking of a litigant party cannot be countenanced unless it deserves due
consideration and is justified. It was further mentioned that ‘it must be never
forgotten that an impartial judge is the quintessence for a fair trial and one
should not hesitate to recuse if there are just and reasonable grounds. At the
same time, one cannot be oblivious of the duties of a judge which is to
discharge his responsibility with absolute earnestness, sincerity and being
true to the oath of his / her office. After perusal of the assertions made in
the I.A.s, we have no hesitation in holding that the same are devoid of merit
and without any substance.’

 

29. 
Hindu Law – Female Hindu – Property held by male governed by any school
of Hindu law other than Dayabhaga dies, his widow shall have the same right in
the property as the deceased had – Accordingly, property possessed by female
Hindu whether acquired before or after the commencement of the Hindu Succession
Act, shall be held by her as the full owner thereof and not as a limited owner
[Hindu Succession Act, 1956, S.14; Hindu Women’s Right to Property Act, 1937,
S.3]

 

Jagannath Waman Undre vs. Yamunabai Sitaram
Kadam AIR 2019 Bombay 143

 

The plaintiff (sister) filed a suit for
declaration of her rights in the suit property. The defendant was the
plaintiff’s brother whose name alone was entered in the records of rights of
the suit property after their mother’s death. The district court reversed the
order of the trial court and passed the order in favour of the plaintiff. The
appellant-defendant is in appeal before the high court.

 

The learned trial court held that under the
coparcenary law a wife or a widow or a daughter though a member of Joint Hindu
Family, was not entitled to any share or interest in the coparcenary property
of that joint family, except to the extent of the right of maintenance and
residence or marriage expenses. The trial court thus held that a woman, whether
wife or widow or daughter, could not claim share separately. On this ground
alone, the suit was dismissed.

 

The Appellate Court held that under sub-section
(2) of section 3 of the Hindu Women’s Right to Property Act, 1937 when a Hindu
governed by any school of Hindu law other than Dayabhaga dies having at the
time of his death interest in Hindu joint family property, his widow shall have
the same right in the property as the deceased. However, such interest shall be
limited interest known as Hindu woman’s estate.

 

Further, in
view of the provisions of section 14 of the Hindu Succession Act, 1956 the
mother of the plaintiff and the defendant became absolute owners of their share
in the suit property which was the limited interest or Hindu woman’s estate.
Accordingly, the mother’s interest in the property would devolve as per the
scheme in terms of section 15 of the Hindu Succession Act, 1956. Thus, her property
will devolve upon her sons, daughters and husband and not only on the son as
seen in the present case.

 

Allied Laws

16. Appeal – Condonation of delay –
Mentally disturbed – Prolonged illness and hospitalisation – Sufficient cause
for condonation. [Limitation Act, 1963; Section 5]

 

Ummer vs. Pottengal Subida
and Ors. AIR 2018 Supreme Court 2025

 

There was a delay of 554
days in filing an appeal before the High Court. Hence, the Appellant filed an
application u/s. 5 of the Limitation Act praying for condonation of delay in
filing the appeal.

 

The
High Court dismissed the application for condonation of delay as well as the
appeal. In the opinion of the High Court, the Appellant failed to make out any
sufficient cause for condoning the delay in filing appeal and hence the
application seeking condonation of delay of 554 days in filing the appeal was
not liable to be condoned.

 

It was
held by the Apex Court that the delay in filing the appeal was to be condoned
because of the reasons that appellant was mentally disturbed due to disputes
going on in his family and was not able to attend to his day-to-day duties due
to his old age, prolonged ailments and hospitalisation due to heart disease.

 

17. Assignment of rights – Not a
transfer of Immovable   property.    [Indian  
Stamp   Act,       1899;

Section 2(10), 2(14), 57; Art. 62 &
23 of schedule 1 of the Indian Stamp Act]

 

Kotak Mahindra Bank Ltd.
vs. State of U.P. and Ors. AIR 2018 Allahabad 182 Full Bench

 

The
issue was whether assignment of rights in debt was transfer of immovable
property or movable property?

 

In the
present case, the Assignor in the course of its business advanced financial
facilities to various borrowers, who in turn executed agreement/instrument (s)
of mortgage in lieu thereof.

 

The
Assignee agreed to purchase and acquire the debts from the Assignor with all
rights title and interest of the Assignor and underlying financial instruments,
for a consideration agreed to by the parties.

 

The
High Court observed that debt is purely an intangible property, like,
intellectual property right or goodwill, as against documentary intangibles,
viz., bill of lading, promissory note or bill of exchange, which has to be
claimed or enforced by action and not by taking physical possession thereof, in
contrast to immovable and movable property.

 

The
Court held that the instrument is an instrument of assignment chargeable with
stamp duty under Article 62(c) of Schedule 1-B of the Stamp Act which stated
that chargeability of stamp duty would be on transfer of an interest secured by
a bond or mortgage deed and not on the stamp duty prescribed for immovable
property. 

 

18. 
Limited liability partnership – Jurisdiction – Registrar of Companies –
Only administrative – Cannot adjudicate and resolve issues. [Limited Liability
Partnership Act, 2009; Section  25, 43]

 

Neeraj Kumarpal Shah vs.
C2R Projects LLP and Ors. AIR 2018 Gujarat 80

 

In the
present case, ROC had rejected the form filed for the purpose of change in the
partnership agreement. ROC passed an impugned order, inter alia,
informing the LLP that LLP form No. 3 was examined and marked as invalid and
not taken on record mainly on the ground that the original respondent had filed
interim relief application and therefore the said matter is sub-judice and in
this regard the LLP has not submitted satisfactory reply.

 

The
High Court held that when the prescribed forms are submitted before the ROC for
examination and registration, the ROC is required to consider as to whether the
provisions of the Act of 2008 and the Rules of 2009 are complied with or not.
Thus, the duty of the ROC is of ministerial in nature and he is acting as an
administrative authority. The ROC cannot adjudicate and go into the merits of
the dispute pending between the partners. The ROC has to register the necessary
forms subject to outcome of the proceedings pending before the competent Court
between the concerned partners.

 

19. Partnership – Suit by an
unregistered firm is not maintainable. [Partnership Act, 1932; S.69(2)]

 

Arihant  Rice Industries, Tumkur vs. Shubha-laxmi Venkateswara
Traders, Gangavathi AIR 2018 (NOC) 478 (Kerala)

 

A suit
was filed by plaintiff who was a partnership firm, for recovery of money from
third party. The partnership firm was an unregistered one. The only question
which arose was whether the suit filed by the plaintiff in the Court below was
maintainable in view of section 69(2) of the Indian Partnership Act, 1932?

 

Admittedly,
the plaintiff firm was an unregistered firm, as such, the unregistered firm
cannot maintain a suit in view of section 69 of the Partnership Act. Defendant
further submitted that in order to overcome the said lacuna of non-registration
of the firm, the plaintiff has falsely projected itself as a proprietorship
concern.

 

However,
there was no evidence regarding the dissolution of the partnership firm and
neither notice nor any paper publication for dissolution of firm was carried
out. As such, the plaintiff was still a partnership firm, but not a
proprietorship concern.

 

The
Court held that, since it is held that the plaintiff had failed to prove that
it was a proprietorship concern as at the time of institution of the original
suit and that the plaintiff concern was to be taken as partnership firm, thus
the suit was not maintainable.

 

20. Power of Attorney – genuineness – No
entry is made in the Notary Registrar – Power of attorney is held to be invalid

 

Veljibhai Mavjibhai Mistry
vs. Joitiben and Ors. AIR 2018 (NOC) 479 (Gujarat)

 

The
original owner challenged the genuineness of a power of attorney on the ground
of fraud. No documents in original were produced. The Trial court came to the
conclusion that the execution of the Power of Attorney was not done
simultaneously by all parties and therefore the execution was invalid. There is
no evidence brought on record by the defendants to show as to when the Notary
actually signed and stamped the document or made entries in the Notary
Register.

 

In
light of the same, the Court held that due to various contributing factors,
individually and collectively, suggested that the exercise of execution of the
Power of Attorney apart from its manner showed that the entire transaction was
founded on fraud.

 

Having held the
Power of Attorney to be an invalid document, the consequential transaction of
sale is also bad.

 

ALLIED LAWS

10

Agricultural Land –
Preferential rights of heirs over immovable property applies to agricultural
properties also [Hindu Succession Act, 1956, Sections 4, 14, 22]

Babu Ram vs. Santokh
Singh (deceased) through his L.R.s and Ors. AIR 2019, Supreme Court 1506

 

A dispute arose over the
question whether one of the heirs would have a preferential right over the
intestate property devolved upon them at the time of transferring such
property. Whether section 22 of the Hindu Succession Act, 1956 applies to
agricultural lands also?

 

Section 22 of the Act
provides that any immovable property of an intestate person, or any business
carried on by him or her, whether solely or in conjunction with others,
devolves upon two or more heirs specified in Class I of the Schedule, and if
any one of such heirs proposes to transfer his or her interest in the property
or business, the other heirs shall have a preferential right to acquire the
interest proposed to be transferred. However, the Act does not say anything in
the case of agricultural land.

 

It was observed that when
the Parliament thought of conferring the rights of succession in respect of
various properties, including agricultural holdings, it put a qualification on
the right to transfer to an outsider and gave preferential rights to the other
heirs with a designed object. Under the Shastric Law, the interest of a
coparcener would devolve by principles of survivorship to which an exception
was made by virtue of section 6 of the Act. If the conditions stipulated
therein were satisfied, the devolution of such interest of the deceased would
not go by survivorship but in accordance with the provisions of the Act. Since
the right itself in certain cases was created for the first time by the
provisions of the Act, it was thought fit to put a qualification so that the
properties belonging to the family would be held within the family, to the
extent possible, and no outsider would easily be planted in the family
properties. It is with this objective that a preferential right was conferred
upon the remaining heirs in case any of the heirs was desirous of transferring
his interest in the property that he received by way of succession under the Act.

 

In view of the above, it
was held that the preferential right given to an heir of a Hindu u/s. 22 of the
Act is applicable even if the property in question is agricultural land.

 

11

Co-operative Society – Premium for Transfer –
Supreme Court upholds the direction of the State Government putting a ceiling
limit of Rs. 25,000 on the premium charged by a society on transfer of a
property by a society’s member [Maharashtra Co-operative Societies Act, 1960;
Section 79A]

The New India
Co-operative Housing Society Ltd. vs. the State of Maharashtra and Anr., WP No.
4567 of 2007 (HC)(Bom), Dated: 01.02.2013

 

The New India
Co-operative Housing Society Ltd. vs. the State of Maharashtra and Anr., Civil
Appeal No. 10683/2017 (SC), Dated: 23.04.2019

 

The main ground in the
challenge was whether rejection of application of respondent No. 2 was valid on
the premise of non-payment of Rs. 2 crore as demanded by the society for the
purpose of transferring the property.

 

The said applications,
undisputedly, were made in the requisite form annexed to the Maharashtra
Co­operative Societies Rules, 1961, along with a demand draft of Rs. 25,000. It
was informed that on the face of it the application was not acceptable since
the transfer fee offered of Rs. 25,000 was inadequate in view of regulation 6A
of the society and the amount demanded was Rs. 2 crore.

 

The Hon’ble High Court in the case of Mont Blanc
Co­-operative Housing Society Limited vs. State of Maharashtra, 2007 (2) Bom.
C.R. 533 considered the validity of a similar government notification
dated 1st August, 2001 issued u/s. 79A of the said Act thereby
imposing a ceiling of 10% of non­-occupation charges. The Court observed that
they were satisfied that the notification was issued to secure the proper management
of the business of the co-­operative housing societies in general and for
preventing the affairs of such societies being conducted in a manner
detrimental to the interests of the members of such societies. The order does
not suffer from the vice of arbitrariness and it cannot be termed as an unfair
or unjust act by the state government so as to deprive the societies of their
legal, just and proper levies. It is a bona fide exercise by the state
to avoid litigations / disputes and to bring in a uniform levy of
non­-occupancy and to prevent the exploitation of minority members. To bring in
an orderly situation, the government stepped in and exercised its statutory
powers u/s. 79A by issuing directions to levy non-­occupancy charges at 10% of
the service charges.

 

The Court observed that in
the present case also, the government vide notification dated 9th
August, 2001 has directed uniform rates to be charged for effecting transfer of
the tenements / flats. Insofar as municipal corporations are concerned, the
premium has been determined as Rs. 25,000. It is to be noted that clause (2) of
the said notification specifically provides that the said charges are towards
transfer of a member’s tenement / flat and his share and rights in the share
capital / property in the said society. The perusal of the said notification
would reveal that it is applicable to all co­-operative housing societies. In
order to grab exorbitant sums of money from the new members who are trying to
become members of the society, they are being subjected to exploitation at the
hands of the society.

 

The Court held that the
petitioner was bound to comply with the directions issued by the state
government u/s. 79A of the said Act and could not have charged premium higher
than Rs. 25,000.

 

12

Environment – Duty of State as well as the
Citizens to prevent pollution and improve the environment [Constitution of
India; Article 21, 51-A]

Rajesh Madhukar Pandit
and Ors. vs. the Nashik Municipal Corporation and Ors. AIR 2019 (NOC)129 (Bom)

 

A PIL was filed concerning pollution of the Godavari
which is the second longest river in India after the Ganges. The Godavari is
one of the main sources of water supply to the city of Nashik. Several steps
are required to be taken for rejuvenation of the river and for preventing
pollution of the said river.

 

It was observed that the
scope of Article 21 of the Constitution of India gives a right to live in a
clean and pollution-free environment. Moreover, the right to have clean
drinking water is also a fundamental right guaranteed by Article 21. This is in
the context of the fact that the Godavari is a source of water supply to the
said corporation area and nearby villages. The right to live a dignified and
meaningful life is also an essential part of the bundle of rights guaranteed by
Article 21. If the rivers are polluted and pollution is created in and around
the rivers, the fundamental right of living a dignified and meaningful life of
the citizens is defeated. The fundamental right to live in a pollution-free atmosphere
is also violated.

 

Article 48A of the
Constitution of India is a Directive Principle of State Policy which enjoins
the State to protect and improve the environment. Clause (g) of Article 51A
casts a duty on the citizens to protect and improve the natural environment,
including forests, lakes, rivers and wild life, and to have compassion for
living creatures.

 

In view of the above, the
Court held that for protecting the fundamental rights of citizens under Article
21, the State is duty-bound to take all steps to prevent pollution of rivers
and to initiate measures for cleaning and rejuvenation of the rivers. It is the
obligation of the State to keep rivers clean and free from pollution. The
citizens owe a duty to protect and improve the environment, including rivers.

 

13

Notice – Service of notice
by ordinary Post – Dispatch register does not prove fact of service of notice
[General Clauses Act 1897, Section 27]

Agrofab vs. State of Rajasthan and Ors. AIR 2019 Rajasthan 34

The petitioner firm
contended that the showcause notice was never received by it.

 

The Court observed that the
respondents by way of additional affidavit tried to justify the service of the
said notice by producing a photocopy of the dispatch register and postage
register on record.

It was held that sending of
notice by showing any dispatch register through ordinary post does not prove
the fact of service of such notice on the petitioner firm. Further, it was held
that since the terms of the contract provided that rate contract and supply
orders and any discrepancy with regard to the conditions, specifications,
nomenclature, delivery period, etc., if the same were not as per the agreed
terms, conditions and specifications, such letter to the Direct Demanding
Officer and Chief Engineer was to be sent by registered post / AD. Hence, when
the communication is required to be made by the parties by way of registered
post / AD, the plea of the respondents that the showcause notice was sent by
ordinary post is not to be believed by the Court.

 

14

Will or Codicil attested
by a legatee as a witness – Examination of the legatee alone not valid [Indian
Succession Act, 1925, Sections 63, 67; Transfer of Property Act, 1882, Section
3; Indian Evidence Act, 1872, Section 68]

Raveendran Nair vs.
Raman Nair, AIR 2019 Kerala 91

 

The dispute concerned a
Will and its genuineness. There were two attesting witnesses to the Will. One
of the witnesses is the first defendant. The Will was executed in favour of the
children of the first defendant by giving a major portion of the property to
them and only a minor portion was given to other legatees.

 

The questions which arose
in the course of hearing were regarding the legal effect of an unprivileged
Will attested by the legatees alone left out by a Hindu. Whether the
examination of a legatee under a Will who is an attesting witness to the Will
or Codicil would be a sufficient compliance of the requirement as mandated u/s.
68 of the Indian Evidence Act?

 

The Court observed that
though there is no prohibition in the Act to stand as an attesting witness by a
legatee, the mandate both u/s. 63 of the Indian Succession Act and section 68
of Indian Evidence Act would convey the meaning that what is required is the
attestation by two or more witnesses, since the question of genuineness of
execution of a Will or Codicil would arise only after the death of the
testator. The attesting witness must have and should have the necessary animus
testandi or intention to attest the Will or Codicil. The word “attesting”
stands for something more than mere signing of a document as a witness.
Attestation means signing of a document with the intent and purpose to testify
the signature of the executant rather than mere witnessing the affixing of
signature by the executant or its due execution. Necessarily, the attesting
witness must display the necessary competence and the quality of an independent
witness. The word “attested” is defined u/s. 3 of the Transfer of Property Act
which is exactly pari materia with that of the third requirement as
enumerated in clause (c) of section 63 of the Indian Succession Act.

 

The Court held that a Will
or Codicil attested by legatees alone or the person interested with the
legatees who holds a fiduciary relationship with the legatee / legatees would
itself amount to suspicious circumstance attached to its execution. The absence
of an independent attesting witness to the document is fatal to the bequest
under the document. It would destroy the legislative intention demanding compliance
of mandate incorporated both u/s. 68 of the Indian Evidence Act and section 63
of the Indian Succession Act. The evidence or attestation of such witness would
stand as self-serving, though there is no provision debarring attestation by a
legatee as far as an unprivileged Will of a Hindu is concerned. At least one of
the attesting witness should be an independent witness and his examination
cannot be avoided if he is capable of giving evidence and amenable to the
process of the Court for proving the Will or Codicil in accordance with the
mandate u/s. 68 of the Evidence Act.

 

In short, a legatee under the Will or a person who is
interested in the bequest cannot be an independent witness for the purpose of
attestation to a last testament either as a Will or Codicil; and hence mere
examination of a legatee who stands as one of the attesting witness would not
be a sufficient compliance of the mandate u/s. 68 of the Evidence Act.

Allied Laws

20. 
Appeal pending – Till order of court is varied or modified, it remains
valid and subsisting and has to be complied with [West Bengal Municipal Act,
1993, S.96]

 

Subrata Sen vs. The Kolkata Municipal
Corporation and Ors. AIR 2019 Calcutta 32

The issue before the court was whether an
appropriate writ in the nature of mandamus could be issued against the order of
the municipal assessment tribunal, when a revision application had been filed
against such order.

 

It was held by the court that it was a
well-settled law that till an order passed by a competent court or forum is set
aside and / or stayed and / or varied and / or modified, the said order remains
valid and subsisting and is required to be complied with, both in law and in
spirit. If a stand is taken by any person that he / she is unable to comply
with a valid and subsisting order simply because an appeal is pending before a
higher forum, it would render the concept of adherence to due process of law to
a state of absolute farce. This is neither desirable nor acceptable, nor
permissible.

 

If one has to accept the stand taken on
behalf of the Kolkata Municipal Corporation, it would mean that no order passed
by any competent legal forum will ever be complied with till the person
aggrieved by the said order has exhausted all further remedies even if such
remedies are essentially discretionary in nature. This is certainly not in
conformity with the scheme for rendering effective justice in the matter.

 

Accordingly, it was decided that the order
of the Municipal Assessment Tribunal would be implemented and the same shall
not cause any prejudice to the rights of the Kolkata Municipal Corporation in
respect of the revision application, which shall be decided on its own merit
without being influenced in any manner by any observation
made herein.

 

21. 
Dishonour of cheque – Prosecution launched against directors quashed by
High Court set aside – Court would have to look into whether directors had any
role in the business activities of the company [Negotiable Instruments Act,
1881, S.138, 141, 482]

 

A.R. Radha Krishna vs. Dasari Deepthi and
Ors. AIR 2019 Supreme Court 2518

 

The appellant had entered into an investment
agreement with accused No. 1, i.e., the company on the basis of representations
made by the directors of the company. Later, the company agreed to repay the
amount invested by issue of seven cheques. The cheques were returned
dishonoured as ‘payment stopped by drawer’.

 

Consequently, proceedings were initiated u/s
138 and 141 of the Negotiable Instruments Act. During the pendency of the
proceedings, the directors filed an application before the High Court for
quashing of the proceedings initiated against them. The High Court allowed the
criminal petitions filed by the directors and quashed the proceedings against
them. Aggrieved by the same, the appellant approached the Supreme Court.

 

The complaint specifically mentioned that
the directors, who actively participated in the day-to-day affairs, in active
connivance, intentionally issued cheques and later issued instructions to the
bank to stop the payment.

 

But it was contended on behalf of the
directors that both the respondents / directors were non-executive directors of
the company, neither playing any role in the day-to-day activities of the
business nor in charge of the affairs of
the company.

 

It was observed that the High Court, in
deciding a quashing petition u/s 482, Code of Criminal Procedure, must consider
whether the averment made in the complaint is sufficient or if some
unimpeachable evidence has been brought on record which leads to the conclusion
that the director could never have been in charge of and responsible for the
conduct of the business of the company at the relevant time. While the role of
a director in a company is ultimately a question of fact, and no definite
formula can be fixed for the same, the High Court must exercise its power u/s
482, Code of Criminal Procedure when it is convinced from the material on
record that allowing the proceedings to continue would be an abuse of process
of the Court.

 

In the present
case, the appellant had specifically averred in his complaint that the
directors were actively participating in the day-to-day affairs of the company.
The complaint also specified that all the accused, in active connivance,
mischievously and intentionally issued the cheques in favour of the appellant and
later issued instructions to the bank to ‘Stop Payment’. No evidence of
unimpeachable quality had been brought on record by the directors to indicate
that allowing the proceedings to continue would be an abuse of the process of
the Court. In view of the same, the appeals were allowed and the order passed
by the High Court was set aside and that of the trial court restored.

 

22. 
Mahommedan Law – Bequest of property can only be done after taking
consent of all heirs [Mulla’s Principles of Mahommedan Law, S.117]

 

Ayyub and Ors. vs. Llahi Baksh and Ors. AIR
2019 Chhattisgarh 113

 

A property was
bequeathed to one heir without consent of the other heirs who were the
respondents / plaintiffs. Accordingly, a suit was filed by the latter for
declaring the Will void.

 

It was held by
the Court that section 117 of Mulla’s Principles of Mahommedan Law deals with
bequest to an heir and provides that a bequest to an heir is not valid unless
the other heirs consent to the bequest after the death of the testator. Any
single heir may consent so as to bind his own share. Accordingly, the verdict
of the trial court that the Will was void ab initio and illegal was
affirmed.

 

23. 
Service of notice to employee – Employee holding the seal of the company
must be taken to be duly authorised by the company to receive summons on behalf
of the company [Code of Civil Procedure; Order 29, Rule 2]

 

Frost International Ltd. vs. Five Star
Vanijya Pvt. Ltd. AIR 2019 (NOC) 325 Calcutta

 

An application
was filed for recalling an ex parte order. It was stated that the reason
for non-appearance before the court by the applicant was that there was no
proper service of notice on the company. It was argued that the applicant’s
office was totally closed. The applicant did not have any employee by the name
of Manab Basu who accepted the service of the writ of summons on behalf of the
defendant. If anything was received on behalf of the defendant, the same could
not reach the defendant and as a result the writ of summons cannot be treated
to have been served upon the applicant company. The applicant further mentioned
that it had an excellent defence on merits.

 

It was submitted on behalf of the
respondents that the application for recalling the order was barred by
limitation. It was further contended that there was a document which showed
receipt of the writ of summons by one Manab Basu on behalf of the defendant and
the defendant’s official seal was there next to the signature of Manab Basu.

 

The court observed that the said Manab Basu
while acknowledging receipt of the writ of summons put the defendant company’s
seal next to his signature. An employee of a limited company who has in his
custody the company’s seal must be deemed to be authorised by the company to
accept service of notices, summons etc. Order 29 Rule 2 of the CPC provides
that an employee of a corporation / company holding the seal of the company
must be taken to be duly authorised by the company to receive summons on behalf
of the company.

 

In view of the above, the court dismissed
the application for recalling the ex parte order.

 

24.  Unpublished public records – The citizens
have a right to demand information even in respect of matters such as security
of the country and matters relating to relations with a foreign state where
proper reasons are established [Right To Information Act, 2005, S.24, 123;
Evidence Act, 1872, S.124; Official Secrets Act, 1923, S.3, 5]

 

Yashwant Sinha and Ors. vs. CBI and Ors.
2019 (25) G.S.T.L. 161 Supreme Court

 

Reliance was placed on three additional
documents unauthorisedly removed from the office of the Ministry of Defence,
Government of India, that had been appended to the review petition and relied
upon by the review petitioners. The main contention was whether such documents,
being covered u/s 124 of the Indian Evidence Act, 1872 which states that no
public officer shall be compelled to disclose communications made to him in
official confidence, when he considers that the public interests would suffer
by the disclosure, could be placed in the open.

 

It was argued that u/s 8(1)(a) of the Right
to Information Act, information, the disclosure of which will prejudicially
affect the sovereignty and integrity of India, the security and strategic
security and strategic scientific or economic interests of the state, relations
with a foreign state or information leading to incitement of an offence, are
ordinarily exempt from the obligation of disclosure.

 

It was held by the Court that even in
respect of matters relating to state or other prohibited information, Parliament
has advanced the law in a manner which can only be described as dramatic by
giving recognition to the principle that disclosure of information could be
refused only on the foundation of public interest being jeopardised. Section
8(2) recognises that there cannot be absolutism even in the matter of certain
values which were formerly considered to provide unquestionable foundations for
the power to withhold information. The RTI Act through section 8(2) has
conferred upon the citizens a priceless right by clothing them with the right
to demand information even in respect of such matters as security of the
country and matters relating to relations with a foreign state. No doubt,
information cannot be given for the mere asking. The applicant must establish
that withholding of such information produces greater harm than disclosing it. 

 

ALLIED LAWS

This
feature was started in April, 1996 with K Shivaram, Advocate and Chetan Karia
as seed contributors. Reepal Tralshawala (4 years), K Gopal (3 years), Ajay R
Singh (9 years) also co-authored it along with Dr Shivaram. Since 2016-17,
Rahul K Hakani and Sashank Dundu joined Dr Shivaram as co-contributors.

The idea of behind the column was to bring
out summary of cases other than on tax law. It normally includes judgments that
are useful to professionals and have an impact on matters handled by them.
Cases generally covered are those under Hindu Succession Act, Registration Act,
Transfer of Property Act, Evidence Act, Stamp Act, Contempt of Courts Act,
General Clauses Act, Motor Vehicles Act all the way up to the Constitution of
India.

 

25.  Gift – Oral gift under
Mohammedan Law is valid – Burden of proof is on the donee. [Mohammedan Law]

 

Jamila
Begum (D) thr. L.Rs. vs. Shami Mohd. (D) thr. L.Rs. and Ors. AIR 2019 Supreme
Court 72

 

Case of
Respondent-Plaintiff was that Wali Mohd., father of Respondent No. 1 had
purchased two plots and along with Respondent No. 1 got disputed house
constructed which was gifted to Respondent No. 1 through an oral gift and he
was put in possession.

 

It was
observed that Under the Mohammedan law, no doubt, making oral gift is
permissible. The conditions for making valid oral gift under the Mohammedan law
are: (i) there should be wish or intention on the part of the donor to gift;
(ii) acceptance by the donee; and (iii) taking possession of the subject matter
of the gift by the donee.

 

The Apex
Court held that Respondent-Plaintiff claimed right to suit property by virtue
of oral gift in favour of Respondent No. 1. Respondent-Plaintiff had not proved
as to how at time of oral gift, possession was delivered to him. Nothing was
brought on record to show that Respondent No. 1-Shami Mohd. had taken any steps
to get property mutated in his name. Likewise, nothing was brought on record to
show that pursuant to oral gift, Respondent-Plaintiff collected rent from
tenants or paid house tax, water tax, etc. Essential conditions to make a valid
gift under Mohammedan law had not been established by Respondent-Plaintiff to
prove oral gift in his favour. In absence of any proof to show that possession
of suit property was delivered to him, oral gift relied upon by
Respondent-Plaintiff ought not to had been accepted by courts below.

 

26.  HUF – Alienation of
Property of HUF allowed if there is a legal necessity [Hindu Law]

 

Kehar
Singh (D) thr. L.Rs. and Ors. vs. Nachittar Kaur and Ors. (2018) 14 Supreme
Court Cases 445

 

The
dispute in this appeal is between the son, father and the purchasers of the
suit land from father. One Pritam Singh (Father – Defendant No. 1) was the
owner of the suit land. He sold the suit land by registered sale deed to Tara
Singh (Purchaser – Defendant No. 2) and Ajit Singh (Purchaser – Defendant No.
3). Both purchasers were placed in possession of the suit land.

 

Kehar
Singh (Son-Plaintiff) s/o. Pritam Singh (Father-Defendant) filed a civil suit
against the purchasers on the ground that the suit land was and continued to be
an ancestral property of the family of which the Plaintiff is one of its
members along with his father, that the Plaintiff’s family is governed by the
custom, which applies to sale of family property inter se family
members, that the Plaintiff has a share in the suit land along with his father
as one of the coparceners, that his father had no right to sell the suit land
without obtaining the Plaintiff’s consent, which he never gave to his father
for sale of the suit land, that there was no legal necessity of the family
which could permit his father to sell the suit land to the purchasers.

 

The
question before the Supreme Court for consideration was whether the sale made
by the Father in favour of the purchasers was for legal necessity and, if so,
whether it was legal and valid sale.

 

It was
observed that the father had taken various loans from the department for
purchase of seeds bag. Rs. 500/- for repair of house and Rs. 2,500/- for
purchasing pumping set. The father had further purchased a Rehri for Rs.
1,025/- from him in the year 1961. The Father had also borrowed a sum of Rs.
3,000/- in the year 1959 by executing a pronote. The father had also performed
marriage of his 5 children. This proved that legal necessity existed.

It was
held that once the factum of existence of legal necessity stood proved, then,
no co-coparcener (son) has a right to challenge the sale made by the Karta of
his family. The Plaintiff being a son was one of the co-coparceners along with
his father. He had no right to challenge such sale in the light of findings of
legal necessity being recorded against him. It was more so when the Plaintiff
failed to prove by any evidence that there was no legal necessity for sale of the
suit land or that the evidence adduced by the Defendants to prove the factum
of existence of legal necessity was either insufficient or irrelevant or no
evidence at all.

 

27.  Right to Information –
Delay in providing information in response to Right to information application
– Strictures against CESTAT – To educate the concerned officials for effective
discharge of its duties and responsibilities. [Right to Information Act, 2005;
Section7(1)]

 

R.K.
Jain vs. CPIO and Accounts Officer, CESTAT, New Delhi 2018 (10) G.S.T.L. 112
(CIC)

 

The
complainant, vide his RTI application sought information on a few appeals and
required copies of all order sheets and records of proceedings, vakalatnamas,
miscellaneous applications, after Court cause list and copies of Note sheets
put up by Registry etc.

 

Dissatisfied
by the response of the CPIO, the Complainant approached the FAA. The FAA, vide
its order, directed the CPIO to provide the information within two weeks to
the Complainant.

 

It was
argued that the RTI application which was filed on 6-8-2013 was transferred on
8-8-2013 to Asst. Registrar, Service Tax. Subsequently, the Complainant had
sent numerous reminders to the CPIO informing him of his duties as deemed CPIO
to provide information u/s. 7(1) of the RTI Act, 2005 within 30 days. The CPIO
had not responded in the matter at all. The Complainant promptly contested on
the ground that the information pertaining to note sheets had not been provided
till date. Moreover, the Complainant submitted that the CPIO should have acted
on the application within the stipulated time period as envisaged in the RTI
Act, 2005 and demanded initiation of penal proceedings against him in the
matter.

 

The
Commission observed that there is complete negligence and laxity in the public
authority in dealing with the RTI applications. It is abundantly clear that
such matters are being ignored and set aside without application of mind which
reflects disrespect towards the RTI Act, 2005 itself.

 

It was
held by the Central Information Commission that the Respondent was supposed to
be cautious to exercise due care in future to ensure that correct and complete
information is furnished timely to the RTI applicant(s) as per provisions of
the Act failing which penal proceedings u/s. 20 shall be initiated. The
Commission also instructed the Respondent Public Authority to convene periodic
conferences/seminars to sensitise, familiarise and educate the concerned
officials about the relevant provisions of the RTI Act, 2005 for effective
discharge of its duties and responsibilities.

 

28.  Trust – Deed of Transfer
– Transfer between two Trustees – Liable to stamp duty as per section 62(e) and
not as a conveyance – Sufficiency of stamp value. [Stamp Act, 1899; Section
62(e)]

 

The
District Registrar, Registration Department, Madurai South and Ors. vs. M.
Shanmugasundaram AIR 2019 Madras 1

 

A
transfer of Sri Narayana Guru Industrial Training Institute (hereinafter
referred to as ‘institute’), which is a part of Tamil Nadu Sri Narayana Guru
Trust, had taken place between one Trust named ‘Tamil Nadu Sri Narayana Guru
Trust’ and another Trust named ‘Tamil Nadu Illathu Pillaimar Sangam’, where the
latter Trust was one of the trustees of the former Trust.

It was
observed that the said ‘institute’ were to be transferred to another trustee
which is shown as second party, that is, Tamil Nadu Illathu Pillaimar Sangam.
It is also stated that Sri Narayana Guru Industrial Training Institute had a
debt to the tune of Rs. 4,25,000/- and salary arrears for the employees to the tune
of Rs. 65,000/-. The said transfer has taken place only for the purpose of
discharging the above said two amounts. Therefore, the appellants had treated
the same as deed of conveyance and it is argued that the said deed is executed
in favour of an individual and not a trust.

It was contended that the transfer was between
two trustees  and  hence it was not a conveyance of the properties.

 

It was
argued that the question of conveyance would not arise and the stamp duty as
per Article 62(e) of Indian Stamp Act, 1899 would apply which states that
transfer whether with or without consideration between two trustees, the amount
specified therein would apply.

It was
held that when the recitals in the deed of transfer explicitly states that the
transfer is from one trustee to another trustee as per the title deed, the deed
of transfer is not a conveyance but a deed of transfer covered by Article 62 (e)
of the Indian Stamp Act, 1899. Hence the stamp duty applicable in the transfer
of the title deed is only Article 62 (e) of the Indian Stamp Act, 1899.

 

29.  Unregistered Document –
Exchange Deed in respect of immovable property – Inadmissible in evidence
[Evidence Act, 1872; Section 91, 61; Registration Act, 1908; Section 49]

 

Shyam
Narayan Prasad vs. Krishna Prasad and Ors. AIR 2018 Supreme Court 3152

 

The issue
before the Court was whether the exchange deed was admissible in evidence or
not when the said exchange deed purports to transfer immovable property without
being registered.

 

There was
an exchange of business where such business also included an RCC building, the
value of which exceeded Rs. 100. Section 118 of the Transfer of Property Act
defined ‘exchange’ to be a situation where two persons mutually transfer the
ownership of one thing for the ownership of another, neither thing or both
things being money only, the transaction is called an “exchange”.

 

It was
observed that where either of the properties in exchange are immovable or one
of them is immovable and the value of anyone is Rs. 100/- or more, the
provision of section 54 of the TP Act relating to sale of immovable property
would apply. The mode of transfer in case of exchange is the same as in the
case of sale. It is thus clear that in the case of exchange of property of
value of Rs. 100/- and above, it can be made only by a registered instrument.
In the instant case, the exchange deed has not been registered.

 

Section
49 of the Registration Act, 1908 provides for the effect of non-registration of
the document which states that such document, which is not registered, cannot
be received as evidence. Further, section 17(i)(b) of the Registration Act
mandates that any document which has the effect of creating and taking away the
rights in respect of an immovable property must be registered and section 49 of
the Registration Act imposes bar on the admissibility of an unregistered
document and deals with the documents that are required to be registered u/s.
17 of the Registration Act.

 

It was
held that any document which is not registered as required under law, would be
inadmissible in evidence and cannot, therefore, be produced and proved u/s. 91
of the Evidence Act, nor any oral evidence can be given to prove its contents.  

 

Allied Laws

1.      
Cross objection to be disposed
of independently on merits [Code of Civil Procedure, 1908 (CPC), Order XLI Rule
22]

Badru (since deceased) through L.R. and
Ors. vs. NTPC Limited and Ors. AIR 2019 Supreme Court 3385

 

The land in question belonged to the
appellants (landowners). The suit land was acquired by the State for the NTPC
for public purpose. A compensation of Rs. 3,87,383 per bigha was awarded
to the appellants for the land. But the appellants felt aggrieved and
approached the Civil Court for determination of the compensation offered by the
Land Acquisition Officer. The Civil Court partly allowed the reference in
favour of the appellants and enhanced the compensation. The State and the NTPC
felt aggrieved by the award and filed appeals before the High Court. The
appellants instead of filing a regular appeal, filed cross objection under
Order 41 Rule 22 of the CPC and sought enhancement in the compensation awarded.
The High Court dismissed the appeals filed by the NTPC / State and, in
consequence, also dismissed the cross objection filed by the appellants. The
effect of the dismissal of the appeals and cross objection was upholding of the
award passed by the Civil Court. The landowners felt aggrieved by the rejection
of their cross objection and filed the present appeals by way of a special
leave before the Supreme Court.

 

It was observed by the Supreme Court that
one remedy was by way of appeal and the other remedy was to file cross
objection. In this case, the landowners took recourse to the second remedy of
filing cross objection. The High Court having dismissed the appeals filed by
the State / NTPC was, therefore, required to examine whether any case was made
out by the landowners in their cross objection for enhancement of compensation.
Order 41 Rule 22(4) of the CPC provides that where, in any case in which any
respondent has under this Rule filed a memorandum of objection, the original
appeal is withdrawn or is dismissed for default, the objection so filed may
nevertheless be heard and determined after such notice to the other parties as
the Court thinks fit. Merely because the High Court dismissed the appeals filed
by the respondents herein, though on merits, yet that by itself would not
result in dismissal of the landowners’ cross objection also.

 

In view of the same, the Supreme Court held
that the cross objection had to be disposed of on its merits notwithstanding
the dismissal of the same by assigning reasons. The case was accordingly
remanded to the High Court for deciding the cross objection filed by the
landowners in accordance with law.

 

2.      
Doctrine of promissory estoppel
– New Package Scheme of Incentives, 1993 – The eligibility for sales-tax
exemption cannot be withdrawn [General Sales Tax (GST), Art. 39(b), 39(c)]

K.M. Refineries and Infraspace Pvt. Ltd.
vs. State of Maharashtra (Bom.) (HC), www.itatonline.org

 

Under the New Package Scheme of Incentives,
1993, monetary and other incentives in the nature of tax subsidy or tax
exemption at the rate prescribed in the scheme and other benefits were given.
As per the eligibility certificate issued by the competent authority, the
certificate was valid for nine years. The Commissioner of Sales Tax prescribed
the effective date but while doing so, curtailed the validity period by about
three years and incentives given in the Incentive Scheme have been
substantially reduced by a new policy prescribing new tax structure of the
State. The assessee challenged the policy on the ground that the new policy
violates the principle of promissory estoppel.

 

Allowing the petition, the Court held that
once a promise has been solemnly given by the State with an intention that it
would be acted upon, and which has been indeed acted upon and liabilities
suffered by the promisee, the State cannot be permitted to backtrack on the
promise and change its position so as to cause loss to the promisee. The
eligibility for sales-tax exemption cannot be withdrawn under GST. (W.P. No.
2209 of 2018, dated 16th July, 2019).

 

3.      
Notional partition – Daughters
entitled to claim a share in the ancestral property after notional partition
between coparceners [Hindu Succession Act, 1956, S. 6]

Gannu Ram and another vs. Dhanmat Bai and
Ors. AIR 2019 Chhattisgarh 148

 

The case was filed by Dhanmat Bai and Deni
Bai, who were the daughters of Ramai before the trial court where it was held
that the daughters were entitled to a share in the property in a case where the
father had expired prior to the amendment in section 6 of the Hindu Succession
Act. The daughters were born before 2005 and hence, the applicability of the
2005 amendment to them was in question. An appeal was preferred against such
order where the question raised was whether the daughter of a pre-deceased karta
/ coparcener is entitled to have equal share in the ancestral property.

 

The court held that the daughters were
entitled to a share in the property but only to the extent of the part of the
shares of their father after a notional partition with the appellant since the
appellant was the coparcener in the Hindu Joint Family property along with the
father of the daughters. For passing an effective decree of partition in favour
of the daughters, the trial court was first required to affect a notional
partition between Ramai and his son (coparcener / appellant) allotting them
half share each in the coparcenary property. Thereafter, a further partition is
required to be affected in respect of the half share of the father which would devolve
equally upon the daughters. The appeal was therefore partly allowed.

 

4.      
Partnership property cannot be
a Hindu Joint Family property [Hindu Law]

Aarshiya Gulati and Ors. vs. Kuldeep Singh
Gulati and Ors. AIT 2019 (NOC) 577 (Del.)

 

While emphasising on the difference between
partnership and a Hindu Joint Family firm, the court referred to Mulla who in
his treatise Hindu Law (21st edition) has pointed out
the following points of difference between a partnership and a Hindu Joint
Family firm: ‘In a joint family business no member of the family can say that
he is the owner of one-half, one-third or one-fourth. The essence of joint
Hindu family property is unity of ownership and community of interest and the
shares of the members are not defined’.

 

The court also referred to the case of Nanchand
Gangaram Shetji vs. Mallappa Mahalingappa Sadalge & Ors. where it
was held that in a joint Hindu family business, no member of the family can say
that he is the owner of one-half, one-third or one-fourth. The essence of joint
Hindu family property is unity of ownership and community of interest and the
shares of the members are not defined. Similarly, the pattern of the accounts
of a joint Hindu family business maintained by the karta is different
from those of a partnership. In the case of the former the shares of the
individual members in the profits and losses are not worked out, while they
have to be worked out in the case of partnership accounts.

 

In view of the same, the court held that a
partnership property cannot be a Hindu Joint Family property.

 

5.      
Tenancy – Prior consent of
creditor to be taken when tenancy created after mortgage of premises to
creditor – If consent not taken, tenant not entitled to temporary injunction
against dispossession by creditor bank. [Securitisation And Reconstruction Of
Financial Assets And Enforcement Of Security Interest Act, 2002, S. 13]

Chief Manager, Bank of Baroda, Dhanbad
branch vs. Amit and Ors. AIR 2019 Jharkhand 122

 

The brief facts of the case are that the
petitioner bank had sanctioned a loan by keeping the property in question
mortgaged by a collateral security and on having become a non-performing asset,
a notice u/s 13(2) of the Securitisation and Reconstruction of Financial Assets
and Enforcement of Security Interest Act, 2002, was issued, thereafter
resorting to the provision of S. 13(4) of the Act. The respondent No. 1
(tenant) has entered into an agreement of tenancy prior to mortgaging of the
property by the owner. When a notice u/s 13(4) was served on the owner, the
respondent No. 1 filed a suit pleading therein that he is a monthly tenant and
has been paying rent regularly and on time but without any receipt. The bank
(creditor) appeared and filed show cause, disputed the claim of the respondent
No. 1 by stating that the owner is a director of a private limited company and
has got cash credit facility of Rs. 300 lakhs which was sanctioned and secured
by getting a mortgage of the property; when the loanee became irregular and
despite repeated requests and intimations did not pay the loan amount due to
which the loan amount became an NPA; this forced the petitioner bank (creditor)
to file a suit in the Debt Recovery Tribunal.

 

The tenant also
filed a separate petition for grant of temporary injunction restraining the petitioner
bank (creditor) from taking forceful possession of the tenanted premises.


It was observed by the court that no
borrower shall lease any of the secured assets referred to in the notice
without the prior written consent of the secured creditor and holding therein
that save and except the process of tenancy, there cannot be any eviction of
the tenant.

The court referred to the case of Kalsaria
where the lease has been created after the property had been mortgaged and
therefore, it has been held that before creating tenancy right before the date
of mortgage, consent is required to be taken from the creditors. It is in the
touchstone of this ratio and the definition of mortgage that the case in hand
has been examined by the court.

 

It was held that since it was nowhere on
record that before creating tenancy by virtue of agreement, prior consent of
the creditor has been taken this fact ought to have been appreciated by the
appellate court but having not done so, the appellate court has committed gross
error.

 


ALLIED LAWS

10. Binding Precedent – Lower authorities to
follow the precedent – Contempt action may be taken. 

Mangala Ispat (Jaipur) Pvt. Ltd. vs. Union
of India 2018 (15)  G.S.T.L. 487 (Raj.)


A matter was remanded back to the Assistant
Commissioner with a direction to pass a fresh order regarding excise duty
liability in the light of the direction given by the Supreme Court. Order of
the Division Bench of this court was not challenged by the Department.
Assistant Commissioner and the commissioner had allowed the credit relying on
the Supreme Court judgment. However, the Commissioner of Excise Department and
the Tribunal made observations against the High Court and the Supreme Court
decisions.


It was held that it was a well settled
principle of law that the law declared by the Supreme Court is binding on all
and when the Division Bench of this Court has held that the judgment is
applicable against which no SLP was preferred, any lower authority in rank
observing that the High Court was not sure about the similarity of the issue in
both the cases otherwise the Bench could have decided the case, in our
considered opinion, these observations by Commissioner (Appeals) in Appeal Memo
is not only objectionable but it is not permissible under law. We were inclined
to grant even the prayer for contempt but to avoid any delay since the sufferer
is the petitioner, we have restrained ourselves from issuing any contempt
notice against the officers.


Even the Tribunal while setting aside the
order of the First two Authorities has not given any reasons and simply
accepted the appeal memo and has allowed the appeal without reversing the
finding arrived at by both the authorities and observed that the Supreme Court
judgment is not binding. In our considered opinion, the first two authorities
rightly observed and allowed the proceedings in favour of petitioner/assessee
and the Tribunal as well as two Commissioners of Excise department exceeded the
jurisdiction and committed an error in making observations against the High
Court and the Supreme Court decisions.


11. Coparcenary Property – Daughter can
become a coparcenor only when the father is alive. [Hindu Succession Act, 1956;
Section 6] Anjalai and Ors. vs. K. Rathina and Ors.
AIR 2018 (NOC) 797 (Mad.)


It was held that the Central Amendment to
section 6 of the Hindu Succession Act, came into force with effect from
09.09.2005. As per the said amendment, from that date onwards, daughters will
be the coparceners along with the sons from their birth. The daughters can
become coparceners only when the father is alive and when the father is not
alive, they cannot become coparceners along with the brother.


12.
Family Arrangement – Document recording division of properties amongst Muslim family may not be registered. [Muslim
Law]


Ajambi vs. Roshanbi and Ors. (2017) 11
Supreme Court Cases 544


Deceased had made arrangements with regard
to his property during his lifetime and the said arrangements had been
subsequently recorded in that document, which had been duly acted upon by the
revenue authorities by dividing the suit property into two different parts. The
property which had been divided by deceased was in occupation of the respective
parties and the said fact has also been recorded in the revenue record.

The question
arose as to whether the High Court erred in agreeing with view expressed by
lower Appellate Court mainly on ground that document had not been registered as
it ought to have been registered as it was compulsorily registrable.


It was held that the said document was not
compulsorily registrable since it was a mere arrangement i.e. The arrangement
so made was duly accepted by the family members and it was also acted upon.
Only thereafter a formal record of the said fact. There is no concept of joint
family in Muslims but it was open to deceased to give his property to his
children in a particular manner during his lifetime, which he rightly did, so
as to avoid any dispute which could have arisen after his death. The
arrangement so made was duly accepted by the family members and it was also
acted upon. Only thereafter a formal record of the said fact was made by late
deceased in the document.


13. Post Office – Delay in delivery –
Liability. [Indian Post Office Act, 1898; Section 6]


Post Master,
Main Post Office, Jagdalpur and Ors. vs. Rajesh Nag and Ors. AIR 2018
Chhattisgarh 156


The short
question involved in the writ petition was whether Permanent Lok Adalat, Public
Utility Services is justified in granting damages to the extent of Rs. 25,000/-
to respondent No. 1 in light of the provisions contained u/s. 6 of the Indian
Post Office Act, 1898 which grant exemption from liability for loss,
misdelivery, delay or damage?


The respondent No. 1 made an application for
a post to the Bastar University, for which he sent an application by speed post
on 22.12.2012 and paid the necessary postal charges, as the last date for
submission of the application was 24.12.2012, but the application reached the
Bastar University on 26.12.2012 and since the application was not received well
in time, respondent No. 1 was not called for interview, leading to filing of
claim before the Permanent Lok Adalat claiming damages to the extent of Rs.
20,00,000/- with interest at the rate of 18% and cost.


It was argued that since the delay was not
caused fraudulently or willingly, the petitioner/Union of India was not
responsible for the damages, if any, in light of section 6 of the Act of 1898.


It was observed that the Post Office which
is run by the Government shall not be liable for delay caused in delivery of
the postal articles either by ordinary or registered post, except the liability
which may be expressed in terms undertaken by the Central Government.


It was held that, the order of the Permanent
Lok Adalat granting damages to the extent of Rs. 25,000/-, along with interest,
cost and Advocate fee deserves to be and was thereby set aside being contrary
to section 6 of the Indian Post Office Act and Rules made thereunder and
consequently, it was thereby quashed.


14. Will – Probate Court – Should have original jurisdiction-Probate is conclusive. [Code of Civil Procedure; Sections 151, 10] Rai Sharwan Kumar vs. Rai Bharat Kumar AIR
2018 Allahabad 257


A question came up before the Court with
respect to deciding the validity of the Will, which was objected to on the
ground that the Civil Court will have no jurisdiction on the original side to
go into the question for validity of the Will, but a competent Court would have
such jurisdiction.


It was argued that a court has inherent
powers to make such orders as may be necessary for the ends of the justice or
to prevent abuse of the process of the court as provided u/s. 151 of the Code
of Civil Procedure.


