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Category: Allied Laws

Tribunal – Should consider issue raised in appeal in depth and render complete finding – Undue haste – Result in Miscarriage of Justice.

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Electropneumatics and Hydraulics (I) P. Ltd. vs. Commr. Of Central Excise. 2014 (309) ELT 408 (Bom.)

In an excise duty matter, the Appellant argued before the Hon’ble Court that there was no proper application of mind to the controversy, by the Tribunal, in dealing with the submissions canvassed orally and in writing and by a reasoned order either uphold or reject them.

The Hon’ble Court from reading of the impugned order observed that the assessee had raised several contentions before the Tribunal. The order contains several references worksheets and manner of calculations. The findings at internal page 5 of the order in original would denote that it considers the objections with regard to time bar, so also, on merits. With regard to imposition of penalty there were objections that were serious in nature raised by the Assessee. The Tribunal was required to consider the issues raised in the Appeal in-depth and render a complete finding. If a particular issue was pressed or was given up that should be indicated in the order of the Tribunal.

The Hon’ble Court remarked that it was expected from the Tribunal, which is manned by both judicial and technical experts, to be aware of the seriousness of the adjudication and not take up the assignment lightly and casually. There is no specific target which has to be achieved nor could the Tribunal be expected to decide particular number of appeals during a calendar year. Therefore, undue haste is not at all called for. That results in miscarriage of justice and in a given case would result in vital issues of both sides being concluded in the most unsatisfactory manner. The Court expected the Tribunal to guide the Adjudicating Authorities so that they would properly adjudicate the cases with reasoned orders and after considering the evidence on record. It is the duty of the Tribunal which has been repeatedly emphasised and to be performed to the best of its ability. The impugned order of the Tribunal was quashed and set aside and the Appeal was restored to the file of the Tribunal for decision afresh and in accordance with law.

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Transfer of Agricultural land – For Non – Agricultural use – Requirement of payment of premium and prior sanction – valid Gujarat Tenancy and Agricultural Land Act, 1948 section 43.

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Gohil Jesangbhai Raysanbhai and others vs. State of Gujarat & Another AIR 2014 SC 3687.

The appeals raise the questions with respect to the validity of section 43 of Bombay Tenancy and Agricultural Lands Act, 1948 as applicable to the State of Gujarat, now known in the State of Gujarat as Gujarat Tenancy and Agricultural Lands Act, 1948. This section places certain restrictions on the transfer of land purchased or sold under the said Act. The appeal raises questions also with respect to the validity of the resolution dated 4-7-2008 passed by the Government of Gujarat to give effect to this section, and which resolution fixes the rates of premium to be paid to the State Government for converting, transferring, and for changing the use of land from agricultural to non-agricultural purposes.

The Hon’ble Court observed that the requirement of payment of premium by deemed purchaser for getting sanction to transfer his agricultural land for non-agricultural purpose is not invalid. The premium charged is neither tax nor fee. The tenant holds the land under State and the premium charged is for granting the sanction. This is because under this welfare statute these lands have been permitted to be purchased by the tenants at a much lesser price. The tenant is supposed to cultivate the land personally. It is not to be used for non-agricultural purpose. A benefit is acquired by the tenant under the scheme of the statute, and therefore, he must suffer the restrictions which are also imposed under the same statute. The idea in insisting upon the premium is also to make such transfers to non-agricultural purpose unattractive. The intention of the statute is reflected in section 43, and if that is the intention of the legislature there is no reason why it should be held otherwise. Plea that the premium charged is unconscionable and is expropriator not tenable in view of scheme of the Act.

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Sale of minors property by defecto guardian – Sale without legal necessity void or voidable. Hindu Minority and Guardianship Act, 1956, section 6, 11 & 12.

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Kanhei Charan Das vs. Ramakanta Das & Ors. AIR 2014 Orissa 193

The undisputed facts are that, the land appertaining to the plots was the ancestral land of one Krutibas Das and stood recorded in his name. After the death of Krutibas and his wife, the property devolved on his two sons, namely, Banamali and Ramakanta as joint owners thereof, both having 50% share each. Ramakanta being a minor was being looked after by his major brother Banamali, who was managing the joint family properties including the undivided interest of Ramakanta. By registered sale deed, Banamali sold the entire disputed land of 40 decimals on behalf of himself and also as brother guardian in favour of one Agani Dash. Agani in his turn sold the disputed land to one Sanatan and the present petitioner, Kanehei by registered sale deed.

During the consolidation operation, the disputed land was recorded in the name of Sanatan Dash and Petitioner Kanehei. Ramakanta, the present opposite party No.1, filed objection claiming to record his half share in the disputed land in his name on the ground that his brother Banamali had no right to alienate his share.