However the counter-argument taken was based
on section 10 of the Code of Civil Procedure which provides the rule with
regard to stay of suits where things are under consideration or pending
adjudication by a court.


It was observed by the honourable court that
the probate granted by the Competent Court is conclusive of the validity of the
Will until it is revoked and no evidence can be admitted to impeach it except in
a proceeding taken for revoking the probate.


When a probate was granted, it operates upon
the whole estate and establishes the Will from the death of the testator.
Probate is conclusive evidence not only of the factum, but also of the validity
of the Will and after the probate has been granted, in is incumbent on a person
who wants to have the Will declared null and void, to have the probate revoked
before proceeding further. That could be done only before the Probate Court.


It was held that that the Court of Probate
alone has jurisdiction and is competent to grant probate to the Will annexed to
the petition in the manner prescribed under the Succession Act, and that such a
declaration by the Probate Court binds not only the defendants but
everyone else.

Allied Laws

26. 
Appellate Tribunal – Bias – Adjudicating authority subsequently became a
Technical Member – Matter remanded for fresh adjudication. [CESTAT]

Sify Technologies Ltd. vs. Commissioner of
C. Ex. and S.T., LTU, Chennai 2018 (12) G.S.T.L. 245 (Mad.)

 

In the present case, there were two grounds
pleaded before the High Court with respect to the authority who has issued the
show cause notice, thereafter became a Technical Member of the CESTAT and he
was also part of the Bench, which passed the Final Order. The bench of the
CESTAT had decided the issue against the appellant. Though likelihood of bias
has not been pleaded before the Tribunal, but a ground has been raised in the
instant appeals. On such ground and without going into the merits of the case,
we are of the view that impugned orders are liable to be set aside and
accordingly, set aside.

 

27. Benami – Joint family property – Benami
Transaction – Section 4 cannot be applicable to the facts of the case. [Benami
transactions (Prohibition) Act, 1988; Section 4]

K.Krishna Palani vs. Santhakumari and
others AIR 2018 (NOC) 154 (MAD.)

 

The question for determination before the
honourable bench was whether the provisions of section 4 of the Benami
transactions (Prohibition) Act, 1988 was attracted to the facts of the case.

 

It was contended that section 4 of the
Benami Act would be attracted since schedule property stood in the name of the
mother i.e. the 2nd defendant (since deceased). Therefore, the
property would be treated as self-acquired property of the 2nd
defendant.

 

It was observed that the properties
belonging to the Joint family were settled in favour of the 2nd
defendant, where it was clearly stated that the properties could not be sold by
herself but only along with the other members of the family including the
settlor. The courts below had clearly held that the father of the appellant had
purchased the property for his wife i.e. the 2nd defendant. From
evidence available on record, the schedule property was held to be joint family
property.

 

It was held by the court that since the
property is a joint family property and the claim only seeks to proclaim the
property as joint family property and not to claim the property to be their own
property, the rigor of section 4 of the Benami Act cannot have any application
to the facts of the case.

 

28. Noise Pollution – Right to Life will
include an atmosphere free from noise pollution. [Constitution of India;
Article 21]

Ajay Marathe and Ors. vs. UOI and Ors.
(01.09.2017 – BOMHC) AIR 2018 (Bombay) 117 (FB)

 

If anyone increases his volume of speech and
that too with the assistance of artificial devices so as to compulsorily expose
unwilling persons to hear a noise raised to unpleasant or obnoxious levels then
the person speaking is violating the right of others to a peaceful, comfortable
and pollution-free life guaranteed by Article 21. The right to live in an
atmosphere free from noise pollution is a part of Article 21.

 

29.  Registration – Memorandum of Understanding –
No immovable property getting transferred – Registration not required.
[Registration Act, 1908; Section 17; Maharashtra Stamp Act, 1958; Section 3,
33]

Yuvraj
Developers and Ors. vs. Gavtya Dhondu Mhatre and Ors. AIR 2018 (NOC) 717 (BPM.)

 

The facts of
the case are that a ‘Memorandum of Understanding’ for agreement to lease was
not registered and, therefore, the bar of section 49 of the Registration Act is
attracted i.e. no effect would be given to the immovable property mentioned in
the unregistered document and, secondly, also on the ground that, in order to
fix the valuation, the document needs to be sent for impounding, u/s. 33 of the
Maharashtra Stamp Act, 1958, for payment of proper stamp-duty.

 

It was held
that documents mentioned under the Maharashtra Stamp Act, 1958 can be
chargeable with the stamp-duty and the said provision refers to the instruments
mentioned in ‘Schedule-1’, which are chargeable under the Act. It is submitted
that, ‘Schedule-1’ does not refer to the ‘Memorandum of Understanding’, which,
ultimately, is leading to the ‘Agreement of Lease’ and hence, according to him,
if the instrument is not chargeable with the stamp-duty, under the provisions
of section 3 of the Maharashtra Stamp Act, 1958, then, in no case, it can be
impounded. As the impounding of the MOU was sought on the basis that, under the
said MOU, the possession was delivered and, therefore, the ‘Explanation’ to
Article 25 was invoked. However, as that analogy cannot be accepted,
considering the provisions of Articles 3 and 36 of the Maharashtra Stamp Act,
1958, the impugned order passed by the Trial Court does not call for any
interference.

 

30. Transfer of
Property – Unregistered gift deed – Substance over form – Valid if compliant
with law. [Transfer of Property Act, 1882; S.122, 123]

Topden Pintso
Bhutia vs. Sonam Plazor Bhutia (17.08.2017 – SIHC) AIR 2018 SIKKIM 1

 

The Plaintiff
and the Defendant are blood brothers, the Defendant being the Plaintiff’s elder
brother. The Plaintiff laid claim to the suit land alleging that his mother had
verbally gifted him the property in the year 1980. His mother passed away in
the year 2008. The Plaintiff claims possession of the suit land since 1980, to
the exclusion of his other siblings. After his mother’s demise, he approached
the Office of the Sub-Divisional Magistrate, Ravangla, South Sikkim, for
mutation of the suit property in his name. This was objected to by the
Defendant, inter alia, on the ground that, vide a document dated
21-12-2001, executed by his Late father, allegedly in the presence of the
Defendant and his brothers, the suit property was in fact gifted to him. It is
this document, that the Defendant seeks to validate on the basis of the
aforesaid Notification which clearly provides that, an unregistered document
may, however, be validated and admitted in Court to prove title or other
matters contained in the document, on payment of penalty up to fifty times the
usual registration fee.

 

The Court held
that the document sought to be validated, being bereft only of registration,
ought in substance, to be compliant of the provisions of section 122 and
section 123 of the Transfer of Property Act, 1882. It further held that it is
not every document that has not been registered which can be validated by the
order of the Court, but only those documents which bear compliance to the legal
provisions.

 

ALLIED LAWS

6.  Gift deed – Cancellation of registered gift
deed requires mutual consent of both the parties and their participation – Gift
deed cancellation not valid [Transfer of Property Act (1882), section126;
Registration Act (1908), section 17]

 

Kolli Rajesh Chowdary vs. State of Andhra Pradesh
and Ors. AIR 2019, Andhra Pradesh 40

 

A gift settlement deed was executed out of
love and affection by the respondent (grandmother) for the petitioner
(grandson) with a view to provide the said property for his livelihood. The
gift was accepted and possession of the property was delivered to the
petitioner on the same day. Thereafter, the petitioner made an online
application and paid the requisite fee and requested for mutation of the said
property in his name in the revenue records and for issuance of pattadar
passbook. Since the date of the gift settlement deed, the petitioner was in
continuous possession and enjoyment of the property covered by the deed.

 

In the year
2019, the petitioner noticed that the respondent had executed a deed of
cancellation, dated 29th September, 2017, registered the same and
revoked the gift settlement deed executed by her in favour of the petitioner.
The petitioner also noticed that after execution of the cancellation deed, she
had further executed a sale deed, dated 28th October, 2017, in
favour of another person and registered it on 6th November, 2017.
Since the property in question was transferred in favour of the petitioner with
absolute rights by the respondent by executing the registered gift settlement
deed, she had no right to execute the deed of cancellation either cancelling or
revoking the gift settlement deed already executed by her in favour of the
petitioner. The reason for cancellation of the gift deed was mentioned by the
respondent to be deception and non-fulfilment of the word given by the
petitioner to the respondent.

 

It was observed
that there cannot be unilateral cancellation of registered sale deeds and that
a deed cancelling a sale deed can be registered only after the same is
cancelled by a competent civil court after notice to the parties concerned. In
the absence of any declaration by a competent court or notice to parties, the
execution of the deed of cancellation as well as its registration are wholly
void and non-est and such transactions are meaningless transactions.

 

Accordingly, it
was held that the said deed of cancellation / deed of revocation was null and
void and that it was of no effect. As a sequel to the said finding that the
cancellation deed or revocation deed was null and void and further, in view of
the settled legal position that no one can convey a better title than what he /
she has, it was further held that the subsequent sale deed executed by the
respondent was also not valid.

 

Further, it was
contended by the respondent that if the petitioner was aggrieved by the
cancellation or revocation deed he had to approach a civil court and seek the
common law remedy for setting aside the same but he could not approach the writ
court.

 

It was held
that if the petitioner was aggrieved by the cancellation or revocation deed
which was unilaterally executed and was null and void and meaningless, it was
just and fair to allow the writ petition leaving it open to the executants of
the cancellation deed or revocation deed to seek the common law remedy by
approaching the civil court.

 

7.  Lawyer’s statement – Client not bound by the
lawyer’s statements or admissions as to matters of law or legal conclusions
[Kerala Buildings (Lease and Rent Control) Act, 1965, S. 11]

 

Central
Bank of India and Ors. vs. Beena Thiruvenkitam, AIR 2019 Kerala 164

 

A lease
agreement had been entered into between the bank and the then owners of the
building. After the respondent became the owner of the building, the appellant
(tenant-bank) paid the rent of the building to the respondent and she had
received it. After the lease period expired, the respondent informed the bank
that she was not willing to renew the lease. The bank informed the petitioner
that since a currency chest is attached to the branch, a suitable place will
have to be found by the bank to house its branch and as and when a suitable
place is found, they will surrender the tenanted premises. A writ petition was
filed alleging that despite the undertaking made, the bank is not making any
efforts to surrender the leased premises. The petitioner, therefore, sought
appropriate directions from the court. Before the court it was stated by the
learned senior counsel for the bank that the premises will be surrendered
immediately after the construction of the currency chest. However, the senior
counsel for the bank had not given any undertaking before the court that the
premises shall be vacated within any specific time.

 

The learned
single judge disposed of the writ petition by directing the bank to surrender
vacant possession of the building occupied by it to the respondent within four
months from the date of the judgement. The aforesaid judgement was under
challenge in the appeal.

 

The senior
counsel for the appellant bank contended that the writ petition filed by the
respondent was not maintainable. He contended that no direction could be issued
by the court to a tenant, in exercise of its writ jurisdiction under Article
226 of the Constitution, to surrender vacant possession of the building
occupied by the tenant to the landlord. The respondent landlord contended that,
when the writ petition came up for hearing (before the single judge) the
counsel who appeared for the bank had submitted that the bank was ready to
surrender possession of the premises to the respondent and it was on the basis
of such undertaking that the writ petition was disposed of. He submitted that
the appellants cannot now turn around and contend that the writ petition filed
was not maintainable.

 

As per section
11, a tenant shall not be evicted, whether in execution of a decree or
otherwise, except in accordance with the provisions of the Kerala Buildings
(Lease and Rent Control) Act.

 

It was observed
by the court that neither the client nor the court is bound by the lawyer’s
statements or admissions as to matters of law or legal conclusions. A 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.
Consequently, the appeal was allowed.

 

8.  Foreign judgement and its implication on
residents of India [Code of Civil Procedure, 1908, S. 13]

 

Jose Sousa vs. Ema Mata Fernandes and Ors. AIR
2019 (NOC) 644 (Bom.)

 

An application
under Article 1102 of the Portuguese Civil Procedure Code, 1939 (Code) was
filed seeking confirmation of the judgement and order passed by the Family
Court at Bradford, U.K., by which the marriage between the applicant and the
first respondent had been dissolved by a decree of divorce.

 

The applicant
and the respondent are Goans, citizens of India, and were married to each
other. Disputes and differences arose between the parties in the initial period
of the marriage and the parties separated; the applicant had been residing in
London since the year 2005, when he went there for the purpose of work. The
applicant has since acquired Portuguese citizenship in the year 2009, while the
first respondent continues to be an Indian citizen. The applicant and the first
respondent resided together in Goa as husband and wife until the year 2005 and
from the time the applicant left for the U.K. they have been residing
separately.

 

Matrimonial
petitions had been filed on two occasions for dissolution of the marriage.
However, the same were dismissed. Another petition was filed before the Family
Court at Bradford, U.K. A notice of the petition was served on the first
respondent who sent a detailed reply thereto inter alia taking exception
to the jurisdiction of the Family Court at Bradford to entertain the petition.
It was contended that the parties were Indian nationals of Goan origin at the
time of their marriage. Their marriage was solemnised at Margao, where it is
registered, and thus the Family Court at Bradford would lack jurisdiction to
entertain the petition only on the ground that the applicant has been residing
in the U.K. The Family Court in the U.K. granted the decree of divorce. The
application was filed for confirmation of the decree.

 

The only
question for adjudication was whether the judgement of the Family Court at
Bradford, U.K., could be confirmed.

 

The court held
that the applicant has not shown how the Family Court at Bradford, U.K., would
have jurisdiction to entertain the petition only on the basis of the residence
of the applicant in U.K. Admittedly, the marriage was solemnised at Margao as
per the family laws applicable in Goa, when both the parties were Indian
nationals and were governed by the said law, and their marriage was registered
in the office of the Sub-Registrar at Margao. Subsequently, the petitioner
acquired Portuguese citizenship in the year 2009 and had been staying in the
U.K. The parties last resided together at Margao. Even assuming that the U.K.
Family Court had jurisdiction, the judgement of such court makes absolutely no
reference to the specific ground raised of the absence of jurisdiction. Clauses
(a) and (b) of section 13 of the C.P.C. provide as to when a foreign judgement
is not conclusive. On the basis of these clauses the court stated that the
judgement of the Family Court in the U.K. cannot be said to be conclusive and
held that it was not possible to confirm the foreign judgement. In the result,
the civil application was dismissed.

 

9.  Natural guardian – Transfer of property
without the consent of minors u/s 8(3) – Suit for setting aside of document of
transfer being mandatory was time-barred [Hindu Minority and Guardianship Act,
1956, S. 8(3); Limitation Act, 1963, Art. 60]

 

Thankamoni
Amma Padmakumari Amma and Ors. vs. Ganapathi Suresh and Ors. AIR 2019 Kerala
170

 

A suit for
partition and fixation of boundary was filed. The defendant, i.e., the father
of the plaintiffs, had sold a property owned by the plaintiff’s mother after
the mother’s death. At the time of such sale of property, the plaintiffs were
minors. Seven years after attaining majority, a suit for partition and fixation
of boundaries was filed. No period of limitation is mentioned anywhere in the
Hindu Minority and Guardianship Act for exercising the option available to the
minor u/s 8(3) of the Act.

 

It was observed
by the court that no prayer for setting aside the document of transfer had been
made. The legal position can be summarised to say that it is necessary to seek
the relief of setting aside the document to exercise the option by a minor to
avoid the disposal of immovable property by the natural guardian.

 

It was held
that since the relief of setting aside the document of alienation cannot be
avoided in a suit exercising the option u/s 8(3) of the Act challenging the
disposal of immovable property by the natural guardian, the period of
limitation in such a case would be the one available for setting aside a
document of transfer under the Limitation Act. A separate provision is made under
Article 60 of the Limitation Act to set aside a transfer of property made by
the guardian of a ward as three years from the date of attainment of majority.
Accordingly, the maximum time available to institute a suit for exercising the
option u/s 8(3) of the Act is only three years from the date of attainment of
majority and hence the suit is hopelessly barred by limitation.

 

10.  Stamp Duty – Deputy Commissioner of Stamp
Duty cannot decide the validity of the document or the validity of the trust
deed for the purpose of determining the stamp duty payable [Transfer of
Property Act, 1882, S. 14; Karnataka Stamp Act, 1957, S. 28, 33, 39]

 

B.R. Jagadish
vs. District Registrar and Deputy Commissioner for Stamps, Basavanagudi and
Ors. AIR 2019 Karnataka 129

 

A gift deed was
executed which was held to be insufficiently stamped. The reason for the
insufficiency was due to the Deputy Commissioner’s objection to the fact that
the gift of the immovable property was done by a trust and not by a family
member. The stamp duty payable in case of a trust and a family member are
different.

 

The facts of
the case suggested that a private trust was purported to have been formed by
one of the family members where certain conditions in violation of rules of
perpetuity as per section 14 of the Transfer of Property Act were laid down.
Hence, the trust became null and void and inoperative in the eyes of law, being
void ab initio. Thereafter, a gift deed was drafted for the purpose of
gifting the properties to children. However, the Deputy Commissioner impounded
the said gift deed stating that proper stamp duty had not been paid on the
instrument. It was alleged that the property belonged to the trust and not the
family members and that the gift deed was in the nature of conveyance and hence
a higher stamp amount was applicable.

 

The Court held that while deciding the stamp
duty under the provisions of sections 33 and 39 of the Stamp Act, the recitals
of the document have to be looked into. The Deputy Commissioner for Stamps
cannot decide the validity of the document or the validity of the trust deed.
It was for the person who disputes the gift deed or the trust deed to approach
the competent civil court. The authorities exercising powers under the
provisions of the Stamp Act have to consider the recitals to determine stamp
duty and they have no jurisdiction to decide the title between the parties.
Accordingly, the impugned order was quashed.

ALLIED LAWS

15. Advocate –A
client is not bound by a statement or admission which he or his lawyer was not
authorised to make – There is no estoppel against law [Advocates Act,
1961, S. 35]

 

Director of
Elementary Education, Odisha and Ors. vs. Pramod Kumar Sahoo; AIR 2019 SC 4755

 

The counsel for
the appellant conceded before the Tribunal that teachers having Intermediate
qualification are entitled to the scale of pay as is available to trained
Matric teachers. On the basis of such concession, the learned Tribunal allowed
the original application. The counsel for the appellant submitted that separate
pay scales are provided for untrained Matric teachers and for trained Matric
teachers. Merely because the respondent is Intermediate, that is, a higher
qualification than Matric does not make him a trained teacher. Therefore, the
concession given by the State counsel is an erroneous concession in law and
does not bind the appellant.

 

The Court
observed that generally, admissions of fact made by a counsel are binding upon
their principals as long as they are unequivocal; however, where doubt exists
as to a purported admission, the Court should be wary about accepting 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. A
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. The Court
added that neither the client nor the Court is bound by the lawyer’s statements
or admissions as to matters of law or legal conclusions.

 

Accordingly, it
was held that the concession given by the State counsel before the Tribunal was
a concession in law and contrary to the statutory rules. Such concession is not
binding on the State for the reason that there cannot be any estoppel
against law. The rules provide for a specific grade of pay; therefore, the
concession given by the learned State counsel before the Tribunal is not
binding on the appellant. The original application filed by the respondent was
dismissed on merits.

 

16. Advocate –
Legal advice – Negligence – Advocate is not liable unless guilt proved [Indian
Penal Code, S. 420, 467, 468, 471 & 120B]

 

Subha Jakkanwar W/o Arun Jakkanwar vs. State of Chhattisgarh, Criminal
Misc. petition No. 1614 of 2017; Date of order: 26th November, 2019
(CHH)(HC)

 

Ten borrowers
made an application to a bank for a loan. The bank requisitioned a
non-encumbrance certificate, which was provided by the petitioner who was the
empanelled advocate of the bank. The petitioner certified the application qua
the lands held by the borrowers for the grant of loan. The borrowers failed to
repay the loan. It was seen that the borrowers had submitted false and
fabricated documents. The question arose as to whether the advocate
(petitioner) could be incriminated for issuing a non-encumbrance certificate
negligently.

 

The High Court
observed that extending of a legal opinion for granting loan has become an
integral component of an advocate’s work in the banking sector. A lawyer on his
part has a responsibility to act to the best of his knowledge and skills and to
exhibit an unending loyalty to the interests of his clients. He has to exercise
his knowledge in a manner that would advance the interest of his clients.
However, while doing so, the advocate does not assure his client that the
opinion so rendered by him is flawless and must in all possibility act to his
benefit. Just as in any other profession, the only assurance which can be
given, and may even be implied from an advocate so acting in his professional
capacity, is that he possesses the requisite skills in his field of practice
and while undertaking the performance of a task entrusted to him, he would
exercise his skills with reasonable competence.

The only
liability that may be imputed to an advocate while so acting in his
professional capacity is that of negligence in application of legal skills, or
due exercise of such skills, or when an opining advocate is an active
participant in a plan to defraud the bank. Merely because his opinion may not
be acceptable he cannot be criminally prosecuted, particularly in the absence
of direct evidence against him.

 

It was held
that in the instant case the petitioner was neither named in the written
complaint nor in the FIR. Only in the statements of three branch managers for
the first time was the advocate’s name indicated stating that with an intention
to extend pecuniary advantage to the farmers, the non-encumbrance certificate
was issued in their favour which was found to be not acceptable by the bank and
also found to be untrue. There is no basis on record for making such a
statement except that the non-encumbrance certificate was not found proper.
There is no evidence on record to hold that the petitioner met the accused
persons at any point of time and there is no allegation that she gained any
pecuniary benefit as a result of preparing such a report; except for the
statements of three branch managers of Dena Bank that the report was false,
there is no material to show that the petitioner at any point of time was
involved in any criminal conspiracy with any of the accused persons to commit
the offence alleged against her.

 

Accordingly, even
if the allegations are taken at their face value and accepted in their
entirety, the same do not disclose any commission of offence nor do they make
out a case against the petitioner. The Honourable Court relied upon the case of
K. Narayana Rao (2012) 9 SCC 512. Accordingly, the entire
charge-sheet as framed and filed against the petitioner was quashed.

 

17. Joint
family property – Inherited property – Any conveyance or compromise regarding
inherited property by few coparceners would not affect and bind the shares of
the other coparceners who were not a party to such conveyance / compromise
[Hindu Law]

 

Doddamuniyappa
(Dead) through L.R.S. vs. Muniswamy and Ors.; (2019) 7 SCC 193

 

The property
was originally purchased by propositus (sic) of the family, namely,
Chikkanna. After the death of Chikkanna, the property devolved to his three
sons who jointly sold the property in 1950 and the sale deed contained the
clause of re-conveyance requiring the purchaser to re-convey the property in
the event of sale. After the appellant purchased the subject property in 1962,
a civil suit was instituted for the re-conveyance of the property by the sons
of Chikkanna in the first instance which was dismissed by the trial court. On
the order of the High Court, the respondents put the decree to execution and a
deed of re-conveyance was executed and possession of the property was restored
to the respondents on execution of the decree; it assumed the character of a
joint family property in the hands of the respondents.

 

At the stage of
execution appeal, which was preferred at the instance of the appellant, a
compromise was executed between the parties and accordingly, part of the
possession of the subject property was restored to the appellant. After the
restoration of possession of the subject property, the title of the property
re-assumed its original character of joint family property and created the
right of inheritance in the joint family property; all the coparceners were
neither consulted nor made parties to the said compromise.

 

The Court held
that the respondents were not parties to the compromise and the subject
property at that time was joint family property and the compromise entered into
between the parties would not bind the rights of the respondents. It would be
an ancestral property in their hands and the respondents are neither party to
the proceedings nor consented when the compromise decree was executed in the
execution appeal; admittedly, the same would not be binding upon their share of
the property. It goes without saying that the compromise would bind the share
of the respondents as they are party to the compromise which was entered into
in the execution appeal and has been rightly recorded by the High Court under its impugned judgment.
Accordingly, the order of the High Court was upheld.

 

18. Limitation
– Residuary section of Limitation Act will apply when no limitation under any
other Act provided [Hindu Succession Act, 1925, S. 263; Limitation Act, 1963,
Article 137]

 

Jethmal Soni
vs. Hariom Soni and Ors.; AIR 2019 (CHH) 172 (HC)

 

An application
under section 263 of the Indian Succession Act, 1925 was filed for revoking a
probate granted by a probate court in favour of the petitioners. A preliminary
objection against the said application was filed before the trial court that
there was a delay of more than 90 days due to which the application was barred
by limitation. The trial court rejected the said preliminary objection finding
no merit in it and held that limitation for revocation of probate will be
governed by Article 137 of the Limitation Act, 1963; the date of knowledge
admittedly is 20th December, 2013, and therefore the application so
filed is within the period of limitation. A writ petition was filed challenging
the order of rejecting the preliminary objection.

 

The Court in
the present petition held that the learned District Judge while dealing with
the application in question was acting as a civil court and, therefore, the
provisions of Article 137 of the Act of 1963 clearly govern the situation. In
view of the same, in case of application u/s 263 of the Act of 1925 for
revocation of probate, which is not governed by any specific Article of the Act
of 1963, the residuary Article 137 of the Act of 1963 would apply. It was held
that the correct position was that ‘the right to apply’ accrued to the
respondents only on 20th December, 2013 and they filed an
application for revocation of probate on 27th January, 2014, well
within the period of three years when the right to apply for setting aside
accrued to them. Thus, the learned District Judge was absolutely justified in rejecting
the preliminary objection filed by the petitioner.

 

 

ALLIED LAWS

11. 
Adverse possession – Gratuitous licensee – No rights acquired in case of
gratuitous possession [Limitation Act, 1963, Article 65]

 

Lawrence
Ranchhodbhai Christian vs. Gujarat Christian Service Society, AIR 2019, Gujarat
161

 

The
suit was preferred by the plaintiff. The suit premises were owned by the
defendant institution and the plaintiff was living in the premises since
childhood because he had been adopted by the defendant as an orphan. Since the
acceptance of the plaintiff by the defendants, the physical possession of the
suit premises was handed over to him within the knowledge of the defendant and
trustees of the defendant. Nobody had made any disturbance in the possession of
the plaintiff since the last 25 years or more. It was clarified that he was not
a tenant of the suit premises.

 

But the plaintiff claimed
that he was in vacant and peaceful possession of the suit premises since the
last 25 years and by way of adverse possession he was the owner of the said
premises.

 

The Court observed that
admittedly the plaintiff was an orphan and since his childhood was permitted by
the defendant institution to live in the suit premises. He cannot create any
dispute by claiming any ownership of the said premises as he has not acquired
any title. Long possession even of many years or decades could not acquire
(bestow) any rights or interest in the suit premises by the plaintiff. An
orphan can never acquire any interest in the property irrespective of his long
possession. Such possession cannot be protected by a court of law. Such
protection can only be granted or extended to a person who has a valid,
subsisting rent agreement, a lease agreement or a license agreement in his
favour. The plaintiff has acquired no right or interest whatsoever in the suit
property irrespective of his long stay and possession.

 

It was held that the
appellant shall hand over the vacant possession and mesne profit of the
suit premises to the defendant who is admittedly the owner of the property.

 

12. 
General power of attorney holder (GPA) – When no legal practitioner
appears for the principal and the GPA holder undertakes not only the signing of
pleadings but also the job of a legal practitioner, he must necessarily file
the affidavit of the principal authorising him to do so [Civil Procedure Code,
1908; O. 3, R. 2; Andhra Pradesh Civil Rules of Practice and circular orders,
R. 32]

 

Ruhina
Khan and Ors. vs. Abdur Rahman Khan and Ors. AIR 2019, Hyderabad 117

 

The issue was regarding the
nature of the procedure prescribed by Rule 32 which dealt with an agent other
than an advocate appearing for a party and Rule 33 of the Civil Rules of
Practice which dealt only with signing or verification of proceedings by an
agent; and should it be construed to be merely directory or mandatory to the
extent of holding non-compliance therewith to be fatal?

 

It was
observed by the Court that Rule 32(1) was clear w.r.t. its application to a
situation where a party appears as an agent other than an advocate. Therefore,
the said agent would appear for the party in all respects and not merely for
the purpose of signing and verifying pleadings. When the party appears through
an agent other than an advocate, the agent is required, before he appears or
acts in the Court or makes an application thereto, to file the power of
attorney, or written authority, or a properly authenticated copy thereof along
with an affidavit that the said authority, whereby he is empowered to do so, is
still subsisting. In the event of an agent carrying on a trade or business on
behalf of a party without a written authority, an affidavit stating the
residence of his principal; the trade or business carried on by the agent on
his behalf; the connection of the same with the subject matter of the suit; and
that no other agent is authorised to make or do such appearance, application or
act; shall be filed. Rule 32(2) provides that the Judge may thereupon record in
writing that the agent is permitted to appear and act on behalf of the party
and unless and until the said permission is granted, no appearance, application
or act of the agent shall be recognised by the Court.

 

Rule 33 deals with an agent
signing and verifying on behalf of his principal and states that if any
proceeding, which under any provision of law or the Civil Rules of Practice, is
required to be signed or verified by a party but is signed or verified by the
agent, a written authority in this behalf signed by the party shall be filed in
Court, together with an affidavit verifying the signature of the party and
stating the reason for his inability to sign or verify the proceedings and
stating the means of knowledge of the facts set out in the proceedings of the
person signing or verifying the same and that such person is a recognised agent
of the party, as defined by Order 3 Rule 2 CPC, and is duly authorised and
competent to do so.

 

The Division Bench held
that where the GPA holder merely signs the pleadings in a case where the
principal is represented by a legal practitioner, it is sufficient if the Court
satisfies itself that he has the authority to sign such pleadings and the
filing of an affidavit is not mandatory. Any defect in this regard can also be
cured at a later stage by convincing the Court that such GPA holder was duly
authorised by the principal to represent him in the matter. However, in a case
where the GPA holder not only signs the pleadings but also adduces evidence and
advances arguments on behalf of the principal, he would necessarily have to
file an affidavit of the principal affirming that he authorised the GPA holder
to do so.

 

In
view of the above observations, the Court held that Rule 32 of the Civil Rules
of Practice is not mandatory seems to be an oversight as it is Rule 33 which
was held to be not mandatory, but no mention was made of the said Rule in the
concluding paragraph. Rule 32, on the other hand, was clearly held to be
mandatory as the Bench observed that when no legal practitioner appears for the
principal and the GPA holder undertakes not only the signing of pleadings but
also the job of a legal practitioner, he must necessarily file the affidavit of
the principal authorising him to do so.

 

13. Hindu Undivided Family (HUF) – Sale
by karta – Failure to prove legal necessity – Sale not binding on
members of joint family [Civil Procedure Code, 1908; O. 32, R. 1]

 

Sangnath
and Ors. vs. Babu and Ors., AIR 2019 (NOC) 685 (Bom.)

 

The appeal was filed by the
original defendants. The present respondents No. 1 and 2 were the original
plaintiffs. They had filed a suit for partition and separate possession. They
were minors at that time and therefore the suit was filed through their cousin
as next friend. The original defendant is the father of the plaintiffs.

 

It was contended that the
plaintiffs and the defendant are the members of a joint Hindu family. However,
after the wife expired, the father (defendant) did not pay attention to the
family. He got addicted to liquor and ganja and in order to fulfil his
vices, he started selling the joint Hindu family properties. It is stated that
there was absolutely no necessity for the defendant to sell the lands. The sale
transactions were not for legal necessity and they were not binding on the
share of the plaintiffs. The defendant filed a written statement and denied the
statement that the defendant was addicted to liquor and in order to satisfy his
vices, he had sold out the lands.

 

It was
argued that the land which was near a rivulet (nala) was barren and was
not giving any income to the father, therefore he sold it to defendant No. 2.
It was for the necessities of the family. So also a portion of the land was
sold since the father did not have bullocks and other agricultural implements to
cultivate it. Thus, according to defendants No. 2 to 4, the lands had been sold
for legal necessity and those transactions were binding on the plaintiffs.

 

Taking into consideration
the evidence on record and hearing both sides, the Civil Judge, Junior Division
held that the plaintiffs would get 2/3rd share. The first appeal
before the Joint District Judge was dismissed.

 

In the 2nd appeal
before the High Court, heavy reliance was placed on ratio expounding
that karta of the family can sell the property for legal necessity.

 

The
High Court held that casual statements made in the sale deed regarding sale of
the land for ‘necessity’ is not sufficient evidence for the simple reason that
the details of the necessity were not given in the recital of the sale deeds.
Further, there was also no need to challenge the sale deeds for the simple
reason that, though the sale deeds were executed by the defendant No. 1 without
any legal necessity, those sale deeds cannot be said to be binding on the share
of the plaintiffs. Accordingly, the appeal was dismissed.

 

14. 
Secured creditors would have priority over all debts and government dues
[Securitisation and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002; section 35]

 

Kulbir
Singh Dhaliwal vs. UT Chandigarh, AIR 2019 P&H 151

The earlier owner of the
property in question through its Directors had availed of a loan facility in
the amount of Rs. 13.15 crores from respondent No. 3 – Punjab National Bank – against
security by way of equitable mortgage. The respondent bank had got the details
of the secured asset registered. The loan account subsequently became irregular
as the borrowers could not maintain financial discipline and hence the same was
classified as an NPA (Non-Performing Asset). Thereafter, the respondent bank
initiated recovery proceedings under the provisions of the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest Act,
2002 (SARFAESI Act), which culminated in taking over of the possession of the
secured asset. A public auction was fixed at a reserve price of Rs. 11.50
crores vide a notice in which the petitioners emerged as the highest bidders.
After the deposit of the entire bid amount of Rs. 13.92 crores against the
reserve price of Rs. 11.50 crores, physical possession of the property was
handed over to the petitioners by respondent No. 3 (the bank) along with the
sale certificate under Rule 9(6) of the Security Interest (Enforcement) Rules,
2002. It may be emphasised here that there was no mention at all in the public
notice regarding any dues or encumbrances which may have stood against the said
property.

 

When the petitioners and
the authorised officer of the secured creditor approached respondent No. 2
(Sub-Registrar, UT) for registration of the sale certificate under the
Registration Act, 1908 (the 1908 Act), he refused to register the same holding
that the property in question already stood attached by the Government of
Maharashtra u/s 4 and 5(1) of the Maharashtra Protection of Interest of
Depositors (in Financial Establishments) Act, 1999 (the MPID Act). On refusal
of registration of the sale certificate, the petitioners impugned the order by
preferring an appeal u/s 72 of the 1908 Act before the Deputy
Commissioner-cum-Registrar, respondent No. 1, who dismissed the same. It was in
this background that the instant writ petition came to be filed before the High
Court.

 

The question which arose
for consideration was whether the recovery of a secured debt would take
precedence over a crown debt; the issue is no longer res integra.

 

It was observed that a
reading of section 31-B of the Recovery of Debts and Bankruptcy Act, 1993 which
starts with a non-obstante clause, makes it amply clear that the right
of a secured creditor to realise a secured debt shall have priority over all
debts and government dues including revenues, taxes, cesses and rates due to
the Central Government, State Government or Local Authority.

 

Accordingly it was held
that it cannot be over-emphasised that the property in question was auctioned
by the respondent bank to recover its secured debts and the attachment order
issued by the Government of Maharashtra must yield to the rights of the
respondent bank. Therefore, the auction proceedings must be taken to their
logical end and no reason was seen as to why the registration of the sale
certificate be refused to the auction purchasers, i.e., the petitioners.

 

 

ALLIED LAWS

15.  Appeal dismissed – Merger of
the High Court order into the Supreme Court Order. [Constitution of India,
Article 141, 136]

 

Archana
Mishra and Ors. vs. State of U.P. and Ors. AIR 2018 Allahabad 278

 

The
question before the Court for consideration was with respect to whether Dr.
Vishwajeet Singh’s case  and the Full
Bench decision in Heera Lal’s case  have been correctly decided.

 

It
was observed that the decision in Dr. Vishwajeet Singh had been subjected to
challenge before the Supreme Court in Civil Appeal Nos. 6385-6386 of 2010, and
the same was dismissed without any discussion. Hence, it was not in dispute
that if it is ultimately held that the view/opinion expressed by the Division
Bench in Dr. Vishwajeet Singh’s stands confirmed and merged in the order of the
Supreme Court, it would not be necessary for the reference to be addressed on
merits.

 

It
was held by the Court that their unequivocal answer therefore to the issue
framed would be that the decision in Dr. Vishwajeet Singh stood duly
affirmed by the Supreme Court. The said decision consequently merged in the
order of the Supreme Court. The order of the Supreme Court came to be rendered
after grant of leave. Once the decision of this Court stood merged in the order
of the Supreme Court, it would not be legally permissible for this Full Bench
to consider the correctness or otherwise of Dr. Vishwajeet Singh. This Court is
bound by the said order of the Supreme Court irrespective of the absence of a
“speech” or recordal of elaborate reasons on the legal issues which
arose therein. The issue essentially is not one of the Court being faced with a
precedent but primarily of merger. Once, as we have found, the decision of the
Division Bench stood subsumed in the order of the Supreme Court after grant of
leave with a positive affirmation of the view taken therein, it is no longer
open for this Court to revisit the said decision.

 

16.  Benami
Property – Land in name of Family member – Cannot be considered as Benami.
[Benami Transactions (Prohibition) Act, 1988; Section 4]

 

Narendra
Prasad Singh vs. Ram Ashish Singh and Ors. AIR 2018 Patna 205

 

The stand of the appellant was that the claim of the
plaintiff’s title and not the title of the defendants, over the suit property,
was barred u/s. 4 of the Benami Transaction (Prohibition) Act, 1988. It was
observed by the court that such a view could not have been accepted since
acquisition of the land in the name of a member of a family from the joint
family property cannot be regarded as a benami transaction within the meaning
of section 2 of the Benami Transaction (Prohibition) Act, 1988. Benami
transaction has been defined u/s. 2(a) of the Benami Transaction (Prohibition)
Act, 1988 as any transaction in which property is transferred to one person and
a consideration is paid or provided by another person. In the present case, the
consideration has been found to have been provided by the joint family fund
which cannot be treated as fund of another person.

 

It
was therefore held that the said provision does not have any application at all
in the present facts and circumstances. This is also to be noted that the
plaintiff claimed his title purely on the basis of the family arrangement and
not a benamidar and, therefore, the suit cannot be said to be hit by Benami
Transaction (Prohibition) Act, 1988. The said question was answered
accordingly.

 

17.  Partition – Oral Agreement
–Registered document not required. [Registration Act, 1908; S.17]

 

Santosh
Kumar Tiwari and Ors. vs. Meena Bai and Ors. AIR 2018 Chhattisgarh 167


The
plaintiffs had proved that the registered deed was executed amongst the
successors-in interest of Chhedilal and their three brothers namely Ramdulare,
Ramjharokha and Ramnarayan, in which also, such fact was mentioned. The deed
had been duly proved by Santosh Kumar (P.W. 1). Therefore, the evidence led by
all the joint owners and their successors-in-interest is coherent that the oral
partition had taken place amongst four brothers way back in the year 1966-67.
The defendant-Motilal is an outsider. As against common stand taken by all the
shareholders of the property that the partition was effected in the year
1966-67, the defendant/Motilal, except denying such partition, has failed to
place on record any clinching evidence, oral or documentary in nature, to prove
that partition had taken place in the year 1962-63, except suggestions being
given to the witnesses.

 

In
view of the above, the Court held that the learned Trial Court fell in error in
holding that the plaintiffs failed to prove the partition amongst themselves.
It has to be noticed that the factum of partition has been proved from
the oral evidence of Ramnarayan, Ramjharokha and Ramdulare who were three brothers
in the partition proceedings with their fourth brother – Chhedilal. Learned
Trial Court appears to be swayed from the fact that a subsequent deed was not a
registered document. The effect of that document being unregistered would only
be that it would not be inadmissible in evidence as proof of partition,
however, the plaintiffs have led their evidence to prove partition amongst four
brothers. When three out of four brothers have deposed in the Court that they
had partitioned a joint family property amongst themselves in the year 1966-67,
in the considered opinion of this Court, law does not require that it should be
proved only by a registered document and not otherwise. Once there is reliable
oral evidence of partition amongst the joint holders of the property, the law
does not require that it should be only by way of registered deed of partition.

 

18.  Precedent – Mere pendency of
appeal cannot operate as stay on order – Order appealed against holds good.

 

R.K. Ganapathy Chettiar vs. Assistant Commissioner (CT),
Kangeyam  2018 (16) G.S.T.L. 562 (Mad.)

 

In
case of an issue where reliance was place on a certain judgment by the
petitioner, the Learned counsel appearing for the respondent submitted that
writ appeals have been preferred by the State, against the order in the case of
Everest Industries Limited vs. State of Tamil Nadu [2017] 100 VST 158 (Mad),
and the appeals are yet to be numbered.

 

It
was held by the honourable Court that, as on date, the writ appeals filed by
the State challenging the correctness of the decision in Everest Industries
Limited vs. State of Tamil Nadu [2017] 100 VST 158 (Mad), are yet to be
numbered and mere pendency of such appeals cannot operate as stay of orders in Everest
Industries Limited vs. State of Tamil Nadu [2017] 100 VST 158 (Mad).
Therefore as on date, the said order holds good. Thus, on the second aspect
also, the assessment requires to be re-done.

 

19.  Public Interest Litigation –
Encroachment by shopkeepers – Mandatory Directions. [Constitution of India;
Article 226, 227, 21]

 

Manmohan
Lakhera vs. State and Ors. AIR 2018 Uttarakhand 187

 

The
fact of the matter state that despite repeated directions issued the Court,
neither the State Government nor the MDDA nor the Nagar Nigam Dehradun had
taken any effective steps to remove the encroachment from the public
streets/pavements.

 

It was observed
by the honourable Court that the Public streets are for public convenience.
These should be free from encroachment. The citizen must have a free access to
footpaths. The Court can take judicial notice of the fact that the children and
elderly people also use the footpaths. The shopkeepers, firstly, are permitted
to construct temporary khokhas and, thereafter, they make them pucca. There are
permanent bottlenecks as noticed in the report, and highlighted by us. The
footpaths are being permitted to be used for placing big generators causing
noise and air pollution. The shopkeepers are permitting the vegetable and fruit
vendors to sit in front of their shops. The residential premises have been
converted into commercial complexes, more particularly, in the oldest colony
i.e. Nehru Colony. Similar is the plight of other localities. There is chaos
all over Dehradun. The traffic moves at snail’s pace. The public authorities
cannot be oblivious to the loss of precious time of commuters. The Court can
take judicial notice of the fact that the roads, encroached upon with impunity
with the connivance and collusion of the authorities, are also ridden with
garbage. Every citizen has a right to access to footpaths, roads, parks and
public utilities under Article 21 of the Constitution of India. It is the duty
cast upon the MDDA and the Nagar Nigam to keep the roads clean. Recently, there
was a strike by the Safai Karamchari which further deteriorated the position.
There was no alternative plan available with the Nagar Nigam and MDDA. The
garbage was not removed from the streets for days together. The respondents are
putting wool over the eyes of the Court by giving assurances from time to time
that they are doing their best to remove the encroachment, but till date,
Dehradun town is still suffering from this menace. The decision was taken by
the High Power Committee on 10th July 2014. We are in 2018. Since
then, the things have worsened instead of improving. The simple reason for
encroachments, extension of shops and unauthorised construction is
manifestation of the human greed with the collusion of functionaries of
government and municipal bodies. The employers did not take any disciplinary action
against the persons responsible for keeping the cities and towns free from
encroachment.



In
view of the same, The Municipal Corporation/MDDA/State functionaries are
directed to remove all the unauthorised encroachment on public
footpaths/streets/roads/pavements including unauthorised constructions made
over them within a period of four weeks from today by using its might.

 

The
Chief Secretary to the State of Uttarakhand is directed to initiate
disciplinary proceedings against the officers/officials, during whose tenure,
government land/municipal land/forest land have been encroached, with impunity,
by the unscrupulous people, and other related parties.

 

It was also mentioned that in case of
non-compliance, he shall be personally liable for contempt as well as
disciplinary proceedings.

Allied Laws

21. 
Demerger – No prior approval taken before demerger to transfer the lease
rights – Transfer fee rightly charged. [Companies Act, 1956]

 

Sections 391 and 394 – Allenby Garments Pvt. Ltd. and Ors. vs. West Bengal Industrial
Development Corporation Ltd. and Ors. AIR 2018 (NOC) 527 (CALcutta)

 

The
facts of the case are that with a view to promoting garment trade, the Garment
Corporation undertook a project called Garment Park Module. It invited
applications from interested parties for allotment of commercial space (module)
and car parking space in the project. A company by the name of Eastern Metalik
applied for it.

 

Physical
possession of the module was given to Eastern Metalik and possession
certificate dated 11 September, 2008 was issued by the Corporation in favour of
Eastern Metalik. Eastern Metalik filed an application for its demerger under
the provisions of the Companies Act, 1956. The scheme of demerger was sanctioned
by the Court by reason whereof the garment division of Eastern Metalik stood
transferred to and vested in Allenby. Thereafter, Allenby wrote a letter to the
Managing Director of the Corporation recording the factum of demerger of
Eastern Metalik and vesting of the garment division of Eastern Metalik in
Allenby and requesting for effecting registration of the said module in favour
of Allenby. However, the Corporation had decided to register the said module
along with car parking space in the name of Allenby subject to payment of Rs.
30.34 lakh as transfer fee to the Corporation.

 

A Writ
petition was filed stating that the additional amount of transfer fee charged
was illegal and arbitrary.

 

The
Court observed that the transfer processing fee of 5% of the initial sub-lease
premium would be applicable where the transfer of the sub-lease is made with
prior permission of the Corporation. In the present case, admittedly no prior
consent was taken by Eastern Metalik before going through the process of demerger
and transferring its garment division to Allenby. No prior permission of the
Corporation was asked for or obtained before putting Allenby in physical
possession of the Module in question. The scheme of demerger is not binding on
the Corporation.

Since
Allotment does not give any indefeasible right to have a lease/sub-lease
executed in favour of the allottee, the allotment of the module which was in
favour of Eastern Metalik, Allenby cannot be called as an allottee. Hence,
neither Eastern Metalik nor Allenby can be presently said to be a sub-lessee in
respect of the said module.

 

It was
held that, although Allenby might have stepped into the shoes of Eastern
Metalik in so far as the garment division of Eastern Metalik is concerned by
reason of demerger, the fact remains that Eastern Metalik and Allenby are two
separate legal entities and it cannot be said that Allenby is an allottee due
to the reason of demerger. Since specific approval was supposed to be taken,
which was not done in the present case, Allenby is rightly charged the transfer
fees.

 

22. 
Gift Deed – Attestation by two witnesses mandatory. [a. Hindu Succession
Act, 1956;

b. Transfer of Property Act, 1882]

 

a. Section 14, b. Section 123  – Radha Sah vs.
Girja Devi AIR 2018 PATNA 115

 

The
plaintiffs filed a case against the appellant for declaration that the
registered deed of gift executed by the plaintiff’s husband in favour of the
defendant and registered deed of gift executed by the plaintiff’s husband’s
first wife in favour of the defendants in respect of a property were void. The
plaintiffs alleged that the said transaction i.e. the deeds of gift to transfer
of property does not bind the plaintiffs.

 

The
main contention of the plaintiffs was that the property in question is a co-parcenary
property and such property was alienated in the form of gifts against the
mandate of law and that the gift deeds were sham and void.

 

It was
observed by the court that the property acquired by the plaintiff’s husband’s
first wife was a self-acquired property in terms of section 14 of the Hindu
Succession Act, 1956. Hence, she could alienate the property. It was also
observed that there was no bar even on a co-parcener and he/she can make a gift
of his undivided interest in the coparcenary property to another coparcener or
to a stranger with the prior consent of all other coparceners. Such a gift
would be quite legal and valid.

 

The
court held that property which the plaintiff’s husband’s first wife had gifted
was her self-acquired property. Hence, she was competent to gift the same.
However, the deed of gift executed by Tulni Devi is not according to law or as
required by section 123 of the Transfer of Property Act as it is not attested
by two witnesses. In view of the aforementioned defect, the said deed of gift
stood void and is not executed according to law.

 

23.  Mesne Profits – Tenant did not vacate the
building for 18 years – Was liable to pay damages at the rate of Rs. 5/- per
square feet per month with a 10% escalation. [Transfer of Property Act, 1882]

 

Section
106 – Badri Vishal vs. The Kshatriya Rajput Sabha Kutbiguda, Hyderabad AIR 2018
(NOC) 516 (UTR.)

 

In the
present case, the defendant-tenant had not vacated the property for a period of
18 years even after the notice of termination from the lessor.

           

The
Court observed that a tenancy that was terminated in the year 1999 has still
not resulted in the tenant vacating the building. The tenant is continuing to
enjoy the building by paying rent at old rate after 18 years also. The Hon’ble
Supreme Court of India in various cases talks of the need to award damages etc.,
as per market value and mesne profits to offset the delays. Even while granting
injunction, in one case, the need for imposing a condition to give mesne
profits and market rent while granting injunction has also been stressed by the
highest court of law. The law which admittedly is not static should change and
recognise the need for modification to suit the times. Therefore, to offset
legal delays; to protect an innocent landlord and to discourage a clever tenant
the Court has to award damages for use and occupation at the prevalent/current
market rents. This will deter unscrupulous tenants from clinging onto the
property for years together, taking advantage of the period in which the matter
is pending in the Court. Even if the delay is genuine, there will be a
realistic amount realized by awarding damages at current rates.

 

The
Court held that the defendant is liable to pay damages for use and occupation
of the premises @ Rs. 5/- per square feet per month for the suit property from
the date of the suit till the date of this order along with escalation of 10%
per annum as is being paid by all other tenants in the building and as noticed
by the lower Court.

 

24. 
Succession of Property – Property in India – Can be inherited by a
foreign national. [Succession Act, 1925]

 

Section 2 – B. C. Singh
vs. J.M. Utarid AIR 2018 SUPREME COURT 2374

 

Plaintiff,
an Indian-Christian had purchased a property in India. However, the plaintiff
died leaving no issue. The question arose as to who was entitled to inherit the
property.