The Hon’ble Court observed that, where the de facto guardian of a minor is also the Karta or Manager or an adult member of the joint family including the minor himself, for sale by him of the joint family property including the undivided interest of the minor in such property, no permission of the court is necessary. Such sale shall be governed by the uncodified Mitakshara School of Hindu law, according to which sale by the Karta or Manager of the Hindu Joint Family Property without any legal necessity or benefit of estate shall be voidable at the option of the minor with regard to his undivided interest.

Thus, the sale of the minors’ property, in contravention of section 11 of the Hindu Minority and Guardianship Act, 1956 Act, is void and invalid must be applicable to all properties of the minor except where the sale is by a Karta or Manager of a joint Hindu Family of the undivided interest of the minor in the joint family property. The voidability of the sale transaction could only be decided by the Civil Court and not the consolidation Authorities.

The finding of the Consolidation Authorities in the impugned orders that the sale of Ramakanta’s undivided interest in the disputed joint family property by Banamali was void and invalid being in contravention of Section 11 of the Hindu Minority and Guardianship Act, 1956 cannot be sustained.

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Instrument of sale – Determination of Market value for purpose of stamp duty – On Date of Execution of sale deed – Transfer : Stamp Act, 1899

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Shanti Bhushan and Ors vs. State of UP & Ors.; AIR 2015 (NOC) 95 (All)

In the instant case, vendor was landlord and vendee was tenant.

The agreement for sale was arrived at in 1966, but it was oral. On account of failure on the part of the owner landlord, suit had to be filed in which compromise was arrived at and fresh agreement for sale was executed in October, 2010. Thereafter, sale deed was executed in November, 2010. It was pleaded by vendee that as vendor-landlord had only limited right to receive rent, market value should be determined on basis of that limited right on the date the sale deed was executed.

The Hon’ble Court observed that there are two sets of rights enjoyed by a person in respect of the property. One corporeal and the other incorporeal. The corporeal right is the right of ownership in material things whereas incorporeal right is any other proprietary right in rem. The owner of a material object is he who owns a right to the aggregate of its uses. Some of the rights of the owner might have been transferred by way of lease, the right of the user of those rights is as merely encumbrance and not as an owner. The ownership is of general use and not of absolute use. Once certain rights are transferred for a specific purpose, the landlord enjoys residuary rights in the said property. Even if any land may be mortgaged, leased, charged, bound by restrictive covenants and re so on, yet the residuary right remains with the owner. Though the residuary use, so left with the owner, may be of very small dimension and some encumbrancer may own rights over it that is much more valuable than owner, yet the ownership of it remains with the owner and not with the encumbrancer. No such right loses its identity because of an encumbrance vested in someone else. The right of ownership is essentially an inheritable right. It is capable of surviving its owner for the time being. It belongs to the class of rights which are divested by death but are not extinguished by it. The encumbrance does not become owner of the property despite the fact that he enjoys the property to the exclusion of the ownership.

For the aforesaid reason the plea by instrument of sale, the limited right to receive rent is transferred which is the basis for determination of the market value, cannot be accepted. The lessee who is encumbrancer has limited right of enjoyment of the property and nothing more than that. Even if the landlord had limited right of use of property, would not dilute his right of ownership. He continues to enjoy the residuary right in the said property. Once the property has been conveyed, the landlord by virtue of this transfer conveyes to the lessee the right of ownership which does not include only the right of enjoyment of the property, but all the residuary rights which the owner has in the said property.

The High Court concluded that after giving property in tenancy, pleas based on limited right are not tenable.

By virtue of a sale deed executed in favour of the petitioner, ownership has been transferred in his name. It cannot be said that by execution of the sale deed, limited rights have been transferred to the petitioner. As a result of the said sale deed, all the rights of the owner, described herein above, stand transferred in the name of the petitioner. While enjoying these rights, he cannot claim that a limited right of receipt of rent alone has been transferred, which would become the basis for determination of the market value.

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Hindu Succession –Daughter born out of womb of Hindu Female inheriting property of her second husband: Hindu Succession Act. 1956, section 15(1)(a):

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Sashidhar Bank & Ors. vs. Ratnamani Barik & Anr. AIR 2014 Orissa 202

One Lata was first married to Hrushi, who died prior to 1956 leaving behind his widow (Lata) and daughter Ratnamani (the plaintiff) as his successors. Ratnamani had only one daughter, namely, Banabasi.