The
plaintiff had invited the defendants to stay at the property that he had
purchased. After the death of the plaintiff, the legal representatives of the
deceased contested in the court that the defendants were only licencees and the
license was terminated, and were not the owners or co-owners of such property.
The contention of the defendants was that they were the relatives of the
plaintiff and hence, the property was to devolve upon the defendants.

 

There
was an alternate contention that even if the defendants were related to the
plaintiff, they could not succeed since the plaintiff had a sister and that she
would be a preferential heir as compared to the defendants.

 

The
defendants argued that the sister of the plaintiff would not be entitled to the
property since she was a Pakistani National.

 

The
Court held that the Indian Succession Act, 1925 would be applicable to the
succession of the property left by the plaintiff. This Act does not bar the
succession of property of any Indian Christian by a person who is not an Indian
national. There is no prohibition for succession of the property in India by a
foreign national by inheritance.

 

25. 
Will – Testator blind – No restriction of execution of a Will by a blind
person. [Indian Succession Act, 1925]

 

Section 59 – Chhotey Lal
and Ors. vs. Ram Naresh Singh and Ors. AIR 2018 (NOC) 621 (ALLahabad)

 

One of
the issues was that the unregistered Will set up by the respondent was
surrounded with doubt and uncertainty particularly on account of admission that
the testator was blind, illiterate and was of extreme old age and hence the
Will was not a genuine document and was not executed properly.

 

The
Court observed that where a document is registered, there is a general
presumption that the same has been executed and registered in accordance with
law, unless the presumption is rebutted by placing reliable and cogent evidence
but where the document is unregistered and creates suspicion on the face of it,
the propounder of the Will is required to prove its due execution and in such
cases the duty of the court also increases so as to satisfy itself that the
Will is not surrounded by any suspicious circumstances and has been executed by
the executant out of his or her freewill and also that the executor was in free
mental condition at the time of execution of Will.

 

The
Court held that section 59 of the Indian Succession Act provides, that every
person of sound mind not being a minor may dispose of his property by way of
Will. It has further been clarified that a married woman may also dispose of by
Will, any property which she could transfer by her own act during her life.

 

It is also provided
that the persons who are deaf, dumb or blind are not incapacitated for making a
Will if they are able to know what they do by it. Thus, there is no restriction
on execution of a Will by a blind person, provided, of course, that he is able
to know what he is doing.

 

 

ALLIED LAWS

5. Attachment –
Bank accounts of directors cannot be attached when company is in default for
payment of taxes [Central Goods and Services Tax Act, 2017; Section 2, Section
89]

 

H.M. Industrial Pvt. Ltd. vs. Commissioner
of CGST and Central Excise 2019 (22) G.S.T.L. 13 (Gujarat)

 

By a provisional attachment order u/s. 83,
the bank accounts of the directors of the petitioner-company were attached. The
question was whether the bank accounts of the directors of the company can be
attached?

 

Section 83 of the CGST Act shows that it
empowers the Commissioner to attach provisionally any property, including bank
accounts, belonging to the taxable person. The term “taxable person”
has been defined under sub-section (107) of section 2 of the CGST Act to mean a
person who is registered or liable to be registered u/s. 22 or u/s. 24 of that
Act.

 

In the present case, it was the
petitioner-company which was registered under the provisions of the CGST Act
and was, therefore, the taxable person. Under such circumstances, provisions of
section 83 could not have been invoked against the directors of the
petitioner-company.

 

It was argued by the respondents (i.e.
Commissioner of CGST) that section 89 of the CGST Act permits recovery of the
dues of a private company from its directors in case such amount cannot be
recovered from the company. However, the Court dismissed the arguments of the
respondent on the grounds that section 89 of the Act relates to recovery of any
tax, interest or penalty due from a private company in respect of supply of
goods or services and hence is not applicable to the current case.It was
further mentioned that even if such amount cannot be recovered from the private
company, the directors of the company do not ipso facto become liable to
pay such amount and it is only if the director fails to prove that non-recovery
cannot be attributed to any gross neglect, misfeasance or breach of duty on his
part in relation to the affairs of the company, that the same can be invoked.

 

In view of the same, it was held that the
attachment of the bank accounts in the present case was without any authority
of law and hence the bank accounts were directed to be released.

 

6. Attachment – Provisional attachment immediately after issuance of
show-cause notice – Department asked to explain the urgency – Bank accounts
released [Gujarat Goods and Services Tax Act, 2017; Section 83]

 

Mono Steel (India) Ltd. vs. State of
Gujarat 2019 (22) G.S.T.L. 184 (Gujarat)

 

Show-cause notices were issued and
immediately thereafter, the order of provisional attachment was made. The bank
statement showed huge cash reserves lying at the disposal of the company with
the banks concerned which were attached.

 

It was observed by the Court that the
assessee was not a fly-by-night operator, i.e., the assessee was not someone
who could not be trusted and would desperately try to avoid the payment of the
taxes due. This observation was due to the reason that the assessee had paid
duty to the tune of more than Rs. 100 crore in the previous year. Under such
circumstances, the respondent was asked to explain the expediency and rationale
behind ordering attachment of all the bank accounts.

 

It was held that the bank accounts were to
be released subject to the petitioner/assessee maintaining a certain amount in
one of its bank accounts.

 

7. Courts,
Tribunals – Duty to exercise power in accordance with law though the litigant
does not point out the relevant principles and provisions of law

 

Champa Lal vs. State of Rajasthan and Ors.
(2018) 16 SCC 356

 

The litigation revolves around two
notifications issued by the state government.

 

It was observed by the Court that various
parameters mandatorily required were not taken into consideration in the two
above-mentioned notifications. Therefore, it was observed that the two
notifications cannot be treated as notifications.

 

It was held by the Hon’ble Court that,
unfortunately, this aspect had not been noticed by the High Court obviously
because it was not brought to its notice. The fact that a litigant before the
Court does not point out the relevant principles and provisions of law does not
prevent the Court from examining the issues involved in the lis, more
particularly, when the process which is the subject matter of litigation before
the Court is inconsistent with the mandate of the Constitution. It is a settled
principle of law that Courts are bound to take note of the Constitution and the
laws.

 

8. Hindu law –
Inheritance of property – Individual property and not ancestral property or
joint Hindu family property [Hindu Succession Act, 1956, Section 8]

 

Jagat Ram vs.
Rajo AIR 2019 Punjab and Haryana 38

 

The issue in the present case was whether
the property inherited by Class-I heir Mr. P (Father) from his father (Mr. T)
as per section 8 of the Hindu Succession Act, 1956 would be his (Mr. P’s)
individual property or would it be ancestral property or joint Hindu family
property?

 

It was observed by the Court that the
property came to Mr. P u/s. 8 of the Hindu Succession Act, 1956. Once, on the
death of a common ancestor, property has devolved upon his Class-I heirs or
Class-II heirs as per section 8 of the Hindu Succession Act, 1956, such heirs
would become the absolute owners of the property and such property would not be
either joint Hindu family or coparcenary or ancestral property in the hands of
such legal heirs, in absence of any other evidence to this effect.

 

It was held that, in the present case, the
entire property which came to be inherited by Mr. P (Father) from Mr. T (Mr.
P’s Father) is individual property of Mr. P (Father).

 

9. Unregistered sale agreement – Admissible in evidence for specific
performance of a contract [Registration Act, 1908 – Section 17 and Section 49]

 

Sanjeeva Shetty vs. B. Chittaranjan Rai and
Ors. AIR 2019 Karnataka 36

 

The Trial Court permitted to tender the
unregistered agreement of sale as evidence in a suit for specific performance
of the contract.

 

It was observed that proviso to section 49 of
the Registration Act, 1908 reads as under:

“Provided that an unregistered document
affecting immovable property and required by this Act or the Transfer of
Property Act, 1882 (4 of 1882), to be registered may be received as evidence of
a contract in a suit for specific performance under Chapter II of the Specific
Relief Act, 1877 (3 of 1877) or as evidence of any collateral transaction not
required to be effected by registered instrument.”

 

In appeal before the High Court, it was held
that if section 17(1A) and proviso to section 49 of the Registration Act, 1908
are read conjointly, it is evident that there is no prohibition under proviso
to section 49 of the Registration Act, 1908 for receiving an unregistered
document as evidence of a contract in a suit for specific performance under
Specific Relief Act, 1877. In view of the clear statutory proviso in this
regard, it was held that the Trial Court had rightly admitted the unregistered
document in a suit for specific performance of the contract.

ALLIED LAWS

 

15 Deficiency of service – Delay in obtaining
occupation certificate – Reasonable cause for termination of agreement –
Eligible for refund with interest [Consumer Protection Act, 1986, S. 2(1)(g)]

 

Pioneer Urban Land and
Infrastructure Ltd. vs. Govindan Raghavan and Ors. AIR 2019 Supreme Court 1779

 

A builder entered into an
agreement with a purchaser to deliver the possession of the flat along with the
occupancy certificate within 39 months from the date of excavation, with a
grace period of 180 days. The builder, however, failed to apply for the
occupancy certificate as per the stipulations in the agreement.

 

The purchaser filed a
consumer complaint before the National Commission alleging deficiency of
service on the part of the builder for failure to obtain the occupancy
certificate and hand over possession of the flat. Admittedly, the
appellant-builder offered possession after an inordinate delay of almost three
years (on 28th August, 2018). On account of the inordinate delay,
the respondent (flat purchaser) had no option but to arrange for alternate
accommodation in Gurugram. Hence, he could not be compelled to take possession
of the apartment after such a long delay.

 

It was observed that the
builder had obtained the occupancy certificate almost two years after the date
stipulated in the agreement with the purchaser. As a consequence, there was a
failure to hand over possession of the flat within a reasonable period. The
purchaser has made out a clear case of deficiency of service on the part of the
builder. The purchaser was justified in terminating the agreement by filing the
consumer complaint and cannot be compelled to accept the possession whenever it is offered by the builder. The purchaser was
legally entitled to seek refund of the money deposited by him along with
appropriate compensation.

It was held that the
builder failed to fulfil his contractual obligation of obtaining the occupancy
certificate and offering possession of the flat to the purchaser within the
time stipulated in the agreement or within a reasonable time thereafter. The
purchaser could not be compelled to take possession of the flat, even though it
was offered almost two years after the grace period under the agreement
expired. During this period, the purchaser had to service a loan that he had
obtained for purchasing the flat by paying interest @ 10% to the bank. In the
meanwhile, the purchaser also located an alternate property in Gurugram. In
these circumstances, the purchaser was entitled to be granted the relief prayed
for, i.e., refund of the entire amount deposited by him with interest.

 

16 Dishonour of cheques – Cheques issued
in pursuance of agreement to sell is also a duly enforceable debt or liability
[Negotiable Instruments Act, 1881, S.138]

 

Ripudaman Singh vs.
Balkrishna AIR 2019  Supreme Court 1625

 

The issue pertained to
dishonour of cheques for part payment of sale consideration. Two people sold
their agricultural land to one Mr. X (respondent). Part payment was already
done by Mr. X. Two post-dated cheques were issued to the sellers. However, on
the due date the cheques were returned unpaid with the remark ‘insufficient
funds’. Legal notices were issued and complaints were initiated u/s. 138 of the
Negotiable Instruments Act, 1881 before the judicial magistrate. The magistrate
dismissed the applications seeking discharge of the complaint cases and charges
were framed u/s. 138. The respondent then filed a petition u/s. 482 before the
High Court.

 

The High Court held that
the cheques had not been issued for creating any liability or debt but for the
payment of balance consideration and hence the respondent did not owe any money
to the complainants. Accordingly, the complaint u/s. 138 was quashed.

 

On appeal, the Supreme
Court held that the cheques were issued under and in pursuance of the agreement
to sell. Though it is well settled that an agreement to sell does not create
any interest in immovable property, it nonetheless constitutes a legally enforceable
contract between the parties to it. A payment which is made in pursuance of
such an agreement is hence a payment made in pursuance of a duly enforceable
debt or liability for the purposes of section 138. Hence, the order quashing
the complaint was set aside.

 

17 Hindu Law – Right of daughter to
coparcenery property – Amendment not applicable to cases where the transfer of
such property had already taken place [Hindu Succession Act, 1956, S.6]

 

Jayaraman Kounder vs.
Malathi and Ors. AIR 2019 Madras 113

 

A property which was
inherited from the parents was sold by the son and grandchildren on 2nd
June, 1994. All the children were male. Thereafter, the Hindu Succession Act
got amended wherein section 6 brought the daughters on par with the sons as
coparceners.

 

After the amendment in the
Hindu Succession Act, the daughters filed a suit against the father / brothers
in connection with the sale of property which was done 18 years prior to the
amendment.

 

The High Court while
answering the question whether the sale deed dated 2nd June, 1994
executed in favour of the appellant by the father and brothers of the first and
second respondents / sisters is valid or whether, by virtue of becoming
coparceners, they are entitled to set aside the same even after getting a
decree of partition; the Court held that the proviso to sub-section 4 of
section 6 of the Hindu Succession Act made it clear that the properties which
have been alienated, including through partition, will be affected by virtue of
the amendment which came into force on 20th December, 2004.
Admittedly, the properties were sold by the father and brothers as early as on
2nd June, 1994. De hors the theory of the Will, the property
was already alienated on 2nd June, 1994. Therefore, the properties,
which had been sold to the appellant are exempted from the amendment.

 

18 Power of Attorney
holder – Only a right to appear but not plead [Advocates Act 1961; S.29; High
Court (Original Rules) 1914, Ch.1 R.5]

 

Usha Kanta Das and Ors. vs. Sefalika Ash AIR 2019 Calcutta 145

The issue before the Court
was whether appearance, application or acting by a recognised agent of a party
would include within such scope the right to plead and argue before a court of
law as defined in rule 2 of order III?

 

In the present case, Mr. N
admittedly was a power of attorney holder on behalf of the caveatrix and claims
a right to argue the case of the caveatrix, including examining witnesses in
the proceedings on the basis of the authorisation arising from the power of
attorney.

 

It was observed that three
propositions emerge: first, order III rule 1 specifically excludes the
expression ‘plead’ from the purview of ‘appearing’ or ‘acting’. The expression
‘plead’, on the other hand, arises from the definition of ‘pleader’ u/s. 2(15)
of the CPC. Second, advocates, vakils and attorneys of a High Court have
been specifically included in the class of those who are entitled to plead for another before a court. Third, ‘pleading’ as an
exclusive domain has been formalised under chapter I rule 1(i)(a) of the
Original Side Rules which has specifically excluded ‘pleading’ from ‘acting’.

 

It was held that only a
special class of persons, namely, advocates enrolled under the Advocates Act,
1961, have been authorised to plead and argue before a court of law. It should
further be noted that the ‘special reason’ of permitting ‘any other person’
under rule 5 of chapter 1 of the Original Side Rules relates only to appearance
and not pleading.

 

19 Surety /
Guarantor – Liability co-extensive with original borrower [Contract Act, 1872;
S.128]

 

Bharatbhai Sagalchand
Thakkar vs. State of Gujarat AIR 2019 Gujarat 81

 

A co-operative society had
advanced money to one of its members where two guarantors had also given surety
for the same. Later, the original borrower defaulted in payment of the loan. A
question for consideration was that since the loan was disbursed in favour of
the original borrower, whether there is a duty cast upon the co-operative
society or the bank, as the case may be, first to recover the loan advanced to
the borrower and then to take steps against the guarantor or steps may be taken
against anyone?

 

It was held that the
liability of a guarantor is co-extensive with that of the original borrower. It
is always open for the co-operative society to first proceed against the guarantor for
the recovery of the loan amount. It is not necessary that the co-operative
society should first go after the original borrower and only thereafter proceed
against the guarantor.

ALLIED LAWS

20. Additional Evidence – Translated document would not amount to
additional Evidence. [Civil Procedure Code, 1908; Or. 41 R. 27]

 

Chandreshwar Bhuthnath Devasthan vs. Baboy Matiram
Varenkar  (2018) 12 Supreme Court Cases
548

 

The Defendant
in support of the title had filed certain documents in Portuguese language in
trial court. The English translation of the said document was submitted before
the First appellate court. The first appellate court in para 43 of its judgment
observed that there was no application filed under the provisions of Order XLI
Rule 27 of the Code of Civil Procedure, 1908 (in short ‘the CPC’) for producing
the additional translation of the original document. As such translation could
not be taken on record prayer had been disallowed for taking English version on
record, which the High Court upheld.

 

It was held
that the translated version of the already filed document could not be said to
be constituting additional evidence as the original document was already on
record of the trial court. It was thus in order to facilitate the just decision
of the matter and to enable the court to read the document, its translated
version had been filed which ought to have been taken on record without any
demur by the court below. Interest of justice required it to be taken on record
being document recording title. Accordingly, the matter was set aside to the
first appellate authority to re-assess the evidence taken into consideration.

 

21. Conditional Gift – Cancellation during lifetime is held to be
proper. [Transfer of Property Act, 1882; Section 122, 123]

 

S. Sarojini Amma vs. Velayudhan Pillai Sreekumar AIR 2018 Supreme Court
5232

 

In the facts of
the case, in expectation that, Respondent would look after Appellant and her
husband and also for some consideration, appellant executed a purported gift
deed in favour of Respondent. Gift deed clearly stated that, gift would take
effect after death of Appellant and her husband.

 

It observed
that a conditional gift with no recital of acceptance and no evidence in proof
of acceptance, where possession remains with the donor as long as he is alive,
does not become complete during lifetime of the donor. When a gift is
incomplete and title remains with the donor the deed of gift might be
cancelled. Moreover, a conditional gift only becomes complete on compliance of
the conditions in the deed.

 

It was held
that, in the present case, since the appellant applied for cancellation before
the death of the appellant, there was no completed gift of the property in
question by the Appellant to the Respondent and the Appellant was within her
right in cancelling the deed.

 

22. Consumer – Person purchasing goods for self employment is considered
as a ‘consumer’. [Consumer Protection Act, 1986; Section 2(1)(d)]

 

Paramount Digital Color Lab and Ors. vs. Agfa India Pvt. Ltd. and Ors.
AIR 2018 Supreme
Court 3449

 

Complaint was
filed where the State Commission directed Respondents to pay compensation on
account of loss, mental and physical torture and expenses of Appellants. Appeal
was filed by Respondents which was allowed on ground that Appellants should not
be considered as consumers.

 

The facts show
that the appellants being unemployed graduates decided to start a business of
photography in partnership for self-employment and for their livelihood. For
such purpose, they purchased a developing and printing machine which eventually
failed to work due to a defect in a pre-loaded software. A contention was made
by the respondents that the Appellants do not come under the definition of
‘Consumer’ under the Consumer Protection Act, 1986, since the appellant
intended to use the goods for ‘Commercial Purposes’, which the ‘Act’
specifically prohibits.

 

It was observed that the point to be considered was whether the
Appellants had purchased the machine in question for “commercial
purpose” or exclusively for the purposes of earning their livelihood by
means of “self-employment”.

 

It was held by
the Hon’ble Supreme Court that the Appellants purchased the machine for their
own utility, personal handling and for their small venture which they had
embarked upon to make a livelihood. The same is distinct from large-scale
manufacturing’ or processing activity carried on for huge profits. There is no
close nexus between the transaction of purchase of the machine and the alleged
large-scale activity carried on for earning profit. Since the Appellants had
got no employment and they were unemployed graduates, that too without
finances, it is but natural for them to raise a loan to start the business of
photography on a small scale for earning their livelihood. Accordingly, the
appeals were allowed.

 

23. Hindu Law – Under the principles of prestine Hindu Law, daughters
would not inherit properties of their father if there are male survivors and
widows. [Hindu Succession Act, 1956; Section 14]

 

Kunnath Narayani and Ors. vs. Kunnath Kochan and Ors. AIT 2018 Kerala
141 Full Bench

 

There was a
difference of opinion between the different schools of Hindu law as to the
nature of the right that would be inherited by a daughter. The Courts in Bengal
and Madras have consistently decided in a series of decisions that the daughter
takes only a qualified estate, though the courts of Bombay have taken the view
in some cases that the daughter inherits the property absolutely. Where the
daughter succeeds to the estate of the father in the absence of male survivors
under the principles of pristine Hindu law, the estate would be a qualified one
and the same would certainly ripen into an absolute one by virtue of section 14
of the Act. Hence the full bench was constituted in order to resolve such
issue.


Before the Full
bench, the facts stated that the Plaintiff is the sister of the defendants. The
suit was filed raising the contentions that the suit property belonged to the
father of the parties, Perachan, who died prior to enforcement of the Hindu
Succession Act. The deceased was survived by his wife, his sons, the defendants
and his daughters; they contended that since the plaintiff (daughter) and her
sister were unmarried, they acquired limited ownership in the suit properties
on the death of their father; they also contended that the said limited
ownership became absolute ownership by virtue of section 14 of the Act; further
they contended that the plaintiff’s sister died unmarried and issueless on
10-9-1972; that the mother died on 22-8-1985 and that since the plaintiff’s
sister and mother are survived by the plaintiff and defendants, the plaintiff
is entitled to l/3rd share over the suit properties which are in
joint possession of the plaintiff and defendants. As defendants did not accede
to the demand of the plaintiff to partition the property, the suit was laid.

 

Defendants
contested the suit contending mainly that they being the male children of
Perachan (father), the suit properties devolved on them exclusively on the
death of their father in terms of the principles of Hindu Mitakshara Law
applicable to them and they are in exclusive possession of the same.

 

The Full bench
held that Hindu Woman’s Right to Property Act was introduced in circumstances
to give better rights to woman in respect of property. However, said statute
only applies to Hindu widows and not to other Hindu females. Rights to Hindu
females are governed by principles of Hindu Law till the Act came into force.
Under the principles of Mithakshara Law, self-acquired properties and separate
properties of the Hindu male devolves in the heirs by succession and not to his
coparceners. But, daughter, mother and to grandmother were recognised as heirs
only to one who died without male issues. As regards order of succession among
them, daughter does not inherit until all widows are dead and gone. Under
principles of Hindu Law, daughters would not inherit properties of their father
if there are male survivors and widows. In case where daughter succeeds to
estate of father in absence of male survivors under principles of Hindu Law,
estate would be qualified one and same would certainly ripen into absolute one
by virtue of section 14 of Act.




In the facts of the present case, the plaintiff being the daughter of
Perachan was not covered by the Hindu Women’s Rights to Property Act. The Court
held that as the plaintiff was unmarried at the time when the succession
opened, she had only a right to claim maintenance out of the income from the
properties till her marriage. When the plaintiff has not acquired any right in
the property, as explained in the various decisions of the Apex Court and High
Courts referred to in the case, the application of section 14 of the Act does
not arise in her case.

 

24.  Partnership Firm – Properties allotted to
Partners vide a valid dissolution deed – Transfer not valid if no valid deed of
Conveyance. [Partnership Act, 1932; Section 48, 14; Registration Act, 1908;
Section 17(1)]

 

State of Kerala and Ors. vs. V.D. Vincent AIR 2018 Kerala 199

 

The facts of the case show that there were partners in a Firm who were
entitled to a transfer of registry of the properties accruing to them
consequent to the dissolution of the Firm, without there being a registered
document, transferring the interest of the partner, who had the ownership of
the property, prior to it being brought into the stock of the Firm.

 

It was observed that a dissolution deed, that merely allocates items of
immovable properties to a partner, proportionate to his share in the assets of
the firm without conveying title of the said property to him, does not confer
on the said partner a right to obtain mutation of the property in his name,
under the Transfer of Registry Rules.

 

It was held that only a
valid deed, duly registered, can convey the title over immovable property to
the writ petitioners, and it is only thereafter that they can seek a transfer
of registry in respect of the said items of immovable property.   

 

 

ALLIED LAWS

20. Securitisation
and Reconstruction of Financial Assets and Enforcement of Security Interest
(SARFAESI) Act, 2002, sections 2(c) and 5(c), Banking Regulation Act, 1949,
sections 5(b) and 6(1) – Co-operative banks – Definition of ‘banks’ – SARFAESI
Act – Power of the Central Government to legislate

 

Pandurang
Ganpati Chaugule vs. Vishwasrao Patil Murgud Sahakari Bank Limited; Civil
Appeal No. 5674 of 2009 (SC); Date of order: 5th May, 2020

Bench: Arun
Mishra J., Indira Banerjee J., Vineet Saran J., M.R. Shah J., Aniruddha Bose J.

 

FACTS

A question
arose with respect to the legislative field covered by Entry 45 of List I, viz.
‘Banking’ and Entry 32 of List II of the Seventh Schedule of the Constitution
of India, consequentially the power of the Parliament to legislate and the
applicability of the SARFAESI Act to co-operative banks.

 

HELD

The Supreme Court held that the
co­-operative banks under the State legislation and multi­-state co-­operative
banks are ‘banks’ u/s 2(1)(c) of the SARFAESI Act and while state laws might
regulate co-operative societies regarding their incorporation, regulation and
winding up, the Parliament was competent to enact laws to regulate their
banking function.

 

Further,
recovery is an essential part of banking; as such, the recovery procedure
prescribed u/s 13 of the SARFAESI Act, a legislation relatable to Entry 45 List
I of the Seventh Schedule to the Constitution of India, is applicable.
Parliament has legislative competence under Entry 45 of List I of the Seventh
Schedule of the Constitution of India to provide additional procedures for
recovery u/s 13 of the SARFAESI Act with respect to co-operative banks.

 

21. Covid-19 –
Period of limitation – Applicable to Arbitration & Conciliation Act, 1996,
and Negotiable Instruments Act, 1881

Suo Motu
Writ Petition by the Hon’ble Supreme Court; Suo Motu Writ Petition No. 3
of 2020 (SC); Date of order: 6th May, 2020

Bench: Chief Justice S.A. Bobde, Deepak
Gupta J., Hrishikesh Roy J.

Counsel: K.K. Venugopal, Tushar Mehta

 

FACTS

The Hon’ble
Supreme Court had in the same petition vide order dated 23rd
March, 2020 held that to ease the difficulties faced by the litigants and their
lawyers across the country in filing their petitions / applications / suits /
appeals, irrespective of the limitation prescribed under the general law or
Special Laws whether condonable or not, shall stand extended w.e.f. 15th
March, 2020 till further order/s to be passed by the Court in the present
proceedings. A clarification was sought with respect to the applicability of
the order to the Arbitration and Conciliation Act, 1996 and the Negotiable
Instruments Act, 1881.

 

HELD

The Supreme
Court has clarified that all periods of limitation prescribed under the
Arbitration and Conciliation Act, 1996 and u/s 138 of the Negotiable
Instruments Act, 1881 shall be extended with effect from 15th March,
2020 till further orders.

 

It further held
that in case the limitation has expired after 15th March, 2020, then
the period from 15th March, 2020 till the date on which the lockdown
is lifted in the jurisdictional area where the dispute lies or where the cause
of action arises, shall be extended for a period of 15 days after the lifting
of the lockdown.

 

22. Partnership Act, 1932, sections 37 and 42 – Partnership firm – Only
two partners – Retirement of one partner – Dissolution – Accounts to be settled
accordingly

Guru Nanak Industries vs. Amar Singh
(deceased) through LR

Civil Appeal No. 6659-6660 of 2010 (SC);
Date of order: 26th May, 2020

Bench: Sanjiv Khanna J., N.V. Ramana J.,
Krishna Murari J.

 

FACTS

The firm had two partners and one of them
agreed to retire. The dispute arose as to whether the same amounted to ‘dissolution of a partnership firm’ or ‘retirement of a partner’ as
the same would have a direct bearing on the accounting treatment for settling
of the accounts.

 

HELD

The Supreme Court held that there is a clear
distinction between ‘retirement of a partner’ and ‘dissolution of a partnership
firm’. On retirement of the partner, the reconstituted firm continues and the
retiring partner is to be paid his dues in terms of section 37 of the
Partnership Act. In case of dissolution, the accounts have to be settled and
distributed as per the mode prescribed in section 48 of the Partnership Act. In
the present case, there being only two partners, the partnership firm could not
have continued to carry on business as a firm. A partnership firm must have at
least two partners. When there are only two partners and one has agreed to
retire, the retirement amounts to dissolution of the firm.

 

23. Indian
Evidence Act 1872, sections 65 and 66 – Wills – Existence of a Will – Secondary
evidence to establish its existence

 Jagmail Singh vs. Karamjit Singh; Civil
Appeal No. 1889 of 2020 (SC); Date of order: 13th May, 2020 Bench: Navin Sinha J., Krishna Murari J.

 

FACTS

During the pendency of a land dispute, an
application under sections 65 and 66 of the Evidence Act was moved by the
appellants seeking permission to prove a copy of a Will dated 24th
January, 1989 by way of secondary evidence. The application was made on the
ground that the said original Will was handed over by the appellants to revenue
officials for sanctioning the mutation in their favour. The revenue officials
were issued notice for production of the original Will dated 24th
January, 1989 but they failed to produce the said Will. The application was
then dismissed.

 

HELD

The Supreme Court held that a perusal of
section 65 makes it clear that secondary evidence may be given with regard to
the existence, condition or the contents of a document when the original is
shown or appears to be in possession or power against whom the document is
sought to be produced, or of any person out of reach of, or not subject to, the
process of the Court, or of any person legally bound to produce it, and when,
after notice mentioned in section 66 such person does not produce it. It is a
settled position of law that for secondary evidence to be admitted foundational
evidence has to be given being the reasons as to why the original evidence has
not been furnished.

 

Further, during cross-examination the
(revenue) officials did not unequivocally deny the existence of the Will and
the scribe of the Will and another witness had admitted the existence of such a
Will. Therefore, the appellants would be entitled to lead secondary evidence in
respect of the Will in question. However, such admission of secondary evidence
does not automatically attest to its authenticity, truthfulness or genuineness
which will have to be established during the course of the trial in accordance with
law.

 

24. Covid-19 –
General law – Service of notices, summons and exchange of pleadings / documents

Suo Motu
Writ Petition by the Hon’ble Supreme Court; Suo Motu Writ Petition No. 3
of 2020 (SC); Date of order: 10th July, 2020

Bench: Chief Justice S.A. Bobde, R. Subhash
Reddy J., A.S. Bopanna J.

Counsel: K. K. Venugopal, Tushar Mehta

 

FACTS

Service of notices, summons and exchange of
pleadings / documents is a requirement of virtually every legal proceeding.
Services of notices, summons and pleadings etc. have not been possible during
the period of lockdown because this involves visits to post offices, courier
companies or physical delivery of notices, summons and pleadings. The Supreme
Court took cognisance of this fact.

 

HELD

The Hon’ble Supreme Court held that such
services may be effected by e-mail, FAX, commonly used instant messaging
services, such as WhatsApp, Telegram, Signal, etc. However, if a party intends
to effect service by means of said instant messaging services, the party must
also effect service of the same document / documents by e-mail simultaneously
on the same date.

ALLIED LAWS

24. HUF – Rights of daughter – Coparcenary property – Partition
deed and settlement deed indicating that defendant’s son is absolute owner of
suit premises – Plaintiff having married prior to enforcement of Hindu
Succession Act – Not entitled to claim share in suit properties [Hindu
Succession Act, 1956, S. 6; Hindu Succession Amendment Act, 2005]

 

Amsaveni vs.
Viswanathan; AIR 2020 Madras 20

 

The plaintiff is the daughter and the
second defendant is the son of the first defendant. The plaintiff was married
to one Rajaram in the year 1987 and they had two children. The plaintiff’s
husband began to ill-treat the plaintiff and therefore she left the company of
her husband six years ago and came to her parents’ house along with the male
child. Subsequently, the male child was taken away by the plaintiff’s husband.
The plaintiff was provided a separate residence by the defendants and
accordingly the plaintiff was also enjoying the suit property as a joint family
member of the defendants and therefore, according to the plaintiff, she is
entitled to obtain her share in the suit properties.

 

The Court held that the plaintiff has
admitted that she was married to one Rajaram in the year 1987. Therefore, as
determined by the first appellate court, the plaintiff having got married prior
to the enactment of the Hindu Succession (Amendment) Act 1989 and the Hindu
Succession (Amendment) Act, 2005,  she
would not be entitled to claim share in the suit properties claiming to be a
coparcener of the same.

 

25. Precedent – Two mutually irreconcilable decisions of co-equal
Benches of the Supreme Court – Earlier decision to prevail – Subsequent view
would be held as per incuriam [Constitution of India, Art. 141]

 

Vasanthi Shridhar
Bangera vs. Vishala Bokapatna Laxman; AIR 2020 Bom. 31


The plaintiff is the
younger sister of the respondent. She sued her elder sister and brother-in-law
for eviction. The suit was decreed. Vasanthi, the elder sister, and her husband
appealed, but without success. In the meanwhile, her husband died. So, along
with her children, the respondent filed this Civil Revision Application. The
issue No. 3 was pertaining to the retrospective applicability of the Benami
Transaction (Prohibition) Act, 1988.

 

A three-judge bench of the Hon’ble
Supreme Court in the case of R. Rajagopal Reddy, in principle, accepted that
the Act is prospective. However, the petitioners relied on a three-judge bench
of the Hon’ble Supreme Court in the case of K. Govindraj wherein, in a case
pertaining to Minor Mineral Concession Rules, it was held that the legislature
can legislate prospectively or retrospectively.

 

It was held that the decision in the
case of K. Govindraj, a co-equal bench of the Supreme Court upsets R. Rajagopal
Reddy’s proposition. However, firstly, a decision that deals with an
issue directly should take precedence over a decision which deals with the same
issue collaterally. Secondly, in the event of the two co-equal bench
decisions, the former prevails and the latter can also be per incuriam
if it is not possible for the Court to reconcile its ratio with that of
a previously pronounced judgment. It was further held that the former case does
not dilute nor overrule the latter case.

 

26. Registration – Compulsory – Unregistered agreement of mortgage
by conditional sale – No evidentiary value [Registration Act, 1908, S. 17, 49]

 

Tukaram S/o Shankar
Gondkar vs. Dnyaneshwar S/o Sopanrao; AIR 2020 (NOC) 123 (Bom.)

 

The petitioner is the original plaintiff
in Regular Civil Suit No. 80/1990. He claims to have purchased the land
admeasuring 40 R. out of Survey No. 167 vide sale deed dated 29th
April, 1981. The petitioner, by preferring the suit for redemption of mortgage
of 40 R. land from Survey No. 167/5/A, contended that respondent No. 1 had
entered into a mortgage deed dated 30th July, 1979 with the
petitioner for a period of five years. The said period ended on 30th
July, 1984 and the mortgage was to be redeemed by respondent No. 1 in favour of
the petitioner. Since he failed to do so, the petitioner was constrained to
prefer the said suit.

 

It was held that the document at issue
was necessarily required to be registered. Since it was an unregistered
document, it was struck by section 49 of the Registration Act under which no
document required to be registered u/s 17 of the Act would have any evidentiary
value.

 

27. Website – Order/Judgment from official website has sanctity –
Should not be refused

 

Ibrahim Sk. Rasool
vs. Mohommad Zahir Mohammad Sharif and Ors.; Civil Application No. 411 of 2018
in Second Appeal No. 157 of 2017; Date of order: 19th March, 2018
(Bom.)(HC)

 

The counsel for the applicant had
approached the office of the appellate court in order to deposit the amount of
Rs. 5,000 in terms of the judgment and order dated 4th September,
2017, relying upon the copy of the said judgment and order obtained from the
official website of the Court. But the office of the Court below refused to
accept the said amount on the ground that it would do so only when an official
copy of the said order was received from the Court.

 

It was held that
the insistence on an official copy of the order of the Court was absolutely
uncalled for and the applicant / appellant ought to have been permitted to
deposit costs on the basis of the copy of the judgment and order obtained from
the official website of the Court. Further, a printout of the orders of the
Court from the official website has sanctity and the trial Courts are expected
to consider the said orders, if they are cited after taking a printout from the
official website. The said orders are also available before the trial Court
from the official website and there can be a counter verification to find out
whether such an order is actually uploaded to the official website or not.

 

 

 

 

 

ALLIED LAWS

1.       Appeal
– High Court – Non-appearance of counsel – Matter dismissed by the High Court
on merits – Unjustified – Matter remanded [Civil Procedure Code, 1908, S. 100,
O. 41, R. 17]

 

Prabodh Ch. Das and Ors. vs. Mahamaya Das and Ors.; AIR 2020
SC 178

 

The question for consideration is whether the High Court is
justified in dismissing the second appeal on merits in the absence of the
learned counsel for the appellants. It was held that, with the explanation that
was introduced in Order 41 Rule 17(1) w.e.f. 1st February, 1977 to
clarify the law by making an express provision that where the appellant does
not appear, the Court has no power to dismiss the appeal on merits – thus, Order
41 Rule 17(1) read with its explanation makes it explicit that the Court cannot
dismiss the appeal on merits where the appellant remains absent on the date
fixed for hearing.

 

In other words, if the appellant does not appear, the Court
may, if it deems fit, dismiss the appeal for default of appearance but it does
not have the power to dismiss the appeal on merits. Therefore, the impugned
judgment was set aside and it was directed to remit the matter to the High
Court for fresh disposal in accordance with the law.

 

2.       Hindu
Undivided Family (HUF) – Recovery of debt – Auction sale – Coparcener
challenging sale as property mortgaged without his consent – Material produced
– Property purchased by mortgager in his own name for his own business –
Property never brought into the HUF – Bank would have every right to sell
property for recovery of loan [Recovery of Debts Due to Banks and Financial
Institutions Act, S. 25]

 

Abhimanyu Kumar Singh vs. Branch Manager, I.D.B.I. Bank Ltd.
and Ors.; AIR 2020 Patna 22

 

The petitioner filed a case that the property in question
which was mortgaged with the bank by his father and an equitable mortgage was
created by way of deposit of title deed, happened to be a joint Hindu family
property. The fact that the petitioner is a coparcener and the property in
question had been mortgaged without his consent, means that the 1/4th
share of the petitioner cannot be attached and sold by auction.

 

The High Court held that the fact remains that the property
in question is in the individual name of the father of the petitioner
(mortgagor), the mutation and rent receipts remained in his individual name and
he could very well satisfy the bank that he happened to be the absolute owner
of the property and for his business he was mortgaging the land with the bank
by deposit of title deed.

 

Further, in a Hindu Undivided Family there would be a
presumption of jointness and the burden to prove that there was a partition
lies upon the person who claims the partition. It is well settled that even
within an HUF, a member of the family may create self-acquired and personal
property. It is only when such self-acquired property is brought into the
hotchpotch of the joint family that the property acquires the status of a joint
family property.

 

3.       Partnership
– Dissolution– Partnership which is not at will cannot be terminated by notice
u/s 43 [Partnership Act, 1932, S. 43]

 

Manohar Daulatram Ghansharamani vs. Janardhan Prasad
Chaturvedi and Ors.; AIR 2019 Bombay 283

 

An issue arose with respect to the dissolution of a
partnership firm upon issuance of a notice u/s 43 of the Indian Partnership
Act, 1932. It was held that the terms of the partnership deed clearly stipulate
that the partnership was entered into for the purpose of developing the
property and constructing buildings. Thus, the partnership deed did not
expressly spell out a fixed term of duration. Nevertheless, the terms of the
contract indicate that the partnership was to end after completion of
construction of the buildings, obtaining completion certificates and execution
of conveyance in favour of the society. The terms of the contract thus imply
that the duration of the partnership was until completion of construction and
execution of conveyance. Further, the partnership deed also provides for
dissolution of partnership in the event of insolvency or death of any of the
partners.

 

Therefore, it was held that where a partnership deed which
contains a provision for duration of the partnership or for the determination
of the partnership, cannot be a partnership at will. As a corollary thereof,
the partnership that is not a partnership at will cannot be legally terminated
by a notice u/s 43 of the Partnership Act. Consequently, sending of notice u/s
43 of the Partnership Act, 1932 seeking dissolution of partnership is of no
consequence.

 

4.       Will
– Onus to prove – None of the witnesses appeared before the Court to prove the
Will – Petitioner assured to produce the witnesses – No assistance taken from
Court to issue summons – Document in question cannot be said to be a validly
executed last Will [Succession Act, 1925, S. 222, S. 223, S. 246]

 

Chankaya vs. State and Ors.; AIR 2020 Delhi 30

A petition was filed u/s 226 of the Indian Succession Act,
1925 seeking grant of probate in respect of the document, purported to be the
validly executed last Will of deceased Shri D.C.S., grandfather of the
petitioner.

 

The petitioner has contended that he is aware of the
whereabouts of the witness and time and again assured that he would produce the
said witness before the Court. However, the same was not done. Later the
petitioner contended that the whereabouts of the witness was not known. The
petitioner did not exhaust all the remedies for producing the witness before
the Court. The petitioner could have resorted to Order 16 Rule 10 of the Civil
Procedure Code, 1908 for the purpose of seeking appearance of the attesting
witness. No assistance was taken from the Court to summon the said witness.

 

The Court held that, the burden of proof in the present case,
to prove the document claimed to be the validly executed last Will of the
deceased, lay on the petitioner who propounded the same. Indisputably, none of
the attesting witnesses had appeared before the Court to prove the Will. Thus, the
petitioner has failed to prove that the document is a Will executed by the late
Shri D.C.S. and accordingly the said issue is decided against the petitioner.
Therefore, the said Will has not been proved.

 

5.   Writ
– Jurisdiction of High Court – Alternative remedy – Writ jurisdiction can be
exercised in respect of orders passed by the Armed Forces Tribunal (AFT) – No
blanket ban on exercise of writ jurisdiction because of alternative remedy
[Armed Forces Tribunal Act, 2007, S. 34, S. 15, Constitution of India, Art.
226]

 

Balkrishna Ram vs. Union of India; AIR 2020 SC 341

 

An issue arose before the Hon’ble Supreme Court whether an
appeal against an order of a single judge of a High Court deciding a case
related to an Armed Forces personnel pending before the High Court is required
to be transferred to the Armed Forces Tribunal, or should be heard by the High
Court. It was held that the principle that the High Court should not exercise
its extraordinary writ jurisdiction when an efficacious alternative remedy is
available, is a rule of prudence and not a rule of law. The writ courts
normally refrain from exercising their extraordinary power if the petitioner
has an alternative efficacious remedy. The existence of such a remedy, however,
does not mean that the jurisdiction of the High Court is ousted. At the same
time, it is a well-settled principle that such jurisdiction should not be
exercised when there is an alternative remedy available. The rule of
alternative remedy is a rule of discretion and not a rule of jurisdiction.
Merely because the Court may not exercise its discretion is not a ground to
hold that it has no jurisdiction. There may be cases where the High Court would
be justified in exercising its writ jurisdiction because of some glaring
illegality committed by the AFT.

 

One must also remember that
the alternative remedy must be efficacious and in case of a Non-Commissioned
Officer (NCO), or a Junior Commissioned Officer (JCO), to expect such a person
to approach the Supreme Court in every case may not be justified. It is
extremely difficult and beyond the monetary reach of an ordinary litigant to
approach the Supreme Court. Therefore, it will be for the High Court to decide
in the peculiar facts and circumstances of each case whether or not it should exercise
its extraordinary writ jurisdiction. There cannot be a blanket ban on the
exercise of such jurisdiction because that would effectively mean that the writ
court is denuded of its jurisdiction to entertain such writ petitions.

ALLIED LAWS

19. Auction sale of secured assets – Bank
obliged to disclose any dues on secured assets in notice of sale – Failure of
disclosure – Auction purchaser cannot be fastened with the liability to pay the
same [SARFAESI Act, 2002, S. 13, 38]

 

Corporation Bank and Ors. vs. Jayesh Kumar
Jha; AIR 2019 Cal 328

 

The auction purchaser successfully
participated in the e-auction for the sale of an immovable property undertaken
by the bank through its officers under the provisions of the SARFAESI Act,
2002. On receipt of the consideration price fixed by the auction, the appellant
bank issued sale certificate in favour of the respondent in respect of the
property in question. The sale was free from all encumbrances.

 

Subsequent to this, the purchaser was
charged for payment of property tax and maintenance tax in respect of the
property for the period prior to the auction payable to the Kolkata Municipal
Corporation. Contending that he was not liable to pay any such tax or charge
levied for the period prior to the sale, the purchaser moved Court with a
prayer for issuance of a writ of mandamus directing the bank authorities
to set aside the letter under which it communicated to him that the bank was
not liable to any outstanding dues with a further writ of mandamus
directing the bank authorities to reimburse the amount paid by the purchaser
towards the outstanding property tax to the Kolkata Municipal Corporation with
interest.

 

The Court held that Rules 8 and 9 of the
Security Interest (Enforcement) Rules, 2002 deal with the stage anterior to the
issuance of sale certificate and delivery of possession. Rule 9(8) casts a duty
upon the authorised officer to deliver the property to the purchaser free from
encumbrances (or) requiring the purchaser to deposit money for discharging the
encumbrances. The ignorance of the second creditor regarding the encumbrance on
the property is no longer a good and acceptable defence in view of the
statutory provisions and various precedents by the Hon’ble Supreme Court and
different High Courts on the subject… The SARFAESI Act and the Rules have
replaced the rule of caveat emptor by caveat venditor. When a
property is put to sale, the bank is under statutory obligation to sell the
secured asset with a clear title free from any encumbrance. As the bank did not
disclose the pre-sale property tax dues which are a charge on the land or
building in respect of the secured asset, therefore, the bank has failed to discharge
its statutory obligation.

 

After completion of the sale and delivery of
possession, the auction purchaser-respondent cannot be fastened with the
liability to discharge such encumbrances.

 

20. Hindu law – Right in coparcenary
property – No document to show that property was purchased with the money of
the HUF – Partition taken place – Devolution of coparcenary property takes
place only when succession opens and not before that – Father of the plaintiff
(daughter) is still alive – Suit claiming right in coparcenary property was not maintainable [Hindu
Succession Act, 1956, S. 6]

 

Chandribai and Ors. vs. Tulsiram and Ors;
AIR 2019 MP 206

 

The plaintiff (daughter) filed a suit for
declaration as well as for setting aside the sale deed which had been executed
in favour of the defendant. It was alleged that the disputed property is
ancestral undivided property of the plaintiffs and the plaintiffs have right,
title and interest in the property since their birth. It was also alleged that
the property has been purchased by transfer of ancestral property and that it
continued to remain so.

 

The trial Court, after framing the issues
and recording the evidence, held that the plaintiffs have 1/6th
share each in the disputed property and they are entitled for partition and
possession. The trial Court further held that the property is not a
self-acquired one. The 1st Appellate Court reversed the judgment
passed by the trial Court.

The Hon’ble High
Court upheld the order of the 1st  Appellate
Court that there is no presumption of a property being joint family property
only on account of the existence of a joint Hindu family. The one who asserts
this has to prove that the property is a joint family property and the onus
would shift on the person who claims it to be self-acquired property to prove
that he purchased the property with his own funds and not out of the joint
family nucleus (corpus) that was available.

 

Further, it is significant to note that the
phrase ‘devolution of coparcenary property’ only takes place when succession
opens and not before that. It is well settled that succession opens on the
death of the karta. As a necessary corollary, the karta being
alive, the suit in issue was not maintainable.

 

21. Tenancy rights – Inheritance of tenancy
right is not applicable to a joint family [Bombay Rent Act, 1947, S. 5, 13, 15]

 

Vasant
Sadashiv Joshi. & Ors vs. Yeshwant Shankar Barve through Lrs & Ors.; WP
2371 of 1977; Date of order: 2nd January, 2020 (Bom)(HC)(UR)

 

The petition was filed by a tenant who was
being evicted from the suit premises. The original tenant was his father and
upon his death the rent receipt came to be transferred in the name of the
petitioner. The premises was occupied by his cousin as the petitioner had moved
to an alternate accommodation. The petitioner argued that tenancy rights can be
inherited by any and every member of the joint family.

 

The Court held
that the provisions of the Bombay Rent Act, which pertain to tenancy rights
would not be applicable to a joint family unit. After the death of the original
tenant, tenancy rights cannot be inherited by any member of the family of the
deceased by claiming to be in a joint family set-up.

 

22. Will – Attestation – Signature of the
testator on the Will is undisputed where the attesting witnesses deposed that the testator came to them individually with his own
signed will and read it out to them after
which they attested it [Succession Act, 1925, S. 63]

 

Ganesan (D) through Lrs. vs. Kalanjiam and
Ors.; AIR 2019 SC 5682

 

The appellant filed a suit claiming share in
the suit properties asserting them to be joint family properties. The trial
Court held that the suit property was the self-acquired property of the
deceased who died intestate and the genuineness of the Will had not been
established in accordance with the law, entitling the appellant to 1/5th
share. The appeal was allowed holding that the signature of the testator was
not in dispute and the testator was of sound mind. The second appeal by the
appellant was dismissed.

 

The Hon’ble Supreme Court held that where
the signature of the testator on the Will is undisputed and the Succession Act
requires an acknowledgement of execution by the testator followed by the
attestation of the Will in his presence, and where a testator asks a person to
attest his Will, it is a reasonable inference that he was admitting that the
Will had been executed by him.

 

There is no express prescription in the
statute that the testator must necessarily sign the Will in the presence of the
attesting witnesses only, or that the two attesting witnesses must put their
signatures on the Will simultaneously at the same time in the presence of each
other and the testator.

 

Both the attesting witnesses deposed that
the testator came to them individually with his own signed Will and read it out
to them, after which they attested the Will. Therefore, the appeal was
dismissed.

 

23. Power of attorney holder – Cannot depose
for principal by entering in his shoes – His testimony cannot be treated as
that of principal [Civil Procedure Code, 1908, O. 3, Rr 1,2]

 

Narmada Prasad vs. Bedilal Burman; AIR 2019
MP 660

 

In the instant
civil suit, the petitioner filed a power of attorney in favour of his son and
apprised the Court below specifically that his son will enter the witness box
on his behalf. In turn, the son, Jitendra Burman, entered the witness box,
deposed his statement and was cross-examined. The petitioner introduced his son
as power of attorney holder on the ground that he is suffering from an aliment
of forgetfulness because of which his memory was not in order and, therefore,
his son will depose on his behalf.

 

The Court held
that the son cannot be permitted to depose on behalf of the principal for the
acts done by him. As a necessary corollary, the son cannot be cross-examined on
those aspects in respect of the principal. Thus, the right to adduce evidence
by the power of attorney holder is available to a limited extent. By no stretch
of the imagination can the son be treated to be a representative of the
principal in all aspects and, therefore, it cannot be said that the stand of
the petitioner will deprive him from entering the witness box. In other words,
it is trite that no estoppel operates against the law.