After the death of Hrushi, his widow Lata married Kalakar, who also died prior to 1956 leaving behind Lata as his only successor-in interest. Kalakar had one brother, namely, Kantha. After the death of Kalakar, his widow Lata filed a suit and got the share of Kalakar allotted to her and, getting delivery of possession thereof, she continued to remain in possession of the same. During her life time, for her legal necessity she had sold land to different persons.

The plaintiff’s case that the scheduled land, which is also a part of the properties Lata had got in the partition, has been bequeathed by Lata under an unregistered Will executed in favour of Banabasi, who is Lata’s granddaughter and on the strength of that Will Banabasi, has been in possession and enjoyment of scheduled property.

After the death of Lata, it is claimed, the plaintiff has been in possession of the scheduled properties. It is alleged that D-2 to D-12, being agnates of Kalakar (Lata’s second husband), created disturbance in plaintiff’s possession over the suit land. Hence, the suit for declaration of her right, title and interest in respect of schedule properties. The plaintiff has also sought for declaration of her title over scheduled land in case no title is found to have been passed on to Banabasi under the aforestated Will.

The learned Courts below had recorded concurrent findings that by operation of section 14 of the Hindu Succession Act, 1956 (in short, the Act) Lata became full owner in respect of the property she got in suit and the plaintiff Ratnamani being Lata’s natural daughter through her first husband would succeed to all the properties in respect of which Lata died intestate, irrespective of the fact that the source of the property is Lata’s second husband, who is not the father of the plaintiff.

The Court relied on the case of Keshri Parmai Lodhi and another vs. Harprasad and others, reported in AIR 1971 MP 129, wherein their Lordship observed that from the language used in sub-section (1) and (2) of section 15 of the Act, it is clear that the intention of the Legislature is to allow succession of the property to the sons and daughters of the Hindu female and only in the absence of any such heirs the property would go to the husband’s heirs.

In the Text Book: Principles of Hindu Law by D.F. Mulla, it is commented on section 15(1)(a) of the Act that in case of a female intestate who had remarried after the death of her husband or after divorce her sons by different husbands would all be her natural sons and entitled to inherit the property left by the female Hindu regardless of the source of the property.

The Court observed that in the case at hand, if Lata’s daughter born to her first husband is considered to be her daughter coming within the expression ‘daughter’ appearing in section 15 of the Act, then sub-section (1) of section 15 of the Act would govern the situation. Therefore, the inevitable conclusion is that being a daughter born out of the womb of Lata by her first husband the plaintiff-respondent No.1 comes within the expression ‘daughters’ appearing in section 15(1)(a) of the Act and with the application of Rule-1 of section 16 of the Act, the Appellants, who are coming within the expression ‘heirs of the husband’, are to be kept from succeeding to the properties left behind by Lata even though she inherited the same from her second husband-Kalakar and he is not the father of plaintiff-respondent No.1.

Therefore, it was rightly held that plaintiff-Ratnamani succeeded to the suit properties consequent upon the death of her mother Lata and that the Appellantsdefendant Nos. 2 to 12 are not entitled to inherit the property of Lata.

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Precedent – Judicial discipline – Third Member is bound to consider judgement of Division bench – CESTAT order was unsustainable for non consideration of law in favour of assessee:

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Larsen and Toubro Ltd vs. Commissioner of Central Excise; 2014 (306) ELT 27 (Bom.)(HC)

There was a difference of opinion between the Judicial member and the Technical Member. The appeal before the Tribunal was therefore referred to a Third Member. The Third Member held against the appellant/assessee. Prior to the decision of the Third Member, there was a decision of the Tribunal which supported the appellant’s contention before the Tribunal. That decision was brought to the notice of the learned Third Member before passing the order. The Third Member was bound to consider the judgment of the Tribunal. He, however, did not do so.

Prima facie, at least, even before the Tribunal the position for law appears to be in favour of the appellant. Unfortunately, the third member did not consider the judgment of the Tribunal.

The court also observed that the order of Tribunal was referred not because it has any precedent value in this court but is a indication of what the impugned order of the third member may well have been, had the judgement been considered by the learned third member.

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Precedent – Law declared by Supreme Court – Binding on all High Courts – High Court Judge sitting singly bound by Supreme Court decision rather than Division Bench Judgement which is contrary to Supreme Court. (Constitution of India, Article 141)

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Sidramappa and others vs. State of Karnataka and Others; AIR 2014 Karnataka 100 (Karn.)(HC) (FB)

The learned single Judge of Karnataka High Court in a Writ Petition passed an order stating that earlier judgement of a Division Bench of the High Court requires reconsideration and in the absence of any statutory provision empowering him to refer the same to the larger Bench the relevant papers be placed before Chief Justice to examine the question and constitute a larger Bench.

The Hon’ble Court observed that according to Article 141 of the Constitution of India, the law declared by the Supreme Court shall be binding on all Courts within the territory of India. The expression “all courts” means Courts other than the Supreme Court. The decision of the Supreme Court is binding on all the High Courts. In other words, the High Court’s cannot hold the law laid down by the Apex Court is not binding on the ground that relevant provisions were not brought to the notice of the Supreme Court, or the Supreme Court laid down the legal position without considering all the points. The decision of the Apex Court binds as much the pending cases as the future ones. Even the directions issued by the Apex Court in a decision constitute binding law under Article 141. It is pertinent to state that the Supreme Court is not bound by its own decisions and may overrule its previous decisions. It is also pertinent to state that the Apex Court may overrule the previous decisions either by expressly saying so or impliedly by not following them in a subsequent case. Thus, in view of Article 141 of Constitution of India, when there is a decision of the Apex Court directly applicable on all fours to the case on hand, the Learned Single Judge could have decided the Writ Petitions following the decision of the Apex Court, holding that the decision of the Division Bench is contrary to the law laid down under Article 141 of the Constitution of India. Therefore the learned single Judge could decide the petitions in accordance with the law laid down by the Apex Court.

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Guarantor – Mortgage by deposit of title deeds – Liability of Guarantor – Loan taken from bank – Deposit of title deeds with Bank. Section 128-Contract Act, Transfer of property section 58(f).

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Allahabad Bank vs. M/s. Shivganga Tube Well and Others; AIR 2014 Bombay 100 (Bom.)(HC)

The original defendant No. 1 had availed a loan of Rs. 10 lakh on for the purposes of purchase of a truck with Bore-Well Rig, Machine, Screw Compressor, Drilling Rig, etc. The original defendant No.1 – the borrower hypothecated the said machinery and its accessories with the plaintiff Bank. At the same time, the defendants No. 2 to 6 i.e., present respondents No. 2 to 6 agreed to stand as continuing guarantors for the original defendant No. 1 in repayment of the loan amount as agreed between the appellant Bank and the defendant No. 1. They agreed to mortgage their respective immovable property. They accordingly delivered their title-deeds. Thus, equitable mortgage by depositing the title-deed was created by these respondents.

All the defendants attended the Himayatnagar branch of appellant Bank and deposited the title-deeds of their respective immovable properties, as detailed in the plaint. They had agreed by executing affidavits regarding the confirmation of the mortgage by deposit of title-deeds and had further agreed that the revival of the loan, if any by the borrower i.e. defendant No. 1 shall bind the mortgagor.

The Appellant Bank filed a suit for recovery of an amount of Rs. 27,76,137/- and for preliminary decree for sale of the mortgaged property for recovery of the said amount was decreed against the borrower-original defendant No. 1, but was dismissed against the guarantors i.e., defendants No. 2 to 6. Hence, the appeal was filed against the guarantors.

The Hon’ble Court noted the difference between “the agreement to mortgage” and “mortgage by deposit of title-deeds”. The mortgage by deposit of title-deeds is defined by section 58(f) of the Transfer of Property Act, 1882.

It is undisputed that the city of Hyderabad is a notified city where the delivery of the title-deeds of immovable property can be made with the intention to create a security thereon.

It is a settled position of law that the mortgage by deposit of title deeds requires no registration. However, if any document is executed, which would show that the mortgagee has, under the said document, mortgaged the property by deposit of title-deeds, then only the registration of the said document is required. However, the contemporaneous document fortifying the “intention to create the security” is neither an agreement to mortgage or a mortgage. The deposit of title-deeds itself with intention in the mind of the person that the said title-deeds are being deposited with intention to create a security thereon, is sufficient to culminate the transaction into a mortgage by deposit of title-deeds. This mortgage by deposit of title-deeds is sometimes called as equitable mortgage, as was prevalent in England. However, the ingredients of the equitable mortgage and the mortgage as defined u/s. 58(f) of the Transfer of Property Act are not identical.

The documents on record, coupled with the affidavits as admitted by the defendant and positively proved by the relevant witness of the plaintiff would show that the title-deeds were deposited with the plaintiff Bank, with an intention to create the security thereon.

The title-deeds of the respective respondents were admittedly put in the custody of the appellant Bank at that time. None of the relevant respondents at any time asked for return of those title-deeds, nor complained of keeping the same in the custody of the Bank.

The documents on record would show that the respondents No. 2 to 6 had intention to create the security for the repayment of the loan availed by the principal borrower. Therefore, they showed their readiness to deposit the title-deeds by various agreements and affidavits and also by placing all the title verification certificate by the Advocates, etc. and ultimately, they deposited the titledeeds with the appellant Bank at Hyderabad branch.