 

ALLIED LAWS

14. Covid-19 – Lockdown – Banks cannot
classify firms as NPAs – RBI guidelines

 

Anant Raj Ltd.
vs. Yes Bank Ltd.; W.P.(C) Urgent 5/2020; Date of order: 6th April,
2020 (Delhi)(HC)(UR)

 

The petitioner had approached the Court
seeking a direction against Yes Bank from taking coercive / adverse steps
against it, including but not limited to declaring its account as a
Non-Performing Asset (NPA). The petitioner contended that it failed to pay the
instalment which fell due on 1st January, 2020 (the subject matter
of the present petition) because of adverse economic conditions brought about
by the effects of the Covid-19 pandemic.

 

The High Court
held that classification of the account of the petitioner as an NPA cannot be
done in view of the RBI Circular related to moratorium of loan repayments. It
held that a prima facie reading of the Statement on Development and
Regulatory Policies issued by the RBI on 27th March, 2020 along with
the Regulatory Package indicates the intention of RBI to maintain the status
quo as on 1st March, 2020 for all accounts. The Court further
observed that before classification as NPA, an account has to be classified as
SMA-2 and any account which is classified as SMA-2 on 1st March,
2020 cannot be further downgraded to an NPA after the issuance of the
Notification. The status has to be maintained as it was on 1st
March, 2020.

 

Thus, the Court granted interim protection
from the account being declared as an NPA. However, it was clarified that the
stipulated interest and penal charges shall continue to accrue on the
outstanding payment even during the moratorium period.

 

15. Covid-19 –
Lockdown – Period of the moratorium – Will not include period of lockdown

 

Transcon Skycity Pvt. Ltd. and Ors. vs.
ICICI & Ors.; W.P. LD VC No. 28 of 2020; Date of order: 11th
April, 2020 (SC)(UR)

 

A petition was filed before the Supreme
Court as to whether the moratorium period is excluded in the computation of the
90-day period for determining NPA for amounts that fell due prior to 1st March,
2020 and which remain unpaid or in default. The Court at the outset observed
that its scope for adjudication, at that particular juncture, was restricted
only to the aspect of urgent ad interim relief and issues like
maintainability were kept open for adjudication at an appropriate time.

 

The Hon’ble Court held that the period
during which there is a lockdown will not be reckoned by ICICI Bank for the
purposes of computation of the 90-day NPA declaration period. If the lockdown
is lifted at an earlier date than 31st May, 2020, then this
protection will cease on the date of lifting of the lockdown and the computing
and reckoning of the remainder of the 90-day period will start from that
earlier lifting of the lockdown-ending date. The moratorium period of 1st
March, 2020 to 31st May, 2020 under the RBI Covid-19 regulatory
package does not per se give the petitioners any additional benefits in
regard to the prior defaults, i.e. those that occurred before 1st
March, 2020. Thus, the relief to the petitioners is co-terminus with the
lockdown period.

 

The Court also
opined that this order will not serve as a precedent for any other case in
regard to any other borrower who is in default or any other bank. Each of these
cases will have to be assessed on its own merits. The question as to whether
the petitioners are entitled to the benefit of the entire moratorium period in
respect of the prior defaults of January and February, 2020 was left open.

 

16. Employment – Ministry of Home Affairs Order – Payment of wages
during lockdown – Negotiable [Disaster Management Act, 2005, S.10; Constitution
of India, 1949, Art. 14, Art. 19, Art. 300A]

 

Ficus Pax Pvt. Ltd. vs. UOI; W.P.(C) Diary
No. 10983 of 2020; Date of order: 12th June, 2020 (SC)(UR)

 

A petition was filed by an association of
employers and a private limited company challenging the validity of the Order
of the Ministry of Home Affairs dated 29th March, 2020 stating that
all the employers, be they in the industry or in the shops and commercial
establishments, shall make payment of wages of their workers at their work
places on the due date, without any deduction for the period their
establishments are under closure during the lockdown.

 

The Hon’ble Supreme Court held that no
industry can survive without the workers. Thus, employers and employees need to
negotiate and settle among themselves. If they are not able to do so, they need
to approach the labour authorities concerned to sort out the issues.

 

17. Family Law –
Maintenance on divorce – Wife entitled to maintenance – Even if she runs a
business and earns income [Hindu Marriage Act, 1955, S.12, S.13; Code of
Criminal Procedure, 1973, S.125]

 

Sanjay Damodar Kale vs. Kalyani Sanjay Kale
(Ms); RA No. 164 of 2019; Date of order: 26th May, 2020
(Bom)(HC)(UR)

 

The couple got
married on 12th November, 1997 in accordance with Hindu religious
rites and ceremonies. According to the applicant, the wife, since the inception
of marital life the respondent husband treated her with extreme cruelty. She
was dropped at her parental home at Satara in the month of January, 1999 by her
husband. Despite repeated assurances, the respondent did not come to fetch her
back to her marital home. In April, 2007 the respondent expressed his desire to
obtain divorce from the applicant. Although the applicant claimed to have
resisted in the beginning, she signed the documents for a divorce petition by
mutual consent as the respondent assured the applicant that he would continue
to maintain the marital relationship with her despite a paper decree of
divorce.

 

Despite the decree of dissolution of
marriage, the respondent continued to visit the applicant at her apartment and
had marital relations as well. But from September, 2012 the respondent-husband
stopped visiting the applicant’s house. The applicant-wife claimed the
respondent made no provision for her maintenance and livelihood as she had no
source of income. Hence, the applicant filed an application u/s 125 of the
Criminal Procedure Code for award of maintenance at the rate of Rs. 50,000 per
month. The Family Court allowed the application holding that the respondent has
refused or neglected to maintain the applicant who is unable to maintain
herself, despite the respondent having sufficient means to maintain her.

 

The Bombay High Court held that the claim of
the applicant that she had no source of income ought to have been accepted by
the learned Judge, Family Court with a pinch of salt. The tenor of the evidence
and the material on the record suggests that the applicant was carrying on the
business of Kalyani Beauty Parlour and Training Institute to sustain her
livelihood. Further, in this inflationary economy, where the prices of
commodities and services are increasing day by day, the income from the
business of beauty parlour, which has an element of seasonality, may not be
sufficient to support the livelihood of the applicant and afford her to
maintain the same standard of living to which she was accustomed before the
decree of divorce. Thus, the Court concluded that Rs. 12,000 per month would be
a reasonable amount to support the applicant wife instead of Rs. 15,000 awarded
by the Family Court (against the original claim / prayer for Rs. 50,000)  as the applicant’s source of income was not
adequately considered by the Family Court Judge.

 

18. Interpretation of terms and conditions
of document(s) – Constitutes substantial question of law – High Court required
to exercise power – Matter remanded to the High Court [Code of Civil Procedure,
1908, S.100]

 

Rajendra Lalit Kumar Agrawal vs. Ratna
Ashok Muranjan; (2019) 3 Supreme Court Cases 378

 

The appellant is the plaintiff whereas the
respondents are the defendants. The appellant filed a civil suit against the
respondents for specific performance of the contract in relation to the suit
property. The suit was based on an agreement dated 8th August, 1984.
The trial Court passed an order dated 5th July, 2004 favouring the
appellant and passed a decree for specific performance of the contract against
the respondents. On appeal by the respondents, the District Court vide
order dated 10th November, 2016 allowed the prayer of the
respondents, thereby dismissing the suit. The appellant filed a second appeal
before the High Court. The High Court dismissed the second appeal, too, holding
that it did not involve any substantial question of law as is required to be
made out u/s 100 of the Code of Civil Procedure, 1908 (Code).

 

On an appeal before the Supreme Court, it
was held that interpretation of terms and conditions of document(s) constitutes
a substantial question of law within the meaning of section 100 of the Code,
especially when both parties admit to the document. The Apex Court also held
the High Court could have framed questions on the issues, which were material
for grant or refusal of specific performance keeping in view the requirements
of section 16 of the Specific Relief Act. Therefore, the order of the High
Court was set aside and the matter was remanded back to the High Court.

 

19. Will – Mutual Will – Effect from – Death
of either testator – The beneficiaries do not have to wait till the death of
both the executants to enforce their rights [Hindu Succession Act, 1956]

 

Vickram Bahl & Anr. vs. Siddhartha
Bahl; CS(OS) 78/2016 & IAs Nos. 2362/2016, 12095/2016, 15767/2018 and
15768/2018; Date of order: 25th April, 2020 (Delhi)(HC)

 

Late Wing
Commander N.N. Bahl and his wife Mrs. Sundri Bahl executed a Joint Will dated
31st March, 2006. As per the Will, after the demise of one spouse
the entire property will ‘rest’ in the other spouse and no one else shall have
any right or interest until the demise of both the testators. Further, as per
the Will after the demise of both the testators their eldest son,
grand-daughter (daughter of the eldest son) and younger son will have ownership
rights as per their respective shares. The eldest son along with his daughter
filed a suit seeking permanent injunction against his mother and brother from
dispossessing them from their respective share of the property under the Will.

 

The Court held that Mrs. Sundri N. Bahl
having accepted the said Will, is bound by it. Since the rights in favour of
the ultimate beneficiary under the mutual Will are crystallised on the demise
of either of the executants and during the lifetime of the executant of the
Will, i.e. Mrs. Sundri Bahl, the beneficiaries do not have to wait till the
death of both the executants to enforce their rights.

 

ALLIED LAWS

11.
Arbitration – Challenging order passed by the arbitrator pending arbitration
proceedings ruling on its own jurisdiction – Not by writ petition – Arbitration
Act is a Code by itself [Arbitration and Conciliation Act, 1996; Code of Civil
Procedure, 1908; Constitution of India, 1949, Art. 226, Art. 227]

 

GTPL Hathway Ltd. vs. Strategic Marketing Pvt. Ltd.;
R/SCA No. 4524 of 2019; Date of order: 20th April, 2020 (Guj.)(HC)

 

On a petition filed u/s 11 of the Arbitration and
Conciliation Act, 1996 (the Act), the High Court vide an order dated 9th
February, 2018 appointed a sole arbitrator. Thereafter, the arbitral Tribunal vide
order dated 14th February, 2019 dismissed the preliminary objection
application filed by the petitioner (of this writ petition) and held that it
has jurisdiction over the dispute between the parties. The petitioner filed a
writ petition before the Hon’ble High Court.

 

The Court held that section 16 of the Act empowers an
arbitral Tribunal to rule on its jurisdiction, section 34 of the Act pertains
to setting aside of an arbitral award and section 37 of the Act provides for an
appeal if the arbitral Tribunal declines jurisdiction. Therefore, these provisions
provide for a complete code for alternative dispute resolution as against the
Civil Procedure Code, 1908. Further, considering the policy, object and
provisions of the Act, the same appear to be a special act and a self-contained
code. Therefore, during pendency of arbitration proceedings, the impugned order
dismissing the preliminary objections cannot be challenged under Article
226/227 of the Constitution.

 

12.
Employment – Covid-19 – Deferral of payment of salary – Denial of property
[Constitution of India, 1949, Art. 300A]

 

Meena Sharma vs. Nand Lal W.P(C) TMP No.182 of 2020; Date
of order: 28th April, 2020 (Ker.)(HC)

 

On financial difficulties arising out of the lockdown,
the Kerala government had issued an order dated 23rd April, 2020
stating that the salaries of all government employees who are in receipt of a
gross salary of above Rs. 20,000 would be deferred to the extent of six days
every month from April to August. Individuals of different departments filed a
petition before the Hon’ble High Court challenging the order for being
unconstitutional and violative of Article 300A of the Constitution of India.

 

The Court held that payment of salary to an employee is
certainly not a matter of bounty. It is a right vested in every individual to
receive the salary. It is also a statutory right as it flows from the Service
Rules. The right to receive salary every month is part of the service
conditions emanating from Article 309 of the Constitution of India. Further,
neither the Epidemic Diseases Act, 1897 nor the Disaster Management Act, 2005
justify such an order and deferment of salary for whatever reason amounts to
denial of property.

 

13.
Labour law – Payment of wages – Covid-19 – Principle of ‘No work – No wages’
not applicable [Industrial Disputes Act, 1947]

 

Rashtriya Shramik Aghadi vs. The State of Maharashtra and
Others; WP No. 4013 of 2020; Date of order: 12th May, 2020
(Bom.)(HC)(Aur.)

 

A workers’ union made a grievance before the Bombay High
Court that a lockdown has been effected but though the members of the Union are
willing to offer their services as security guards and health workers, they are
precluded from performing their duties on account of the clamping of the
lockdown for containment of the Covid-19 pandemic. Further, the payments made
by the contractors for the month of March, 2020 are slightly less than the
gross salary; and for the month of April, 2020 a paltry amount has been paid.

 

The Court held that these employees are unable to work
since the temples and places of worship in the entire nation have been closed
for securing the containment of the Covid-19 pandemic. Even the principal
employer is unable to allot the work to such employees. In such an
extraordinary situation, the principle of ‘No work —­ No wages’ cannot
be made applicable.

 

ALLIED LAWS

6. Continuation
of interim orders – Covid-19
pandemic – Bombay High Court – Interim
orders continued

 

Writ Petition Urgent 2 of 2020
dated 26th March, 2020 and 15th April, 2020 (Bom.)(HC)

 

In view of
the lockdown due to the Covid-19 pandemic, the Bombay High Court held that all
interim orders operating till 26th March, 2020 which are not already
continued by some other courts / authorities including this Court, shall remain
in force till 30th April, 2020 subject to liberty to parties to move
for vacation of interim orders only in extremely urgent cases. Thus, all
interim orders passed by this High Court at Mumbai, Aurangabad, Nagpur and
Panaji as also all courts / Tribunals and authorities subordinate over which it
has power of superintendence expiring before 30th April, 2020, shall
continue to operate till then. It is further clarified that such interim orders
which are not granted for limited duration and therefore are to operate till
further orders, shall remain unaffected by this order. In view of the extension
of the lockdown, the interim orders are further extended up to 15th
June, 2020.

 

7. Arbitration – Limitation – Delay in filing an appeal beyond 120
days cannot be condoned – Further clarified – 120 days include 30 days of grace
period as per Limitation Act [Arbitration and Conciliation Act, 1996, S. 34, S.
37; Limitation Act, 1963, S. 5]

 

N.V. International vs. State of
Assam & Ors.; 2019, SCC OnLine 1584

 

An arbitral
award was passed on 19th December, 2006 which was challenged before
the District Judge in a petition u/s 34 of the Arbitration and Conciliation
Act, 1996 which ultimately was rejected on 30th May, 2016. An appeal
was filed against this order in March, 2017 after a delay of 189 days. The
delay was not condoned as no sufficient cause was made out for the same. On an
SLP, the Supreme Court held that apart from sufficient cause, since a section
34 application has to be filed within a period of a maximum of 120 days
including the grace period of 30 days, any appeal u/s 37 should be covered by
the same drill. Allowing a delay beyond 120 days will defeat the overall
purpose of arbitration proceedings being decided with utmost dispatch.

 

8. Limitation
– Covid-19 pandemic – Supreme Court – Relief for litigants and lawyers
[Constitution of India, Articles 141, 142]

 

Suo motu Writ
petition (Civil) No. 3/2020 dated 23rd March, 2020 (SC)

 

On account
of the situation posed by the Covid-19 pandemic, the Hon’ble Supreme Court has suo
motu held that to ease the difficulties faced by the litigants and their
lawyers across the country in filing their petitions / applications / suits /
appeals, irrespective of the limitation prescribed under the general law or
special laws whether condonable or not, shall stand extended w.e.f. 15th
March, 2020 till further order/s passed by this Court in the present
proceedings.

 

9. Consumer Protection – Self-contribution scheme for benefit of
employees – Whether consumer-service provider relationship between employee and
employer [Consumer Protection Act, S. 2(1)(d), S. 2(1)(o)]

 

ONGC & Ors. vs. Consumer
Education Research Society & Ors.; 2019, SCC OnLine SC 1575

 

In this
case there was no dispute that the claimants were employees of ONGC which had
introduced a self-contribution scheme after obtaining the required permissions
from the government. The scheme was voluntary and optional and the employer was
making a token contribution of Rs. 100 p.a. There was a delay in sending the
claims of the employees to LIC on account of which the employees suffered a
loss. The employees filed a case against the employer (ONGC) for deficiency in
service. The Hon’ble Supreme Court held that there is virtually no privity of
contract for providing services between the employees and the employer.
Further, the scheme is managed and run by a trust and not by ONGC. Therefore,
the service, if any, is being rendered by the Trust and not by ONGC. Thus,
there is no consumer-service provider relationship between the employees and
the employer (ONGC).

 

10. Priority of employees’ dues over all dues – Not applicable to
co-operative societies [Companies Act, 1956, S. 529A; Maharashtra Co-operative
Societies Act, 1960, S. 167]

 

Maharashtra State Co-operative
Bank Limited vs. Babulal Lade & Ors.; 2019, SCC OnLine SC 1545

 

The Hon’ble Supreme Court inter alia held that
section 167 of the Companies Act, 1956 creates a bar on the applicability of
the Companies Act to societies registered under the Societies Act. Given that
the karkhana (factory) was a co-operative society registered under the
said Act, section 167 of the Societies Act, 1960 is applicable and the High
Court committed a grave error in relying upon section 529A of the Companies
Act, 1956. Thus, employees cannot make use of section 529A of the Companies Act
to claim priority over all the other debts of the karkhana.


ALLIED LAWS

19. The Internet & Mobile Association of India vs. RBI WP(C) No. 528 of 2018 (SC) Date of order: 4th March, 2020 Bench: Rohinton Fali Nariman J., Aniruddha Bose J., V. Ramasubramanian J.

 

Cryptocurrencies – RBI – Circular imposing ban on trading in cryptocurrency – Subordinate legislation – Violation of Fundamental Rights [Constitution of India, Art. 19(1)(g), Art. 14; Banking Regulation Act, 1949, S. 35A, S. 36(1)(a), S. 56; RBI Act, 1934, S. 45JA, S. 45L; Payment and Settlement Systems Act, 2007, S. 10(2), S. 18]

 

FACTS

The Reserve Bank of India (RBI) issued a ‘Statement on Developmental and Regulatory Policies’ on 5th April, 2018 and a Circular dated 6th April, 2018 in exercise of the powers conferred on it by section 35A read with section 36(1)(a) and section 56 of the Banking Regulation Act, 1949; section 45JA and 45L of the RBI Act, 1934; and section 10(2) read with section 18 of the Payment and Settlement Systems Act, 2007, which directed the entities regulated by RBI (i) not to deal with or provide services to any individual or business entities dealing with or settling virtual currencies, and (ii) to exit the relationship, if they already have one, with such individuals / business entities, dealing with or settling virtual currencies (VC).

 

The petitioner challenged the said Statement and Circular and sought a direction to the respondents not to restrict or restrain banks and financial institutions regulated by RBI from providing access to the banking services to those engaged in transactions in crypto assets.

 

HELD

The measure taken by the RBI should pass the test of proportionality, since the impugned Circular has almost wiped the VC exchanges out of the industrial map of the country, thereby infringing Article 19(1)(g) of the Constitution.

 

While regulation of a trade or business through reasonable restrictions imposed under a law made in the interests of the general public is saved by Article 19(6) of the Constitution, a total prohibition, especially through a subordinate legislation such as a directive from RBI, of an activity not declared by law to be unlawful, is violative of Article 19(1)(g). The Circular dated 6th April, 2018 was set aside on the ground of proportionality.

 

20. Tarabai Wellinkar Charitable Trust & Anr. vs. The State of Maharashtra & Ors. WP No. 448 of 2020 Date of order: 12th February, 2020 Bench: Pradeep Nandrajog J., Bharati Dangre J.

 

Leave & Licence – No transfer of right, title or interest – Levy u/s 37A of Maharashtra Land Revenue Code is held to be not valid [Maharashtra Land Revenue Code, 1966, S. 37A]

 

FACTS

Petitioner No. 1, the trust, executed a Leave & Licence agreement with M/s Sheorey Digital Systems Private Limited demising to it, as a licensee, the ground floor of a building popularly known as ‘Tarabai Hall’ for three years commencing from 15th July, 2019 to 14th July, 2022 with licence fee of Rs. 4,00,000 per month plus GST and other taxes to be borne by the licensee.

 

Treating the Leave & Licence agreement to be a sale / transfer of interest, the Collector has by order dated 21st June, 2019 issued u/s 37A of the Maharashtra Land Revenue Code, 1996 demanded from the petitioner Rs. 41,27,427 towards unearned income.

 

HELD

A bare reading of the legislation in section 37A of the Maharashtra Land Revenue Code, 1966 makes it clear that the permission of the State Government, with right vested in the State Government under sub-section (2), is required when a sale, transfer, redevelopment, use of additional Floor Space Index, transfer of Transferable Development Rights or change of use is taking place under a document. The transfer referred to in the said section has to be a transfer of an interest in the corpus.

 

An Indenture of Leave & Licence does not create any right, title or interest in the corpus of the property in favour of the licensee. It only permits the licensee to enter upon the property and do such acts as are permitted and which in the absence of the licence would amount to a trespass.

 

The Indenture of Leave & Licence, be it for residential, commercial or industrial purpose, would not be subject to any levy u/s 37A of the Maharashtra Land Revenue Code.

 

21. Vidya Drolia & Ors. vs. Durga Trading Corporation Civil Appeal No. 2402 of 2019 (SC) Date of order: 14th December, 2020 Bench: Sanjiv Khanna J., N.V. Ramana J.

 

Arbitration – Landlord-Tenant disputes under Transfer of Property Act, 1882 – Arbitrable if Rent Control Laws are not applicable [Arbitration and Conciliation Act, 1996, S. 8, S. 11; Transfer of Property Act, 1882, S. 111, S. 114, S. 114A]

 

FACTS

A reference was made to a larger bench vide order dated 28th February, 2019 in Civil Appeal No. 2402 of 2019 titled Vidya Drolia and Others vs. Durga Trading Corporation, 2019 SCC OnLine SC 358 as it doubted the legal ratio expressed in Himangni Enterprises vs. Kamaljeet Singh Ahluwalia (2017) 10 SCC 706 that landlord-tenant disputes governed by the provisions of the Transfer of Property Act, 1882 are not arbitrable as this would be contrary to public policy.

 

The issues that are required to be answered relate to two aspects that are distinct and yet interconnected, namely:

(i) meaning of non-arbitrability and when the subject matter of the dispute is not capable of being resolved through arbitration; and

(ii) the conundrum – ‘who decides’ – whether the Court at the reference stage or the arbitral tribunal in the arbitration proceedings would decide the question of non-arbitrability.

 

HELD

The landlord-tenant disputes arising out of the Transfer of Property Act, 1882 are arbitrable as they are not action in rem but pertain to subordinate rights in personam that arise from rights in rem.

 

Further, the Transfer of Property Act, 1882 does not expressly bar arbitration and an arbitral award may be executed and enforced like a decree of a civil court.

 

The Arbitration and Conciliation Act, 1996 itself does not exclude any category of disputes as being non-arbitrable. However, post the 2015 amendment the structure of the Act was changed to bring it in tune with the pro-arbitration approach. Under the amended provision, the Court can only give a prima facie opinion on the existence of a valid arbitration agreement. In clear cases where the subject matter arbitrability is clearly barred, the Court can cut the deadwood to preserve the efficacy of the arbitral process.

 

However, where a dispute would be covered by State Rent Control Laws, then the said dispute is not arbitrable.

 

 

22. Rajesh Agarwal vs. RBI & Ors. WP 19102 of 2019 (Telangana)(HC) Date of order: 10th December, 2020 Bench: Raghvendra Singh Chauhan J., B. Vijaysen Reddy J.

 

RBI – Master Circular – Principles of Natural Justice to be read into the Circular

 

FACTS

The petitioner was the Chairman and Managing Director of the borrower company. In the course of its business, the company approached several banks, including the respondent banks, and availed a loan of Rs. 1,406.00 crores. The company defaulted in repayment of the loan amount.

 

As per the Circular Guidelines of the Reserve Bank of India, all lender banks, with the State Bank of India as the lead bank, formed the JLF (a Joint Lenders Forum). On 29th June, 2016 the JLF declared the company’s accounts as Non-Performing Assets.

 

Based on the Forensic Audit Report dated 29th August, 2016, on 31st August, 2016 the JLF closed the issue observing that ‘there were no irregularities, with regard to fraudulent transactions pointed out in the Forensic Audit Report’.

 

Thereafter, by invoking Clause 2.2.1(g) of the Master Circular, on 2nd February, 2019 the JLF & Fraud Identification Committee declared the account of the company as ‘fraud’. Hence the writ petition.

 

HELD

Fair play in governance is the gravitational force which binds the entire State. Therefore, before a person or entity is obliterated, or is subjected to civil and penal consequences, the person or entity must be given an opportunity of a hearing. Without giving such an opportunity, without giving the opportunity to explain the intricacies of the accounts, or of the business dealings, to denounce a person is to act unfairly, unjustly, unreasonably and arbitrarily. Even in an administrative action, justice should not only be done but must also appear to be done to the satisfaction of all the parties.

 

Considering the grave civil consequences and penal action which would follow as a result of classifying a borrower as ‘a fraudulent borrower’, or ‘a holder of a fraudulent account’, it is imperative that the principles of natural justice, especially the principles of audi alteram partem, must be read into Clauses 8.9.4 and 8.9.5 of the Master Circular.

 

23. Nautilus Metal Crafts (P) Ltd. vs. Joint Director-General of Foreign Trade WP(C) No. 5167 of 2020 (Del.)(HC) Date of order: 18th November, 2020 Bench: Navin Chawla J.

 

Foreign Trade (Development and Regulation) Act, 1992 – Suspension or cancellation – Licence, certificate, scrip or any instrument bestowing financial or fiscal benefits – Only with ‘for good and sufficient reasons’ – Mandatory requirement [Foreign Trade (Development and Regulation) Act, 1992, S. 9]

 

FACTS

The petitioner dealt with readymade garments. It procured orders from other countries and after procurement of an order directly approached the manufacturer in India who manufactured the same and thereafter these were supplied by the petitioner to the foreign buyers.

 

The respondent issued the impugned show cause notice dated 8th November, 2019 to the petitioner stating that the DRI had informed it that an investigation is being carried out against the petitioner ‘for gross overvaluation to fraudulently avail export benefits’ and it had been requested not to issue any export incentives to the petitioner. The petitioner was asked to show cause as to why it be not placed in DEL so that benefits under Foreign Trade Policy (FTP) are stopped, including future refusal of Authorisation / Scrips under Rule 7(c), 7(j) and 7(n) of the Foreign Trade (Regulation) Rules, 1993 (‘Rules’).

 

The petitioner has challenged the show cause notice dated 8th November, 2019 on the ground that it was vague as it did not spell out the exact nature of violation for which the petitioner is sought to be proceeded against and also the impugned order dated 10th January, 2020 on the ground that the same had been passed without supplying the petitioner the documents sought to be relied upon for proceeding against it.

 

The petitioner further claimed that pursuant to the Circular No. 16/2019-Customs dated 17th June, 2019 issued by the Director, Customs, Central Board of Indirect Taxes and Customs with regard to IGST refund, the exports made by the petitioner were subjected to 100% examination and no discrepancy was found in the same. It was further claimed that even the export proceeds against these exports and other exports had been realised by the petitioner.

 

HELD

The Court held that any refusal to grant, suspend or cancel any licence, certificate, scrip or any instrument bestowing financial or fiscal benefits can only be ‘by an order in writing’. In fact, section 9(4) expressly mandates that suspension or cancellation of any licence, certificate, scrip or any instrument bestowing financial or fiscal benefits can only be ‘for good and sufficient reasons’. The requirement of giving reasons cannot, therefore, be dispensed with and is mandatory.

 

Further, in the order there is no reference to the show cause notices and to the replies submitted by the petitioner and how they have been dealt with and appreciated by the Authority. In fact, it gives no reason except stating that the ‘Firm is under DRI Ludhiana investigation’.

 

The impugned order dated 10th January, 2020 does not show any application of mind to these submissions as the order contains no reasons. The impugned order was set aside. Costs were imposed on the respondent.

 

ALLIED LAWS

15. Arnab Manoranjan
Goswami vs. The State of Maharashtra & Ors. Cr.
Appeal No. 742 of 2020 (SC) Date of order: 27th November, 2020
Bench: Dr. Dhananjay Y. Chandrachud J., Indira Banerjee J.

 

Human liberty – Role of Courts – Misuse of the criminal law is a matter
to which the High Court and the lower Courts in the country must be alive
[CrPC, 1973, S. 482, Constitution of India, Art. 226, 227]

 

FACTS

The appellant
is the Editor-in-Chief of an English television news channel, Republic TV who
was arrested on 4th November, 2020 in connection with FIR No. 59 of
2018 that was registered at Alibaug Police Station under sections 306 and 34 of
the IPC. It was registered on 5th May, 2018 on the complaint of the
spouse of the deceased informant who is alleged to have committed suicide. The
deceased had not received payment for the work which was carried out by him, as
a result of which he was under mental pressure and committed suicide by hanging
on 5th May, 2018; there is a suicide note holding the appellant and
others responsible.

 

HELD

Human liberty
is a precious constitutional value which is undoubtedly subject to regulation
by validly enacted legislation. As such, the citizen is subject to the edicts
of criminal law and procedure. Section 482 recognises the inherent power of the
High Court to make such orders as are necessary to give effect to the
provisions of the Code of Criminal Procedure – or prevent abuse of the process
of any Court or otherwise to secure the ends of justice. The recognition by
Parliament of the inherent power of the High Courts must be construed as an aid
to preserve the constitutional value of liberty. The writ of liberty runs
through the fabric of the Constitution. The need to ensure the fair
investigation of crime is undoubtedly important in itself, because it protects
at one level the rights of the victim and, at a more fundamental level, the
societal interest in ensuring that crime is investigated and dealt with in
accordance with law. On the other hand, the misuse of the criminal law is a
matter to which the High Courts and the lower Courts in the country must be
alive.

 

In the present
case, the High Court could not but have been cognizant of the specific ground
which was raised before it by the appellant that he was being made a target as
part of a series of occurrences which had been taking place since April, 2020.
The specific case of the appellant is that he has been targeted because his
opinions on his television channel are unpalatable to authority.

 

In failing to make even a prima facie evaluation of the FIR, the
High Court abdicated its constitutional duty and function as a protector of liberty.
Courts must be alive to the need to safeguard the public interest in ensuring
that the due enforcement of criminal law is not obstructed. The fair
investigation of crime is an aid to it. Equally, it is the duty of Courts
across the spectrum – the district judiciary, the High Courts and the Supreme
Court – to ensure that the criminal law does not become a weapon for the
selective harassment of citizens. Courts should be alive to both ends of the
spectrum – the need to ensure the proper enforcement of criminal law on the one
hand and the need, on the other, of ensuring that the law does not become a
ruse for targeted harassment. Liberty across human eras is as tenuous as
tenuous can be. Liberty survives by the vigilance of her citizens, on the
cacophony of the media and in the dusty corridors of courts alive to the rule
of (and not by) law. Yet, much too often, liberty is a casualty when one of
these components is found wanting.

 

16. Noy Vallesina Engineering SpA vs. Jindal Drugs Limited & Ors. Civil Appeal
No. 8607 of 2010 (SC) Date of order:
26th November, 2020 Bench: S.
Ravindra Bhatt J., Indira Banerjee J.

 

Arbitration – Foreign award – Setting aside – Not maintainable
[Arbitration and Conciliation Act, 1996, S. 34]

 

FACTS

The appellant company (N.V. Engineering) was incorporated under Italian
law and was involved in the setting up and construction of plants for
production of synthetic fibres, polymers and ascorbic acid in India. The
respondent (Jindal Drugs) is a public limited company incorporated under the
Indian law. Disputes arose between the two in respect of an agreement between
them. The latter (N.V. Engineering) terminated the agreement and claimed
damages. Jindal Drugs filed a request for arbitration before the International
Court of Arbitration (ICC), Paris. But its claims were rejected by the Tribunal
via a partial award.

 

Jindal then filed a petition before the Bombay High Court u/s 34 of the
Act challenging the partial award which held that since the partial award was a
foreign award, a challenge through a petition was not maintainable u/s 34.
Jindal then preferred an appeal against this order before the Division Bench.
During the pendency of the appeal, N.V. Engineering applied for enforcement of
the two awards, i.e., the partial award and the final award under sections 47
and 48 of the Act, in the chapter relating to foreign awards. This petition was
allowed and Jindal’s objections against the two awards’ enforceability were
overruled. Jindal preferred an appeal and N.V. filed a cross-appeal

 

Pending these two appeals, the Division Bench decided Jindal’s first
appeal and held that proceedings u/s 34 could be validly maintained to
challenge a foreign award. Hence this appeal by N.V. Engineering.

 

HELD

The Court relied on the decision of
BALCO vs. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552 wherein
it was held that the Arbitration Act, 1996 has accepted the territoriality
principle which has been adopted in the UNCITRAL Model Law. Section 2(2) makes a
declaration that Part I of the Arbitration Act, 1996 shall apply to all
arbitrations which take place within India. Therefore, Part I of the
Arbitration Act, 1996 would have no application to international commercial
arbitration held outside India. Therefore, such awards would only be subject to
the jurisdiction of the Indian courts when the same are sought to be enforced
in India in accordance with the provisions contained in Part II of the
Arbitration Act, 1996. The provisions contained in the Arbitration Act, 1996
make it crystal clear that there can be no overlapping or intermingling of the
provisions contained in Part I with the provisions contained in Part II of the
Arbitration Act, 1996.

The appeal was allowed and costs imposed on Jindal.

 

17. Madras Bar Association vs. Union of India & Anr. Writ (C) No. 804 of 2020 (SC) Date of order: 27th November, 2020 Bench: L. Nageswara Rao J., Hemant Gupta J., S. Ravindra Bhat J.

 

Judicial Member – Qualification and experience – Appellate Tribunal and
other Authorities Qualification, Experience and Other Conditions of Service of
Members Rules, 2020 [Finance Act, 2017, Administrative Tribunals Act, 1956]

 

FACTS

The petitioner filed a petition challenging the constitutional validity
of the Tribunal, Appellate Tribunal and other Authorities Qualification,
Experience and Other Conditions of Service of Members Rules, 2020 (Tribunal
Rules) on several grounds, viz., exclusion of advocates for being considered as
a judicial member in ten out of 19 Tribunals, a minimum of 25 years of
experience for an advocate to be eligible to become a member in seven tribunals
(Central Administrative Tribunal, Income-tax Appellate Tribunal, Customs Excise
and Sales Tax Appellate Tribunal, etc.) inter alia.

 

HELD

The Hon’ble Supreme Court held that the exclusion of advocates in ten
out of 19 Tribunals for being appointed as a judicial member is contrary to the
decision in the case of Union of India vs. R. Gandhi, President, Madras
Bar Association, (2010) 11 SCC 1 and the case of Madras Bar
Association vs. Union of India, (2014) 10 SCC 1.

 

It further held that the Tribunal Rules shall
be amended to make advocates with an experience of at least ten years eligible
for appointment as judicial members in the Tribunals. While considering
advocates for appointment as judicial members in the Tribunals, the
Search-cum-Selection Committee shall take into account the experience of the
Advocates at the bar and their specialisation in the relevant branches of law.
They shall be entitled for reappointment for at least one term by giving
preference to the services rendered by them for the Tribunals.

 

18. State of UP vs. Sudhir Kumar Singh & Ors. Civil Appeal No. 3498 of 2020 (SC) Date of order: 16th October, 2020 Bench: R.F. Nariman J., Navin Sinha J., K.M. Joseph J.

 

Principle of natural justice – Arbitrary termination is held to be bad
in law [Constitution of India, Art 14, 226]

 

FACTS

The private respondents filed a case on account of illegal and arbitrary
termination of their tender upon completion of one year, whereas the term
stipulated in the tender was two years. It was prayed that the order
terminating the tender was bad in law due to violation of the principles of
natural justice, i.e., audi alteram partem.

 

HELD

The principles of natural justice have undergone a sea change. The
earlier view that even a small violation would result in the order being
rendered a nullity is not correct. Some real prejudice must be caused to the
complainant by the refusal to follow natural justice. The prejudice must not
merely be the apprehension of a litigant. No prejudice is caused to the person
complaining of the breach of natural justice where such person does not dispute
the case against him or it. There is a clear distinction between cases where
there was no hearing at all and the cases where there was mere technical
infringement of the principle. Since there was prejudice caused to the private
respondents and financial loss has occurred, the Court upheld the impugned
judgment of the High Court on the ground that natural justice has indeed been
breached.

 

ALLIED LAWS

11. Ravi Dixit vs. State of U.P. and another Application u/s 482 No. 14068 of 2020
(All.)(HC) Date of order: 23rd September,
2020 Bench: Dr. Kaushal Jayendra Thaker J.

Dishonour of cheque – Intention not to make
payment – Complainant need not wait 15 days [Negotiable Instruments Act, 1881,
S. 138]

 

FACTS

A cheque of Rs. 5,00,000 was issued on 1st
March, 2019 and another cheque of Rs. 5,98,000 on 2nd March,
2019. Both were dishonoured on 28th May, 2019 as the drawer (the
petitioner here) had directed the bank to stop the payments. The complainant
sent a notice to the petitioner on 11th June, 2019. A response was
received on 25th June, 2019. But the complainant did not receive any
money; therefore, on 29th June, 2019, he filed a complaint u/s 138
of the Negotiable Instruments Act, 1881.

 

The Judge, after
referring to the dates, was satisfied that a prima facie case is made
out for issuance of notice and so on 3rd September, 2019 passed the
summoning order.

 

The petitioner
approached the High Court stating that the complainant should have waited for a
period of 15 days and should not have filed the complaint on 29th
June, 2019.

 

HELD

The provision of section 138 of the N.I. Act
cannot be interpreted to mean that even if the accused refuses to make the
payment the complainant cannot file a complaint. Proviso (c) of the said
section is to see the bona fides of the drawer of the cheque and is with
a view to grant him a chance to make the payment. The proviso does not
constitute ingredients of an offence punishable u/s 138. It simply postpones
the actual prosecution of  the offender
till such time as he fails to pay the amount, then the statutory period
prescribed begins for lodgement of complaint.

The petitioner replied to the notice which
goes to show that the intention of the drawer is clear that he did not wish to
make the payment. Once this is clarified, the complainant need not wait for the
minimum period of 15 days. The petition was dismissed with cost.

 

12. High Court on its own motion vs. the State of  Maharashtra Suo motu WP (ST) No. 93432 of 2020 (Bom.)(HC) Date of order: 29th October, 2020 Bench: Hon’ble C.J., A.A. Sayed J., S.S. Shinde
J., K.K. Tated J.

 

Covid-19 – Extension of interim orders –
Eviction, demolition and dispossession – Passed by the Courts in Maharashtra
and Goa – Until 22nd December, 2020

 

FACTS / HELD

Although the situation in the State of
Maharashtra because of the pandemic has improved over the last few days, access
to the Courts of law is not easy. To ensure that persons suffering orders of
dispossession, demolition, eviction, etc., passed by public authorities are not
inconvenienced by reason of inability to approach the Courts because of the
restrictions on movements imposed by the State Government, as well as the
requirement to maintain social distancing norms, the Court considered it just
and proper to extend the interim orders passed by it on this writ petition till
22nd December, 2020 or until further orders, whichever is earlier.

 

13. Srei Equipment Finance Ltd. vs. Seirra Infraventure Pvt. Ltd. A.P. 185 of 2020 (Cal.)(HC) Date of order: 7th October, 2020 Bench: Moushumi Bhattacharya J.

 

Arbitration – Interim relief – Jurisdiction
– Where a part of the cause of action has arisen – Valid [Arbitration and
Conciliation Act, 1996, S. 2(1)(e)(i), S. 9]

 

FACTS

The petitioner / finance company has sought
an injunction restraining the respondent / hirer from dealing with the assets
leased by it (the petitioner) to the respondent under a Master Lease Agreement
entered into between the parties on 15th March, 2018. The petitioner
has alleged outstanding rental dues as on the date of termination of the agreement
and has sought for appointment of a receiver to take possession of the assets
together with an order directing the respondent to furnish security to the
extent of Rs. 75,19,388.

 

The respondent has raised a point of
maintainability of the application on the ground that this Court does not have
territorial jurisdiction to entertain the application as would be evident from
the pleadings and documents, as also the relevant provisions of the Arbitration
and Conciliation Act, 1996.

 

HELD

An application u/s 9 of the Arbitration and
Conciliation Act, 1996 can be filed where a part of the cause of action has
arisen or where the seat of arbitration has been chosen by the parties. It is
stated that part of the cause of action has arisen within the jurisdiction of this
court.

 

Further, it
must also be borne in mind that the parties have consented to the jurisdiction
in clause 18(k) as well as the seat of arbitration as provided in clause 18(l)
of the agreement. Both these clauses point to ‘Kolkata’. Section 2(1)(e)(i) of
the 1996 Act designates the principal Civil Court of original jurisdiction in a
district, including the High Court in exercise of its Ordinary Original Civil
Jurisdiction, having jurisdiction to decide the questions forming the subject
matter of the arbitration for the purpose of applications in matters of
domestic arbitration under Part I of the Act. Therefore, the preliminary
objection of the respondent with regard to the jurisdiction of this Court,
fails.

 

14.
Paramount Prop. Build. Pvt. Ltd. through its authorised signatory Mr. Anil
Kumar Gupta vs. State of U.P. and 118 others Writ (C)
No. 12573 of 2020 (All.)(HC) Date of
order: 4th November, 2020 Bench:
Surya Prakash Kesarwani J.,  Dr. Yogendra Kumar Srivastava, J.

 

Promoters – Delay in handing over
possession of the flats – Contravention of obligation cast upon promoters –
Authority empowered to award interest [Real Estate (Regulation and Development)
Act, 2016, S. 18, S. 38]

 

FACTS

The petitioner is a promoter and the
respondent Nos. 3 to 119 are allottees. The petitioner could not deliver
possession of the flats to the allottees in time and there occurred a delay.
The allottees filed separate complaints before the Uttar Pradesh Real Estate
Regulatory Authority, Gautam Buddh Nagar, who passed the impugned orders
awarding interest.

 

A writ petition was filed on the ground that
the impugned orders are without jurisdiction inasmuch as the power to grant
interest does not vest with the Authority.

 

HELD

Section 18 of the RERA Act, 2016 is in
respect of return of amount and compensation in case the promoter fails to
complete or is unable to give possession of an apartment, plot or building.
Sub-section (1) of section 18 provides for two different contingencies. In case
the allottee wishes to withdraw from the project, the promoter shall be liable
on demand to return the amount received by him to the allottees in respect of
the apartment, plot or building as the case may be, with interest at such rate
as may be prescribed, including compensation in the manner as provided under
the Act.

 

Alternatively, where the allottee does not
intend to withdraw from the project, the promoter shall, as per the proviso
to section 18(1) of the Act, be liable to pay interest for every month of delay
till the handing over of the possession, at such rate as may be prescribed.

 

Further, section 38(1) of the Act confers
powers upon the Authority to impose penalty or interest in regard to any
contravention of obligations cast upon the promoters, the allottees and the
real estate agents, under the Act or the Rules or the Regulations made
thereunder.

 

The promoter having contravened the
aforesaid obligation with regard to giving possession of the apartment by the
specified date, and complaints in this regard having been filed by the
allottees, the Authority exercising powers u/s 38(1) of the Act is fully
empowered to impose interest in regard to contravention of the obligation cast
upon the promoter.  

 

ALLIED LAWS

6. Abetment – Denial of loan on loan – Prudent banking – Not abetment to
suicide [Indian Penal Code, 1850, S. 306, S. 107; Code of Criminal Procedure,
1973, S. 482]

 

Santosh Kumar
vs. State of Maharashtra & Anr. Cr.A.
(APL) No. 63 of 2016 (Bom)(HC) (Nag. Bench) Date of order: 9th
September, 2020 Bench: V.M. Deshpande J. and Anil S. Kilor J.

 

FACTS

The applicant was Branch Manager, Bank of Maharashtra, Morshi Branch,
District Amravati. The complainant had a loan account with the Bank. So did his
father Wamanrao. Sudhir Gawande, the brother of the complainant, committed
suicide on 12th June, 2015 by hanging himself in his house. The
complainant approached Morshi Police Station and lodged a report against the
present applicant. As per the FIR, the bank manager had said no to Sudhir
Gawande for a fresh restructuring of a loan, which led to his suicide.

 

After
registration of the offence, since the applicant apprehended arrest, he moved
an application, vide Misc. Criminal Bail Application No. 529 of 2015,
for grant of pre-arrest bail. The Sessions Judge at Amravati on 26th
June, 2015 granted him pre-arrest bail in the event of arrest. Thereafter, the
applicant filed the present proceedings for quashing of the FIR.

 

HELD

The Court
relied on the decision of the Supreme Court in the case of Dilip s/o
Ramrao Shirasrao and Ors. vs. State of Maharashtra and Anr. 2016 ALL MR (Cri)
4328 wherein it was held that it is incumbent upon the prosecution to
show at least prima facie that the accused had an intention to aid,
instigate or abet the deceased to commit suicide. In the absence of such
material, the accused cannot be compelled to face trial for the offence
punishable u/s 306 of the IPC.

 

The loan account of the complainant was showing outstandings to the tune
of Rs. 2,32,689. The deceased was not having any loan outstanding in his name.
If a previous loan amount is outstanding and if the applicant, who is the
Branch Manager of the said Bank, refuses to grant any further loan, it can be
said to be an act of a vigilant and prudent banker, and it cannot be said that
by such act he instigated and / or abetted the person to commit suicide. The
criminal application is allowed.

 

7. Arbitration – Place of Arbitration – Only the High Court named in the
Arbitration agreement has territorial jurisdiction – Only such Court can
appoint an Arbitrator [Arbitration & Conciliation Act, 1996, S. 11(6)]

 

SJ Biz Solution
Pvt. Ltd. vs. M/s Sany Heavy Industry India Pvt. Ltd. ARBP No. 56 of
2018 (Orissa)(HC) Date of order:
1st October, 2020 Bench: Mohammad Rafiq CJ

 

FACTS

An issue arose
between the manufacturer of heavy construction equipment and its dealer in
Orissa. The petitioner filed an application u/s 11(6) of the Arbitration and
Conciliation Act, 1996 (the Act) seeking appointment of an independent
Arbitrator to arbitrate the disputes between the petitioner and the respondent.

 

The petitioner contended that although as per clause 15 of the
dealership agreement it was agreed that the place of arbitration shall be Pune,
the jurisdiction of this Court to entertain the present application filed u/s
11(6) of the Act is not excluded as the cause of action, wholly or at least in
part, has arisen in the territory of Orissa. The petitioner further contended
that in view of the definition of the Court given in section 2(1)(e) of the
Act, the Courts at Bhubaneswar would have jurisdiction to entertain the
petition u/s 9 and for the same reason the Court would also have the
territorial jurisdiction, especially in view of section 11(11).

 

HELD

It was held
that in an identical issue before the Supreme Court in the case of Swastik
Gases Private Limited vs. Indian Oil Corporation Limited (2013) 9 SCC 32,
it was held that the territorial jurisdiction to appoint an Arbitrator lies as
per the jurisdiction agreed upon in the agreement.

 

The Court
considered the decision of the Supreme Court in the case of Duro
Felguera, S.A. vs. Gangavaram Port Limited (2017) 9 SCC 729 which held
that all that the Court at the stage of section 11 of the Act needs to see is
whether an Arbitration agreement exists, nothing more and nothing less. It was
held that legislative policy and purpose is essentially to minimise the Court’s
intervention at the stage of appointing the Arbitrator. Therefore, all other
questions, including the question of territorial jurisdiction, are not open for
consideration.

 

After analysing
various decisions, the Court held that the argument of the petitioner that
while considering the petition u/s 11(6) of the Act this Court ought to only
examine the existence of the Arbitration agreement and should leave all other
questions, including that of territorial jurisdiction, open for consideration
by the Arbitrator in the scope of section 16 of the Act, cannot be
countenanced.

 

It held that the Court did not have the territorial jurisdiction to
entertain the present petition filed u/s 11(6) and accordingly dismissed the
petition as not maintainable.

 

8. Civil dispute – Legal representative – Maintainability of
applications – Inheritance of shares – NCLT has no jurisdiction [Companies Act,
2013, S. 241, S. 242, S. 244]

 

Aruna Oswal vs.
Pankaj Oswal & Ors. CA Nos. 9340,
9399 and 9401 of 2019 (SC) Date of order:
6th July, 2020 Bench: Arun Mishra J. and S. Abdul Nazeer J.

 

FACTS

These appeals
have been preferred against the judgment of the NCLAT concerning
maintainability of applications filed under sections 241 and 242 of the
Companies Act, 2013.

 

The case is the
outcome of a family tussle. The Late Abhey Kumar Oswal, during his lifetime,
held a large amount of shares in M/s Oswal Agro Mills Ltd., a listed company.
He passed away in Russia on 29th March, 2016. Prior to that, he
filed a nomination as per section 72 in favour of Mrs. Aruna Oswal, his wife.
Two witnesses duly attested the nomination in the prescribed manner. As per the
appellant, it was explicitly provided therein that this nomination shall
supersede any prior nomination made by him.

 

Mr. Pankaj
Oswal (son of the deceased) and Respondent No. 1, filed a partition suit,
claiming entitlement to one-fourth of the estate of Abhey Oswal. He also filed a company petition
alleging oppression and mismanagement in the affairs of the Respondent No. 2
company.

 

HELD

The Supreme
Court, relying on the case of World Wide Agencies (1990) 1 SCC 536
held that a legal representative has a right to maintain an application for
oppression and mismanagement without being registered as a member against the
securities of a company. Further, the Court, relying on the case of Sangramsinh
P. Gaekwad (2005) 11 SCC 314 held that a dispute as to inheritance of
shares is a civil dispute and does not attract the Company Court’s jurisdiction
and held that the matter was not maintainable before the NCLT.