The above facts is sufficient to hold that the respondents No. 2 to 6 stood as guarantors and created mortgage of their property for repayment of the loan advanced to the principal borrower by depositing their title-deeds.

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Frivolous Litigation – State as a Litigant/party – Expenses to be paid personally by officials concerned.

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Haryana Dairy Development Co-op Federation Ltd. vs. Jagdish Lal; (2014) 3 SCC 156 (SC)

In the instant case, an amount of Rs. 8,724/- was to be paid to the Respondent employee as reimbursement of his medical claim. The Petitioner Haryana Dairy Development Cooperative Federation Limited filed SLP before Supreme Court. The Court frwoned upon such practice of the petitioner corporation as the corporation must have spent the amount already by filing this petition more than the total amount involved herein.

The Law Commission of India in its 155th report has observed that what is distressing is that the number of pending litigations relate to trivial matters or petty claims, some of which have been hanging for more than fifteen years. It hardly needs mention that in many such cases money spent on litigation is far in excess of the stakes involved, besides wasting valuable time and energy of the concerned parties as well as the Court.

The court directed that the expenses of the litigation shall be incurred by the Managing Director personally who has signed affidavit in support of the petition and it shall not be taken from the Federation.

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Deficiency in service – Mental Agony & harassment – Cost of Litigation-Builder. (Consumer Protection Act section 17).

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Col. Sukhawant Singh Saini (Retd.) vs. GBM Builders and Developers P. Ltd.; (State Consumer Disputes Redressal Commission, UT Chandigarh).

The facts, in brief, are that the complainant booked a 2 BHK flat , the price whereof was Rs. 22,50,000/-. He paid a sum of Rs.1.00 lakh, as booking amount, to the builder. The allotment letter, dated 13-10-2011, was issued in favour of the complainant, in respect of the aforesaid flat. Totally, the complainant paid a sum of Rs. 21,50,000 towards the price of the flat, in question. The remaining amount of Rs.1.00 lakh was to be paid by the complainant, at the time of handing over possession of the flat, by the builder (Opposite Party). The Opposite Party, failed to deliver the possession in time. The complainant wrote a number of letters requesting the Opposite Party, to hand over physical possession of the flat. The opposite Party vide letter dated 06-12-2012 intimated the complainant that possession of the flat shall be delivered on or before 15-01-2013. Even on that date, the possession of the flat was not delivered. It was intended that the complainant suffered a lot of mental agony and physical harassment, on account of non-delivery of possession of the flat, in question, by the stipulated date, or non-refund of the amount deposited by him. It was further stated that the aforesaid acts of the Opposite Party, amounted to deficiency, in rendering service, as also indulgence into unfair trade practice. When the grievance of the complainant was not redressed, left with no alternative, a complaint u/s. 17 of the Consumer Protection Act, 1986 was filed claiming from the Opposite Party compensation for mental agony and physical harassment; refund of Rs. 21.50 with interest @18% p.a. from the date of deposit of the said amount; pay interest @10.75% p.a., which was being paid by him (complainant) to the Bank of India, for the loan facility, availed of by him to purchase the flat, in question; etc.

The state commission observed that as per the evidence produced, on record, it is evident that the complainant only booked one flat, bearing No. 498, in the project of the Opposite Party, for a sale consideration of Rs. 22.50 lakh. There is nothing, on record, that the complainant purchased this flat, for commercial purpose with the intention to resell the same as and when there was escalation in prices. Thus the complainant falls within the definition of a consumer, as defined by section 2(1)(d)(ii) of the Act.

The next question, that falls for consideration, is, as to within which period the possession of the flat was to be delivered. It is evident from this document, that the Opposite Party stated therein, that it would try to give possession of the flat by 15-01-2013. It means that possession of the flat was to be delivered, on or before this date. However, there is no document, on record, to prove that either on 15-01-2013 or immediately thereafter offer of possession of the flat, in question was made to the complainant, but he refused to accept the same. Had the construction of the flat, in question, been complete, in all respects, then certainly the Opposite Party would have sent offer of possession of the flat, after 15-01- 2013, to the complainant. Non-sending of such a letter, in itself, indicates that construction of the flat, in question, was not complete, and as such, the question of offer of possession thereof on or after 15-01-2013 did not at all arise. By making a false promise, that the possession shall be offered by 15-01-2013, and failure to abide by the commitment, the Opposite Party was not only deficient in rendering service but also indulged into unfair trade practice.

Even by the time the complaint was filed, the possession of the flat was not offered to the complainant. The Opposite Party utilised the amount, deposited by the complainant, for a sufficient long period. Neither the possession was offered to the complainant, nor refund of the amount, was made to him. Since the Opposite Party failed to deliver possession of the flat by the stipulated date or even by the time the complaint was filed, it was its bounden duty to refund Rs. 21.50 and Rs. 37,028/- (paid as service tax) to the complainant but it failed to do so. It was, therefore, held that the complainant was entitled to the refund of Rs. 21,50,000/- deposited by him towards the price of the flat and Rs. 37,028/- paid by him, towards service tax to the Opposite Party. By not refunding the amount aforesaid, the Opposite Party was deficient, in rendering service.

For the financial loss caused to the complainant on account of non-refund of the amount, deposited by him immediately after the expiry of the stipulated date for delivery of possession of the flat, the complainant was entitled to refund of the aforesaid amounts, with interest @12% interest p.a. from the respective dates of deposits.

As stated above, neither possession of the flat by the stipulated date, was given to the complainant, nor refund of the amounts paid by him, was made. One can really imagine the mental condition of a person, who deposited 95% of the price of the flat, but was neither delivered the possession thereof nor refund of the amounts deposited by him was made. The complainant, thus, suffered a lot of mental agony and physical harassment, on account of the acts of omission and commission of the Opposite Party. Not only this, the complainant shall also not be able to purchase a flat, at the same rate, on account of escalation in prices. Compensation for mental agony and physical harassment and on account of escalation, in prices to the tune of Rs. 1,50,000/- was granted Litigation cost of Rs.15,000/- also granted. (Dated 02-07-2014 complaint Case No. 41 of 2014).

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Document Gift or relinquishment deed-Determination- Stamp Act, 1899, Article 55

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Srichand Badlani vs. Govt. of N.C.T. of Delhi & Ors. AIR 2014 (NOC) 539 Del.

One of the co-owners can relinquish his share in a co-owned property in favour of one or more of the coowners. The document executed by him in this regard would continue to be a relinquishment deed irrespective of whether the relinquishment is in favour of one or all the remaining co-owners of the property. There is no basis in law for the proposition that if the relinquishment deed is executed in favour of one of the co-owners, it would be treated as a Gift deed. The law of stamp duty (as applicable in Delhi) treats relinquishment deed and gift deed as separate documents, chargeable with different stamp duties. It is not necessary that in order to qualify as a relinquishment deed, the document must purport to relinquish the share of the relinquisher in favour of all the remaining co-owners of the property. Even if the relinquishment is in favour of one of the co-owners, it would qualify as a relinquishment deed.

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Consent Decree – Appeal not maintainable – Party to approach the court which had recorded compromise and passed decree and establish that there was no compromise. [CPC O. 23 R.3]

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Smt. Lajja Devi vs. Khushi Ram Prajapat, AIR 2014 (NOC) 510 (Raj.)(HC.)

The Civil Misc. Appeal had been filed against the judgement and decree dated 05-11-2011, passed by the District Judge, Alwar whereby a consent decree u/s.13B of the Act of 2005 had been passed dissolving the marriage between the appellant–wife and the respondent-husband.

It was contended that the appellant is an absolutely illiterate lady and was married to the respondent on 31- 01-2009. It is submitted that the judgment and decree dated 05-11-2011 purportedly by consent for dissolution of marriage has been obtained fraudulently and the appellant at no point of time signed an application u/s. 13B of the Act of 2005, nor even entered the witness box before the District Judge, Alwar nor make any statement as attributed to her before the learned trial court. It is submitted that the judgment and decree for dissolution of marriage on 05-11-2011 is absolutely fraudulent and in fact an outcome of criminal enterprise.

The Court observed that section 96(3) CPC categorically states that no appeal shall lie from a decree passed by the court with the consent of the parties. There is thus a clear statutory prohibition against filing of an appeal against a consent decree. Thus, the court held that u/s. 96(3) CPC, an appeal against a consent decree is not maintainable.

The Hon’ble Supreme Court in the case of Pushpa Devi Bhagar (D) by LR vs. Rajinder Singh & Ors. [AIR 2006 SC 2628 (1)] had the occasion to deal with a situation where a consent decree was sought to be impugned in appeal.

The Hon’ble Court observed that the position that emerges from the amended provisions of Order 23, can be summed up thus :

(i) No appeal is maintainable against a consent decree having regard to the specific bar contained in section 96(3) CPC.

(ii) No appeal is maintainable against the order of the court recording the compromise (or refusing to record a compromise) in view of the deletion of clause (m) Rule 1, Order 43.

iii) No independent suit can be filed for setting aside a compromise decree on the ground that the compromise was not lawful in view of the bar contained in Rule 3A.