 

9. Dishonour of Cheque – Post-retirement – Director – Not responsible
for daily affairs – Proceedings including the summons quashed [Negotiable
Instruments Act, 1881, S. 138, S. 141; Code of Criminal Procedure, 1973, S.
482]

 

Alibaba
Nabibasha vs. Small Farmers Agri-Business Consortium & Ors. CRL. M.C.
1602/2020, CRL. M.A. 9935/2020 (Del)(HC) Date of order:
23rd September, 2020 Bench: V. Kameswar Rao J.

 

FACTS

Proceedings
have been initiated by the Respondent No.1 against the petitioner before the
Metropolitan Magistrate, Saket Courts, u/s 138 of the Negotiable Instruments
Act, 1881 (N.I. Act) purportedly on the ground that the petitioner was a
director of the Respondent No. 2. According to the petitioner, the cheques in
question, all dated 31st December, 2018 were issued by the
Respondent No. 2 for a total amount of Rs. 45 lakhs and the same were
dishonoured due to insufficient funds vide memo dated 11th
January, 2019.

 

The petitioner
ceased to be a director of the Respondent No. 2 w.e.f. 27th October,
2010, at least eight years prior to the issuance of the cheques in question.
The petitioner was a non-executive director of the Respondent No. 2 for a brief
period between 7th October, 2009 and 27th October, 2010.
The resignation of the petitioner was also notified to the Registrar of
Companies / Ministry of Company Affairs by the Respondent No. 2 by filing Form
32 dated 4th January, 2011 which is a public document.

 

However, the
Court, in a mechanical manner, considering only the Company Master Data of the
period when the Petitioner was director, has entertained the complaint u/s 138
of the N.I. Act and without applying any judicial mind and without recording
any satisfactory reasons as to whether the offence is made out against the
petitioner, has issued the summons.

 

The petitioner
filed a petition u/s 482 of the Code of Criminal Procedure, 1973 (CrPC) to
quash the proceedings initiated by the Respondent No. 1.

 

HELD

The case of the
Respondent No. 1 is primarily that the petitioner was involved in the
discussion before an agreement was executed between the Respondent No. 1 and
the Respondent No. 2. However, Form 32, i.e. the petitioner ceasing to be a
director, is not disputed. This factum surely suggests that the
petitioner having resigned on 27th October, 2010 from the Respondent
No. 2 was not the director when the agreement dated 3rd March, 2011
was executed. Even the cheques dated 31st December, 2018 were issued
much after the petitioner’s resignation as director of the Respondent No. 2.

 

It is settled
law that mere repetition of the phraseology of section 141 of the Act that the
accused is in charge and responsible for the conduct of the day-to-day affairs
of the company may not be sufficient and facts stating as to how the accused
was responsible must be averred.

 

Further, is is a settled position of law that the High Court while
entertaining a petition of this nature shall not consider the defence of the
accused or conduct a roving inquiry in respect of the merits of the
accusation/s but if the documents filed by the accused / petitioner are beyond
suspicion or doubt and upon consideration demolish the very foundation of the
accusation/s levelled against the accused, then in such a matter it is incumbent
for the Court to look into the said document/s which are germane even at the
initial stage and grant relief to the person concerned u/s 482 CrPC in order to
prevent injustice or abuse of the process of law. The petition was allowed and
the proceedings including the summons were quashed.

 

10. Maintenance – Death of Husband – Wife has right to claim maintenance
– From estate inherited by father-in-law [Hindu Adoptions and Maintenance Act,
1956, S. 19, S. 22]

 

Sardool Singh
Sucha Singh Matharoo vs. Harneet Kaur widow of Bhupinder Singh Matharoo &
Anr. WP (ST.) No.
4054 of 2020 (Bom)(HC) Date of order:
7th September, 2020 Bench: Nitin W. Sambre J.

 

FACTS

The petitioner
had two sons. One of them, Late Bhupinder, was married to Respondent No. 1 on
12th December, 2004 and died on 21st May, 2015. The
mother of Respondent No. 1 died in the year 2016, whereas her father died in
February, 2017. It is her case that she has no independent source of income and
she and her son are completely dependent on the earnings of the petitioner.

 

Respondent No.
1 preferred the proceedings u/s 19 and 22 of the Hindu Adoption and Maintenance
Act, 1956 (Act) before the Family Court with a prayer for grant of maintenance
of Rs. 1,50,000 per month to her and Rs. 50,000 to her son. The claim was
resisted by the present petitioner. Vide impugned order dated 28th
January, 2020 the Family Court has allowed the prayer partly and granted
maintenance of Rs. 40,000 per month towards the widow and Rs. 30,000 per month
to her son.

 

It is the case
of the petitioner that he is already incurring expenses of about Rs. 95,000 per
month on the respondents. Further, he has to maintain himself (he is a cancer
patient), his aged wife, his other son and his family, and also to repay bank
loans. Therefore, he filed a Writ Petition to quash and set aside the order.

 

HELD

A plain reading of section 19 of the Act contemplates that the
respondents have every right to claim maintenance after the death of the
husband from the estate inherited by her father-in-law, i.e., the present
petitioner. As per section 19(1) the respondent has to demonstrate that she is
unable to maintain herself. It is in this eventuality that she can claim
maintenance from the estate of her husband, but still the fact remains that the
said burden can be discharged by Respondent No. 1 at an appropriate stage. The
object with which the provision is made in the statute book for grant of
interim maintenance cannot be ignored.

 

Further, the income of the petitioner for A.Y.
2018-2019 as reflected in the income-tax returns was Rs. 74,87,007. Therefore,
the maintenance awarded to the respondent appears to be justified. The petition
is dismissed.

 

ALLIED LAWS

1. Home-buyer –
Cannot invoke IBC – Recovery of RERA award [Insolvency and Bankruptcy Code,
2016, S. 3(10), S. 5(7) S. 7, S. 65; Real Estate (Regulation and Development)
Act, 2016, S. 40]

 

Sh. Sushil Ansal vs. Ashok Tripathi &
Ors. Company Appeal (AT) (Insolvency) No. 452 of
2020 (NCLAT) Date of order: 14th August, 2020

Bench:
Bansi Lal Bhat J. (Acting Chairperson), Anant Bijay Singh J. and Dr. Ashok
Kumar Mishra

 

FACTS

The respondents are two house allottees who
booked flats with the appellant (Ansal Builders). As per the agreements, the
appellant had undertaken to complete the project within a period of two years
from the initiation of construction in 2015. However, on account of not
fulfilling the terms as per the agreement, the respondents approached the Uttar
Pradesh RERA where they were awarded a decree of Rs. 73 lakhs. Further, RERA
also issued recovery certificates against the builders. The respondent
allottees sought recourse under IBC for the recovery of their dues.

 

HELD

The three-member Bench held that as per
section 7 of the IBC as amended by the 2020 Amending Act, to make an
application under IBC it requires a minimum of 100 buyers or 10% of all
home-buyers, whichever is lower.

 

Further, the respondents have not approached
the Adjudicating Authority in the capacity of ‘allottees of a real estate
project’, therefore they cannot be brought within the meaning of ‘financial
creditors’. They can only be construed to be decree-holders on account of
non-payment of principal amount along with penalty as decreed by UP RERA.
Therefore, a decree-holder, though covered by the definition of ‘creditor’ u/s
3(10) of IBC, does fall within the definition of a ‘financial creditor’ across
the ambit of section 5(7) of the IBC and should have taken steps for filing an
execution case in the Civil Court.

 

2. Co-operative
Societies – Part of Constitutional Scheme – Unnecessary interference to be
avoided [Maharashtra Co-operative Societies Act, 1961, S. 77, S. 80, S. 152;
Constitution of India]

 

Rambujarat
Ramraj Chaurasia vs. State of Maharashtra WP-ASDB-LD-VC 220 of 2020 (Bom) (HC) Date of order: 2nd September,
2020 Bench: Ujjal Bhuyan J. and Abhay Ahuja J.

 

FACTS

The petitioner is the Chairman of Vidhisha
Shantiniketan CHS Ltd. and the petition has been filed challenging the order of the Dy. Registrar, Thane (Respondent No. 2) directing a bank to
not allow the petitioner to operate the Society’s bank account and to allow another member, as assigned by the
Respondent No. 2, to operate the same.

 

The Society had imposed a penalty on one Mr.
Ramesh Mankar. Aggrieved by the penalty, he had approached the Respondent No. 2
who had given certain directions to the petitioner, failing which the
Respondent No. 2 would appoint an Administrator. Pursuant thereto, and on
account of inaction, Respondent No. 2 dissolved the Managing Committee of the
Society and appointed an Administrator.

 

The Society appealed before the Divisional
Joint Registrar, Co-operatives, Respondent No. 3, who quashed and set aside the
order of the Respondent No. 2 on 20th May, 2020. However, Respondent
No. 2, via a communication dated 14th July, 2020 directed the bank
to allow the Administrator, as appointed by him, to operate the accounts.

 

HELD

The Court held that the Society shall be
jointly managed under the Chairmanship of the petitioner and the Respondent No.
6 Administrator only for day-to-day affairs till the disposal of the appeal
before the Respondent No. 3. Further, that co-operative societies are now part
of the Constitutional scheme as co-operative societies have been inserted in
the Constitution of India as Part IX B by way of the Constitution (97th
Amendment) Act, 2011 w.e.f. 15th February, 2012. Therefore,
co-operative societies should have the necessary space and autonomy to function
and develop to their full potential. Interference in the affairs of
co-operative societies should be avoided unless there is serious statutory
breach or compelling necessity.

 

3. Unpaid
instalment – As per agreement – Not an operational debt [Insolvency and
Bankruptcy Code, 2016, S. 5(21), S. 9]

 

Brand Realty Services Ltd. vs. Sir John
Bakeries India Pvt. Ltd. (IB) 1677(ND) of 2019 (NCLT) (Del.) Date of order: 22nd July, 2020 Bench: Mr. K.K. Vohra and Mr. Abni Sinha

 

FACTS

Sir John Bakeries India Pvt. Ltd. (the
corporate debtor) approached Brand Realty Services Ltd. (the operational
creditor) for investment and consultancy services vide an agreement in
November, 2014. The agreement was further ratified in 2018. As per the new
agreement, the corporate debtor agreed to pay the outstanding sum of Rs. 33
lakhs via post-dated cheques. However, the corporate debtor then requested the
operational creditor to hold on and not deposit the cheques and that the
payment would be met via RTGS. However, that never happened either.

 

A legal notice and a demand notice were
issued under the IBC. The corporate debtor denied any liability in the absence
of any document and said that there exists a dispute between the parties with
respect to the debt.

 

HELD

In order to trigger section 9 of the IBC,
i.e., application for initiation of Corporate Insolvency Resolution Process by
the operational creditor, an operational creditor is required to establish a
default for non-payment of operational debt as defined in section 5(21) of the
IBC. The application u/s 9 of the IBC was filed for the breach of the terms and
conditions of the settlement agreement between the parties and not against the
invoices raised in terms of the original agreement between them. Therefore, a
default on an instalment of the settlement agreement doesn’t come within the
purview of operational debtors.

 

The application was dismissed.

 

4. Dishonour of
cheque – Not offence against society – Can be compounded – Sentence reduced
[Negotiable Instruments Act, 1881, S. 138; Code of Criminal Procedure, 1973, S.
147, S. 386, S. 401]

 

Rakesh Kumar vs. Jasbir Singh and another Crl. Rev. No. 3004 of 2019 (P&H)(HC) Date of order: 11th August, 2020 Bench: Sudhir Mittal J.

 

FACTS

The revision petitioner is the accused. He
issued a cheque dated 22nd April, 2006 to the complainant-respondent
No. 1, which was dishonoured. Vide a judgment dated 8th July,
2016, the petitioner was convicted and sentenced to undergo rigorous
imprisonment for two years. He was also directed to pay compensation equal to
the cheque amount along with interest at the rate of 9% per annum from the date
of the cheque till the date of the judgment. An appeal against the judgment of
conviction was dismissed, leading to the present revision petition.

 

HELD

Sentencing is
primarily a matter of discretion as there are no statutory provisions governing
the same. Even guidelines have not been laid down to assist the courts in this
matter. Further, provisions inserted in the Negotiable Instruments Act are for
inculcating greater faith in banking transactions as the same needed more teeth
so that cases involving dishonour of cheques are reduced. Therefore, deterrence
and restoration are the principles to be kept in mind for sentencing. At the
same time, the Court cannot lose sight of the fact that the offence u/s 138 of
the Act is quasi criminal in nature. Section 147 of the Act makes the
offence compoundable notwithstanding anything contained in the Code of Criminal
Procedure, 1973. It is not an offence against society and an accused can escape
punishment by settling with the complainant. It was further held that the
cheque amount is only Rs. 4 lakhs, and the award of maximum sentence is
arbitrary. On the facts of the case, the sentence is reduced to one year and
six months.

 

5.
Disqualification of Director – Companies Fresh Start Scheme, 2020 –
Disqualification to be set aside [Companies Act, 2013, S. 164(2)(a)]

 

Sandeep Agarwal & Ors. vs. UOI &
Anr. WP No. 5490 of 2020 (Delhi) (HC) Date of order: 2nd September,
2020 Bench: Prathiba M. Singh J.

 

FACTS

The petition has been filed by the
petitioners, Mr. Sandeep Agarwal and Ms Kokila Agarwal, both of whom are
directors in two companies, namely, Koksun Papers Private Limited and Kushal
Power Projects Private Limited. The name of Kushal Power was struck off from
the Register of Companies on 30th June, 2017 due to non-filing of
financial statements and annual returns. The petitioners, being directors of
Kushal Power, were also disqualified with effect from 1st November,
2016 for a period of five years till 31st October, 2021 u/s
164(2)(a) of the Companies Act, 2013. Pursuant to the disqualification, their
Director Identification Numbers (DIN) and Digital Signature Certificates (DSC)
have also been cancelled. In view thereof, they are unable to carry on the
business and file returns, etc. in the active company Koksun Papers. By the
present petition, the disqualification is challenged and quashing is sought of
the impugned list of disqualified directors.

 

HELD

Companies
Fresh Start Scheme (CFSS) is a new scheme which has been notified on 30th
March, 2020. This Scheme was not invoked before the learned Division Bench. The
Scheme is obviously launched by the Government in order to give a reprieve to
such companies who have defaulted in filing documents; they have been allowed
to file the requisite documents and to regularise their operations, so as to
not face disqualification. The Scheme also envisages non-imposition of penalty
or any other charges for belated filing of documents.

 

This Scheme
provides an opportunity for active companies who may have defaulted in filing
of documents, to put their affairs in order. It thus provides the directors of
such companies a fresh cause of action to also challenge their disqualification
qua the active companies.

 

In view of the
fact that in the present case the petitioners are directors of an active
company Koksun Papers in respect of which certain documents are to be filed and
the said company is entitled to avail of the Scheme, the suspension of the DINs
would not only affect the petitioners qua the company, whose name has
been struck off, but also qua the company which is active.

 

Further,
considering the Covid-19 pandemic, the MCA has launched the Fresh Start
Scheme-2020, which ought to be given full effect. It is not uncommon to see
directors of one company being directors in another company. Under such
circumstances, to disqualify directors permanently and not allow them to avail
their DINs and DSCs could render the Scheme itself nugatory; therefore, the disqualification of the petitioners as directors is set aside.
The DINs and DSCs of the petitioners are directed to be reactivated within a
period of three working days.

ALLIED LAWS

25. Hindu
Succession Act, 1956, section 6 – Hindu Succession (Amendment) Act, 2005 –
Equal right of a daughter in HUF – Devolution of interest in coparcenary property
– Confers status of coparcener on daughters, even if born prior to the
amendment, with effect from 9th September, 2005 – And it is not
necessary that the father should be living as on 9th September, 2005
– Amendment is retrospective

 

Vineeta Sharma vs. Rakesh Sharma & Ors. Diary No. 32601 of 2018 (SC) Date of order: 11th August, 2020 Bench: Arun Mishra J., S. Abdul Naseer J.,
M.R. Shah J.

 

FACTS


Several appeals on the issue of
retrospective effect of section 6 of the Hindu Succession Act were filed before
the Supreme Court. In one of the cases, Vineeta Sharma (appellant) filed a case
against her two brothers, viz., Rakesh Sharma and Satyendra Sharma, and her
mother (respondents). The father, Dev Dutt Sharma, had three sons, one daughter
and a wife. He expired on 11th December, 1999. One of his sons
(unmarried) expired on 1st July, 2001. The appellant claimed that
being the daughter she was entitled to 1/4th share in the property
of her father. The case of the respondents was that after her marriage she
ceased to be a member of the joint family. The High Court disposed of the
appeal as the amendments of 2005 did not benefit the appellant because her
father had passed away on 11th December, 1999.

 

HELD


The Supreme Court held that the provisions
contained in substituted section 6 of the Hindu Succession Act, 1956 confer the
status of coparcener on the daughter born before or after the amendment, in the
same manner as a son, with the same rights and liabilities. Since the right in
coparcenary is by birth, it is not necessary that the father should be living
as on 9th September, 2005 (the date of the amendment).

 

26. Indian
Evidence Act, 1872, section 65B – Evidence – Electronic record – Certificate
u/s 65B(4) – Not necessary that original document itself is produced

 

Arjun Panditrao Khotkar vs. Kailash
Kushanrao Gorantyal and Ors. CA No. 20825-20826 of 2017 (SC) Date of order: 14th July, 2020 Bench: V. Ramasubramanian J., R.F. Nariman
J., S. Ravindra Bhat J.

 

FACTS


Two election petitions were filed by the present
respondents before the Bombay High Court challenging the election of the
present appellant, Arjun Panditrao Khotkar, to the Maharashtra State
Legislative Assembly for the term commencing November, 2014. The case revolved
around the four sets of nomination papers filed by the appellant. It was the
case of the present respondents that each set of nomination papers suffered
from defects of a substantial nature and, therefore, all four sets of
nomination papers having been improperly accepted by the Returning Officer of
the Election Commission, the election of the appellant be declared void. In
particular, the respondents contended that the late presentation of nomination
forms (filed by the RC after the stipulated time of 3.00 p.m. on 27th
September, 2014), meant that such nomination forms were not filed in accordance
with the law and ought to have been rejected.

 

The respondents sought to rely upon the
video camera arrangements that were made both inside and outside the office of
the Returning Officer (RO). According to the respondents, the nomination papers
were only offered at 3.53 p.m. (i.e. beyond 3.00 p.m.), as a result of which it
was clear that they had been filed after time. A specific complaint making this
objection was submitted by Kailash Kushanrao Gorantyal before the RO at 11 am
on 28th September, 2014 in which it was requested that the RO reject
the nomination forms that had been improperly accepted. This request was
rejected by the RO on the same day, stating that the nomination forms had, in
fact, been filed within time. The High Court, by its order dated 16th March, 2016, ordered the Election Commission and the
officers concerned to produce the entire record of the election of the constituency, including the original video
recordings. A specific order was made that the electronic record needs to be produced along with the ‘necessary
certificates’. The Court held that the CDs that were produced by the Election Commission could not be
treated as an original record and would, therefore, have to be proved by means
of secondary evidence. It was also found that no written certificate as
required by section 65B(4) of the Evidence Act was furnished by any of the
election officials.

 

HELD


The Supreme Court held that a certificate
u/s 65B(4) is unnecessary if the original document itself is produced. This can
be done by the owner of a laptop computer, computer tablet or even a mobile
phone, by stepping into the witness box and proving that the device concerned,
on which the original information is first stored, is owned and / or operated
by him.

 

27. Foreign
Exchange Regulation Act (FERA), 1973, sections 8, 51, 68 — Liability for
offence — Role played in company affairs — Not designation or status

 

Shailendra
Swarup vs. The Deputy Director, Enforcement CA No. 2463 of 2014 (SC) Date of order: 27th July, 2020 Bench: Ashok Bhushan J., R. Subhash Reddy
J., M.R. Shah J.

 

FACTS


Modi Xerox Ltd. (MXL) was a company
registered under the Companies Act, 1956 in 1983. Between 12th June,
1985 and 21st November, 1985, 20 remittances were made by the
company through its banker Standard Chartered Bank. The Reserve Bank of India
issued a letter stating that despite reminders issued by the authorised dealer,
MXL had not submitted the Exchange Control copy of the customs bills of Entry /
Postal Wrappers as evidence of import of goods into India. The Enforcement
Directorate wrote to MXL in 1991-1993 for supplying invoices as well as
purchase orders. MXL on
9th July, 1993 provided the documents for four transactions and
Chartered Accountant’s Certificates for balance 16 amounts for which MXL’s
bankers were unable to trace old records dating back to 1985. MXL amalgamated
and merged into Xerox Modicorp Ltd. (hereinafter referred to as “XMC”) on 10th
January, 2000. A show cause notice dated 19th February, 2001 was issued by the Deputy Director, Enforcement Directorate to MXL and its
directors, including the appellant. The notice required to show cause in
writing as to why adjudication proceedings as contemplated in section 51 of
FERA should not be held against them. The Directorate of Enforcement decided to
hold proceedings as contemplated in section 51 of the FERA, 1973 read with
sub-sections 3 and 4 of section 49 of FEMA and fixed 22nd October,
2003 for personal hearing. A notice dated 8th October, 2003 was sent
to MXL and its directors.

 

In reply the appellant stated that he is a
practising advocate of the Supreme Court and was only a part-time,
non-executive director of MXL and he was never in the employment of the company
nor had any executive role in its functions. It was further stated that the
appellant was never in charge of, nor ever responsible for, the conduct of the
business of the company. The Deputy Director, Enforcement Directorate, after
hearing the appellant and other directors of the company, passed an order dated
31st March, 2004 imposing a penalty of Rs. 1,00,000 on the appellant
for contravention of section 8(3) read with 8(4) and section 68 of FERA, 1973.

 

The appellant approached the Appellate
Tribunal for foreign exchange but his appeal was dismissed on 26th March, 2008. A criminal appeal was filed by the appellant in
the Delhi High Court but by the impugned judgment dated 18th
October, 2009 it dismissed the appeal of the appellant.

 

HELD


The Supreme Court held that for proceeding
against a director of a company for contravention of provisions of FERA, 1973
the necessary ingredient for proceeding shall be that at the time the offence
was committed, the director was in charge of and was responsible to the company
for the conduct of its business. The liability to be proceeded with for an
offence u/s 68 of FERA, 1973 depends on the role one plays in the affairs of
the company and not on mere designation or status.

 

Editor’s Note: FERA, 1973 has been substituted with FEMA, 1999. Section 51 of
FERA, 1973 is similar to section 13(1) of FEMA, 1999.

 

28. Constitution
of India, Articles 226, 300A – High Courts bound to issue Writ of Mandamus –
For enforcement of public duties – Right to property is a fundamental right and
human right

 

Hare Krishna Mandir Trust vs. State of Maharashtra
& Ors. CA No. 6156 of 2013 (SC) Date of order: 7th August, 2020 Bench: Indu Malhotra J., Indira Banerjee J.

 

FACTS


The Thorat family was the owner of a plot at
Bhamburda in Pune. By a registered deed of conveyance dated 21st
December, 1956, one Krishnabai Gopal Rao Thorat sold the northern part of the
plot jointly to Swami Dilip Kumar Roy, one of the most eminent disciples of Sri
Aurobindo, and Indira Devi, daughter-disciple of Swami Dilip Kumar Roy. Swami
Dilip Kumar Roy had moved to Pune to propagate the philosophy of Sri Aurobindo
and established the Hare Krishna Mandir with his daughter disciple, Indira
Devi, on the land purchased from Krishnabai Gopal Rao Thorat.

 

According to the appellants, the Pune
Municipal Corporation, by an order dated 20th August, 1970, divided
Plot No. 473 which was originally numbered Survey No. 1092. The final plot No.
473 B was sub-divided into four plots. On 20th August, 1970 the City
Survey Officer directed issuance of separate property cards in view of a
proposed Development Scheme under the Regional and Town Planning Act which
included Final Plot No. 473, and an Arbitrator was appointed. The Arbitrator
made an award dated 16th May, 1972 directing that the area and
ownership of the plots were to be as per entries in the property register. The
appellant contended that the Pune Municipal Corporation by its letters dated 29th
June, 1996, 4th January, 1997 and 18th January, 1997
admitted that the internal road had never been acquired by the Pune Municipal
Corporation. The Town and Planning Department also admitted that the Pune
Municipal Corporation had wrongly been shown to be the owner of the said road.

 

The Urban Development Department rejected
the proposal of the appellant and held that the Pune Municipal Corporation is
the owner of the land. The Hon’ble High Court dismissed the Writ Petition
challenging the said order and refused to issue a Writ of Mandamus.

 

HELD


The Supreme
Court held that the right to property may not be a fundamental right any
longer, but it is still a Constitutional right under Article 300A and a human
right. In view of the mandate of Article 300A of the Constitution of India, no
person is to be deprived of his property save by the authority of law. The High
Courts, exercising their jurisdiction under Article 226 of the Constitution,
not only have the power to issue a Writ of Mandamus or in the nature of
Mandamus, but they are duty-bound to exercise such power where the Government
or a public authority has failed to exercise or has wrongly exercised
discretion conferred upon it by a statute, or a rule, or a policy decision of
the Government, or has exercised such discretion mala fide or on
irrelevant consideration. The High Court is not deprived of its jurisdiction to
entertain a petition under Article 226 merely because in considering the
petitioner’s right to relief questions of fact may fall to be determined.
Exercise of the jurisdiction is discretionary, but the discretion must be
exercised on sound judicial principles.

 

 

 

 

 

 

 

 

We must never ever give up, or give in or throw in the
towel. We must continue to press on! And be prepared to do what we can to help
educate people, to motivate people, to inspire people to stay engaged, to stay
involved and to not lose their sense of hope. We must continue to say we’re one
people. We’re one family. We all live in the same house. Not just an American
house but the world house. As Dr. King said over and over again, ‘We must learn
to live together as brothers and sisters.
If not, we will perish as fools.

—  John
Lewis, 8th June, 2020, New York Interview (civil rights giant,
17-term Congressman, an ally of MLK. He passed away in July, 2020)

ALLIED LAWS

5 Sobha Hibiscus Condominium vs. Managing Director, M/s Sobha Developers Ltd. & Anr. AIR 2020 Supreme Court 1163 Date of order: 14th February, 2020 Bench: Mohan M. Shantanagoudar J., R. Subhash Reddy J.

Condominium – Maintainability – Complainant – Condominium is neither ‘consumer’ nor ‘recognised voluntary association’ but group of individual consumers [S. 2(1)(d), S. 12(1)(b) Consumer Protection Act]

FACTS
The appellant / complainant is a statutory body. It consists of members who are the owners of the apartments in a multi-storey building, namely, ‘Sobha Hibiscus’, situated in South Bangalore Taluk in Karnataka.

The National Consumer Disputes Redressal Commission (NCDRC) rejected the complaint filed by the appellant on the ground that the appellant condominium has no locus standi to file the complaint since neither is it a ‘consumer’ nor a ‘recognised consumer association’ within the meaning of section 12 of the Consumer Protection Act, 1986.

HELD
The Court held that the finding of the NCDRC that a recognised consumer association can file a complaint on behalf of a single consumer but cannot file a complaint on behalf of several consumers in one complaint is erroneous and there is no legal basis for it. From a reading of section 12(1)(b) of the Act read with Explanation to section 12 it is clear that a voluntary registered association can file a complaint on behalf of its members to espouse their grievances. There is nothing in the aforesaid provision of the Act which would restrict its application to the complaint pertaining to an individual complainant. If a recognised consumer association is made to file multiple complaints in respect of several consumers having a similar cause of action, that would defeat the very purpose of registration of a society or association and it would result only in multiplicity of proceedings without serving any useful purpose.

The matter is remitted back to the NCDRC with a direction to consider the complaints on merits and pass appropriate orders.

6 Shaik Janimiya vs. State Bank of India AIR 2020 Telangana 126 Date of order: 27th April, 2020 Bench: M.S. Ramachandra Rao J., T. Amarnath Goud J.

Registration – Transfer of prohibited property – Impossible – Highest bidder cannot wait until bank gets clear title – Bidder entitled to relief [Registration Act, 1908]
    
FACTS
The petitioner is the Managing Director of M/s Crescent Formulations Pvt. Ltd. which is engaged in the manufacture and marketing of pharmaceutical formulations. The respondent bank issued an e-auction notice under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act proposing to conduct an e-auction of several properties on 29th February, 2017 [sic]. The petitioner deposited Rs. 21,80,000 as EMD and later became the highest bidder after quoting Rs. 2,19,00,000. On 30th November, 2017 the respondent addressed a letter to the petitioner declaring him as the highest bidder and directed him to deposit the balance EMD amount of 25% (Rs. 32,75,000) immediately. The petitioner complied and another letter dated 30th November, 2017 was issued by the respondent directing him to deposit Rs. 1,61,81,000 being 75% of the sale consideration within 15 days from the date of the auction. The petitioner was also asked to make arrangements for registration of the sale certificate with the Sub-Registrar concerned.

When the petitioner approached the Sub-Registrar, the latter informed him that the properties in Sy. No. 11 of Khanamet village were in the prohibitory list notified under section 22-A of the Registration Act, 1908 by the State of Telangana and that he would not register the certificate of sale issued by the respondent in favour of the petitioner.

The petitioner contends that he demanded the respondent to refund the sum of Rs. 2,19,00,000 deposited by him with interest at 12% per annum.

HELD
It is not disputed that before the sale certificate could be registered the State Government had imposed a prohibition on the registration of plots in Sy. No. 11 of Khanamet village, in which the above property is located. Hence it became impossible for the title to the property to be conveyed to the petitioner by registering the sale certificate. The petitioner cannot be compelled to wait till the bank litigates with the State and resolves the issue.

This Court has repeatedly expressed the view that Governments and statutory authorities should be model or ideal litigants and should not put forth false, frivolous, vexatious, technical (but unjust) contentions to obstruct the path of justice.

The bona fide claims of the petitioner cannot be defeated by the respondent by raising hyper-technical pleas. The petitioner was entitled to the prayed relief. The writ petition was allowed.

7 Surender Kumar Singhal & Ors. vs. Arun Kumar Bhalotia & Ors. CM(M) 1272 of 2019 dated 25th March, 2021 Date of order: 25th March, 2021 Bench: Prathiba M. Singh J.

Arbitration – Tribunal can decide objections on its jurisdiction – High Courts have limited interference – Jurisdiction should be adjudicated first [Arbitration and Conciliation Act, 1996]

FACTS
Disputes arose between two branches of one family. The Delhi High Court referred the matter to arbitration by a sole arbitrator.

The petitioners herein then filed an application before the arbitrator u/s 16 of the Arbitration and Conciliation Act, 1996 (Act) and raised the objection that the Tribunal does not have any jurisdiction to adjudicate the claims against the petitioners. The arbitrator held that the issue of jurisdiction would be dealt with along with the final order. An application was made for recall of the said order. The said application was rejected by the arbitrator. The orders rejecting the applications were challenged in the present proceedings.

HELD
The Court observed that the arbitrator was of the opinion that a final decision on the application of the petitioners u/s 16 of the Act cannot be taken without further evidence in the matter. The property which the petitioners have purchased as per the arbitrator is clearly the subject matter of the arbitral proceedings and thus the arbitrator, after evidence being recorded, may be required to mould relief in the same manner. The Court did not deem it appropriate to interfere under Article 227. However,
the Court held that the arbitrator’s observation that the said objection shall be decided ‘while passing the award’ may also not be fully in line with the legal position as held in McDermott International Inc. vs. Burn Standard Co. Ltd. and Ors. (2006) 11 SCC 181. Thus, the question of jurisdiction raised by the petitioners would have to be adjudicated first, prior to the passing of the final award.

ALLIED LAWS

1. Uma Mittal & Ors. vs. UOI & Ors. AIR 2020 Allahabad 202 Date of order: 15th June, 2020 Bench: Shashi Kant Gupta J., Saurabh Shyam Shamshery J.

Guardian – Comatose state – No remedy under law – Wife appointed as guardian – Central Government directed to consider enacting an appropriate legislation [Constitution of India, Art. 21, Art. 226; Guardians and Wards Act, 1890, S. 7]

FACTS
Petitioner No. 1 is the wife of Sunil Kumar Mittal (SKM). The couple has four children (petitioner Nos. 2 to 5), three daughters and a son Raghav Mittal; petitioner No. 2 is a married daughter. However, petitioner Nos. 3 and 4 are unmarried daughters and petitioner No. 5 is the son.

SKM had a fall and suffered a severe head injury. After a series of medical procedures, Doctors opined that till his eventual demise SKM would remain in comatose condition.

SKM was carrying on business as a sole proprietor till December, 2018. He also had a few real estate properties and bank accounts.

Writ Petition was filed to appoint the petitioner No. 1 as the guardian of her husband to protect his interest, administer bank accounts, investments, proprietorship business, etc., and in the event of necessity, to sell the immovable property standing in the name of her husband and to use the proceeds towards medical treatment of her husband and family welfare expenses.

HELD
There appears to be no dispute that any of legislative enactments are applicable qua SKM, a person lying in a comatose state. Further, the petitioners are in dire need of money towards medical treatment of SKM and for the welfare of the family as they have exhausted their financial resources in the past one and a half years.

Further, since the petition has been filed jointly, there is no dispute amongst the legal heirs of SKM.

Petitioner No. 1, Uma Mittal, wife of SKM as the guardian of her husband who is in a comatose condition, is vested with the property of her husband to do all acts, deeds and things for the proper medical treatment, nursing care, welfare and benefit of SKM and his children and with power to do all acts, deeds and things with respect to his assets and properties.

Further, the Central Government to consider enacting an appropriate legislation pertaining to appointment of guardians qua persons lying in a comatose state, as no remedy is provided in any statute to persons in comatose / vegetative state.

2. N. Mani and Ors. vs. Babyammal AIR 2020 (NOC) 511 (Mad) Date of order: 19th September, 2019 Bench: T. Ravindran J.

Registration – Alleged relinquishment of property – Family arrangement – Instrument not registered – Agreement not sustainable [Hindu Succession Act, S. 14(1)]

FACTS
The properties in the plaint belonged to one Natesa Naicker and when it is admitted that the plaintiff and the defendants are the legal heirs of Natesa Naicker, it is found that on the demise of Natesa Naicker, the plaintiff and the defendants would be each entitled to equal share in the schedule properties.

However, the defendants have put forth the case that the defendants had effected a partition amongst the family members by a partition deed and further also put forth the case that in the family arrangement jewels and cash were given to the daughters including the plaintiff and thereby the daughters had relinquished their right in the family properties and accordingly the plaintiff is not entitled to claim any share in the family properties.

HELD
The family arrangement and the alleged relinquishment said to have been made by the plaintiff in respect of her share in the family properties has been stoutly challenged by the plaintiff and despite the same the defendants have not placed any acceptable and reliable materials to establish that the so-called family arrangement said to have been effected between the family members is true and validly effected. When the defendants are unable to put forth the clear case that the daughters had been given jewels and cash in lieu of their shares in the family properties and when the defendants have not tendered clear evidence as to when actually the jewels and cash were given to the daughters, we cannot safely accept the case of the defendants that a valid family arrangement had been effected and the daughters had been given jewels and cash in lieu of their shares and that the daughters had thereby relinquished their right in respect of their family properties.

On a perusal, when such instruments are required by law to be compulsorily registered and when it is found that they are not registered, no safe reliance could be made on the abovesaid documents for sustaining the defence version and the Courts below had rightly rejected the said documents.

3. Food Corporation of India & Anr. vs. V.K. Traders & Anr. (2020) 4 SCC 60 Date of order: 6th March, 2020 Bench: S.A. Bobde C.J., B.R. Gavai J. and Surya Kant J.

Lease deeds – Unregistered lease deeds – Not admissible as evidence – No right in lease [Registration Act, 1908, S. 17; Transfer of Property Act, 1882, S. 107]

FACTS
It was common practice in Punjab for different government agencies to allocate paddy for custom milling to hundreds of rice mills, which in turn would supply the rice, post-milling as per approved specifications, to the appellant FCI. Such allocation would take place through terms of a bipartite agreement and the same took place for the kharif marketing season (KMS) of 2004-05.

A dispute arose as to the quality of the milled rice stock for the aforementioned KMS, leading to an investigation by the Central Bureau of Investigation (CBI). Finding the quality to be defective, the CBI initiated prosecution against numerous rice millers and additionally recommended blacklisting of a total of 182 millers. Such ban was effected by the FCI vide a Circular dated 10th October, 2012.

The blacklisted rice mills, thus, were not allocated any paddy for purposes of custom milling in 2011-12. Allegedly with a view to wriggle out of the ban period, the mill owners leased out their rice mills to other similar partnership / proprietorship firms. Notably, all such lease deeds were unregistered.

These new lessees subsequently applied to the appellant FCI for allocation of paddy and asserted that none of them had committed any default or been blacklisted and that the disqualification attached to their lessors could not traverse onto their lawful entitlements. The FCI, on the other hand, declined to entertain such requests on the ground that the new lessees had simply stepped into the shoes of the earlier blacklisted lessors as the lease deeds were nothing but sham transactions to circumvent the ban.

HELD
No reliance can be placed upon the lease deeds allegedly executed between the defaulting rice miller(s) and the respondent(s), as they do not satisfy the statutory requirements of section 17(1)(d) of the Registration Act, 1908. These lease deeds thus cannot be accepted as evidence of valid transfer of possessory rights. The plea taken by the appellant FCI, that such documentation was made only to escape the liability fastened on the defaulting rice millers, carries some weight, though it is a pure question of fact. The appeal is allowed.

4. Apurva Jagdishbhai Dave vs. Prapti Apurva Dave AIR 2020 Gujarat 124 Date of order: 25th October 2020 Bench: A.P. Thaker J.

Electronic evidence – CD recording – Application dismissed – Certificate u/s 65B filed later – Admitted as primary evidence u/s 62 [Evidence Act, 1872; S. 62, S. 65B]

FACTS

The petitioner wanted to play a CD in the Court proceedings and asked a question to the respondent either to controvert or to admit the incident of a particular date and also asked the respondent whether or not it was her voice. It was contended that the petitioner had made an application for playing the CD.

The respondent raised an objection with regard to playing of the CD in the Family Court and filed a reply wherein she disputed the contents of the recording and stated that no such incident had occurred; after hearing both the parties, the trial Court rejected the application.

HELD


The trial Court dismissed the application on the ground that the certificate under section 65B of the Evidence Act has been produced at a later stage and not at the time when the original document was produced. Now, it is an admitted fact that u/s 65B of the Evidence Act, the electronic document can be produced along with the certificate which is prescribed under the Act.

In view of the provisions of section 65B of the Evidence Act, the Supreme Court in the case of Anwar P.V. vs. P.V. Basheer, reported in (2014) 10 SCC 473 has held that an electronic record by way of secondary evidence shall not be admitted in evidence unless the requirements u/s 65B are satisfied. Thus, in the case of CD, VCD, chip, etc., the same shall be accompanied by the certificate in terms of section 65B obtained at the time of taking the document, without which the secondary evidence pertaining to that electronic record is inadmissible. Although the aforesaid case clarified the position relating to certification to a large extent, it did not specify as to whether the certificate can be supplied at a later stage.

There are two decisions of the Delhi High Court and the Rajasthan High Court, i.e., Kundan Singh vs. State, 2015 SCC Online Delhi 13647 and Paras Jain vs. State of Rajasthan (2015) SCC Online Rajasthan 8331, respectively. Both the Courts have taken the view that section 65B certificate can be provided at a later stage and it is not an illegality going to the root of the matter.

Therefore, the impugned order of the Family Court regarding non-submission of the certificate at the time of production of electronic record is not legally sustainable. The document ought to have been permitted to be produced in the matter and after proper verification it could have been exhibited. Therefore, the impugned order of the trial Court is set aside and the electronic record is liable to be taken on record.

ALLIED LAWS

24. Jayanta Ghosh & Ors. vs. Ajit Ghoshb AIR 2020 Calcutta 196 Date of order: 25th February, 2020 Bench: Shampa Sarkar J.


 

Gift deed – Unconditional registered gift deed cannot be revoked – No conditions of maintenance of parents are referred in the gift deed hence no duty cast upon son to maintain the parents [Maintenance and Welfare of Parents and Senior Citizens Act, 2007, S. 10, S. 23; Transfer of Property Act, 1882, S. 122]

 

FACTS

By a registered deed of gift dated 18th July, 2018, Ajit Ghosh (the respondent), transferred a two-storied building together with the appurtenant land to his son Jayanta Ghosh (petitioner No. 1). Thereafter, by a registered deed of gift dated 14th November, 2018, the petitioner No. 1 transferred the suit property to his wife and son (petitioners Nos. 2 and 3). The petitioners reside on the first floor and the parents on the ground floor.

 

The petitioners have alleged that the married daughters of the respondent and their husbands with ulterior motive tried to grab the said property, conspired with a few developers and created a cloud over the petitioners’ title over the suit property. Under such circumstances, being left with no other alternative, the petitioners Nos. 2 and 3 were constrained to institute a civil suit seeking a decree for declaration of title and injunction against the daughters and sons-in-law of the opposite party. The Court of the Learned Civil Judge (Jr. Division) directed the parties to maintain status quo in respect of the nature, character and possession of the suit property.

 

The respondent filed an application seeking maintenance under the Maintenance and Welfare of Parents and Senior Citizens Act, 2007 (the Act). The Tribunal directed the petitioner No. 1 to pay maintenance of a sum of Rs. 10,000 per month. The respondents filed an application before the Tribunal seeking cancellation of the said deed of gift.

 

The Tribunal allowed the maintenance case, thereby cancelling the two registered deeds of gift dated 18th July, 2018 and 14th November, 2018 and further directing the petitioners to vacate the said property within six months from the said order. Aggrieved, this revisional application has been filed before the High Court.

 

HELD

From the recitals in the deed of gift, it appears that the respondent being pleased and satisfied with the love and respect shown by the petitioners, considered it his fatherly duty to secure his son in the future and thus had gifted the said property to the petitioner No. 1. The deed of gift was unconditional. No condition was attached with regard to the duty upon the petitioner No. 1 to provide basic maintenance and basic physical needs to the respondents. Therefore, section 23 of the said Act does not have any manner of application in this case. The revisional application is allowed.

 

25. Ashwin Kumar Ramanathan & Anr. vs. Inspector-General of Registration, Chief Controlling Revenue Authority AIR 2020 Madras 246 Date of order: 27th May, 2020 Bench: M. Govindaraj J.

 

Family arrangement – Stamp duty is not leviable – Transfer of property between family members [Stamp Act, 1899, Sch. 1 Art. 45(a)]

 

FACTS

One Mr. K. Ganesan by a Will dated 12th April, 1990 bequeathed life interest in favour of his wife and absolute interest in favour of his grandson (the appellant). On 18th October, 2002 the said Ganesan died. Since the Will was not probated, the family members have entered into a family arrangement. As per this, the wife and daughters of the deceased Ganesan have given the property to the grandchild as intended by the testator in his Will. However, the conveyance by the daughters of Ganesan was considered as settlement by non-family members as they do not fall within the definition of ‘family’. Therefore, stamp duty was imposed in respect of the shares of the daughters of Ganesan settled in favour of their brother’s son under the Indian Stamp Act.

 

HELD

It is pertinent to note that the Government in Notification No. 5450/C2/05 has clarified the definition of family for the purpose of Article 45(a) of Schedule I of the Indian Stamp Act. The clarification is given by the Government to the effect that even though the parent has died, the sisters and brother shall be construed as sons and daughters and they will fall within the definition of family. This will also apply to the children of the predeceased sons and daughters. As per the clarification, the daughters of Ganesan shall also fall under the definition of family. The conveyance or settlement made by them in favour of the children of the predeceased sons shall be considered as a transaction between the family members. They cannot be treated as members outside the family but included within the meaning of the family. The appeal is allowed.

 

26. Branch Manager, Indigo Airlines vs. Kalpana Rani Debbarma AIR 2020 Supreme Court 678 Date of order: 28th January, 2020 Bench: A.M. Khanwilkar J., Dinesh Maheshwari J.

 

Deficiency in service – Failure of passenger to reach the boarding gate after issuance of boarding pass – Airlines not duty-bound to escort every passenger [Consumer Protection Act, 1986, S. 2(1)(g), S. 21]

 

FACTS

The respondents had booked air ticket(s) for the flight from Kolkata to Agartala operated by the appellant airlines. According to them, they had reported well in time at the check-in counter and after completing the necessary formalities, they were issued boarding passes. However, they were left behind by the ground staff of the airlines and the flight departed without any information about its departure being given to the respondents. The respondents then requested the ground staff of the airlines to accommodate them in the next available flight for Agartala. Even this request was turned down.

 

As a result, the respondents had to incur expenditure for staying back at a hotel in Kolkata for two nights. They also had to incur loss of salary, mental agony, harassment, etc. Initially, the respondents sent a legal notice through their advocate on 28th January, 2017 demanding compensation of Rs. 3,32,754. As no response thereto was received, the respondents filed a complaint before the District Forum reiterating the grievance made in the legal notice and prayed for direction to the appellants for damages along with interest at the rate of 12% per annum.

 

HELD

The District Forum, the State Commission and the National Commission ruled in favour of the respondents but granted compensation of varying amounts. The matter was carried to the Apex Court.

 

The Supreme Court noted that while dealing with such a complaint, the jurisdiction or the nature of inquiry to be undertaken by the consumer fora is limited to the factum of deficiency in service and to award compensation only if that fact is substantiated by the party alleging the same. The expression ‘deficiency in service’ has been defined in section 2(1)(g) of the Consumer Protection Act, 1986 to mean any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service.

 

Further, the approach of the consumer fora is in complete disregard of the principles of pleadings and burden of proof. First, the material facts constituting deficiency in service are blissfully absent in the complaint as filed. Second, the initial onus to substantiate the factum of deficiency in service committed by the ground staff of the airlines at the airport after issuing boarding passes was primarily on the respondents. That has not been discharged by them. The consumer fora, however, went on to unjustly shift the onus on the appellants because of their failure to produce any evidence. In law, the burden of proof would shift on the appellants only after the respondents / complainants had discharged their initial burden in establishing the factum of deficiency in service.

 

Further, after the boarding pass is issued, the passenger is expected to proceed towards the security channel area and head towards the specified boarding gate on his own. There is no contractual obligation on the airlines to escort every passenger, after the boarding pass is issued at the check-in counter, up to the boarding gate. Further, the airlines issuing boarding passes cannot be made liable for the misdeeds, inaction or so to say misunderstanding caused to the passengers, until assistance is sought from the ground staff of the airlines at the airport well in time. It is not the case of the respondents that the boarding gate was changed at the last minute or there was any reason which created confusion attributable to airport / airlines officials, so as to invoke an expansive meaning of ‘denied boarding’. The factual situation in the present case is clearly one of ‘Gate No Show’ and the making of the respondents and not that of ‘denied boarding’ as such.

 

The appellant airlines cannot be blamed for the non-reporting of the respondents at the boarding gate. The appeal is allowed.

 

27. Seelam Pra vs. Ganta Mani Kumar AIR 2020 Telangana 189 Date of order: 19th July, 2019 Bench: M.S. Ramachandra Rao J.

 

Recording evidence through video conferencing – Wife working in USA – Unable to come to India – Cannot be compelled to give up her job to appear in Court – Evidence can be led through video conferencing [Hindu Marriage Act, 1955, S. 13, S. 21; Evidence Act, 1872, S. 65-B]

 

FACTS

The petitioner is employed in the USA and lives there along with a son born to the parties. The petitioner is represented by her father / G.P.A. holder. She sought recording of evidence by video conference from her residence in the US on the ground that she was living there and it was not possible for her to appear before the Family Court, Hyderabad on the several dates of adjournment. But the trial Court declined to give such permission observing that in the premises of the City Civil Court, Hyderabad where the Family Court was located, infrastructure / facility for video conferencing has not been provided.

 

HELD

In a situation where one or both of the parties to a matrimonial proceeding is living abroad and is unable to come to India to give evidence on account of his / her employment there, and there is a risk of the party losing his / her employment if he / she were to return to India, it would be unjust to compel the said party to give up her job there so that she can appear on every date of adjournment in the Family Court in India where her case is pending. It is common knowledge that pendency in some of the Family Courts is very high and there is every possibility of the matter getting dragged on indefinitely.

 

Further, that the petitioner cannot be penalised if her evidence could not be recorded when she was in India in the year 2018 because she admittedly attempted to file her documents through her G.P.A. which was rejected and permitted only much later.

 

The Principal Judge, Family Court, was directed to record the chief-examination / cross-examination of the petitioner through video conferencing at the video conferencing facility available in City Civil Court, Hyderabad after fixing an appropriate time with the consent of both parties and their counsel.

 

28. Abhilasha vs. Parkash & Ors. AIR 2020 Supreme Court 4355 Date of order: 15th September, 2020 Bench: Ashok Bhushan J., R. Subhash Reddy J., M.R. Shah J.

 

Maintenance – Unmarried daughter unable to maintain herself even after attaining majority – The obligation which is cast on the father to maintain his unmarried daughter can be enforced by her against her father [The Hindu Adoptions and Maintenance Act, 1956, S. 20(3); The Code of Criminal Procedure, 1973, S. 125]

 

FACTS

The respondent No. 2, mother of the appellant, on her behalf as well as on behalf of her two sons and the appellant daughter, filed an application u/s 125 CrPC against her husband, the respondent No. 1, Parkash, claiming maintenance for herself and her three children. The Judicial Magistrate dismissed the application u/s 125 CrPC of the applicants and allowed the same for respondent No. 1 (appellant before us) for grant of maintenance till she attains majority.

 

Two questions arise for consideration in this appeal:

 

(i) Whether the appellant, who although she had attained majority but is still unmarried, is entitled to claim maintenance from her father in proceedings u/s 125 CrPC although she is not suffering from any physical or mental abnormality / injury?

 

(ii) Whether the orders passed by the Judicial Magistrate as well as the Revisional Court limiting the claim of the appellant to claim maintenance till she attains majority on 26th April, 2005 deserves to be set aside with a direction to the respondent No. 1 to continue to give maintenance even after 26th April, 2005 till the appellant remains unmarried?