(iv) A consent operates as an estoppel and is valid and binding unless it is set aside by the court which passed the consent decree, by an order on an application under the proviso to Rule 3 of Order 23.

Therefore, the only remedy available to a party to a consent decree to avoid such consent decree, is to approach the court which recorded the compromise and made a decree in terms of it, and establish that there was no compromise. In that event, the court which recorded the compromise will itself consider and decide the question as to whether there was a valid compromise or not. This is so because a consent decree, is nothing but contract between parties superimposed with the seal of approval of the court. The validity of a consent decree depends wholly on the validity of the agreement or compromise on which it is made.

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Will – Succession – Clause offending rule against perpetuity is invalid – Indian Succession Act, 1925, section 114.

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Asis Mitra vs. Sibani Dutta & Ors AIR 2014 Calcutta 126

In 1900, Baikuntha Nath Dutta had founded a “thakurbari.” He installed this deity and started worship. By his will dated 30-07-1916 various properties of the testator were dedicated to the above deity. Shebaits were appointed. Clause 5 of the Will dealt with the devolution of Shebaitship.

Many years had passed since the making of this dedication. The main question that was posed before the court was whether the stipulation in the Will and in the Codicil that Shebaitship would vest only in sons of the Shebaits was valid or not.

The issue in this case was in regard to the rule against perpetuity. The rule applied equally to transfer of property inter vivos as it did to transmission of property by succession. In this case those rules regarding transmission of property by succession were relevant. The owner of a property, while bequeathing it, could not postpone the vesting of the absolute legal and beneficial ownership thereof indefinitely. He could not fetter the powers of alienation, indefinitely.
Hence, if A is disposing of his property by Will or by creation of a trust, he cannot hold up its absolute vesting in some other person, for an uncertain period. Neither can he tie this person’s hands regarding alienation for an uncertain time.

If there was any further postponing of absolute legal and beneficial ownership of the property, the bequest or settlement was void as it violated the rule against perpetuity. The law against perpetuity did not favour, as observed earlier, tying up of property without its vesting, for an indefinite period of time.

The Indian Succession Act, 1925, section 114 enacts as follows:

“114. Rule against perpetuity. – No bequest is valid whereby the vesting of the thing bequeathed may be delayed beyond the life-time of one or more persons living at the testator’s death and the minority of some person who shall be in existence at the expiration of that period, and to whom, if he attains full age, the thing bequeathed is to belong.”

Hence, the Clause in the will devolving Shebaitship only on grandson and on death of grand sons to their sons violates the rule against perpetuity.

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Precedent – Doctrine of per incuriam and sub silentio – Constitution of India – Article 141

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Triveni Engineering & Industries Ltd vs. The State of Karnataka & Ors AIR 2014 Karnataka 75

The doctrines of per incuriam and sub silentio operate as exceptions to the rule of precedent. Incuriam literally means carelessness. In practice, per incuriam means per ignorantium. Doctrines of per incuriam and sub silentio have been taken recourse to by the courts for relieving from injustice perpetrated by unjust precedents. A decision which is not express and is not founded on reasons or consideration of the issue, could not be deemed to be a law declared having binding effect as is contemplated under Article 141 of the Constitution.

The doctrine of per incuriam has no application in a case to ignore the principle laid down after analysing the relevant provisions of law by a co-ordinate bench. The doctrine of per incuriam is resorted to when decisions are rendered without reference to statutory prescriptions or other binding authorities.

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Month – Month does not mean 30 days – Computation of six months period, Negotiable Instruments Act, 1881, section 138.

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Rameshchandra Ambalal Joshi vs. State of Gujarat & Anr. AIR 2014 SCC 1554

While hearing on SLP against an order passed by the High Court in context of a complaint filed u/s. 138 of the Negotiable Instrument Act, 1881 the court was required to consider the meaning of term ‘months’.

Proviso (a) to section 138 provides that the cheque should be presented within six months from the date on which it is drawn. Word month has been defined u/s. 3(35) of General Clauses Act to mean a month reckoned as per British calendar. Period of six months cannot therefore be calculated on 30 days basis.

As regards computation of six months period section 9 of General Clauses Act has to be pressed in service proviso (a) to section 138 of the Act uses the expression “Six months from the date on which it is drawn.” Once the word “from” is used for the purpose of commencement of time, in view of section 9 of the General Clauses Act, the day on which the cheque is drawn has to be excluded and the last day within which such act needs to be done is to be included. In other words, six months period stipulated in section 138 would expire on day prior to the date in the corresponding month and in case no such day falls, the last day of the immediate previous month. For calculating period of six months for cheque drawn on 31-12-2005 the first day, i.e., 31-12-2005 has to be excluded and the period of six months will be reckoned from the next day i.e. from 01-01-2006; meaning thereby that according to the British calendar, the period of six months will expire at the end of the 30th day of June, 2006.