 

HELD

Section 20(3) of the Hindu Adoptions and Maintenance Act, 1956 (Act) is nothing but recognition of the principles of Hindu Law regarding maintenance of children and aged parents. Section 20 of this Act casts a statutory obligation on a Hindu to maintain his daughter who is unmarried and unable to maintain herself out of her own earnings or other property. Hindu Law prior to the enactment of the Act of 1956 always obliged a Hindu to maintain an unmarried daughter who is unable to maintain herself. The obligation, which is cast on the father to maintain his unmarried daughter, can be enforced by her against her father if she is unable to maintain herself by enforcing her right u/s 20. 

ALLIED LAWS

8 Chief Information Commissioner vs. High Court of Gujarat AIR (2020) SC 4333
Date of order: 4th March, 2020 Bench: R. Banumathi J., A.S. Bopanna J., Hrishikesh Roy J.

Right to Information – Certified copies to third parties – Only on affidavit – Not inconsistent with RTI Act – RTI Act will not override High Court Rules [Right to Information Act, 2005, S. 6(2), S. 11, S. 12; Gujarat High Court Rules, R. 151]

FACTS

An RTI application dated 5th April, 2010 was filed by respondent No. 2 seeking information pertaining to certain cases along with all relevant documents and certified copies. In reply, by a letter dated 29th April, 2010, the Public Information Officer, Gujarat High Court, informed respondent No. 2 that for obtaining the required copies he should make an application personally or through his advocate by affixing a court fee stamp of Rs. 3 along with the requisite fees to the ‘Deputy Registrar’. It was further stated that as respondent No. 2 is not a party to the said proceedings, as per Rule 151 of the Gujarat High Court Rules, 1993 his application should be accompanied by an affidavit stating the grounds on which the certified copies are required and on making such application he will be supplied with the certified copies of the documents as per Rules 149 to 154 of the Gujarat High Court Rules, 1993.

HELD

Rule 151 of the Gujarat High Court Rules stipulates that a third party to have access to the information / obtaining the certified copies of the documents or orders is required to file an application / affidavit stating the reasons for seeking the information, and this is not inconsistent with the provisions of the RTI Act but merely lays down a different procedure from the practice of payment of fees, etc., for obtaining information. In the absence of any inherent inconsistency between the provisions of the RTI Act and other laws, the overriding effect of the RTI Act would not apply.

For information to be accessed / certified copies on the judicial side to be obtained through the mechanism provided under the High Court Rules, the provisions of the RTI Act shall not be resorted to.

9 In Re: Expeditious trial of cases u/s 138 of the Negotiable Instruments, Act, 1881 Suo motu W.P. (Crl) No. 2 of 2020 Date of order: 17th April, 2021 Bench: A.S. Bopanna J., B.R. Gavai J.,  L. Nageswara Rao J., Ravindra Bhat J., S.A. Bobde CJI

Dishonour of cheques – Long pendency of disputes – Guidelines issued [S. 138, Negotiable Instruments Act, 1881]

FACTS


Special Leave Petition (Criminal) No. 5464 of 2016 pertains to dishonour of two cheques on 27th January, 2005 for an amount of Rs. 1,70,000. The dispute has remained pending for the past 16 years. Concerned with the large number of cases filed u/s 138 of the Negotiable Instruments Act, 1881 (the 1881 Act) pending at various levels, a Division Bench of this Court decided to examine the reasons for the delay in disposal of these cases. The Registry was directed to register a suo motu Writ Petition (Criminal).

HELD

Courts are inundated with complaints filed u/s 138 of the 1881 Act. The cases are not being decided within a reasonable period and remain pending for a number of years. This gargantuan pendency of complaints has had an adverse effect on disposal of other criminal cases. Concerned with the large number of cases pending at various levels, a larger bench of the Supreme Court has examined the reasons for the delay in disposal of cases. The following conclusions were arrived at:

1) The High Courts are requested to issue practice directions to the Magistrates to record reasons before converting trial of complaints u/s 138 from summary trial to summons trial.
2) Inquiry shall be conducted on receipt of complaints u/s 138 to arrive at sufficient grounds to proceed against the accused when such accused resides beyond the territorial jurisdiction of the court.
3) For the conduct of inquiry u/s 202 of the Code, evidence of witnesses on behalf of the complainant shall be permitted to be taken on affidavit. In suitable cases, the Magistrate can restrict the inquiry to examination of documents without insisting on examination of witnesses.
4) We recommend that suitable amendments be made to the Act for provision of one trial against a person for multiple offences u/s 138 committed within a period of 12 months, notwithstanding the restriction in section 219 of the Code.
5) The High Courts are requested to issue practice directions to the Trial Courts to treat service of summons in one complaint u/s 138 forming part of a transaction, as deemed service in respect of all the complaints filed before the same court relating to dishonour of cheques issued as part of the said transaction.
6) Judgments of this Court in Adalat Prasad [(2004) 7 SCC 338] and Subramanium Sethuraman [(2004) 13 SCC 324] have interpreted the law correctly and we reiterate that there is no inherent power of Trial Courts to review or recall the issue of summons. This does not affect the power of the Trial Court u/s 322 of the Code to revisit the order of issue of process in case it is brought to the court’s notice that it lacks jurisdiction to try the complaint.
7) Section 258 of the Code is not applicable to complaints u/s 138 and findings to the contrary in Meters and Instruments [(2004) 13 SCC 324] do not lay down the correct law. To conclusively deal with this aspect, amendment to the Act empowering the Trial Courts to reconsider / recall summons in respect of complaints u/s 138 shall be considered by the committee constituted by an order of this Court dated 10th March, 2021.
8) All other points, which have been raised by the Amici Curiae in their preliminary report and written submissions and not considered herein, shall be the subject matter of deliberation by the aforementioned committee. Any other issue relating to expeditious disposal of complaints u/s 138 shall also be considered by the committee.

10 Asset Reconstruction Company (India) Limited vs. Bishal Jaiswal & Anr. CA No. 323 of 2021 Date of order: 15th April, 2021 Bench: Rohinton Fali Nariman J., B.R. Gavai J., Hrishikesh Roy J.

Period of Limitation – Balance Sheet entries – Acknowledgement of debt [S. 18, Limitation Act, 1963]

FACTS

In 2009, Corporate Power Ltd. (corporate debtor) set up a thermal power project in Jharkhand and availed of loan facilities from various lenders, including the State Bank of India (SBI). The account of the corporate debtor was declared as a non-performing asset by SBI on 31st July, 2013. On 27th March, 2015, SBI issued a loan-recall notice to the corporate debtor in its capacity as the lenders’ agent. On 20th June, 2015, the appellant issued a notice u/s 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFAESI Act) on behalf of itself and other consortium lenders to the corporate debtor.

On 1st June, 2016, the appellant took actual physical possession of the project assets of the corporate debtor under the SARFAESI Act. On 26th December, 2018, the appellant filed an application u/s 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) before the National Company Law Tribunal, Calcutta (NCLT) for a default amounting to Rs. 59,97,80,02,973 from the corporate debtor. As the relevant form indicating the date of default did not indicate any such date, this was made up by the appellant on 8th November, 2019 by filing a supplementary affidavit before the NCLT, specifically mentioning the date of default and annexing copies of balance sheets of the corporate debtor which, according to the appellant, acknowledged periodically the debt that was due.

On 19th February, 2020, the section 7 application was admitted by the NCLT, observing that the balance sheets of the corporate debtor, wherein it acknowledged its liability, were signed before the expiry of three years from the date of default and entries in such balance sheets being acknowledgements of the debt due for the purposes of section 18 of the Limitation Act, 1963 (Limitation Act), the section 7 application is not barred by limitation. The corporate debtor filed an appeal before the National Company Law Appellate Tribunal (NCLAT), which held that entries in balance sheets would not amount to acknowledgement of debt for the purpose of extending limitation u/s 18 of the Limitation Act on account of a NCLAT Full Bench decision in the case of V. Padmakumar vs. Stressed Assets Stabilisation Fund, Company Appeal (AT) (Insolvency) No. 57 of 2020 (decided on 12th March, 2020).

HELD

The default had been admitted by the corporate debtor and the signed balance sheet of the corporate debtor for the year 2016-17 was not disputed by it. As a result, the NCLT held that the section 7 application was not barred by limitation and therefore admitted the same. It further held that the majority decision of the Full Bench in V. Padmakumar (Supra) is contrary to a catena of judgments and hence set aside.

11 In Re: Cognizance for Extension of Limitation Suo motu W.P. (C) No. 3 of 2020 Date of order: 27th April, 2021 Bench: S.A. Bobde CJI, Surya Kant J., A.S. Bopanna J.
    
Covid-19 – Supreme Court – Relief for litigants and lawyers [Constitution of India, Articles 141, 142]
    
FACTS

Due to the onset of the Covid-19 pandemic, this Court took suo motu cognizance of the situation arising from difficulties that might be faced by the litigants across the country in filing petitions / applications / suits / appeals / all other proceedings within the period of limitation prescribed under the general law of limitation or under any special laws (both Central or State).

The Supreme Court in the same case vide order dated 23rd March, 2020 had extended the due date till further orders. The said order was extended from time to time.

Thereafter, on 8th March, 2021, it was noticed that the country is returning to normalcy and since all the Courts and Tribunals have started functioning either physically or by virtual mode, extension of limitation was regulated and brought to an end. The period between 15th March, 2020 and 14th March, 2021 stood excluded.

The Supreme Court Advocates on Record Association (SCAORA) has now, through this Interlocutory Application, highlighted the daily surge in Covid cases in Delhi and stated how difficult it has become for the Advocates-on-Record and the litigants to institute cases in the Supreme Court and other courts in Delhi. Consequently, restoration of the order dated 23rd March, 2020 has been prayed for.

HELD

The period from 14th March, 2021 till further orders shall also stand excluded in computing the periods prescribed under sections 23(4) and 29A of the Arbitration and Conciliation Act, 1996, section 12A of the Commercial Courts Act, 2015, and provisos (b) and (c) of section 138 of the Negotiable Instruments Act, 1881 and any other laws which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings.

12 The Chief Election Commissioner of India vs. M.R. Vijayabhaskar & Ors. CA 1767 of 2021 Date of order: 6th May, 2021 Bench: Dr. D.Y. Chandrachud J., M.R. Shah J.

Oral comments – reported by media – Sanctity and validity [Article 19, 226, Constitution of India]

FACTS

The Madras High Court entertained a Writ Petition under Article 226 of the Constitution to ensure that Covid-related protocols are followed in the polling booths at the 135-Karur Legislative Assembly Constituency in Tamil Nadu. During the hearings, the Division Bench is alleged to have made certain remarks, attributing responsibility to the Election Commission (EC) for the present surge in the number of cases of Covid-19, due to its failure to implement appropriate safety measures and protocol during the elections. The Court observed, ‘the institution that is singularly responsible for the second wave of Covid-19…’ and that the EC ‘should be put up for murder charges’. These remarks, though not part of the order of the High Court, were reported in the print, electronic and tele-media.

The issue is that these oral remarks made by the High Court, which the EC alleges are baseless, tarnished the image of the EC which is an independent constitutional authority.

HELD


Courts must be open both in the physical and metaphorical sense. Our legal system is founded on the principle that open access to courts is essential to safeguard valuable constitutional freedoms. The concept of an open court requires that information relating to a court proceeding must be available in the public domain. Citizens have a right to know about what transpires in the course of judicial proceedings. The dialogue in a court indicates the manner in which a judicial proceeding is structured. Oral arguments are postulated on an open exchange of ideas.

Article 19(1)(a) of the Constitution guarantees every citizen the right to freedom of speech and expression. The Constitution guarantees the media the freedom to inform, to distil and convey information and to express ideas and opinions on all matters of interest. Freedom of speech and expression extends to reporting the proceedings of judicial institutions as well. Courts are entrusted to perform crucial functions under the law. Their work has a direct impact not only on the rights of citizens but also the extent to which the citizens can exact accountability from the executive whose duty it is to enforce the law.

The independence of the judiciary from the executive and the legislature is the cornerstone of our Republic. Independence translates to being impartial, free from bias and uninfluenced by the actions of those in power, but also recognises the freedom to judges to conduct court proceedings within the contours of the well-established principles of natural justice. Judges in the performance of their duty must remain faithful to the oath of the office they hold which requires them to bear allegiance to the Constitution. An independent judiciary must also be one which is accountable to the public in its actions (and omissions).

ALLIED LAWS

9 Rohit Nath vs. KEB Hana Bank Ltd. AIR 2021 Madras 241 Date of order: 28th July, 2021 Bench: Sanjib Banerjee CJ

Guarantor’s liability – Insolvency proceedings can be initiated before appropriate Debts Recovery Tribunal [Insolvency and Bankruptcy Code, 2016 (Code), S. 95, S. 79, S. 60; Companies Act, 2013, S. 408; Recovery of Debts and Bankruptcy Act, 1993, S. 3; Contract Act, 1872, S. 128]

FACTS
An individual (petitioner) had stood as a guarantor to a credit facility taken by a corporate entity. On non-payment of the credit facility the bank (respondent) proceeded against the petitioner by serving a notice as per Rule 7(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process of Personal Guarantors to Corporate Debtors) Rules, 2019. Pursuant thereto, the bank initiated proceedings before the Debts Recovery Tribunal. It is the case of the petitioner that insolvency proceedings cannot be initiated against an individual u/s 95 of the Insolvency and Bankruptcy Code, 2016 (the Code).

HELD
Section 95(1) of the Code read with section 79(1) thereof permits a creditor to apply to any Debts Recovery Tribunal for initiating an insolvency resolution process under such provision.

Section 95(1) of the Code, in its ordinary form, allows a creditor to initiate an insolvency resolution process. It does not specify as to who the debtor may be. Further, the enactment is a complete code in itself and the three classes of persons indicated to be governed by the Code are corporate persons, partnership firms and individuals. The Debt Recovery Tribunal having jurisdiction over such firms and individuals is the adjudicating authority in matters related to insolvency.

Further, in view of section 128 of the Contract Act, 1872, the liability of a guarantor is co-extensive with that of the principal-debtor, unless it is otherwise provided by the contract. Therefore, the petitioner can be held liable as a guarantor to the credit facility taken by the company. The petition was dismissed with Rs. 50,000 costs.

10 R. Selvam vs. R. Mani C.M.P. No. 8020 of 2016 (Mad)(HC) Date of order: 22nd July, 2021 Bench: G.K. Ilanthiraiyan J

Gift Deed – Unilateral cancellation by the donor – Invalid [Transfer of Property Act, 1882, S. 123, S. 126]

FACTS
The suit is filed for declaration and permanent injunction in respect of the suit property. The case of the plaintiff is that the suit property belonged to the first defendant as per the preliminary decree passed in O.S. No. 18 of 2010 dated 8th December, 2011 on the file of the Fast-Track Court No. 2, Salem. The first defendant filed a suit against her brothers and the suit property was allotted in her favour. Thereafter, the first defendant had executed a registered gift settlement deed in favour of the plaintiff on 8th March, 2012. From the date of the gift settlement deed, the plaintiff had taken possession of the suit property and he is in possession and enjoyment of the same.

According to the plaintiff, in the meanwhile, under the influence of defendants 2 to 4, the first defendant unilaterally executed a registered cancellation deed dated 3rd July, 2012.On the same day, the first defendant executed another gift settlement deed in favour of the plaintiff and defendants 2 to 4. The said cancellation deed and the subsequent gift settlement deed executed by the first defendant are void ab initio. The plaintiff’s case is that once the first defendant had lost her title to the suit property, after execution of the registered settlement deed in favour of the plaintiff, she has no title over the property. On the strength of the settlement deed executed in favour of defendants 2 to 4, they created encumbrance by execution of an agreement for sale with defendant 5 and hence, the suit for declaration and permanent injunction.

According to the second defendant, the registered gift settlement deed in favour of the plaintiff was obtained by the plaintiff by misrepresentation or undue influence and he played fraud without knowledge of the first defendant. This was not acted upon and the first defendant rightly cancelled the gift deed by cancellation.

HELD
The Court noted that the entire issue was revolving around the first defendant. Even then, the other defendants failed to examine the first defendant to support their case whether the gift settlement deed in favour of the plaintiff was obtained on compulsion, misrepresentation or by fraud or undue influence.

The Court held that there is a specific recital that the first defendant has no power to revoke the gift deed and even if she cancelled the deed, the said cancellation would not be valid. When no right has been reserved by the first defendant to cancel the settlement deed, the Court below rightly declared the title in respect of the suit property in favour of the plaintiff. It is settled law that in settlement, once the ‘settlee’ accepts the transfer, it is presumed that the said document has been acted upon irrespective of the fact whether the ‘settlee’ has obtained possession immediately or not. Referring to the judgment of the Supreme Court of India in the case of Jamil Begum vs. Shami Mohd. [(2019) 2 SCC 727], the Court held that there is a presumption that a registered document is validly executed. The appeal suit was dismissed.

11 Davesh Nagalya (D) vs. Pradeep Kumar (D) AIR 2021 Supreme Court 2717 Date of order: 10th August, 2021 Bench: Hemant Gupta J, A.S. Bopanna J

Tenant – Partners – Business in suit premises – Death of partners – Results in dissolution of partnership – Property will be vacant [Urban Buildings Act, 1972, S. 12, S. 25, S. 41; Indian Partnership Act, 1932, S. 42]

FACTS
An application was filed by one Pradeep Kumar in July, 1982 before the Court of the Rent Control and Eviction Officer in terms of the Urban Buildings Act (Act) stating that after the death of the tenant partner, he inducted the legal heir of the deceased, one Subhash Chand, and continued the business in the same premises. The application was, however, opposed by the landlord. The District Magistrate permitted Subhash Chand to be inducted as a partner on 15th November, 1982. The landlord challenged the order passed by the District Magistrate before the District Judge. The revision petition was dismissed on 12th December, 1983. A further challenge before the High Court through a writ petition also remained unsuccessful vide order dated 10th October, 2007. The appellant challenged the said order by way of a Special Leave Petition before this Court but the same was dismissed on 10th January, 2008.

The appellant filed an application for review before the High Court inter alia on the ground that pursuant to the death of the tenant, Pradeep Kumar, i.e., one of the partners of the firm, the partnership does not survive in view of section 42(c) of the Partnership Act.

The review was dismissed vide order impugned in the present appeal on the ground that the petitioners have entirely set up a new case and the grounds urged are different from those of the writ petition. As on record, both the partners, i.e., Pradeep Kumar and Subhash Chand, had died on 21st May, 2004 and 25th June, 2014, respectively. Hence, now the argument is that in terms of section 42(c) the partnership stands dissolved by law. There is no clause in the partnership deed which permits the legal heirs of the deceased partners to continue with the partnership firm. Therefore, by operation of law, the partnership has come to an end.

HELD
The order of permitting Subhash Chand as partner with Pradeep Kumar has come to an end by efflux of time and operation of law. In terms of section 42(c) of the Partnership Act, the partnership stands dissolved by death of a partner. One of the partners, i.e., Pradeep Kumar, died on 21st May, 2004. The High Court has not taken note of such fact in the review petition and failed to take into consideration the subsequent events which were germane to the controversy. Subhash Chand, the other partner, also died during the pendency of the appeal on 25th June, 2014. It was represented to the District Magistrate by Pradeep Kumar that Subhash Chand is a divorcee and has no children but such assertion was not found to be correct as he had two children, a son and a daughter, who were impleaded as his legal heirs.

Therefore, with the death of both the partners and not having any clause permitting continuation of the partnership by the legal heirs, the non-residential tenanted premises is deemed to be vacant in law as the tenant is deemed to have ceased to occupy the building. In view thereof, the order passed by the High Court in the Review Application dated 23rd April, 2008 is set aside. Therefore, the tenant is deemed to cease to occupy the premises in question. Consequently, the tenanted property has fallen vacant as well. The appellants may take recourse to remedy as may be available to them and may proceed in accordance with law and the provisions of the Act.

12 Hemraj Ratnakar Salian vs. HDFC Bank Ltd. and Ors. AIR 2021 Supreme Court 507 Date of order: 17th August, 2021 Bench: S. Abdul Nazeer J, Krishna Murari J

Registration – Tenancy – Claim of tenancy not supported by a registered document – Claim of tenant as ‘tenant in sufferance’ – No protection under the Rent Act [Maharashtra Rent Control Act, 2000, S. 3(2)]

FACTS
HDFC Bank had granted financial facility to the respondent Nos. 2 and 3 (the borrowers). They had mortgaged a property in favour of the bank with an intention to secure the said credit facility.

The accounts of the borrowers were declared as non-performing assets (NPA) on 31st October, 2013. On 25th January, 2014, the bank issued a notice u/s 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) to the borrowers. It is the case of the appellant that he is a tenant of the secured asset on a monthly rent since 12th June, 2012. And he has been paying rent regularly to his landlord since the inception of his tenancy.

The appellant filed an application before the Magistrate seeking protection of his possession of the secured asset as the Magistrate was seized with the petition u/s 14 of SARFAESI filed by the respondent No. 1 Bank. The intervention application of the appellant was dismissed by the Magistrate holding that there was no registered tenancy agreement placed on record by the appellant.

HELD
There is a serious doubt as to the bona fides of the tenant, as there is no good or sufficient evidence to establish his tenancy. According to the appellant, he is a tenant of the secured asset from 12th June, 2012. However, the documents produced in support of his claim are photocopies of the rent receipts and the first copy of the rent receipt is of 12th May, 2013 which is after the date of creation of the mortgage. The borrowers have not claimed that any tenant is staying at the secured asset. The appellant has pleaded tenancy from 12th June, 2012 to 17th December, 2018. This is not supported by any registered instrument. Further, even according to the appellant, he is a ‘tenant in sufferance’, therefore, he is not entitled to any protection of the Rent Act. Secondly, even if the tenancy has been claimed to be renewed in terms of section 13(13) of SARFAESI, the borrower would be required to seek consent of the secured creditor for transfer of the secured asset by way of sale, lease or otherwise, after issuance of the notice u/s 13(2) of SARFAESI and, admittedly, no such consent has been sought by the borrower in the present case. The appeal was dismissed.  

ALLIED LAWS

5 Korukonda Chalapathi Rao & Ors. vs. Korukonda Annapurna Sampath Kumar CA (No.) 6141 of 2021 (SC) Date of order: 1st October, 2021 Bench: K.M. Joseph J, S. Ravindra Bhat J


Deed of family settlement – Merely recording of past transaction – Registration not mandatory – It may not require to be stamped [Registration Act, 1908., S. 17, S. 49; Code of Civil Procedure, 1908, Ord. 13, R. 3]

 FACTS

An issue regarding partition of property arose between the plaintiff and the respondents. The High Court did not admit the Kharurunama (family settlement) as the same was not registered or stamped.

The contention of the appellants was that the Kharurunama dated 15th April, 1986 merely sets out the arrangement arrived at between the brothers which is the family arrangement and it was a mere record of the past transaction and therefore by itself it did not create or extinguish any right over immovable property. As a result, the document did not attract section 17(1)(b) of the Registration Act.

HELD

As per section 49(1)(a) of the Registration Act, a document which it is compulsory to register but which is not registered, cannot have any effect on the rights in immovable property by way of creation, declaration, assignment, limitation or extinguishment. Thus, it prevents an unregistered document being used ‘as’ evidence of the transaction, which ‘affects’ immovable property.

If the Kharurunama by itself does not ‘affect’ immovable property, there would be no breach of section 49(1)(c) of the Registration Act, as it is not being used as evidence of a transaction affecting such property. The transaction or the past transactions cannot be proved by using the Kharurunama as evidence of the transaction. Merely by admitting the Kharurunama containing a record of the alleged past transaction, it is not to be understood as if those past transactions require registration or that it would have any legal effect on the immovable properties in question.

 It is further held that the Kharurunama being a record of the alleged transactions, it may not require to be stamped. The appeal is allowed.

 

6 Asha John Divianathan vs. Vikram Malhotra AIR 2021 Supreme Court 2932 Date of order: 26th February, 2021 Bench: A.M. Khanwilkar J, Indu Malhotra J, Ajay Rastogi J
 

Foreign Citizen – Transfer of immovable property – Without taking mandatory prior approval from RBI – Transfer unenforceable [Foreign Exchange Regulation Act, 1973 (FERA), S. 31]

 

FACTS

Mrs. F.L. Raitt, widow of the late Mr. Charles Raitt, is a foreigner and the owner of the immovable property. The property was gifted to respondent No. 1 (Vikram Malhotra) without obtaining previous permission of the Reserve Bank of India u/s 31 of FERA. Before executing the gift deed, she had executed an agreement of sale in favour of one Mr. R.P. David, father of the appellant (Asha John Divianathan).

The appellant filed a suit against the respondent No. 1 to declare the gift deed and the supplementary as null and void.

The Karnataka High Court held that lack of permission u/s 31 of FERA does not render the subject gift deeds as void much less illegal and unenforceable. An appeal was filed against this order of the Karnataka High Court.

HELD

A contract is void if prohibited by a statute under a penalty, even without express declaration that the contract is void, because such a penalty implies a prohibition. The condition predicated in section 31 of FERA of obtaining ‘previous’ general or special permission of the RBI for transfer or disposal of immovable property situated in India by sale or mortgage by a person, who is not a citizen of India, is mandatory.

Until such permission is accorded, in law, the transfer cannot be given effect to; and for contravening that requirement, the person concerned may be visited with penalty u/s 50 FERA and other consequences provided for in the 1973 Act.

The decision of the High Court taking the view that section 31 of the 1973 Act is not mandatory and the transaction in contravention thereof is not void or unenforceable, is not a good law. The Appeal was allowed.

 

7 Jagannath & Ors. vs. Radheshyam and Ors. AIR 2021 (NOC) 645 (Chh) Date of order: 19th August, 2020 Bench: Sanjay K. Agarwal J        

Deeds – Unregistered gift deed – Immovable property – Not admissible [Transfer of Property Act, 1882, S. 123; Registration Act, 1908, S. 17] 

FACTS

The dispute relates to the property left by Parau and his wife Sumrit Bai. They had four daughters, namely, Samundra Kunwar (defendant No. 1 is her son), Badki Kani (defendant No. 2), Majhali Kani (defendant No. 3) and Nanki Kani (defendant No. 4). The plaintiff, Radheshyam, is the son of defendant No. 4. The plaintiff filed a suit for permanent injunction and, in the alternative, restoration of possession pleading inter alia that the suit property was originally held by Parau and he was in possession of the suit property during his life time.

The defendants filed their joint written statement stating inter alia that they have never surrendered their share by way of gift deeds in favour of the plaintiff and that they are in possession of the suit property jointly and, as such, the suit deserves to be dismissed.

The trial court upon appreciation of oral and documentary evidence available on record, by its judgment and decree dated 7th April, 2007, dismissed the suit holding that the alleged gift deeds are inadmissible in evidence for want of registration, therefore, no title has been conveyed in favour of the plaintiff and the plaintiff is not in exclusive possession of the suit land.

 
The first Appellate Authority held that the plaintiff cannot be dispossessed from the suit land without following the due procedure of law and accordingly granted decree for permanent injunction in favour of the plaintiff restraining the defendants from interfering with his possession.

 
The defendants are in appeal against the said order.

 
HELD

The gift deeds by which the defendants have allegedly gifted the property to the plaintiff are unregistered gift deeds and by virtue of the provisions contained in section 123 of the Transfer of Property Act, 1882 gift deeds are required to be registered. In view of the matter, they are inadmissible in evidence for want of registration and thereby no title was conveyed to the plaintiff.

 
As the gift deeds have been held to be inadmissible by two Courts and affirmed by this Court, the first appellate Court could not have restrained the defendants from using the joint property by decree of permanent injunction.

 
The appeal was allowed.

 

8 High Court of Judicature at Madras Rep. by its Registrar-General vs. M.C Subramaniam and Others AIR 2021 Supreme Court 2662 Date of order: 17th February, 2021 Bench: Mohan M. Shantanagoudar J, Vineet Saran J

Court fee – Refund of Court fee – To be granted even in case of private settlement of dispute outside court [Court Fees Act, 1870, S. 16; Civil Procedure Code, 1908, S. 89; Tamil Nadu Court Fees and Suit Valuation Act, 1955, S. 69A]

FACTS

The respondent No. 1 purchased two vehicles from respondent No. 2. As per the terms of the agreements, respondent No. 1 was to pay sums in instalments to the respondent No. 2 as per the stipulated terms. On account of non-payment, the respondent No. 2 filed suits and sought recovery of the balance amounts along with interest thereon. Both the suits were partly decreed by the Courts.

The respondent No. 1 preferred an appeal before the High Court. While the appeal was still pending consideration, the parties entered into a private out-of-court settlement, thus resolving the dispute between them. The respondent No. 1 sought withdrawal of the appeal and refund of the court fee. Despite the order of the High Court, the Registry orally refused respondent No. 1’s request for refund of court fees on the ground that such refund is not authorised by the relevant rules.

The respondent No. 1 filed a Miscellaneous Application before the High Court which was allowed. The Registry is in appeal against the said order.

 

HELD

The provisions of section 89 of CPC must be understood in the backdrop of the long-standing proliferation of litigation in the civil courts, which has placed undue burden on the judicial system, forcing speedy justice to become a casualty. As the Law Commission has observed in its 238th Report on Amendment of section 89 of the Code of Civil Procedure, 1908 and Allied Provisions, section 89 of the CPC has now made it incumbent on civil courts to strive towards diverting civil disputes towards alternative dispute resolution processes and encourage their settlement outside of court. These observations make the object and purpose of section 89 crystal-clear – to facilitate private settlements and enable lightening of the overcrowded docket of the Indian judiciary. This purpose is sacrosanct and imperative for effecting timely justice in Indian courts. Section 69A of the Tamil Nadu Court Fees and Suit Valuation Act, 1955 also encourages settlements by providing for refund of court fees.

 

Further, the Court observed that the Court Fees Act is a taxing statute and has to be construed strictly and the benefit of any ambiguity has to go in favour of the party and not to the State. The High Court’s order was upheld.

ALLIED LAWS

1 Ramesh and Others vs. Laxmi Bai AIR 2021, Madhya Pradesh 56 Date of order: 1st March, 2021 Bench: Vivek Rusia J

Condonation of delay – Appeal cannot be decided without deciding on the application for condonation of delay in favour of the appellant [Civil Procedure Code, 1908, Ord. 41, R. 3A; Limitation Act, 1963, S. 5]

FACTS
The plaintiffs had filed a civil suit for declaration of title and partition of joint family property. By the judgment dated 24th January, 2009 it was held that they were entitled to partition through the Court. Defendant No. 1 was restrained from getting a mutation in his name. Being aggrieved by the aforesaid judgment and decree, the Defendants filed an appeal in the year 2013 along with an application for condonation of delay u/s 5 of the Limitation Act.

On 24th February, 2019, it came to the notice of the Additional District Judge that the application u/s 5 of the Limitation Act had not been decided so far. Both the parties agreed to first argue on the aforesaid application. The arguments were heard and kept for order on 27th April, 2019. By an order dated 27th April, 2019, the Additional District Judge decided that the application u/s 5 of the Limitation Act would be decided along with the first appeal on merit.

The plaintiffs filed a petition challenging this order of 27th April, 2019 on the ground that the Additional District Judge had committed an error of law while keeping the application u/s 5 for consideration along with the appeal while finally hearing the appeal on merit.

HELD
The Court referred to the decision in the case of State of M.P. vs. Pradeep Kumar 2000 (7) SCC 372. In that the Supreme Court held that the object of enacting Rule 3-A of Order 41 of the Civil Procedure Code seems to be two-fold. The first is to inform the appellant himself that appeal is time-barred and it would not be entertained unless it is accompanied by an application explaining the delay. The second is to communicate to the respondent a message that it may not be necessary for him to get ready to meet the grounds taken up in the memorandum of appeal because the Court has to deal with the application for condonation of delay as a condition precedent.

The Court also referred to the decision in S.V. Matha Prasad vs. Lalchand Meghraj and Others (2007) 14 SCC 772 wherein the Supreme Court had held that the Division Bench of the High Court had not only condoned the delay but took a decision on the merit as well and such exercise was not justified as the only issue before the Division Bench was the question of limitation; accordingly, the judgment of the High Court was set aside to the extent that it went on to the merits of the controversy but maintained it insofar as it dealt with the question of limitation.

In view of the above, the Court held that the Additional District Judge was required to decide first the application u/s 5 of the Limitation Act and if it condoned the delay then there would not be any impediment to deciding the appeal on merit. Further, the Court held that although there is no specific bar which restrains the appellate Court from hearing and deciding the appeal along with the application for condonation of delay, the provisions put a bar on the appellate Court on deciding the appeal unless the application for condonation of delay is decided in favour of the appellant. The petition was allowed.

2 Amola Saikia and Others vs. Pankajit Narayan Konwar AIR 2021, Gauhati 50 Date of order: 23rd January, 2021 Bench: Anchintya Malla Bujor Barua J

Intestate succession – Property of Hindu female – Grant of succession certificate to husband held to be proper [Indian Succession Act, 1925, S. 372; Hindu Succession Act, 1956, S. 15]

FACTS
The respondent-husband filed an application u/s 372 of the Indian Succession Act for grant of succession certificate. The respondent had succeeded in the said application vide order dated 10th June, 2015.The appellants, viz., the mother, sisters and brother of the deceased, challenged the said order of 10th June, 2015.

HELD
As per section 15(1) of the Hindu Succession Act, 1956 it is clearly provided that the property of a female Hindu dying intestate shall devolve firstly upon the sons and daughters and the husband. Thereafter, it would devolve upon the mother and father and then upon the heirs of the father, and finally upon the heirs of the mother. Hence, the grant of succession certificate was in accordance with law.

The appeals were dismissed.

3 Sozin Flora Pharma LLP vs. State of Himachal Pradesh and another AIR 2021, Himachal Pradesh 44 Date of order: 7th January, 2021 Bench: Tarlok Singh Chauhan J and Jyotsna Rewal Dua J

Stamp Duty – Conversion of partnership firm to limited liability partnership – No stamp duty or registration fee [Limited Liability Partnership Act, 2008, S. 58(1), 58(4)(b); Himachal Pradesh Tenancy and Land Reforms Act, 1974, S. 118]

FACTS
The petitioner was registered as a partnership firm on 14th December, 2005 in the office of the Deputy Registrar of Firms. With the intention of availing of the benefits of the Limited Liability Partnership Act, 2008, the petitioner firm converted itself from ‘Firm’ to ‘Limited Liability Partnership’ (LLP). The conversion was as per section 55 of the LLP Act.

The petitioner applied to the Deputy Commissioner for changing its name in the revenue record from ‘M/s Sozin Flora Pharma’ to ‘M/s Sozin Flora Pharma LLP’. The permission to change the name in the revenue record was granted on the condition that stamp duty and registration fee shall be chargeable. The petitioner submitted a representation to the respondent on 25th June, 2019 against the imposition which was rejected on 23rd August, 2019. Hence the writ petition.

HELD
Upon conversion of a registered partnership firm to an LLP under the provisions of the Limited Liability Partnership Act, all movable and immovable properties of the erstwhile registered partnership firm automatically vest in the converted LLP by operation of section 58(4)(b) of the Limited Liability Partnership Act.

The transfer of assets of the firm to the LLP is by operation of law. Being a statutory transfer, no separate conveyance / instrument is required to be executed for transfer of assets.

Since there is no instrument of transfer of assets of the erstwhile partnership firm to the limited liability partnership, the question of payment of stamp duty and registration charges does not arise as these are chargeable only on the instruments indicated in section 3 of the Indian Stamp Act and section 17 of the Indian Registration Act.

The partnership firm’s legal entity after conversion to limited liability partnership does not change. Only the identity of the firm as a legal entity changes. Such a conversion or change in the name does not amount to a change in the constitution of the partnership firm.

Therefore, stamp duty and registration fee cannot be levied upon conversion of a partnership firm to an LLP.

4 Kiran Gupta vs. State Bank of India and another AIR 2021, Gauhati 50 Date of order: 2nd November, 2020 Bench: Hima Kohli J and Subramonium Prasad J

Recovery of dues – Pendency of IRP proceeding against principal borrower – Bank can proceed against guarantor under SARFAESI Act [SARFAESI Act, 2002, S. 13; Insolvency and Bankruptcy Code, 2016, S. 14, S. 31; Contract Act, 1872, S. 128]

FACTS
The short question that arises for consideration in this writ petition is whether a bank / financial institution can institute or continue with proceedings against a guarantor under the SARFAESI Act when proceedings under the Insolvency and Bankruptcy Code, 2016 (IBC) have been initiated against the principal borrower and the same are pending adjudication.

HELD
The view expressed by the Supreme Court in the case of State Bank of India vs. V. Ramakrishan and Another, (2018) 17 SCC 394 amply demonstrates that neither section 14 nor section 31 of the IBC place any fetters on banks / financial institutions from initiation and continuation of the proceedings against the guarantor for recovering their dues. That being the position, the plea taken by the counsel for the petitioner that all proceedings against the petitioner, who is only a guarantor, ought to be stayed under the SARFAESI Act during the continuation of the Insolvency Resolution process qua the principal borrower, is rejected as meritless. The petitioner cannot escape her liability qua the respondent / bank in such a manner. The liability of the principal borrower and the guarantor remain co-extensive and the respondent / bank is well entitled to initiate proceedings against the petitioner under the SARFAESI Act during the continuation of the Insolvency Resolution process against the principal borrower. The petition is dismissed.

Editor’s Note: The Supreme Court in the case of Lalit Kumar Jain vs. Union of India [2021] 167 SCL 1 had held that a personal guarantor is also liable under the Insolvency and Bankruptcy Code, 2016.

ALLIED LAWS

18 Arun Kedia (HUF) vs. Runwal Homes (P) Ltd. Consumer Case No. 1115 of 2017 (NCDRC)(Del) Date of order: 24th June, 2021 Bench: Ram Surat Ram Maurya J. and Mr. C. Vishwanath

Consumer Protection – Builder cancels sale agreement – Without consent – Not handing over timely possession – Interest levied [Maharashtra Ownership of Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963, S. 8]

FACTS

A registered agreement for sale was executed between the complainant and the builders on 5th June, 2013. Clause 17 of the agreement provided that the builder would give possession of the premises to the purchasers by March, 2016.

The complainants received a demand letter dated 12th September, 2016 on 13th September, 2016 but as no date of delivery of possession was mentioned, they did not deposit the amount demanded in it, rather, they requested for handing over of possession of the flat allotted to them. They were not allowed to go to the site to verify the progress under construction, although 85% of the sale consideration was paid. The directors and officers of the builder assured that they need not worry and that the possession would be given to them within a short time.

When the builder neglected to give possession of the flat allotted to them, they served a registered notice on the builders on 15th March, 2017 for handing over the possession of the flat. The builders, through a letter dated 15th March, 2017 (served on 20th March, 2017) unilaterally cancelled the agreement dated 5th June, 2013, mentioning therein that in spite of the demand letter dated 12th September, 2016, they had not deposited the instalment as stated in the agreement. The complainants gave registered notices dated 23rd March, 2017 and 4th April, 2017 to the builders, asking them to withdraw their letter dated 15th March, 2017 cancelling the agreement dated 5th June, 2013, and to hand over possession of the flat allotted to them. Since the notices have not been complied with, the present complaint was filed on 18th April, 2017 by the complainants.

HELD

It is admitted by the builders and also mentioned in the agreement that the Maharashtra Ownership of Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 is applicable. According to section 8 of the said Act, if the builder is not able to hand over the possession of the building / flat within the time specified in the agreement, then the builder is liable to pay interest for the period for which the possession has not been handed over. The builders had failed to complete the construction and hand over possession of the flat in March, 2016 as agreed. Due to the latches on the part of the builders, the complainants are suffering loss. The agreement for sale has been cancelled illegally and the complainants are forced to opt for litigation. The Builders shall pay simple interest at 6% p.a. to the complainants on the amount deposited by them from the due date of possession to the offer of possession after obtaining the occupancy certificate.

19 Compack Enterprises India (P) Ltd. vs. Beant Singh (2021) 3 SCC 702 (SC) Date of order: 17th February, 2021 Bench: Mohan M. Shantanagoudar J. and Vineet Saran J.

Consent decree – No estoppel – Compromise arrived by fraud, misrepresentation or mistake [Code of Civil Procedure, 1908, Or. XII, R. 6]

FACTS
On a dispute arising on account of mesne profits, the Court had passed a consent decree directing that the petitioner shall pay to the respondent (owner of the property), by way of mesne profits, an enhanced sum of Rs.1,00,000 p.m., with a 10% increase every 12 months, i.e., from 1st October, 2009, 1st October, 2011 and so on, till the date the petitioner hands over actual possession of the suit property measuring 5,472 sq. ft. to the respondent.

The petitioner filed a review petition against the consent terms, contending that the High Court had erred in recording the terms of the consent decree agreed to by the petitioner. It contended that the judgment records that the mesne profits be increased by 10% every 12 months, instead of recording a 10% increase every 24 months and that the petitioner was in possession of only 2,200 sq. ft. The review petition was rejected.

HELD
The Court, inter alia, relied on the decision in the case of Byram Pestonji Gariwala vs. Union Bank of India & Ors., (1992) 1 SCC 31, wherein it was held that a consent decree would not serve as an estoppel where the compromise was vitiated by fraud, misrepresentation or mistake. In the exercise of its inherent powers, the Court may also unilaterally rectify a consent decree suffering from clerical or arithmetical errors, so as to make it conform to the terms of the compromise.

The Court observed that the learned Judge of the High Court, in noting that the figure of mesne profits of Rs. 1 lakh will be increased by 10% after every 12 months, i.e., from 1st October, 2009, 1st October, 2011 and so on, (emphasis supplied), has confused not only himself but also the parties to the litigation. Referring to the final decree by the Trial Court awarding a 10% increase only every alternate year and the original terms of the license agreement between the parties, the period of 12 months in the consent decree was rectified to 24 months by the Court. The plea of the petitioner that he was in possession of only 2,200 sq. ft. and not 5,472 sq. ft. was rejected.

20 Trustees of H.C. Dhanda Trust vs. State of M.P. (2020) 9 SCC 510 (SC) Date of order: 17th September, 2020 Bench: Ashok Bhushan J., R. Subhash Reddy J. and M.R. Shah J.

Stamp Act – Imposition of penalty – Ten times of duty deficit – Exercise of discretion – Cannot be imposed normally [Indian Stamp Act, 1899, Ss. 33, 35, 38, 39 and 40]

FACTS
A resolution was passed by the executors / trustees under the will of Late Shri Harish Chand Dhanda to transfer and vest the area to the beneficiaries. On 21st April, 2005, a Deed of Assent was executed between M/s H.C. Dhanda Trust, a private trust, as one part and Jogesh Dhanda and others as the other part. By this Deed of Assent, the trustees / executors gave assent to complete the title of the legatees and vest two properties absolutely and forever in their favour.

A notice was issued by the Collector of Stamps, District Indore, stating that proper stamp duty has not been paid on the Deed of Assent dated 21st April, 2005. The notice further stated that there was a deficit stamp duty on the said document and asked why ten times penalty should not be imposed. The Trust appeared before the Collector of Stamps and filed its objection. The Collector holding the Deed of Assent as a gift deed held that the deficit duty was Rs. 1,28,09,700. He imposed penalty ten times the deficit duty. The Trustees challenged the order of the Collector imposing the penalty.

HELD
The legislative intent is clear from a reading of sections 33, 35, 38 and 39 of the Indian Stamp Act, 1899. It indicates that with respect to the instrument not duly stamped, ten times penalty is not always retained and the power can be exercised u/s 39 to reduce penalty and in regard to that there is a statutory discretion with the Collector to refund the penalty.

The purpose of penalty generally is a deterrence and not retribution. When a discretion is given to a public authority, such public authority should exercise such discretion reasonably and not in an oppressive manner. The responsibility to exercise the discretion in a reasonable manner lies more in cases where discretion vested by the statute is unfettered. Imposition of the extreme penalty, i.e., ten times the duty or deficient portion thereof, cannot be based on the mere factum of evasion of duty. Reasons such as fraud or deceit in order to deprive the Revenue or undue enrichment are relevant factors to arrive at a decision as to what should be the extent of penalty u/s 40(1)(b). The penalty was reduced to five times the duty deficit.

21 Daulat Singh (D) Thr. LRS. vs. The State of Rajasthan (2021) 3 SCC 459 (SC) Date of order: 21st May, 2021 Bench: N.V. Ramana J., S. Abdul Nazeer J. and Surya Kant J.

Gift – Immovable property – Acceptance criterion [Transfer of Property Act, 1882, Ss. 122 and 123]
    
FACTS

The appellant was the owner of 254.2 bighas of land. On 19th December, 1963, he gifted away 127.1 bighas to his son. After the said transfer, the appellant was left with 17.25 standard acres of land, which was below the prescribed limit under the Ceiling Act.

Although proceedings were initiated under the Ceiling Act, the same were dropped on 15th April, 1972 by the Court of the Deputy Sub-Divisional Officer, Pali, Rajasthan. However, by a notice dated 15th March, 1982, the Revenue Ceiling Department reopened the case of the appellant.

The Court of the Additional District Collector, Pali vide order dated 28th October, 1988, declared that the mutation of the land done in favour of the son of the appellant was invalid as there was no acceptance of the gift. It was declared therein that the appellant was holding 11 standard acres of extra land over and above the ceiling limit. The Collector, therefore, directed the appellant to hand over vacant possession of the aforesaid 11 standard acres of extra land to the Tahsildar, Pali.

HELD

The Court, inter alia, on the issue of validity of the gift deed held that section 122 of the Transfer of Property Act, 1882 (TOPA) neither defines acceptance, nor does it prescribe any particular mode for accepting the gift. The word acceptance is defined as ‘is the receipt of a thing offered by another with an intention to retain it, as acceptance of a gift.’ The only requirement stipulated under TOPA is that the acceptance of the gift must be effected during the lifetime of the donor.

Gifts do not contemplate payment of any consideration or compensation. It is, however, beyond any doubt or dispute that in order to constitute a valid gift, acceptance thereof is essential. The document may be handed over to a donee, which in a given situation may also amount to a valid acceptance. The Court held that the fact that possession had been given to the donee also raises a presumption of acceptance. The Court referred to the statement made by the son – the donee – before the Court of the Additional District Magistrate stating that the land transferred to him by virtue of the gift deed was under his possession and he was cultivating the same. The gift was held to be a valid gift.

22 UOI & Ors. vs. Vishnu Aroma Pouching Pvt. Ltd. & Anr. SLP (C) Diary No. 1434 of 2021 (SC) Date of order: 29th June, 2021 Bench: Sanjay Kishan Kaul J. and Krishna Murari J.

Delay in filing appeal – Not justified – Cost imposed – SLP dismissed

FACTS

The Department filed an application for condonation of delay. It was stated in the application that the judgment was pronounced on 14th November, 2019. But the proposal for filing the Special Leave Petition was sent after almost six months, on 20th May, 2020, and it took another three months to decide whether or not to file the Special Leave Petition.

HELD


Such lethargy on the part of the Revenue Department with so much computerisation having been achieved is no longer acceptable. The application shows the casual manner in which the petitioner has approached this Court without any cogent or plausible ground for condonation of delay. In fact, other than the lethargy and incompetence of the petitioner, there is nothing which has been put on record. The leeway which was given to the Government / public authorities on account of innate inefficiencies was the result of certain orders of this Court that came at a time when technology had not advanced and, thus, greater indulgence was shown.

Cases of this kind were ‘certificate cases’ filed only with the objective to obtain a quietus from the Supreme Court on the ground that nothing could be done because the highest Court had dismissed the appeal. The objective was to complete a mere formality and save the skin of the officers who may be in default in following the due process, or may have done it deliberately. Looking to the period of delay and the casual manner in which the application had been worded, the Court considered it appropriate to impose costs on the petitioner(s) of Rs. 25,000 for wastage of judicial time which has its own value. The Special Leave Petition was dismissed as time-barred. A copy of the order was ordered to be placed before the Secretary, Ministry of Finance, Department of Revenue.

ALLIED LAWS

13 Dhanjibhai Hirjibhai Nasit vs. State of Gujarat & Ors. AIR (2020) Gujarat 70 Date of order: 20th February, 2020 Bench: Vikram Nath CJ, Vipul M. Pancholi J. and Ashutosh J. Shastri J.

Co-operative society – Tenure of members appointed by State Government [Gujarat Co-operative Societies Act, 1962, S. 80]

FACTS

The petitioner is a member of the Una Taluka Khand Vechan Sangh Ltd. (union). The union is a specified co-operative society as defined u/s 74C of the Gujarat Co-operative Societies Act, 1961 (Act). The elections of specified co-operative societies are required to be held and conducted as provided u/s 74C read with Chapter XI-A of the Act as well as the Rules framed thereunder. It is further stated that the respondent State Government, in purported exercise of the powers conferred upon it u/s 80(2) of the Act, on 4th January, 1999 appointed three government nominees on the Board of Directors of the Union.

The grievance of the petitioner is that the nominee directors, for reasons best known to them, insisted on continuing on the Board of Directors of the Union. The petitioner had, therefore, prayed that the nominee directors be restrained from taking part in the meeting of the Board of Directors which was scheduled to be held on 10th May, 2007.

HELD

The Committee means ‘Managing Committee’ or other governing body of a society to which the direction and control of the management of the affairs of a society are entrusted. The term of the elected members of the Managing Committee shall be five years from the date of election as provided in section 74C(2) of the Act. It is further clear that where the State Government has subscribed to the share capital of the society directly or through another society, or as per the circumstances enumerated in section 80(1) of the Act, the State Government is empowered to nominate three prescribed representatives on the Committee of the society and such members so nominated shall hold office during the pleasure of the State Government, or for such period as may be specified in the order by which they are appointed. Similarly, section 80(2) of the Act empowers the State to appoint the representatives having regard to the public interest involved in the operation of a society as if the State Government had subscribed to the share capital of the society and the provisions contained in section 80(1) of the Act will be applicable to such nomination.

The petition was disposed of accordingly.

14 Benedict Denis Kinny vs. Tulip Brian Miranda & Ors. AIR 2020 Supreme Court 3050 Date of order: 19th March, 2020 Bench: Ashok Bhushan J. and Navin Sinha J.

Right to judicial review – Citizen has the right against any order of a statutory authority [Constitution of India, Art. 226]

FACTS
The respondent as well as the appellant contested the election for the seat of Councillor in the Mumbai Municipal Corporation reserved for backward class citizens. On 23rd February, 2017, the respondent No. 1 was declared elected. Section 5B of the Mumbai Municipal Corporation Act, 1888 (Act) requires the candidate to submit his caste validity certificate on the date of filing the nomination papers. A candidate who has applied to the Scrutiny Committee for the verification of his caste certificate before the date of filing of nomination but who has not received the said certificate on the date of filing the nomination, has to submit an undertaking that he shall submit within a period of six months from the date of election the validity certificate issued by the Scrutiny Committee.

It is further provided that if a person fails to produce the validity certificate within the period of six months from the date of election, that election shall be deemed to have been terminated retrospectively and he shall be disqualified from being a Councillor. The period of six months was amended to 12 months by the Amendment Act, 2018.

The Scrutiny Committee, vide its order dated 14th August, 2017, held that respondent No. 1 does not belong to the East Indian category. Therefore, it refused to grant caste validity certificate in favour of the respondent. Writ Petition No. 2269 of 2017 was filed by the respondent challenging the above order of the Caste Scrutiny Committee.

The High Court, vide order dated 18th August, 2017, passed an interim order in favour of respondent No. 1. The High Court, vide its judgment and order dated 2nd April, 2019, allowed the writ petition filed by respondent No. 1 and quashed the order of the Scrutiny Committee dated 14th August, 2017 and remanded the matter to the Scrutiny Committee for fresh consideration.

By the judgment dated 2nd April, 2019, the High Court also directed that the respondent No. 1 is entitled to continue in her seat, since the effect of disqualification was postponed by the interim order and the impugned order of the Caste Scrutiny Committee had been set aside.

Aggrieved by the judgment and order dated 2nd April, 2019, Review Petition (L) No. 20 of 2019 was filed by the appellant which, too, was rejected by the High Court by an order dated 2nd May, 2019. Both the orders, dated 2nd April and 2nd May, 2019, have been challenged by the appellant in this appeal.

HELD
The Court, inter alia, on the question of whether the High Court in exercise of jurisdiction under Article 226 can interdict the above consequences envisaged by section 5B of the Act by passing an interim or final judgment, held as under:

An interim direction can be passed by the High Court under Article 226, which could have helped or aided the Court in granting the main relief sought in the writ petition. In the present case, the decision of the Caste Scrutiny Committee having been challenged by the writ petitioners and the High Court finding prima facie substance in the submissions, granted interim order which ultimately fructified in the final order setting aside the decision of the Caste Scrutiny Committee. Thus, the interim order passed by the High Court was in aid of the main relief, which was granted by the High Court.

The interim order passed by the High Court was in exercise of judicial review by the High Court to protect the rights of the respondents. The appeal was dismissed.

15 Suo motu Public Interest Litigation No. 01 of 2021 Date of order: 11th June, 2021 Bench: Dipankar Datta CJI, A.A. Sayed J., S.S. Shinde J. and Prasanna B. Varale J.

Covid-19 – Extension of interim orders

FACTS
The Court On its Own Motion addressed matters wherein interim orders have been passed by the High Court of Bombay at its Principal Seat, and the Benches at Nagpur and Aurangabad, the High Court of Bombay at Goa, and the Courts / Tribunals subordinate to it, including the Courts / Tribunals in the Union Territory of Dadra and Nagar Haveli, and Daman and Diu, during the second wave of the Covid pandemic and for extending protection to those who are unable to access justice because of the restricted functioning of Courts / Tribunals.

HELD
Taking an overall view of the matter, which tends to suggest that resumption of physical hearings in all the Courts across Maharashtra is still at some distance, the protection granted by the interim orders passed on this PIL stand extended till 9th July, 2021 or until further orders, whichever is earlier, on the same terms.

Further, the Court held that the media has reported incidents of building collapses leading to loss of precious lives. Therefore, if indeed there are buildings / structures which are either dilapidated or dangerous / unsafe requiring immediate demolition and vacation thereof by their inhabitants, the particular Municipal Corporation / Municipal Council / Panchayat / Local Body within whose territorial limits such buildings / structures are located, may, considering the imminent need to have such buildings / structures vacated and demolished, bring the particular instance to the notice of the relevant Division Bench in seisin of suo motu Public Interest Litigation No. 1 of 2020 (High Court On its Own Motion vs. Bhiwandi Nizampur Municipal Corporation & Ors.) and seek appropriate orders for proceeding with the demolition process to take it to its logical conclusion.

16 Lalit Kumar Jain vs. UOI & Ors. Transferred case (Civil) No. 245 of 2020 Date of order: 21st May, 2021 Bench: L. Nageswara Rao J. and S. Ravindra Bhat J.
    
Personal guarantor – Liable under IBC Code [Constitution of India, Article 32; Insolvency and Bankruptcy Code, 2016, S. 2(e), 31, 60, 78, 79, 239, 240, 249]
    
FACTS
The petition was preferred under Article 32 as well as transferred cases under Article 139A of the Constitution of India. The common question which arises in all these cases concerns the vires and validity of a Notification dated 15th November, 2019 issued by the Central Government (impugned notification). The petitioners contend that the power conferred upon the Union u/s 1(3) of the Insolvency and Bankruptcy Code, 2016 (Code) could not have been resorted to in a manner so as to extend the provisions of the Code only as far as they relate to personal guarantors of corporate debtors.

HELD
It is quite evident that the method adopted by the Central Government to bring into force different provisions of the Act had a specific design: to fulfil the objectives underlying the Code.

The Amendment of 2018 also altered section 60 of the Code in that insolvency and bankruptcy processes relating to liquidation and bankruptcy in respect of three categories, i.e., corporate debtors, corporate guarantors of corporate debtors and personal guarantors to corporate debtors, were to be considered by the same forum, i.e., the NCLT.

It is, therefore, clear that the sanction of a resolution plan and finality imparted to it by section 31 of the Code does not per se operate as a discharge of the guarantor’s liability. As to the nature and extent of the liability, much would depend on the terms of the guarantee itself.

Therefore, it is held that approval of a resolution plan does not ipso facto discharge a personal guarantor (of a corporate debtor) of her or his liabilities under the contract of guarantee.

The writ petitions were dismissed.

17 Urmila Devi & Ors. vs. Branch Manager, National Insurance Company Limited & Anr. (2020) 11 SCC 316 Date of order: 30th January, 2020 Bench: S.A. Bobde CJI, B.R. Gavai J. and Surya Kant J.

Scope of cross-objection – Even if appeal is withdrawn or dismissed – Cross-objection would survive [Civil Procedure Code, 1908, Or. 41. R. 22]

FACTS
On 2nd May, 2008, Sanjay Tanti, husband of appellant No. 1, father of appellant Nos. 2 to 4 and son of appellant No. 5, met with an accident while he was travelling from Ladma to Goradih by a Tata Maxi vehicle. The appellants filed a claim petition u/s 166 of the Motor Vehicles Act, 1988 (the M.V. Act). The owner of the vehicle was joined as Opponent No. 1; the driver of the vehicle was joined as Opponent No. 2; whereas, the National Insurance Company Limited (hereinafter referred to as ‘the Insurance Company’) was joined as Opponent.

The claim of the Insurance Company was that the driver and the owner of the vehicle had breached the terms and conditions of the insurance policy and, as such, they are not liable for payment of compensation.

The Motor Vehicle Accidental Claim Tribunal (Tribunal) vide judgment and order dated 29th January, 2011, rejected the contention of the Insurance Company that the driver and owner of the vehicle had breached the terms and conditions, and while allowing the claim petition directed the Insurance Company to pay compensation of Rs. 2,47,500 to the claimants.

Being aggrieved by the judgment and award passed by the Tribunal, the Insurance Company preferred Misc. Appeal No. 521 of 2011 before the High Court at Patna contending that the Tribunal had erroneously fastened the liability on it. In the said appeal, a cross-objection came to be filed by the appellants.

When the appeal came up for hearing, it was noticed that the appeal was dismissed for want of office objections and the counsel for the appellants (the Insurance Company) stated that they were not interested in reviving the appeal. The appeal was, as such, disposed of by the High Court. Insofar as the cross-objection of the appellants (the claimants) was concerned, the High Court held that when the appeal filed by the Insurance Company is only restricted to denial of its liability to make the payment of compensation, then in such case the cross-objection at the behest of the claimants in the shape of appeal would not be tenable. It, however, held that if the Insurance Company in the appeal challenges the quantum of compensation, in such a case the claimant(s) will have a right to file an objection.

Being aggrieved, the appellants filed the present appeal by special leave.
HELD
A conjoint reading of the provisions of section 173 of the M.V. Act; Rule 249 of the Bihar Motor Vehicle Rules, 1992; and Order XLI Rule 22 of the CPC, would reveal that there is no restriction on the right to appeal of any of the parties. It is clear that any party aggrieved by any part of the award would be entitled to prefer an appeal. It is also clear that any respondent, though he may not have appealed from any part of the decree, apart from supporting the finding in his favour, is also entitled to take any cross-objection to the decree which he could have taken by way of appeal. When in an appeal the appellant could have raised any of the grounds against which he is aggrieved, a respondent cannot be denied the right to file cross-objection in an appeal filed by the other side challenging that part of the award with which he was aggrieved. The said distinction as sought to be drawn by the High Court is not in tune with a conjoint reading of the provisions of section 173 of the M.V. Act; Rule 249 of the Bihar Motor Vehicle Rules, 1992; and Order XLI Rule 22 of the CPC.
Therefore, even if the appeal of the Insurance Company was dismissed in default and the Insurance Company had submitted that it was not interested to revive the appeal, still the High Court was required to decide the cross-objection of the appellants herein on merits and in accordance with law.

ALLIED LAWS

23 Laureate Buildwell (P) Ltd. vs. Charanjeet Singh 2021 SCC OnLine SC 479 (SC) Date of order: 22nd July, 2021 Bench: U.U. Lalit J, Hemant Gupta J and S. Ravindra Bhat J

Consumer protection – Consumer – Real estate – Subsequent purchaser from original allottee – Same rights against builder [Consumer Protection Act, 1986, S. 2]

FACTS
One Ms Madhabi Venkatraman, the original allottee, applied for allotment of a residential flat. According to the allotment letter, the possession of the flat was to be handed over within 36 months. Upon noticing the slow construction, the original allottee decided to sell the flat. The purchaser (respondent) who was in search of a residential flat was approached by the original allottee through a broker. He was assured that the possession of the flat would be delivered on time and he agreed to purchase the flat. The purchaser alleged that possession was not delivered as promised in the allotment letter. The original allottee requested the builder (appellant) to transfer the flat in favour of the respondent.

The respondent was informed that possession of the said flat could not be delivered till the end of year 2017. After this, the purchaser sought for refund of the amount paid from the builder. On refusal of the payment of instalment, the officials of the builder threatened the purchaser with cancellation and forfeiture of the amounts paid. In these circumstances, the appellant approached the National Consumer Disputes Redressal Commission (NCDRC).

The NCDRC allowed a refund with 10% interest and imposed cost on the respondent. The respondent is in appeal against the said order.

HELD
The original allottee had approached the builder, informing him that the purchaser had stepped into her shoes and would continue with the obligations and was therefore entitled to possession. Subsequently, the builder endorsed and even required the purchaser to execute the letter of undertaking, which he did. Thereby, the builder acknowledged that the rights and entitlements of the original  allottee were assumed by the purchaser and also confirmed his own obligations to the new purchaser (the consumer).

The definition of ‘consumer’ under the Act is very wide and it includes beneficiaries who can take benefit of the insurance availed by the insured. If one also considers the broad objective of the Consumer Protection Act, it is to provide for better protection of the interests of consumers. Therefore, a subsequent purchaser of a flat has the same rights as the original allottee.

24 Dena Bank vs. C. Shivakumar Reddy Civil Appeal No. 1650 of 2020 (SC) Date of order: 4th August, 2021 Bench: Indira Banerjee J and V. Ramasubramanian J

Additional documents – Insolvency application – Can be admitted later [Insolvency and Bankruptcy Code, 2016, S. 7]

FACTS
The bank sanctioned a term loan to the Corporate Debtor which was to be repaid in 24 quarterly instalments. Upon failure on the part of the Corporate Debtor to repay, the Bank initiated proceedings under Insolvency and Bankruptcy Code (IBC) before the National Company Law Tribunal (NCLT).

During the IBC proceedings, on two occasions the bank filed applications to place new documents on record. Both the applications were allowed. Pursuant thereto, the NCLT passed an order admitting the application of the bank.

The Corporate Debtor challenged the order before the NCLAT and succeeded. Aggrieved by the order of the NCLAT, the bank approached the Supreme Court.

HELD
The Supreme Court, inter alia, held that on a careful reading of the provisions of the IBC, and in particular the provisions of section 7(2) to (5) read with the 2016 Adjudicating Authority Rules, there is no bar to the filing of documents at any time until a final order either admitting or dismissing the application has been passed. The time stipulation of 14 days in section 7(4) to ascertain the existence of a default is apparently directory and not mandatory. The proviso inserted by an amendment with effect from 28th December, 2019 provides that if the Adjudicating Authority has not ascertained the default and passed an order under sub-section (5) of section 7 of the IBC within the aforesaid time, it shall record its reasons in writing for the same. No other penalty is stipulated.

Furthermore, the proviso to section 7(5)(b) of the IBC obliges the Adjudicating Authority to give notice to an applicant to rectify the defect in its application within seven days of receipt of such notice from the Adjudicating Authority, before rejecting its application under Clause (b) of sub-section (5) of section 7 of the IBC. When the Adjudicating Authority calls upon the applicant to cure some defect, that defect has to be rectified within seven days. There is no penalty prescribed for inability to cure the defects in an application within seven days from the date of receipt of notice, and in an appropriate case the Adjudicating Authority may accept the cured application even after the expiry of seven days to meet the ends of justice.

Therefore, there is no bar in law to the amendment of pleadings in an application u/s 7 of the IBC, or to the filing of additional documents, apart from those initially filed along with the application u/s 7 of the IBC in Form-1. In the absence of any express provision which either prohibits or sets a time limit for filing of additional documents, it cannot be said that the Adjudicating Authority committed any illegality or error in permitting the appellant bank to file additional documents.

25 South Eastern Coalfields Ltd. vs. S. Kumar’s Associates AKM (JV) 2021 SCC OnLine SC 486 Date of order: 23rd July, 2021 Bench: Sanjay Kishan Kaul J and  Hemant Gupta J

Letter of intent – No binding relation – Forfeit the bid security amount [Indian Contract Act, 1872, S. 3, S. 7]

FACTS
In June, 2009, South Eastern Coalfields Ltd. (the appellant) floated a tender. The respondent was the successful bidder amongst others. A Letter of Intent (LOI) was issued by the appellant awarding the contract for a total work of Rs. 387.4 lakhs.

The respondent, in pursuance of the LOI, mobilised resources at the site. The respondent apparently faced difficulties soon thereafter as the truck-mounted drill machine employed by it suffered a major breakdown. The work, thus, had to be suspended for reasons beyond the control of the respondent. The endeavour to rectify the position or arrange alternative machinery did not work out and the purchase of new machines was expected only after about three months.

The contractual relationship apparently deteriorated. The appellants issued a letter alleging breach of terms of contract and the applicable rules and regulations by the respondent. The appellant further asked the respondent to show cause as to why penal action be not initiated for – (a) termination of work; (b) blacklisting of the respondent company; and (c) award of execution of work to another contractor at the cost and risk of the respondent. Subsequently, the final termination of work was carried out vide letter dated 15th April, 2010.

The respondent filed a writ petition under Articles 226 and 227 of the Constitution of India seeking quashing of the termination letter dated 15th April, 2010. The Division Bench of the Chhattisgarh High Court opined that there was no subsisting contract inter se the parties to attract the general terms and conditions as applicable to the contract.

The appellant filed a Special Leave Petition against the said order.

HELD
None of the mandates was fulfilled except that the respondent mobilised the equipment at the site; the handing over of the site and the date of commencement of the work was also fixed. The respondent, thus, neither submitted the Performance Security Deposit nor signed the Integrity Pact. Consequently, the work order was also not issued nor was the contract executed. Thus, the moot point would be whether mobilisation at the site by the respondent would amount to a concluding contract inter se the parties. The answer to the same would be in the negative. Therefore, all that the appellants can do is to forfeit the bid security amount.

26 Edelweiss Asset Reconstruction Co. Ltd. vs.  TRO and Ors. WP(L) No. 7964 of 2021 Date of order: 28th July, 2021 Bench: S.P. Deshmukh J and Abhay Ahuja J

Recovery of dues – Priority of debtor – Secured creditor would have priority over Government dues [SARFAESI Act, 2002, S. 13(2)]

FACTS
The petitioner, as assignee of right, title and interest of the credit facilities to one Classic Diamonds (India) Ltd. (the borrower, now in liquidation) purporting to have a superior secured and prior charge in time over the attached properties, having commenced proceedings under the SARFAESI / Securitisation Act by issue of notices under sections 13(2) and 13(4) and having taken possession of one of the attached properties (as will be described hereinafter), is aggrieved by the order of attachment dated 17th January, 2013 passed by the respondent, i.e., the Tax Recovery Officer (TRO), seeking recovery of income tax dues of the borrower.

The moot issue arising herein is whether the secured debt assigned in favour of the petitioner has a priority over Government dues / tax dues.

HELD
Relying on the decision of the Supreme Court in the case of Bombay Stock Exchange vs. V.S. Kandalagaokar (2015) 2 SCC 1 and the decision in the case of State Bank of India vs. State of Maharashtra and Ors. (2020) SCC OnLine Bom 4190, the Court held that the charge of the secured creditor would have priority over the Government dues under the Income-tax Act. There is no provision in the IT Act which provides for any paramountcy of the dues of the IT Department over secured debt.

Allied Laws

38. M Baburaj vs. State of Kerala
AIR 2022 Kerala 148
Date of order: 15th July, 2022
Bench: A. Badharudeen J.

Succession certificate – not mandatory – for claim of award under land acquisition cases [S.214(1)(b), Succession Act, 1925; S.31, Land Acquisition, 1894]

FACTS

In a land acquisition case, the Hon’ble Supreme Court granted enhanced compensation. The Respondent deposited the same in court after the death of the claimant. The claimant was succeeded by her son, who is the Petitioner. The Sub Court insisted that the Petitioner produce a copy of the succession certificate. The Petitioner preferred a Writ Petition against this insistence.

HELD

The law emerges is that production of succession certificate is mandatory as per Section 214(1)(b) of the Succession Act when the decree-holder dies in cases where the decree amount comes under the category ‘debts’ or ‘securities’. The compensation arising out of motor accidents or from land acquisition proceedings or cases involving grants of compensation under the Electricity Act, etc., would not come under the purview of `debts’ or `securities’. Therefore, in such cases, the production of a succession certificate is not mandatory. Therefore, the surviving decree holder can execute the decree on his own behalf and on behalf of the legal representative of the deceased decree holder and in such case, the succession certificate as per Section 214(1)(b) of the Succession Act is not necessary.
    
The petition is allowed.

39. Ram Karan vs. Gugan
AIR 2022 Punjab and Haryana 152
Date of order: 9th August, 2022
Bench: Dinesh Maheshwari and
Krishna Murari JJ.

Registration of Documents – Consensual decree – Does not require registration [S. 17, Registration Act, 1908; Or 23 R. 3 Civil Procedure Code, 1908]

FACTS

An issue regarding property arose between members of a family, wherein inter alia, an issue arose in an appeal as to whether a decree obtained by the consent of both parties have to be mandatorily registered. The lower appellate court had set aside on the ground of non-registration.

On Appeal.

HELD

It was held that a decree based on the admission of a party does not require any registration, and also, a family settlement did not require compulsory registration. Therefore, the finding recorded by the lower appellate court that the impugned decree is liable to be set aside on account of non-registration or account of no pre-existing right is apparently erroneous.

The appeal is allowed.
 

40. Kantaben Parsottamdas vs. Ganshyambhai Ramkrishan Purohit (Dead) by LRs
AIR 2022 Gujarat 146
Date of order: 9th June, 2022
Bench: A. P. Thaker J.

Judgements – Judges required to give citation or reference of cases being relied on in their decision [Or. 20, R 1, Civil Procedure Code, 1908]
 
FACTS

Being aggrieved and dissatisfied with the judgment and decree passed by the District Judge in appeal, the original defendant has preferred the present Second Appeal.

On appeal, inter alia, it was challenged that the impugned judgment of the First Appellate Court had relied upon some decision without giving any name or citation thereof and merely upon memory.

HELD

The reliance on a decision without any name or citation number and merely on the basis of memory is not proper on the part of the learned District Judge. The judgment of the court has to be based only upon the facts proved. If there is any precedent applicable in the given facts, then, the particular precedent has to be referred to by name as well as where such a decision is reported. A Judge cannot pass any order or make any observation merely on his own memory without referring names of the parties or the numbers of proceedings and where such a decision is reported. The First Appellate Court Judge has committed a serious error of facts and law in creating a new case in favour of the plaintiff of natural rights.

The appeal is allowed.


41. A. Narahari and Anr. vs. Suman Chit Fund Pvt. Ltd.
AIR 2022 Telangana 158
Date of order: 4th July, 2022        
Bench: G Anupama Chakravarthy J.

Attachment – Recovery from properties of Guarantor – Legal [Or.21 Rr 43, 54 of Civil Procedure Code, 1908; S. 128, Indian Contract Act, 1872]

FACTS

The trial court passed an order directing the petitioners to deposit a sum with the court. Pursuant to the said decree, the plaintiff filed the execution petition under Order 21 Rules 43, 64 and 66 of CPC to attach and sell the petition schedule properties of judgment, for realization of the decretal amount. The revision petitioners, i.e., judgment debtors filed their detailed counters before the trial court, contending that they were not aware of the decree till they received notices in the execution petition and that the decree-holder obtained ex parte decree behind their back. Ultimately, the execution petition was allowed by the trial court ordering attachment against the revision petitioners.

HELD

The principal borrower, i.e., the prized subscriber, was also made as a party along with the guarantors. In the law of indemnity, it is a tri-party agreement, and the law permits the decree holder to proceed with the execution either against the principal borrower or against the guarantors. Further, the decree-holder can proceed against any one of the judgment-debtors, and he is not required to proceed against the principal borrower at the first instance.

The revision petition is rejected.

Allied Laws

34 State of HP vs. Bmd Pvt. Ltd.
AIR 2022 Himachal Pradesh 134
Date of order: 2nd June, 2022
Bench: Sandeep Sharma J.
 
Arbitration clause – Appointment of Arbitrator – Not open for one of the parties to file an application for the appointment of Arbitrator when both the parties have subjected to its jurisdiction [S. 11(6), 13, Arbitration and Conciliation Act of 1996]
 
FACTS  
A dispute arose between the parties and the Respondent served a Notice requesting for a refund of the upfront premium, and in the event the same is not responded, the notice to be treated as an invocation of the arbitration clause as per the agreement between the parties. The Petitioner did not respond to the said notice. Therefore, the Respondent sent a request to the Arbitrator to proceed with the Arbitration. However, pursuant to the Arbitrator taking cognizance of the proceedings, the Petitioner filed this application before the Court for the appointment of the Arbitrator.
 
HELD
The Petitioner admitted to receiving the Notice which invoked the Arbitration and not objected to the same. Therefore, as the Arbitrator was appointed as per the arbitration clause contained in the agreement between the parties, and the Petitioner had subjected itself to the jurisdiction, it was not open for the Petitioner to challenge the mandate by filing an application before the Court for appointment of Arbitrator.  
 
Petition is not maintainable.


35 Vijayalaxmi Chandrashekara Gowda vs. Chandrashekara Gowda
AIR 2022 Karnataka 182
Date of order: 20th April, 2022
Bench: Sreenivas Harish Kumar J.

Benami – Alienation of suit properties – Temporary injunction – Properties purchased by husband – in the name of the wife – Wife restrained to sell the said properties [Or 39, R 1, 2, Civil Procedure Code, 1908]

FACTS

The respondent is the husband of the appellant, and it is his case that he purchased the schedule properties in the name of his wife when he was serving in the Indian Army as a Subedar. He borrowed money from a bank for purchasing one of the properties and that he himself is repaying the loan though the loan was obtained in the name of his wife. When he learnt that the appellant was about to sell away the properties, he brought the suit claiming declaration of title over the properties and ancillary relief of permanent injunction. Along with the plaint, he made an application for temporary injunction to restrain the appellant from alienating the properties, and as it stood allowed by the impugned order, this appeal has been preferred by the defendant.

The appellant does not dispute that she is the wife of the respondent, what she has contended is that she purchased the properties from her money without the aid of the respondent. She admits that the respondent made some payments towards loan installments and submits that over time, he stopped making payments. The loan has not been cleared yet and that she has school going children. She has found it difficult to maintain the family without any help from the plaintiff and in this view, she has got every right to dispose of the properties for the benefit of the family.

HELD

The Trial Court has not committed any error in exercising discretion to grant temporary injunction in favour of the respondent-plaintiff. Though the appellant has contended that she purchased the suit properties from her own income, there is no material to substantiate her contention. Rather, she has admitted that the loan was raised in their joint names for purchasing the property and that the respondent repaid the loan. The appellant is a housewife and for this reason, it is difficult to believe that she could purchase the suit properties. It is the clear case of the respondent that he was working as a Subedar in the Indian Army and till 2015, the appellant and the children were living with him. In this view, it may not be possible to hold at this stage that she had independent source of income. Moreover, purchase of a property by husband in the name of the wife cannot be called a benami transaction.
    
Appeal is dismissed.

36 Mahettar Sidar Singh Kanwar vs. Karmihin Hariram Kanwar and others
AIR 2022 (NOC) 715 (CHH.)
Date of order: 22nd July, 2022
Bench: Deepak Kumar Tiwari J.

Succession – Taking care of deceased and performing last rights – Cannot override succession [S. 8, Hindu Succession Act, 1956, S. 372, Indian Succession Act, 1925]
 
FACTS

The petitioner filed an application u/s 372 of the Indian Succession Act, 1925 before the Civil Judge. As per the pedigree, petitioner’s grandfather Awadhram was the cousin brother of the deceased Mangluram who died on 2nd May, 2014, and was unmarried. The deceased was working at Nagar Palika, Kharsiya and also opened an account with the SBI, Kharsiya in which salary of the deceased was being deposited. At the time of death, Rs. 96,622 was deposited in the said account. As the petitioner had taken care of the deceased during his lifetime and also performed last rituals, he preferred a petition for grant of succession certificate in his favor to obtain the said amount.    

HELD

The property of a male Hindu dying intestate is governed by Section 8 of the Hindu Succession Act, 1956. It is apparent that the petitioner’s grandfather is the cousin brother of the deceased, and as per the Schedule, only the father’s brother and father’s sister have been stipulated as heirs. Therefore, the property devolves to the mother’s side.

The petitioner fails to demonstrate that the petitioner covers under any of the category. The Revision Petition fails.

37 Seepathi Keshavalu vs. Pogaku Sharadha and others
AIR 2022 Telangana 134
Date of order: 27th April, 2022
Bench: K. Lakshman J.

Court Procedure – Application for copies of certified copies is rejected – Copy should be made from original as per definition of ‘certified copies’ [S. 126, Civil Procedure Code, 1908; R. 188, 199, Civil Rules of Practice and Circular Orders]

FACTS

The petitioner herein, third party to the suit, had filed an application under Rule 188 (2) of the Civil Rules of Practice, 1990 (CRP) seeking copies of certified copies of certain exhibits, which was rejected by the lower court.

On Revision.

HELD
A ‘copy’ means a document prepared from the original which is an accurate or ‘true copy’ of the original. The originals were returned to the Plaintiff on filing of an application after substituting by its certified copies on record. Therefore, a copy made from the certified copies will not come within the definition of “certified copies”.

Revision Application is rejected.

Allied Laws

30 Anurag Padmesh Gupta vs. Bank of India
AIR 2022 Bombay 3751
Date of order: 7th June, 2022
Bench: A.S. Chandurkarand & Amit Borkar JJ.

Fundamental Rights – Powers to Debt Recovery Tribunal – No power to restrain individual from travelling abroad [Art. 19, 21, Constitution of India; S. 19, 22, 25, Recovery of Debts due to Banks and Financial Institutions Act, 1993]

FACTS

The petition raised an important issue regarding the interpretation of Article 21 of the Constitution of India as to whether the expression “personal liberty” occurring in the said Article includes the right to travel abroad. Second important question that arose was whether the order passed by the Debt Recovery Tribunal refusing to grant permission to travel abroad results in the infringement of Article 21 of the Constitution of India?

HELD

If the right to travel is a part of the personal liberty of a person, he cannot be deprived of his right except according to the procedure established by law. The right to travel abroad is a right distinct and separate from the right of freedom of movement in a foreign country. The right to travel abroad by its necessary implications means the right to leave the home country and visit a foreign country. The right to travel abroad has been spelt out from the expression “personal liberty” in Article 21 of the Constitution.

Further held, the Tribunal, while exercising the powers of a Civil Court adjudicating money suit, is limited to the extent of passing interim order by way of injunction or stay which are expressly conferred on it. The Tribunal can travel beyond the powers conferred by the Code of Civil Procedure with a view to observe the principle of natural justice. In our view, Section 22 of the Act confers the procedural right to regulate proceedings before it. In the absence of a specific provision conferred on the Debt Recovery Tribunal by statute, the Debt Recovery Tribunal does not have power to restrain a citizen from travelling abroad, particularly when the said right has been recognized as a facet of Article 21 of the Constitution of India.

Petition is allowed.

31 Ayan Kumar Das and another vs. UOI & others
AIR 2022 Gauhati 120
Date of order: 6th April, 2022
Bench: Devashis Baruah JJ.

Appointment of Guardian – Mother of the Petitioner in comatose state – Petitioner appointed as a guardian to deal with the properties of his mother. [Art. 226, Constitution of India]

FACTS

The question that arose for consideration was as to whether in law and on facts the petitioner could be appointed as the guardian of the mother who is in ‘persistent vegetative state’ and ‘coma’ for managing her properties so as to meet medical expenses.

HELD

Article 226 of the Constitution empowers this Court to pass suitable orders on an application being filed to appoint a guardian or a next friend to an incompetent person like the petitioners’ mother who is in persistent vegetative state. In absence of any appropriate legislation, the High Court in exercise of the jurisdiction under Article 226 of the Constitution, can issue guidelines as temporary measures till the field is taken over by a proper legislation for appointment of guardian to a person lying in a comatose state or a vegetative state. Accordingly, on the basis of the materials on record, the Court was of the view that the reliefs sought for by the petitioners were reasonable and may be granted considering the peculiar facts and circumstances of the case. However, to ensure that the order of this Court is followed in letter and spirit and there is no breach thereof, it is also essential that there should be some kind of monitoring of the functioning of the guardian though for a limited duration to ensure that guardianship is being used for the benefit of the person who is in a vegetative state and such monitoring be carried out through the forum of the Assam State Legal Services Authority constituted under the Legal Services Authority Act, 1987.    

Petition was allowed.    
 

32 State of Himachal Pradesh vs. Sita Ram Sharma
AIR 2022 Himachal Pradesh 120
Date of order: 30th March, 2022
Bench: Mohammad Rafiq CJ & Ajay Mohan Goel & Sandeep Sharma JJ.

Constitutional Rights – Right to property – Unless land is voluntarily surrendered – the landowner is entitled to compensation [Art. 300A, Constitution of India]
 
FACTS

The matter has been referred to a larger bench on account of conflict of opinion between judgements. The question before the larger bench is whether a person(s) whose land(s) has been utilised for construction of road under ‘PMGSY’ is entitled to compensation?
    
HELD
Even after the right of property enshrined under Article 19(I)(f) was deleted by the 44th amendment to the Constitution, Article 300A still retains the right to property as the constitutional as well as legal right, and mandates that no person can be deprived of his property except by authority in law. The action of the State in dispossessing a citizen of his private property, without following the due process of law, would be violative of Article 300A of the Constitution of India, as also negate his human right. Thus, the right to property has  been acknowledged, not only constitutional as well as statutory, but also human right, to be construed in the realm of individual rights, such as right to health, livelihood, shelter, employment etc. in a Welfare State. The State Authorities cannot dispossess any citizen of his property except in accordance with the procedure established by law, that too by due process of law and by acquiring land and paying adequate compensation.

33 Sudipta Banerjee vs. L.S. Davar and Company and others
AIR 2022 Calcutta 261
Date of order: 5th April, 2022
Bench: Soumen Sen and Ajoy Kumar Mukherjee, JJ.

No specific legislation – Trade secret – Factors for determining whether information is confidential. [O. 39 R. 1, Civil Procedure Code, 1908]

FACTS

Dr. Sudipta Banerjee and Dr. Indira Banerjee are well qualified patent professionals. They were working in L.S. Davar and Company, a reputed Intellectual property firm since 1st June, 1994 and 1st September, 1994 respectively until their resignations in June 2020. Arpita Ghosh was working as an office assistant of L.S. Davar & Company since 2010 until she resigned on 22nd January, 2021. All of them joined another firm by the name of P.S. Davar and Company, after their resignations were accepted by their erstwhile employer.

On the allegation that the appellants are divulging the confidential information and trade secrets acquired during their course of employment in L.S. Davar and Company, in clear breach of the confidentiality agreement, L.S. Davar and Company filed a suit.

In the suit the plaintiff filed an application for injunction in which the ad interim order of injunction was passed and subsequently extended from time to time.

HELD

There is no specific legislation in India to protect trade secrets and confidential information. Nevertheless, Indian Courts have upheld trade secret protection on basis of principles of equity, and at times, upon a common law action of breach of confidence, which in effect amounts to a breach of contractual obligation. The remedies available to the owner of trade secrets is to obtain an injunction preventing the licensee from disclosing the trade secret, return of all confidential and proprietary information, and compensation for any losses suffered due to disclosure of such trade secrets.

In India, a person can be contractually bound not to disclose any information that is revealed to him/her in confidence. The Indian courts have upheld a restrictive clause in a technology transfer agreement, which imposes negative covenants on the licensee to not disclose or use the information received under the agreement for any purpose other than that agreed to in the said agreement.

The court, while assessing an ad interim order of injunction is required to assess if the plaintiff was able to make out a prima facie case and thereafter consider the other two factors namely; balance of convenience and irreparable loss that might result in the event the ex parte ad interim order of injunction not being passed. In fact, an ad interim order of injunction should be of limited duration, which the learned Trial Court granted; however, we find that extension of the said ad interim order was made mechanically and could be prejudicial to the appellant. The non-compete clause in the instant case may be prejudicial to the appellants, but no order has been passed restraining them from carrying on their profession.

The plaintiff as a professional body may not have any trade secrets per se, but the persons who were/are in the employment of the plaintiff would certainly be privy to privileged information, and any sharing of such information and communication would not only be unethical but also a breach of the confidentiality clause resulting in serious prejudice and harm to the clients of the plaintiff firm. It may also expose the plaintiff firm to civil and criminal consequences. The nature of the complaints, on which the plaintiff relies, is to be assessed at the final disposal of the injunction application. However, at this stage, it cannot be said that the trial court has overstepped its limit or did not follow the accepted guidelines in passing the ad interim order of injunction. However,  there is a possibility of the ad interim order being misconstrued as it appears to be widely worded to cover issues beyond the scope of the confidentiality and non-compete clauses, and not intended by the impugned order. Accordingly, the ad interim order is modified by restraining the appellants from disclosing, divulging or sharing confidential information gathered during the course of their employment in any manner whatsoever till the disposal of the injunction application on merits.

The order of injunction passed by the trial court is modified and clarified to the aforesaid extent.

Allied Laws

26 Rajesh Panditrao Pawar and others vs. Parwatibai Bhimrao Bende and another.
AIR 2022 Bombay 172
Date of order: 7th April, 2022
Bench: Shrikant D. Kulkarni, J.

Hindu Succession Act – Adopted son – Adopted by widow – No rights in deceased husband’s property. [Ss. 8, 14, 15, Hindu Succession Act, 1956; S. 12, Hindu Adoption and Maintenance Act, 1956]

FACTS  

Mr. Rajesh Pawar (Original defendant) is the adopted son of Kausalyabai (Original Plaintiff No. 1). The defendant was adopted by Kausalyabai in 1973 after the death of her husband, Sopanrao, in 1965. Parwatibai Bende (Original Plaintiff No. 2) is the daughter of Plaintiff No. 1 from her marriage to Sopanrao.

The defendant sought ½ share in the property of his mother’s deceased husband, Sopanrao.

HELD

The Court referred to section 12 of the Hindu Adoption and Maintenance Act, 1956, which provides that the adoption takes effect from the date of adoption and not prior to adoption. It also referred to clause (c) of the proviso to section 12 of the Hindu Adoption and Maintenance Act, 1956, which provides that the adopted child shall not divest any person of any estate vested in him or her before the adoption. It was held that as per section 8 of the Hindu Succession Act, 1956, there was an intestate succession in 1965 on the demise of Sopanrao. Soapanrao’s widow and daughter took one-half share each in the property left by Sopanrao. The defendant was not in the picture at the time of the intestate succession and thus will not be entitled to any share in the widow’s husband’s property. The property will be divided equally amongst the deceased’s daughter and widow.

After the death of the widow, the share of the widow (½ property) will be divided equally amongst her daughter (Plaintiff No. 1) and adopted son (defendant).

The appeal is dismissed.


27 Somakka (dead) by LRs vs. K.P. Basavaraj (dead) by LRs
AIR 2022 Supreme Court 2853
Date of order: 13th June, 2022
Bench: S. Abdul Nazeer & Vikram Nath, JJ.

Hindu Succession – Father in possession of tenanted property – later gets occupancy rights – Such rights are heritable – Will be divided amongst the legal heirs. [Mysore (Religious and Charitable) Inams Abolition Act, 1955]

FACTS

The appellant is the own sister of the sole respondent. Their father, Puttanna, had inherited certain properties from his father, which were ancestral properties. Amongst other properties, at the time of death, the father was pursuing occupancy rights in respect of a property under the Inam Act.

An issue arose on the partition of the father’s estate. The respondent claimed that after the demise of the father, he got himself impleaded as the legal representative of late Puttanna, and he was, thereafter, granted occupancy rights by the Land Tribunal, and it became his self-acquired property.

HELD

The Court held that the father had applied for occupancy rights under the Inam Act, which were heritable in nature. For this reason, it would be inherited by both his children, i.e., the appellant and the respondent and under the law, both of them would be entitled to ½ (half) share each.

The appeal was allowed.

28 Santosh Kumar Sahoo vs. Secretary, the Urban Co-operative Bank Ltd. and others
AIR 2022 (NOC) 512 (ORI)
Date of order: 2nd November, 2021
Bench: D. Dash, J.

Guarantor & Borrower – Liability is same – No need to exhaust all remedies before approaching the guarantor [S. 128, Indian Contract Act, 1872]
 
FACTS

The plaintiff stood as a guarantor for a loan availed by defendant Nos. 3 to 5 from the Urban Co-operative Bank Ltd., Rourkela (defendant No.1). The loan was advanced by defendant No. 1 to defendant Nos. 3 to 5 for purchase of an old bus and the plaintiff had stood as a guarantor for smooth payment of the loan by those defendants. In course of time, defendant Nos. 3 to 5 when defaulted in payment of the loan dues, defendant No. 1- Bank straightway started deducting a sum every month from the savings account maintained by the plaintiff with the said Bank.
    
HELD
The liability of the guarantor is co-extensive with the principal borrower and the option lies with the banker to proceed for recovery of the loan dues either against both or one of the two. It is not the position of law that the action by the banker against the guarantor is permissible only after exhausting all the remedies against the borrower and in the event of failure of recovery of dues from the borrower. It is settled law that even after a decree making borrower and guarantor jointly pay the loan dues is passed, the decree-holder – banker may proceed to recover the amount from the guarantor only without proceeding against the borrower. The guarantor has the eventual remedy to recover the amount from the borrower which has been recovered from him by the banker towards the loan dues of the borrower. The principle is that the guarantor would pay  the banker; the same is recoverable by him from the borrower.
 
The appeal was dismissed.


29 Ragya Bee (dead) and another vs. P. S. R. Constructions and another
AIR 2022 Telangana 105
Date of order: 27th January, 2022
Bench: P Naveen Rao and G. Radha Rani JJ.

Arbitration – Scope of section 34 – Only to set aside the award – cannot modify the award. [S. 34, Arbitration & Conciliation Act, 1996]

FACTS

A dispute arose between the owners of the property (appellant) and the developer (respondent). The issue was referred to arbitration. The Arbitrator rejected the claim of the appellants. Aggrieved by the award, the appellants filed an application for setting aside the award. The lower Court modified the award while exercising the powers u/s 34 of the Arbitration & Conciliation Act, 1996 (Act). The said decision was challenged by the applicants before the High Court.
 
HELD
The Court referred to the decision of the Hon’ble Supreme Court in the case of McDermott International Inc vs. Burn Standard Company Limited (2006) 11 SCC 181 and National Highways Authority of India vs. M. Hakeem 2021 SCC Online SC 473, and held that the issue is beyond pale of doubt. It noted that the Supreme Court has held that Section 34 of the Act cannot be held to include within it a power to modify the award. Therefore, the Civil Court is not competent to alter or modify the award of Arbitrator in a petition filed u/s 34 of the Act

The petition was allowed.

ALLIED LAWS

21 Papiya Mukherjee vs. Aruna Banerjea and another
AIR 2022 Calcutta 201
Date of order: 30th March, 2022
Bench: Prakash Shrivastava, J.

Partnership Deed – Arbitration clause – Valid after the partner’s death – Enforceable against the legal heirs of the deceased partner. [S. 11, Arbitration and Conciliation Act of 1996; S. 46, Partnership Act, 1932]

FACTS
Application under Section 11 of the Arbitration and Conciliation Act, 1996 was filed by the applicant for the appointment of an arbitrator to resolve dispute between the parties. One Dr. Dhrubajyoti Banerjea and the applicant had entered into a partnership deed for running the laboratory business. Dr. Dhrubajyoti Banerjea being of old age, had executed a power of attorney in favour of his wife, respondent No.1 herein. Dr. Dhrubajyoti Banerjea passed away on 9th April, 2015. The respondent denied the arbitration by taking the stand that there was no valid arbitration agreement between the parties.

HELD
It was held that respondents are the legal heirs/successors of Dr. Dhrubajyoti Banerjea. Section 40 of the Arbitration Act clearly provides that an arbitration agreement will not be discharged by the death of a party thereto and will be enforceable by or against the legal representatives of the deceased. Section 42 of the Partnership Act, 1932 provides for the dissolution of partnership firms by the death of a partner. In terms of Section 46 of the Partnership Act, on the dissolution of the firm every partner or his legal representative is entitled to, as against all the other partners or their representatives, to have the property of the firm applied in payment of the debts and liabilities of the firm and to have the surplus distributed amongst the partners or their representatives according to their rights.

The application was allowed.

22 Jayasudha vs. Karpagam and others
AIR 2022 (NOC) 373 (MAD.)
Date of order: 4th March, 2021
Bench: T. Ravindran, J.

Hindu Undivided Family – Family Manager – Alienation of property – No immoral purpose – Binding on the family [S. 6, Hindu Succession Act, 1956; S. 92, Indian Evidence Act, 1872]

FACTS
The plaint was filed by the daughters of the family manager as the ancestral properties of the family had been sold by the family manager to his son and daughter-in-law. The plaintiffs claimed a share in the suit property on account of the amendment in the Hindu Succession Act. Further, the plaintiffs submitted that their signatures had been taken as attestors on the sale deed without disclosing the contents of the sale deed.

HELD
As the plaintiffs have admitted to signing the deed, their defence is found to be not in consonance with the provisions of Section 92 of the Indian Evidence Act. Further, the father of the Hindu Joint Family is entitled to alienate the joint family property, and the transfer made by the father need not be for legal necessity, and the same is binding on all the members of the family. When the sale deed executed by the father is not tainted with illegality or immorality, the daughters being the coparceners as per the amended Hindu Succession Act, would be bound by the sale deed executed by their father. Accordingly, the suit filed by the daughter claiming share in the alienated property was dismissed, and the appeal was allowed.

23 Dilip Hariramani vs. Bank of Baroda
AIR 2022 SUPREME COURT 2258
Date of order: 9th May, 2022
Bench: Ajay Rastogi, Sanjiv Khanna, JJ.

Dishonour of Cheque – Proceedings against Partner of Firm – No proceedings against the Firm – Firm not made accused or summoned – Conviction set aside. [Ss. 138, 141, Negotiable Instruments Act, 1881; Partnership Act, 1932]

FACTS
The appellant is challenging his conviction for the dishonour of cheques. The respondent had granted term loans and a cash credit facility to a partnership firm – Global Packaging. It is alleged that in part repayment of the loan, the firm, through its authorised signatory, had issued three cheques. However, the cheques were dishonoured on presentation due to insufficient funds. The bank, through its branch manager, issued a demand notice to the appellant u/s 138 of the Negotiable Instrument Act, 1881 (Act). The respondent bank, through its branch manager, filed a complaint before the Court of Judicial Magistrate, and subsequently, the appellant was convicted.

HELD
It is an admitted case of the respondent bank that the appellant had not issued any of the three cheques, which had been dishonoured, in his personal capacity or otherwise than as a partner. The provisions of Section 141 impose vicarious liability by deeming fiction which presupposes and requires the commission of the offence by the company or firm. Therefore, unless the company or firm has committed the offense as a principal accused, the persons mentioned in sub-section (1) or (2) would not be liable and convicted as vicariously liable. Section 141 of the Act extends the vicarious criminal liability to officers associated with the company or firm when one of the twin requirements of Section 141 of the Act has been satisfied, which person(s) then, by deeming fiction, is made vicariously liable and punished. However, such vicarious liability arises only when the company or firm commits the offence as the primary offender.

Conviction set aside. The appeal was allowed.

24 Namdeo Babuji Bangde vs. State of Maharashtra & Ors.
AIR 2022 MAHARASHTRA 151
Date of order: 4th April, 2022
Bench: Rohit B. Deo, J.

Maintenance of senior citizen – harassed by son & daughter-in-law – Eviction of son & daughter-in-law by Tribunal – Proper [Ss. 4, 7, 23, 32, Maintenance and Welfare of Parents and Senior Citizens Act (56 of 2007)]
 
FACTS
The petitioners are the son and daughter-in-law respectively of respondents 2 and 3, and are assailing the order dated 21st January, 2020 rendered by the Tribunal constituted u/s 7 of the Maintenance and Welfare of Parents and Senior Citizens Act, 2007 (Act) whereby the petitioners were directed to vacate the self-acquired residential house of the respondents 2 and 3. Respondent 2, who was then aged 78 years and respondent 3, who was then aged 67 years, preferred an application dated 21st August, 2018 contending that respondent 2 has constructed the residential house from self-earning in Nagpur, and that the petitioner 1 has illegally and forcibly taken possession of part of the said house and is conducting himself in a manner as would pose a serious threat to the safety and security of the respondents 2 and 3.

The Tribunal found from the material on record that there is a real possibility of the safety and security of the aged petitioners being jeopardised, and therefore, directed eviction by the order impugned. The petitioners have challenged the said order.
    
HELD
The petitioners claimed that the aged parents have lost their mental balance and are therefore, levelling false allegations. In the conservative Indian society, a son is not expected to brand his aged father a ‘swindler’ or then allege that the aged parents have lost mental balance. The Courts have repeatedly acknowledged the right of senior citizens or parents to live peacefully and with dignity. Therefore, an order of eviction is absolutely necessary in order to ensure the physical and emotional health and safety of the parents.

25 Indian Overseas Bank vs. RCM Infrastructure Limited & Another
2022 LiveLaw (SC) 496
Date of order: 18th May, 2022
Bench: L. Nageswara Rao & B.R. Gavai, JJ.

Recovery of Dues – After appointment of CIRP – All actions to foreclose – Insolvency and Bankruptcy Code, 2016 – Complete Code – Overrides any anything contained in other law. [Ss. 13, 14, 238, Insolvency and Bankruptcy Code, 2016; R. 8, 9, Security Interest (Enforcement Rules, 2002)]

FACTS
The appellant bank had extended certain credit facilities to the Corporate Debtor. However, the Corporate Debtor failed to repay the dues, and the loan account of the Corporate Debtor became irregular and came to be classified as a ‘NonPerforming Asset’ (NPA).

The appellant bank issued a demand notice u/s 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESIA), calling upon the Corporate Debtor and its guarantors to repay the outstanding amount due to the appellant bank. Since the Corporate Debtor failed to comply with the demand notice and repay the outstanding dues, the appellant bank took symbolic possession of the two secured assets mortgaged exclusively with it. The same was done by the appellant bank in exercise of the powers conferred on it u/s 13(4) of the SARFAESIA read with Rule 8 of the Security Interest (Enforcement) Rules, 2002 (Rules). One of the said properties stood in the name of Corporate Debtor and the other in the name of Corporate Guarantor. An E-auction notice came to be issued by the appellant bank to recover the public money availed by the Corporate Debtor. In the meantime, the Corporate Debtor filed a petition u/s 10 of the Code before the learned NCLT.

HELD
After the CIRP is initiated, there is a moratorium for any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its property including any action under the SARFAESIA. It is clear that once the CIRP is commenced, there is complete prohibition for any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its property. It could thus be seen that the provisions of the IBC shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law. This Court has consistently held that the IBC is a complete Code in itself and in view of the provisions of Section 238 of the Code, the provisions of the Code would prevail notwithstanding anything inconsistent therewith contained in any other law for the time being in force.

ALLIED LAWS

16 Kanhu Pradhan alias Pradhan alias Kanhu Charan Pradhan and others vs. Pitambara Padhan alias Pradhan AIR 2022 Orissa 67 Date of order: 25th January, 2022 Bench: Arindam Sinha, J.

Adverse possession – Unregistered document – Cannot be relied on as evidence. [S. 17; Registration Act (16 of 1908)]

FACTS
Plaintiffs filed suit for declaration of right, title, interest and injunction in respect of the suit property. The trial Court dismissed the suit on the ground that the defendants had adverse possession on the basis of an unregistered sale document dated 29th September, 1960. They had tendered the document as an ancient document and accordingly the trial Court found in favour of the defendants, to have perfected their title by adverse possession. The first appellate Court relied on Section 17 of the Registration Act, 1908, to hold that a document of sale of immovable property valued at more than Rs. 100 was compulsorily registerable. A compulsorily registerable document, not registered, could not be relied upon in evidence.

HELD
It was held by the High Court that finding by the Trial Court on adverse possession was clearly wrong. Adverse possession can be claimed only on the evidence adduced of possession, openly and hostile to the real owner. There cannot be a finding on adverse possession, when the claim is based on a document, inadmissible in evidence.

17 Mrs. Umadevi Nambiar vs. Thamarsseri  AIR 2022 SUPREME COURT 1640 Date of order: 1st April, 2022 Bench: Hemant Gupta and V. Ramasubramanian, JJ.

Transfer of Property – Power of Attorney – No clause empowering to sell property – The title cannot be transferred.

FACTS
The suit property originally belonged to one Ullattukandiyil Sankunni. After his death, the property devolved upon his two daughters. One of the daughters i.e., Umadevi Nambiar (appellant) executed a general Power of Attorney on 21.07.1971 in favour of her sister Smt. Ranee Sidhan and registered it. The said power was cancelled on 31.01.1985. But in the meantime, the sister was found to have executed four different documents in favour of certain third parties, assigning/releasing some properties. The assignees/releasees had further sold the property. The purchaser of the property from the assignees/releasees is the Respondents herein. The appellant filed a suit for partition of her share in the property. The trial Court granted a preliminary decree in favour of the appellant. However, the regular appeal filed by the Respondent was allowed by a Division Bench of the High Court holding that though the power of attorney did not contain power to sell but the Respondent was a bona fide purchaser as the appellant had constructive notice of sale through Power of Attorney. Therefore, the appellant has come up with the above appeal.

HELD
The Supreme Court, held that there remains a plain and simple fact that the deed of Power of Attorney executed by the appellant on 21.07.1971 in favour of her sister contained provisions empowering the agent: (i) to grant leases under Clause 15; (ii) to make borrowals if and when necessary with or without security, and to execute and if necessary, register all documents in connection therewith under Clause 20; and (iii) to sign in her own name, documents for and on behalf of the appellant and present them for registration, under Clause 22. But there was no Clause in the deed authorizing and empowering the agent to sell the property. Thus, the draftsman has chosen to include, (i) an express power to lease out the property; and (ii) an express power to execute any document offering the property as security for any borrowal, but not an express power to sell the property. Therefore, the draftsman appears to have had clear instructions and he carried out those instructions faithfully. The power to sell is not to be inferred from a document of Power of Attorney. Unfortunately, after finding (i) that the Power of Attorney did not contain authorization to sell; and (ii) that the Respondent cannot claim the benefit of Section 41 of the Transfer of Property Act, 1882 (Bonafide Purchase), the High Court fell into an error in attributing constructive notice to the appellant in terms of Section 3 of the Transfer of Property Act, 1882. The High Court failed to appreciate that the possession of an agent under a deed of Power of Attorney is also the possession of the principal and that any unauthorized sale made by the agent will not tantamount to the principal parting with the possession. It is not always necessary for a Plaintiff in a suit for partition to seek the cancellation of the alienations. It is a fundamental principle of the law of transfer of property that “no one can confer a better title than what he himself has” (Nemo dat quod non habet). The appellant’s sister did not have the power to sell the property to the vendors of the Respondent. Therefore, the vendors of the Respondent could not have derived any valid title to the property. If the vendors of the Respondent themselves did not have any title, they had nothing to convey to the Respondent, except perhaps the litigation.

18 Abhimanyu Jayesh Jhaveri vs. Nirmala Dharmadas Jhaveri and another  AIR 2022 Bombay 132  Date of order: 17th December, 2021 G.S. Kulkarni, J.

Maintenance of senior citizen – harassed by son & grandson for property – Will of Husband not probated – property with grandmother – son and grandson to be vacated [Ss. 4, 5, 23, Maintenance and Welfare of Parents and Senior Citizens Act (56 of 2007)]

FACTS
Claim of eviction from flat in question was made by Nirmala Dharmadas Jhaveri who was 89 years of age, against her son and her grandson, before the Senior Citizen’s Tribunal, Mumbai under the Maintenance and Welfare of Parents and Senior Citizens Act (56 of 2007). The son and grandson were financially well off and well placed but were torturing grandmother with greedy and acquisitive intention to grab here flat. The grandson on the basis of the will in his favour by his grandfather was claiming right over the flat. The grandmother denied the claim of the grandson based on the will as said will was not probated and contended that she was the sole owner of the flat.

HELD
It was held that both the son and the grandson have not only failed to maintain their grandmother, but also have caused mental and physical harassment and depravement to her material needs to extreme extent that she was thrown out of her own house, only with intention to grab said flat. Further, the share certificate with respect to the flat was in the name of the grandmother and the flat was shown in her Income tax returns. As the will under which grandson was claiming the rights was not probated, his claim to the flat could not be entertained. Hence, the son and the grandson were directed to vacate the flat in question.

19 U.P.S.E.B. Hathras vs. Hindustan Metal Works Hathras  AIR 2022 ALLAHABAD 132   Date of order: 11th February, 2022 Bench: Sunita Agarwal and Krishan Pahal, JJ.

Appointment of arbitrator – Death of sole arbitrator initially appointed–case of appointment of new arbitrator and not of supply of vacancy. [Ss. 8, 9(b); Arbitration Act, 1940 (10 of 1940)]
 
FACTS
An agreement was entered into between the appellant and the respondent no. 2 on 9th May, 1964, whereby the appellant had agreed to supply power to the Mill. Pursuant to a dispute, the respondent no. 2 served the notice dated 9.9.1970 upon the appellant asking to agree for appointment of a sole arbitrator in terms of the first part of the arbitration clause 18 in the agreement. The appellant agreed to the said proposal and on 29.9.1970, Mr. Justice T.P. Mukherji, a retired Judge of the Allahabad High Court was appointed as the sole arbitrator. However, before the arbitrator could enter upon the reference, unfortunately, he died. A notice dated 6.7.1982/3.8.1982 under Section 8 of the Arbitration Act, 1940 (the Act) was then served upon the appellant proposing Shri A.C. Bansal, a retired District & Sessions Judge to be the sole arbitrator. This Notice was not objected to by the appellant. On 10th February, 1983, the arbitrator put both the parties to notice intimating that he had entered into the reference and that 7th March,1983 was the date fixed for striking of issues and preliminary hearing. The appellant did not participate in the Arbitral Proceedings on the ground that the appointment was illegal and the proceedings were void ab initio. To challenge the validity of the arbitral award, it was submitted that it was a case of supplying the vacancy on account of death of the appointed arbitrator which would fall within the scope of Section 8(1)(b) of the Arbitration Act, 1940. In that case, in the event of failure of the appellant to appoint the arbitrator by supplying the vacancy after service of notice, only option before the respondent no. 2 was to approach the Court by moving the application seeking for appointment of arbitrator.

HELD
In the instant case, the sole arbitrator who was appointed in accordance with the arbitration clause 18 of the agreement with the consent of the parties could not even enter into the reference. The proceedings of arbitration had not begun. It, therefore, became a case of appointment of a new arbitrator and not of supplying the vacancy. A new arbitrator was to be appointed by the parties in terms of the arbitration clause 18, which contained two options; firstly, that a single arbitrator could be appointed by agreement between the parties or else the dispute could be referred to two arbitrators, one appointed by each party.

The failure on the part of the appellant to appoint one more arbitrator for 15 clear days after the notice had given right to the respondent to invoke Section 9(b) to appoint arbitrator nominated by it to act as sole arbitrator in the reference. It cannot be successfully argued that since the appellant had kept silent, it should be presumed as its non-concurrence to the proposal for the appointment of the sole arbitrator and the respondent had the only option to approach the Court under Section 8 of the Act, 1940. The option available to the appellant to appoint its own arbitrator, as per clause 18 of the arbitration agreement, in case of disagreement to the proposal of sole arbitrator was never exercised. In case argument of the appellant is accepted, the provision of Section 9(b) giving power to the party to appoint sole arbitrator would become redundant. The present is a case which would fall within the scope of Section 9(b) where the award passed by the sole arbitrator on account of failure on the part of one of the parties to appoint another arbitrator, was binding on both the parties as if the sole arbitrator had been appointed by consent. The silence on the part of the appellant in such a case would be treated as its consent.

20 B.V. Subbaiah vs. Andhra Bank, Hyderabad and others  AIR 2022 Telangana 78  Date of order: 31st January, 2022  Bench: P. Naveen Rao and G. Radha Rani, JJ.

Money suit – Limitation – Plaintiff practicing advocate handling several matters of defendant Bank before various Courts, Tribunals, Forums etc. – Bank failed to pay his fees and expenses – Payment to professional person like Advocate and CA is described as “fee” and not “price – ‘Price of work done’ cannot be made applicable to professions where professionals merely provide services for fee – Article 18 of Limitation Act not applicable to claim of plaintiff – Article 113 would be applicable. [Article 18, Limitation Act, 1963]

FACTS
Appellant/plaintiff filed a suit for recovery of amount of Rs. 19,46,701.31 with subsequent interest at the rate of 18% p.a. against the defendant bank for recovery of his legal fees. The defendant bank, though a nationalized bank, had not chosen to pay his fees, not even the expenses incurred, in spite of several requests made by him. The defendants contended that the suit is barred by limitation as it was instituted nearly eight years after the judgment in O.S. No. 1211 of 1991 and nearly 10 or more years after the results of other cases. The fee was claimed beyond three years after the result of the cases. Further, the suit was not filed within three years of the termination of his services in the respective cases and thus as per Article 18 of the Limitation Act, suit has to be instituted within three years on completion of work and when payment was due. The trial court dismissed the suit without costs holding that the suit was barred by time and that the plaintiff was not entitled for recovery of suit amount.

HELD
It is apparent from the reading of both Articles 18 and 113 of the Limitation Act that though the period of limitation is three years, but under Article 18 it begins to run when the “work is done” and under Article 113 it begins to run when the “right to sue” accrues. A professional activity cannot be considered as a commercial activity and the term ‘price’ is not synonymous with the term ‘fee’. In M.P. Electricity Board and others vs. Shiv Narayan and others (2005) 7 SCC 283, the Hon’ble Apex Court held that there is a fundamental distinction, therefore, between a professional activity and an activity of a commercial character. In Dharmarth Trust, Jammu and Kashmir, Jammu and others vs. Dinesh Chander Nanda 2010 (10) SCC 331, the Hon’ble Apex Court held that the term ‘Price’ does not cover the services provided by the professionals such as Architect, Lawyer, Doctor, etc., as professionals charge a ‘fee’. Also, the term ‘work done’ will not be applicable to professionals such as Architect, Lawyer, Doctor, etc. as these professionals render services to their clients. The remuneration of a professional is in the form of a ‘fee’ and therefore, it cannot be said that the professional earns a ‘price’.

It was thus held that the price of work done is not applicable to professionals and therefore Article 18 of the Limitation Act is not attracted to the claim of the plaintiff.

It was further held that an advocate was entitled to be paid his full fee and a change of advocate could not be made without the permission of the court and the right to fee of a counsel was not dependent on the quantum of work that he actually did in the court. It was also held that the conduct of the defendants, a Nationalized Bank, towards their standing counsels of adopting dilatory tactics and raising technical pleas to avoid payments and making him to take recourse to prolonged litigation by wasting the time not only in terms of money but also the valuable time of the counsel and the court is highly reprehensible. The Trial Court order was set aside.

ALLIED LAWS

13 Sant Shri Gajanan Maharaj Sansthan vs. United India Insurance Company Limited AIR 2021 Bombay 177 (Nag)(HC) Date of order: 29th January, 2021 Bench: A.S. Chandurkar J, N.B. Suryawanshi J

Insurance claim – Insurance agreement entered into at Khamgaon – Property situated at Pandharpur – Property destroyed – Part of cause of action at Khamgaon – Court at Khamgaon has jurisdiction [Insurance Act, 1938, S. 20]

FACTS
The plaintiff is a public trust registered under the provisions of the Bombay Public Trust Act, 1950 and the Societies Registration Act, 1860. It runs various educational institutions and charity hospitals at various places in the State of Maharashtra. The Trust on 4th August, 1977 purchased a non-agricultural property at Pandharpur for construction of the Sant Gajanan Maharaj Temple. With a view to safeguard the said property, it entered into an agreement of insurance with the defendant.

The structure was damaged on account of floods during 2001-2003. The trust pleaded that it was required to bear substantial costs and therefore there was a cause of action for recovering money from the defendants.

The insurance company raised an objection to the territorial jurisdiction of the Civil Court at Khamgaon. The property insured was situated at Pandharpur in Solapur District which was beyond the territorial jurisdiction of the Khamgaon Court. The claim for insurance was based on the damage caused to the insured property on account of the occurrence of the events also at Pandharpur. Merely because the insurance policy was entered into at Khamgaon the same could not be a reason to confer jurisdiction on the Court at Khamgaon.

HELD
The contract between the parties was entered into at Khamgaon and the amount of premium was paid by the plaintiff and received by the defendant at Khamgaon. This indicates that as the contract of insurance between the parties was executed at Khamgaon and the policy of insurance was also issued by the office of the defendant at Khamgaon, part of the cause of action arose at Khamgaon. On acceptance of premium by the defendant at Khamgaon, the policy of insurance commenced and though the property insured was located at Pandharpur, District Solapur, the Court at Khamgaon had jurisdiction to entertain the suit based on the insurance policies as the part of the cause of action had arisen at Khamgaon. The Trial Court has rightly held that the Court had territorial jurisdiction to entertain the suit.

14 Collector of Stamps vs. Tulsi Rice and Pulse Mills AIR 2021 Gujarat 72 Date of order: 22nd March, 2021 Bench: Vineet Kothari J, Biren Vaishnav J

Stamp Duty – Retiring partner – Assigning his interest in land to partnership firm – No transfer of assets – No stamp duty [Stamp Act, 1899, S. 48]

FACTS
One of the seven partners of a partnership firm, viz. Tulsi Rice and Pulse Mills, assigned his interest in the leasehold land leased for 99 years by GIDC to the partnership firm.

It is the case of the Stamp Duty Authorities that the assignment amounted to ‘transfer’ as defined in the Stamp Law and the Stamp Authority was justified in levying Stamp Duty vide order dated 16th April, 2008.

The case of the partnership firm was allowed by the Single Judge of the Gujarat High Court. The State of Gujarat filed an appeal against the judgment and order dated 18th October, 2016 allowing the writ petition filed by the respondent and holding that on the deed of assignment dated 5th August, 2000, stamp duty could not be demanded by the Stamp Authorities.

HELD
Even though the said document was titled as ‘Deed of Assignment’, it could not be an assignment or transfer of asset or property by one of the partners of the partnership firm as he had no exclusive right, title or interest in the said leasehold land which was on 99 years’ lease given by GIDC to the said firm. The Court held that the document in question executed in the present case is, in effect, a retirement of one of the partners of the firm who, upon his retirement from the said firm, released his right in the leasehold land in question in favour of the continuing six partners.

The case under this document would squarely fall within the ambit and scope of section 48 of the Indian Partnership Act, 1932 which provides for the mode of settlement of accounts between the partners. It appears that the Stamp Authority in the present case was misled by the title of the document ignoring the actual event or intention of the document by which seven continuing partners assigned the right, title or interest in favour of the six continuing partners, except the seventh and the outgoing retiring partner and the same was construed as a ‘transfer’ or ‘assignment’ by the outgoing partner in favour of the six continuing partners.

The appeal was dismissed.

15 Alka Khandu Avhad vs. Amar Syamprasad Mishra and Anr. AIR 2021 Supreme Court 1616 Date of order: 8th March, 2021 Bench: Dr. D.Y. Chandrachud J, M.R. Shah J

Dishonour of cheque – Proceedings against husband and wife – Wife neither signatory – No joint bank account – No joint liability u/s 138 of the Negotiable Instrument Act, 1881

FACTS
The respondent No. 1 (Amar Syamprasad Mishra) had filed a criminal complaint against the appellant and her husband for the dishonour of a cheque in the Court of the Metropolitan Magistrate, Mumbai. That the original complainant raised a professional bill for the legal work done by him to represent accused Nos. 1 and 2 in the legal proceedings. That, thereafter, original accused No. 1, husband of the appellant herein, handed over to the complainant a post-dated cheque of 15th March, 2016. The said cheque was presented for encashment and the same came to be returned unpaid with the endorsement ‘funds insufficient’. The Respondent No. 1 filed a complaint against both the accused (husband and wife) for the offence punishable u/s 138 of the Negotiable Instrument Act, 1881 (NI Act). The Metropolitan Magistrate directed to issue process against both the accused.

HELD
On a fair reading of section 138 of the NI Act, before a person can be prosecuted the following conditions are required to be satisfied:

i) that the cheque is drawn by a person on an account maintained by him with a banker;

ii) the cheque is for the payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability; and

iii) the said cheque is returned by the bank unpaid, either because the amount of money standing to the credit of that account is insufficient to honour the cheque, or that it exceeds the amount arranged to be paid from that account.

Section 138 of the NI Act does not speak about joint liability. Even in case of a joint liability, in case of individual persons a person other than a person who has drawn the cheque on an account maintained by him cannot be prosecuted for the offence u/s 138. A person might have been jointly liable to pay the debt but such a person cannot be prosecuted unless the bank account is jointly maintained and she / he was a signatory to the cheque.

The appeal was allowed.

16 Prabhat General Agencies and Ors. vs. Jammu Kashmir Bank Ltd. and Ors. AIR 2021 Supreme Court 3469 Date of order: 9th July, 2021 Bench: A.M. Khanwilkar J, Sanjiv Khanna J

Sale of mortgaged property – Challenge on portion of land sold – Challenge on private sale by bank – No violation as sufficient opportunity given to the debtor – Only portion of land which is mortgaged can be sold [Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, S. 38, R.8, R.9]

FACTS
The appellants herein have questioned the auction process inter alia on the ground that the land mortgaged to the respondent bank was only 550 marlas, but possession of 784.5 marlas is being handed over to the respondent Nos. 3 and 4 (private parties) who have purchased the same in the sale by the bank. Further, the reserve price was fixed at Rs. 5.50 crores but the same was sold for Rs. 4.50 crores.

HELD
The appellants have not made the payments in spite of several opportunities. Further, with respect to the sale price the respondents resorted to private sale only when the auction proceedings did not fructify. The appellants were duly informed by the bank and were given sufficient opportunity to deposit the dues. However, the bank must ensure handing over only 550 marlas of land to the private parties from the larger property.

The appeal was dismissed.

17 Ankit Vijaykumar Khandelwal vs. Aarti Rajkumar Khandelwal AIR 2021 Bombay 151 Date of order: 28th April, 2021 Bench: Anuja Prabhudessai J

Arbitration – Partnership deed – Arbitration clause to resolve all disputes through arbitration – Post dissolution of firm – Arbitration clause would not cease to exist [Arbitration and Conciliation Act, 1996, S. 8; Indian Partnership Act, 1932, S. 43]

FACTS
The plaintiff (Aarti Rajkumar Khandelwal) filed a suit for dissolution of partnership firm and rendition of accounts against the respondent (Ankit Vijaykumar Khandelwal). The defendant filed a notice of motion to refer the dispute to arbitration in terms of clause 19 of the Partnership Deed.

HELD
The arbitration clause is widely worded and is not restricted or limited to disputes arising prior to dissolution of partnership firm. The partnership deed does not indicate that the parties intended to exclude post-dissolution disputes from arbitral reference. Consequently, there is no embargo to refer such disputes to arbitration. The enforcement of clause 18 and provisions under sections 46 and 48 of the Arbitration Act, 1996 come into operation post dissolution of partnership. In the absence of any embargo to refer a post-dissolution dispute to the arbitrator, it is not possible to accept that the arbitration clause would cease to exist with dissolution of the partnership firm. Thus, there is a valid arbitration agreement between the parties. The dispute raised in the suit has its genesis in the arbitration clause.

The revision application is allowed.

ALLIED LAWS

11 Narinder Garg & Ors. vs. Kotak Mahindra Bank Ltd. & Ors. WP(C) No. 93 of 2022 (SC) Date of order: 28th March, 2022 Bench: Uday Umesh Lalit; J., S. Ravindra Bhat; J. Pamidighantam and Sri Narasimha, J.

Insolvency & Bankruptcy – Liability of a Director – Negotiable Instruments – Would be statutorily liable under the Negotiable Instruments Act [Insolvency & Bankruptcy Code, 2016 (Code), S. 14, Negotiable Instruments Act, 1881, S. 138, S. 141]

FACTS
The Petitioner filed a writ petition seeking to quash the criminal complaints filed against the corporate debtor and its directors u/s 138 of the Negotiable Instruments Act, 1881 (Act) pending before concerned Judicial Magistrate/Chief Metropolitan Magistrate/Judicial Magistrate of 1st Class in view of the order dated 18th March, 2020 passed by the National Company Law Tribunal, Chandigarh, by which the Resolution Plan was approved by the CoC u/s 30(4) of the Code and as the Respondent Complainants have accepted the approved Resolution Plan.

HELD
Relying on the decision in the case of P. Mohanraj & Others vs. Shah Brothers Ispat Private Limited, (2021) 6 SCC 258, it was held that the moratorium provisions contained in Section 14 of the Insolvency and Bankruptcy Code, 2016 would apply only to the corporate debtor and that the natural persons mentioned in Section 141 of the Act would continue to be statutorily liable under the provisions of the Act.

The writ petition was dismissed.

12 K. C. Laxmana vs. K.C. Chandrappa Gowda & Anr. Civil Appeal No. 2582 of 2010 (SC) Date of order: 19th April, 2022 Bench: S. Abdul Nazeer J, and Krishna Murari J.

Gift – Hindu Undivided Family – Karta cannot gift ancestral property for other than ‘pious purpose’ – Property can be alienated only for legal necessity, the benefit of estate, or with the consent of all coparceners – Term ‘alienation’ includes gift.

FACTS
K.C. Chandrappa Gowda (Plaintiff) filed a suit against his father K.S. Chinne Gowda and one K.C. Laxmana (Defendants) for partition and separate possession of his one-third share in the suit property and a declaration that the gift/settlement deed dated 22nd March, 1980 executed by the first Defendant K.S. Chinne Gowda in favour of the second Defendant K.C. Laxmana as null and void.

According to Plaintiff, the schedule property belongs to the joint family consisting of himself, the first Defendant and one K.C. Subraya Gowda. It was further contended that the first Defendant had no right to transfer the schedule property in favour of the second Defendant as he is not a coparcener or a member of their family. Consequently, it was contended that the alienation made without the Plaintiff’s consent is null and void and thus not binding on him.

HELD
It is trite law that Karta/Manager of joint family property may alienate joint family property only in three situations, namely, (i) legal necessity, (ii) for the benefit of the estate, and (iii) with the consent of all the coparceners of the family. In the instant case, the alienation of the joint family property was not with the consent of all the coparceners. It is settled law that where alienation is not made with the consent of all the coparceners, it is voidable at the instance of the coparceners whose consent has not been obtained. Therefore, the alienation of the joint family property in favour of the second Defendant was voidable at the instance of the Plaintiff whose consent had not been obtained as a coparcener before the said alienation.

Further held, the settlement deed is, in fact, a gift deed which was executed by the first Defendant in favour of the second Defendant ‘out of love and affection’ and by virtue of which the second Defendant was given a portion of the joint family property. It is well settled that a Hindu father or any other managing member of a HUF has the power to make a gift of the ancestral property only for a ‘pious purpose’, and what is understood by the term ‘pious purpose’ is a gift for charitable and/or religious purpose. Therefore, a deed of gift in regard to the ancestral property executed ‘out of love and affection’ does not come within the scope of the term ‘pious purpose’.

It was also held that the word ‘alienation’ in Article 109 of the Second Schedule to the Limitation Act, 1963 includes ‘gift’.

13 Asha Joseph vs. Babu C. George & Ors. RFA No. 543 of 2012 (Ker)  Date of order: 8th April, 2022 Bench: P.B. Suresh Kumar J. and C.S. Sudha, J.

Sale Deed – Immovable Property – Specific performance – Demonstration of funds for purchasing property – Not necessary. [Specific Relief Act, 1963, S. 16(c)]

FACTS
The Plaintiff had entered into a sale agreement by which Defendants 1 to 3 agreed to sell their property for a total sale consideration of Rs. 55,44,000. On the date of the agreement, an amount of Rs. 10,00,000 was paid as advance. The agreement was to execute the sale deed within a period of three months from the date of the agreement.

The Plaintiff was always ready and willing to perform her part of the contract. However, the Defendants were never ready to perform their part of the contract. So, the Plaintiff issued a lawyer’s notice calling upon the Defendants to execute the deed, to which they sent a reply notice raising false and untenable contentions. Hence the suit.

The Defendants filed a written statement contending that there was never any sale agreement as alleged in the plaint. According to the Defendants, the agreement was executed as security when the first Defendant borrowed an amount of Rs. 10,00,000 from the Plaintiff.

The Court below disbelieved Plaintiff’s case and disallowed the prayer for specific performance. Aggrieved, the Plaintiff preferred an appeal.

The Defendants raised a contention that the pleadings in the plaint are totally insufficient and that do not satisfy the requirements u/s 16(c) of the Specific Relief Act, 1963 (Act). The Defendants contended that plaint does not give the details of the funds in possession of the Plaintiff or how she intended to raise the necessary funds to pay the balance sale consideration. As there is non-compliance of Section 16(c) of the Act, the Plaintiff is not entitled to the relief of specific performance.

HELD
The Court noted that the Hon’ble Supreme Court in Nathulal vs. Phoolchand, AIR 1970 SC 546 has held that, to prove himself ready and willing, a purchaser does not have to necessarily produce the money or to vouch for a concluded scheme for financing the transaction.

Further, in the case of Ganesh Prasad vs. Saraswati Devi, AIR 1982 All 47, it has been held that it is not necessary for the plaintiff to work out actual figures and satisfy the Court what specific amount a bank would have advanced to him.

The Plaintiff does not have in such a case to go about jingling money to demonstrate his capacity to pay the purchase price. All that the Plaintiff has to do in such a situation is to be really willing to purchase the property when the time for doing so comes and have the means to arrange for payment of the consideration payable by him. There could, therefore, be no objection if the owner raises the money for payment when the time for doing so comes as Clause (1) of the Explanation to Section 16(c) of the Act clearly enacts that money need be produced only when directed by the Court.

Therefore, the Plaintiff need only establish that she had the capacity to raise the necessary funds, which she has done in this case through the testimony.

Application is allowed.

14 Rajesh Kasera vs. Bank of India & Anr. AIR 2022 (NOC) 272 (Jha.) Date of order: 18th November, 2021 Bench: Rajesh Shankar J.

Succession Certificate – Deceased mother having three children – No nominees to the bank account – Release of bank account in favour of one child cannot be done unless there is a succession certificate. [Banking Regulation Act, 1949, S. 45ZA]

FACTS
The present writ petition has been filed for issuance of direction to the Respondents to release the entire amount of Late Urmila Devi favouring the Petitioner, who claims to be her only son and heir/legal representative.

The Petitioner’s mother, Urmila Devi, died on 14th January, 2019, leaving behind two sons, i.e. the Petitioner and Ramesh Kasera. Ramesh Kasera, Petitioner’s brother, also died on 28th June, 2019 and as such, the Petitioner is the only surviving heir/legal representative of Late Urmila Devi. The father of the Petitioner had already died on 9th June, 1993. The Petitioner obtained a family relation certificate from the Circle Officer, which discloses that the Petitioner is the only son, and his two married sisters live separately in their matrimonial houses. Under the aforesaid circumstance, the Petitioner submitted that the Petitioner being the only surviving son of late Urmila Devi, is entitled to receive the amount lying in the aforesaid bank account.

HELD
The Petitioner is not the only heir/legal representative of the late Urmila Devi, as his two married sisters are alive. Moreover, the concerned bank account of late Urmila Devi did not mention any nominee to operate the same after her death. Though the Respondents have stated in the counter affidavit that two daughters of Late Urmila Devi (sisters of the Petitioner) have raised oral objection against release of the amount lying in the concerned bank account in favour of the Petitioner, this Court does not wish to comment on the same, as no such written objection has been brought on record by the Respondents. However, the substance in the stand taken by the Respondents in the counter affidavit is that since the name of nominee has not been mentioned in the concerned bank account, if the Petitioner claims the amount lying in the said account, he should produce a succession certificate issued by a competent Court of law before the bank.

Hence, no writ of mandamus, as prayed for by the Petitioner in the present writ petition, can be issued.

15 S. Murugesan vs. District Registrar, Madurai.  AIR 2022 Madras 296 Date of order: 28th January, 2022 Bench: C. V. Karthujeyan J.

Gift – Cancellation – Deed expressly mentions about no power to cancel – Plea of ignorance is not valid. [Transfer of Property Act, 1882, S. 122]

FACTS
A writ petition has been filed in the nature of Mandamus seeking a direction to the sub-registrar to permit the Petitioner to cancel a gift deed executed and registered by the Petitioner in the office of the Respondent.

HELD
The Petitioner was around 39 years of age when he had executed the gift deed. Plea of lack of knowledge or ignorance or innocence and, therefore, seeking indulgence cannot be pleaded by the Petitioner as he had voluntarily executed the gift deed.

A ‘gift’ is defined u/s 122 of the Transfer of Property Act. The definition is very clear and straightforward. Section 122 of the said Act also deals with accepting a particular gift. It is stated that if the donee accepts the gift or it is accepted on behalf of the donee, then the act of gift becomes complete.

A perusal of the gift deed shows that the Petitioner had very clearly stated that he has no right to cancel and frustrate the gift deed and that, even if he takes any steps to frustrate the gift deed, such steps would be void. There is no condition attached to the gift, as seen from reading that document.

The Writ Petition is dismissed.

ALLIED LAWS

6 Sri Subhankar Bhowmik vs. Union of India and Anr. WP(C)(PIL) No. 04 of 2022 (Tri.)(HC) Date of order: 14th March, 2022 Bench: S G Chattopadhyay J. and Indrajit Mahanty J.

Insolvency & Bankruptcy – ‘Decree-holders’ cannot be treated at par with Financial Creditors. [Insolvency & Bankruptcy Code, 2016 (Code), S.3(10), S. 14]

FACTS   
The Petitioner, a shareholder of the company, sought for declaration of section 3(10) of the Insolvency & Bankruptcy Code (IBC) read with regulation 9A as ultra vires, for failing to define the term ‘other creditor’ and also to include a decree-holder at par with ‘financial creditors’.

HELD
The right of a decree-holder, in the context of a decree, is at best a right to execute the decree in accordance with the law. Even in a case where the decree passed in a suit is subject to the appellate process and attains finality, the only recourse available to the decree-holder is to execute the decree in accordance with the relevant provisions of the Civil Procedure Code, 1908. Suffice it to say that the provisions contained in Order 21 provide for the manner of execution of decrees in various situations. The said provisions also provide the rights available to judgement debtors, claimant objectors, third parties etc., to ensure that all stakeholders are protected.

The rights of a decree-holder, subject to execution in accordance with the law, remain inchoate in the context of the IBC. This is principally because the IBC, by express mandate of the moratorium envisaged by Section 14(1) of the Code, puts a fetter on the execution of the decree itself.

Therefore, in terms of Section 14(l)(a) of the Code, the right of a decree-holder to execute the decree in civil law freezes by virtue of the mandatory and judicially recognized moratorium that commences on the insolvency commencement date. This is because a decree, in a given case, may be amenable to challenge by way of an appellate process and/or by way of objections in the execution process.

Therefore, the IBC rightly categorizes a decree holder as a creditor in terms of the definition contained in Section 3(10) of the Code. Execution of such a decree, is however subject to the fetters expressly imposed by the IBC, which cannot be wished away.

Editor’s Note: SLP dismissed in Sri Subhankar Bhowmik vs. Union of India and Anr SLP (C) No. 6104 of 2022 dated April 11, 2022 (SC).

7 Experion Developers Pvt. Ltd vs. Sushma Ashok Shiroor Civil Appeal No. 6044 of 2019 (SC) Date of order: 7th April, 2022 Bench: Uday Umesh Lalit J., S. Ravindra Bhat J. and Pamidighantam Sri Narasimha J.

Consumer Protection Act, 1986 – Real Estate (Regulation and Development) Act, 2016 – Interpretation of Statute – Where there are more than two judicial fora – choice offered for effective access to justice – Statutes must be harmoniously construed. [Consumer Protection Act, 1986, S. 14, 2(g), 23; Real Estate (Regulation and Development) Act, 2016, S. 18]

FACTS
Experion Developers Private Ltd. is the promoter of apartment units. The Consumer booked an apartment and agreed to construction linked payment plan, which led to the execution of the Apartment Buyer’s Agreement dated 26th December, 2012. As per Clause 10.1 of the Agreement, possession was to be given within 42 months from the date of approval of the building plan or the date of receipt of the approval of the Ministry of Environment and Forests (Government of India) or date of the execution of the agreement whichever is later. Clause 13 of the agreement provided for Delay Compensation. Under this clause, if the Developer did not offer possession within the period stipulated in the agreement, it was obliged to pay liquidated damages till the possession was offered to the Consumer.

The Consumer approached the National Disputes Redressal Commission by filing an original complaint alleging that he had paid a total consideration and the possession was not granted even till the filing of the complaint. He, therefore, sought a refund of his consideration along with interest.

The Commission, in its judgment dated 19th June, 2019, allowed the complaint. Thus, the Developer filed the present Civil Appeal.

HELD
A consumer invoking the jurisdiction of the Commission can seek such reliefs as they consider appropriate. A consumer can pray for a refund of the money with interest and compensation. The consumer could also ask for possession of the apartment with compensation. The consumer can also make a prayer for both in the alternative. If a consumer prays for a refund of the amount without an alternative prayer, the Commission will recognize such a right and grant it, of course, subject to the merits of the case. If a consumer seeks alternative reliefs, the Commission will consider the matter in the facts and circumstances of the case and will pass appropriate orders as justice demands. This position is similar to the mandate under Section 18 of the RERA Act.

It is crystal clear that the Consumer Protection Act and the RERA Act neither exclude nor contradict each other. When Statutes provisioning judicial remedies fall for construction, the choice of the interpretative outcomes should also depend on the constitutional duty to create effective judicial remedies in furtherance of access to justice. A meaningful interpretation that effectuates access to justice is a constitutional imperative, and it is this duty that must inform the interpretative criterion.

When Statutes provide more than one judicial forum for effectuating a right or to enforce a duty obligation, it is a feature of remedial choices offered by the State for effective access to justice. Therefore, while interpreting statutes provisioning plurality of remedies, it is necessary for Courts to harmonise the provisions constructively.

8 Swarnalatha & Ors. vs. Kalavathy & Ors. Civil Appeal No.1565 of 2022 (SC)  Date of order: 30th March, 2022 Bench: Hemant Gupta J. and V. Ramasubramanian, J.

Will – Suspicious Circumstances – Exclusion of one natural heirs name – Not a ground for suspicion – Article 14 not applicable to Wills. [Indian Succession Act, 1925, S. 384, Indian Evidence Act, 1872, S. 68]

FACTS
The mother Adhilakshmiammal died on 14th August, 1995. She left behind a Will dated 30th January, 1995, bequeathing the properties purchased by her and the properties which she got from her maternal uncle, in favour of her two sons. The daughter Kalavathy was not given any share on the ground that she had already been provided sufficiently. The father Mannar Reddiar died on 8th August, 2000. He left behind a Will dated 10th December, 1998, bequeathing his properties favouring his two sons and grandchildren. The daughter Kalavathy was not allotted any property even under this Will, but the Will contained reasons for the same.

The eldest son V.M. Chandrasekaran died subsequently in October, 1999, leaving behind him surviving his wife Swarnalatha and two sons, who are the appellants in the present appeal. Thereafter, the daughter Kalavathy and the surviving son V.M. Sivakumar (of the testators) filed a suit for partition before the District Munsiff Court. Upon coming to know of the same, the appellants filed a petition in probate before the Principal District Judge for the grant of probate of the Wills of Mannar Reddiar and Adhilakshmiammal.  

By a judgment dated 7th June, 2010, the District Court granted probate of both the Wills. Challenging the judgment of the Probate Court, the daughter Kalavathy and the other son of the testators (respondents 1 and 2 herein) filed an appeal before the High Court of Judicature at Madras. The High Court allowed the said appeal by the impugned judgment on the ground that there were suspicious circumstances surrounding the execution of both the Wills. Therefore, aggrieved by the said judgment, the legatees filed an appeal.

HELD
When it was not even the respondents’ case that the testators were not in a sound and disposing state of mind, the High Court found fault with the appellants for not disclosing the nature of the ailments suffered by them. The exclusion of one of the natural heirs from the bequest cannot by itself be a ground to hold that there are suspicious circumstances. The reasons given are more than convincing to show that the exclusion of the daughter has happened in a very natural way. If the Will had been fabricated on blank papers containing the mother’s signature, there would have been no occasion for the father to make a mention in his own Will about the execution of the Will by the mother.

The law relating to suspicious circumstances surrounding the execution of a Will is already well settled, and it needs no reiteration. But cases in which suspicion is created are essentially those where either the testator’s signature is disputed or the mental capacity of the testator is questioned. In the matter of appreciating the genuineness of execution of a Will, there is no place for the Court to see whether the distribution made by the testator was fair and equitable to all of his children. Further, Article 14 does not apply to dispositions under a Will.

9 CA. Manisha Mehta and Ors. vs. The Board of Directors Represented by  its Managing Director of ICICI Bank and Ors. Writ Petition (L) No. 8418 of 2022 (Bom.) (HC) Date of order: 23rd March, 2022 Bench: Dipankar Datta CJ. and M. S. Karnik, J.

SARFAESI – Debtors of Banks – Natural Justice to be not read into section 14 of SARFAESI Act. [Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, S. 14]

FACTS
This writ petition is at the instance of multiple petitioners who are all debtors of different banks/financial institutions (secured creditors). They are aggrieved by the orders passed by District Magistrates/Chief Metropolitan Magistrate under section 14 of the SARFAESI Act. Some petitioners have approached the jurisdictional Debts Recovery Tribunal under section 17 of the SARFAESI Act, and proceedings are pending.

It is prayed, inter alia, for a declaration that natural justice should be read into section 14 of the SARFAESI Act.

HELD
Section 14 of the SARFAESI Act was amended twice, in 2013 and then again in 2016. If it were the legislature’s intention to extend the opportunity of hearing to a borrower before the District Magistrate/Chief Metropolitan Magistrate, as the case may be, it was free to do so. Advisedly, the legislature did not do so, for it would have militated against the scheme of the SARFAESI Act and, more particularly, section 13 thereof. It is implicit in the scheme of the SARFAESI Act that natural justice, only to a limited extent, is available and not beyond what is expressly provided. The language of section 14 is too clear and unambiguous, and does not admit to any requirement of complying with natural justice by putting the borrower on notice while an application thereunder is under consideration.

10 Mohinder Singh (D) Thr. Lrs. & Ors. vs. Mal Singh (D) Thr. Lrs. & Ors.  Civil Appeal No.1731 of 2009 9 (SC) Date of order: 9th March, 2022 Bench: Sanjay Kishan Kaul J. and M.M. Sundresh, J.

Gift – out of his own free will and volition – Exclusive owner of the properties – nobody’s concern – to whom properties are given – when document is executed validly. [Transfer of Property Act, 1882, S. 122]  

FACTS
The suit was filed on 19th October, 1971 by Mohinder Singh and Gurnam Singh, who are represented by their legal heirs as appellants before us for declaring that a gift deed executed by their brother, Gian Singh, in favour of Pritam Kaur is null and void. It was the appellants’ case that Gian Singh was governed by general customary law till the enforcement of the Hindu Succession Act and Hindu Adoption and Maintenance Act, and the appellants were the nearest best legal heirs of Gian Singh. It was alleged that Gian Singh was issueless, without a wife, had no relationship with Pritam Kaur, the beneficiary of the gift deed and that Pritam Kaur was not the wife of Gian Singh. The appellants alleged later, as per facts set out hereinafter that Gian Singh was married to one Pritam Kaur daughter of Inder Singh who had pre-deceased him.

HELD
It is in these circumstances that one of the issues framed originally was also whether Pritam Kaur enjoyed the status of a wife or not. In our view, if the donor is making a gift out of his own free will and volition and is the exclusive owner of the properties, it is nobody’s concern as to whom he gives the properties. What is most material is that all the Courts have found (i.e. three concurrent findings) that they are not ancestral properties.

The gift deed is a registered gift deed. The Court mentioned that it was really not concerned with the moralistic issue of whether Pritam Kaur was actually married to Gian Singh or she was living with him. There was undoubtedly companionship, and Gian Singh, in his wisdom, deemed it appropriate to hand over the properties through a registered gift deed to Pritam Kaur.

The Court observed that it was time that the Courts get out of this mindset, or possibly may have got out of this mindset by now on passing value judgments on relationships between parties in determining either a testamentary or non-testamentary disposition so long as the document executed is found to be validly executed. Some male chauvinistic approach appears to have coloured judgments passed by the trial Court and the First Appellate Court, which is of course, a reflection of the mindset of the appellants before us. The appeal was dismissed.

ALLIED LAWS

22 Shiv Developers through its partner Sunil bhai Somabhai Ajmer vs. Aksharay Developers & Ors. Civil Appeal No. 785 of 2022 (SC) Date of order: 31st January, 2022 Bench: Dinesh Maheshwari J. and Vikram Nath J.

Partnership Firm – Unregistered Firm – Not barred to file a suit – Where contract in question is not related to business. [Indian Partnership Act, 1932, S. 69(2)]

FACTS
The Appellants, an unregistered partnership firm instituted a suit seeking perpetual injunction and declaration of a sale deed as null and void. The Trial Court rejected the application of the defendants which stated that the suit filed by and on behalf of an unregistered partnership firm which was barred by law.

On appeal, the High Court held that the plaintiff, being an unregistered firm, would be barred to enforce a right arising out of the contract in terms of Section 69(2) of the Partnership Act, 1932 (Act).

HELD
It was held that to attract the bar of Section 69(2) of the Act, the contract in question must be the one entered into by the unregistered partnership firm with a third party and must also be in the course of its business dealings.

Section 69(2) of the Act is not attracted to each and every contract. The sale transaction in question is not arising out of the business of the appellant firm.

The subject suit is one where the plaintiff seeks common law remedies with the allegations of fraud and misrepresentation as also of the statutory rights of injunction and declaration in terms of the provisions of the Specific Relief Act, 1963 as also the Transfer of Property Act, 1882 (while alleging want of the sale consideration). Therefore, the bar of Section 69(2) of the Act of 1932 does not apply to the present case.

The appeal was allowed.

23 V. Anantha Raju and another vs. T.M. Narasimhan and Ors.  AIR 2021 Supreme Court 5342 Date of order: 26th October, 2021 Bench: L. Nageswara Rao J., Sanjiv Khanna J. and B. R. Gavai J.

Partnership Firm – Share of Profits – Disputed – Evidentiary value of Deed is above an oral testimony – Nothing precluded the Defendants from rectifying the deed between 1995 – 2004 – Clauses of Deed would prevail. [Indian Partnership Act, 1932, India Evidence Act, 1872, S. 17, 91 and 92]

FACTS
A Partnership Firm was constituted in the year 1986 vide Partnership Deed dated 30th October, 1992. According to the said deed, the Plaintiff No. 1 was entitled to 50 per cent of the profits provided he introduces a sum of Rs. 50 lakhs as his capital contribution on or before 31st March, 1993 otherwise the same would be only 10 per cent.

Subsequently, the deed was amended in 1995, where the Plaintiff No.1 and his son (Plaintiff No. 2) were both entitled to 25 per cent of the profits, inter alia. The Plaintiffs also filed their Income-tax returns wherein their share is shown as 25 per cent.

In 2004, a dispute arose between the Plaintiffs and the Defendants (Other partners of the Firm). It is the case of the Defendants that the Plaintiff did not bring the said amount of Rs. 50,00,000 on or before 31st March, 1993 and the deed of 1995 has mistakenly mentioned the share of the plaintiffs as 25 per cent each and they rely on their statement made under oath in the affidavit.

The Trial Court had held that the plaintiffs together were entitled to only 10 per cent share in the profits up to 2004, as subsequently they were expelled from the Firm. The appeal against the impugned order of the Trial Court was dismissed by the Hon’ble High Court of Karnataka.

HELD
It was held that the Defendants have not disputed about the reconstitution of the partnership firm by the 1995 Deed. They have also not disputed that in the 1995 Deed, the share of plaintiff Nos. 1 and 2 in the profits and losses of the partnership firm is mentioned as 25% each. The Defendants denying that they had received the requisite sum would have lesser evidentiary value than the Deed of 1995. The contention that the deed of 1995 has mistakenly mentioned the share of the Plaintiffs at 25 per cent each (Total of 50 per cent) cannot be accepted as nothing precluded the Defendants from rectifying the deed between 1995 to 2004.

The appeal was allowed on this point.

24 Ripudaman Singh vs. Tikka Maheshwar Chand (2021) 7 SCC 446 Date of order: 26th July, 2021 Bench: Sanjay Kishan Kaul J. and Hemant Gupta J.

Family Settlement – Exempt from compulsory registration – Where the same to pre-existing rights and no new right is created. [Registration Act, 1908. S. 17]

FACTS
The Plaintiff and Respondent were sons of one late Vijendra Singh. The Appellant-Plaintiff filed a suit for possession in the year 1978 disputing the Will dated 4th December, 1958 executed by Vijendra Singh in favour of the Defendant. The Appellant claimed half share of the land as described in the plaint. During the pendency of suit, a decree was passed on the basis of compromise arrived at between the parties.

In pursuance of the decree so passed, the Plaintiff sought mutation of the half share of the land vesting to him which was allowed by Tehsildar. However, an appeal against the said mutation was disposed of for fresh consideration without granting any opportunity of being heard to the Respondent

The Appellant-Plaintiff thereafter filed an appeal before the Divisional Commissioner. The appeal was dismissed on the ground that the compromise decree in the absence of registration was against the provisions of the Registration Act, 1908. The Appellant-Plaintiff subsequently filed a suit for declaration challenging such order passed by the Commissioner. The suit was dismissed by the Ld. Sub Judge. But the appeal preferred by the appellant was allowed by the Ld. District Judge.

This order was challenged before the High Court. The High Court set aside the judgment and decree passed by the first appellate court and the suit was dismissed on the ground that the land even though being subject-matter of compromise, was not the subject-matter of the suit and therefore the decree required registration under Section 17(2)(vi) of the Registration Act, 1908.

HELD
In the judgment in the case of Bhoop Singh vs. Ram Singh Major (1995) 5 SCC 709 it was held that a decree or order including compromise decree creating new right, title or interest in praesenti in immovable property of value of Rs.100 or above is compulsory for registration. It was also held that where the decree holder has a pre-existing right in the property, that decree does not require registration.

Therefore, the judgment and decree of the High Court holding that the decree requires compulsory registration is erroneous in law. The compromise was between the two brothers consequent to death of their father and no right was being created in praesenti for the first time, thus not requiring compulsory registration. Consequently, the appeal is allowed and the suit is decreed.

25 Moutushi Chakraborty vs. Manju Deb (Chakraborty) AIR 2021 Tripura 40 Date of order: 23rd April, 2021 Bench: S. Talapatra J. and S. G. Chattopadhay J.

Hindu Law – Maintenance – Daughter from second marriage entitled to share in pension of her deceased Father – ‘Estate’ includes pension. [Hindu Adoption and Maintenance Act, 1956, S. 22, 23]

FACTS
The Appellant is the daughter of Mr. Narayan Chakraborty from his second marriage with Smt. Karuna Chakraborty. The Respondent is the first wife of Mr. Narayan Chakraborty. The lower Court had held that Smt. Karuna Chakraborty cannot claim any maintenance as she was not legally married to Mr. Narayan Chakraborty. However, there cannot be any dispute that the appellant has a right over the property/estate of the deceased for all purposes.

The Appellant and her mother filed a petition seeking maintenance from the respondent who is in receipt of family pension for the death of Mr. Narayan Chakraborty.

HELD
The word ‘estate’ cannot be given a narrow definition for purpose of Hindu Adoption and Maintenance Act. The family pension is no doubt an ‘estate’, which has been acquired through the deceased as pension is an estate secured on putting the definite period of service. Thus, the dependents have the right to claim maintenance from the heirs of the deceased. The discretion to deny the maintenance under Section 23 of the Hindu Adoption and Maintenance Act, 1956 is confined to determining the quantum of the maintenance, not to whether the maintenance should be granted or not.

The appeal was allowed
    
26 Master M. Yashas (Minor) vs. Nil AIR 2021 Karnataka 198 Date of order: 23rd April, 2021 Bench: B. V. Nagarthna J. and J. M. Khazi J.

Property of Minor – Parents seeking permission to sell – Not for the minor’s necessity – Parents can’t dispose minor’s property to overcome their financial problems. [Hindu Minority and Guardianship Act, 1956, S. 8]
 
FACTS
The petition was filed by the appellant, mother of the minor child aged about twelve years under Section 8(2)(a) of the Hindu Minority and Guardian ship Act, 1956 (Act), seeking permission to sell the property standing in the name of her minor son and to use a portion of the sale proceeds to the tune of Rs. 15,00,000 for use of the minor son for the purpose of meeting his day-to-day expenses, school expenses, to tide over the financial crisis of the parents etc., and to deposit the balance sale proceeds in the name of her minor son. The trial Court by impugned order dated 28th January, 2021 has dismissed the petition.

HELD
As per Section 8(4) of the Act, the Court may grant permission to alienate the minor’s property only for his legal necessity or benefit to the estate.

In the present case, petitioner/appellant is seeking permission to sell the petition schedule property belonging to minor child not for his legal necessity or benefit to the estate, but to tide over the financial crisis faced by her and her husband.

Being the parents and natural guardians of the minor child, it is the duty and responsibility of petitioner/appellant and her husband to take care of him including his education and other expenses. In order to overcome their financial crisis, they cannot dispose of the minor’s property. The legal necessity of the minor does not include the necessity of the guardian or any other person even in the face of a pandemic like Covid-19. Certainly, the intended alienation of the property is not for the benefit to the estate of the minor.

The appeal was dismissed.