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Hindu Law – Devolution of property of male dying intestate: Hindu Succession Act, 1956, sections 8 and 10:

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Narinder Singh Rao vs. Air Vice Marshal Mahinder Singh Rao & Ors. (2013) 9 SCC 425

Rao
Gajraj Singh and his wife Sumitra Devi were occupiers of the suit
property. The property had been constructed somewhere in 1935 and as per
the municipal record, it belonged to Rao Gajraj Singh. A document was
executed by Rao Gajraj Singh to the effect that upon death of himself or
his wife, the suit property would be inherited by the survivor. The
said writing was attested by Rao Devender Singh, the son of Rao Gajraj
Singh’s real sister.

Rao Gajraj Singh expired on 29th March, 1981
and thereafter Sumitra Devi, who had eight children, started residing
at Ranchi with the Appellant. Somewhere in 1980s, Sumitra Devi had
constructed some shops in the suit premises and the said shops were
given on rent.

On 1st June, 1989, Sumitra Devi executed a Will
whereby she bequeathed the suit property to one of her sons, namely,
Narinder Singh Rao (the present Appellant and original Defendant No. 1)
and she expired on 6th June, 1989.

After the death of Sumitra
Devi, her four children, one of them being the present Respondent No. 1,
filed a suit for declaration claiming their right in the suit property.
Subsequently, the plaint was amended so as to make it a suit for
partition. According to the case of the said children, the Will was not
genuine and therefore, the said Will could not have been acted upon and
as Sumitra Devi was survived by eight children, the suit property would
be inherited by all the children. Thus, each child had a 1/8th share in
the suit property.

Even after the death of Rao Gajraj Singh, the
suit property continued to remain in his name because nobody had got the
property mutated in the names of his heirs/legal representatives after
his death. Upon the death of Rao Gajraj Singh, no mutation entry was
made in the Municipal Corporation records to show as to who had
inherited the property in question and the said property continued to
remain in the name of late Rao Gajraj Singh.

By virtue of the
Will executed by Sumitra Devi, whereby the property had been bequeathed
to the present Appellant, the Appellant claims complete ownership over
the suit property.

The Hon’ble Court observed that so far as
inheritance of the suit property by the present Appellant in pursuance
of the Will dated 1st June, 1989 executed by Sumitra Devi is concerned,
the Will was validly executed by Sumitra Devi, which had been attested
by two witnesses, one being an advocate and another being a medical
practitioner.

The next question which was to be considered by the
High Court was with regard to the ownership right of the suit property.
The property was in the name of Rao Gajraj Singh and no evidence of
whatsoever type was adduced to the effect that the property originally
belonged to Sumitra Devi. Thus, the findings that the suit property
belonged to Rao Gajraj Singh cannot be disturbed. As Rao Gajraj Singh
died intestate and was the owner of the property at the time of his
death, the suit property should have been inherited by his widow, namely
Sumitra Devi and his eight children in equal share, as per the
provisions of the Hindu Succession Act, 1956. In that view of the
matter, the High Court arrived at the conclusion that the suit property
would be inherited by all the nine heirs, i.e., Sumitra Devi and her
eight children and therefore, Sumitra Devi had inherited only 1/9th of
the right and interest in the suit property whereas 1/9th of the right
and interest in the suit property belonged to each child of Rao Gajraj
Singh.

Though the Will executed by Sumitra Devi has been treated
as a validly executed Will, Sumitra Devi, who had only 1/9th of the
right and interest in the suit property, could not have bequeathed more
than her interest in the suit property. If Sumitra Devi was not a
full-fledged owner of the suit property, she could not have bequeathed
the entire suit property to the present Appellant, Narinder Singh Rao,
who has claimed the entire property by virtue of the Will executed by
Sumitra Devi. At the most Sumitra Devi could have bequeathed her
interest in the property which was to the extent of 1/9th share in the
said property. So the High Court rightly came to the conclusion that the
1/9th share in the suit property belonging to Sumitra Devi would be
inherited by the present Appellant – Narinder Singh Rao by virtue of the
Will executed by her. In addition to his own right and interest in the
suit property to the extent of 1/9th share, which the present Appellant
had inherited from his father. Thus the present Appellant would get
1/9th share in the suit property as he also inherited the share of his
mother Sumitra Devi whereas all other children of Rao Gajraj Singh would
get 1/9th share each in the suit property. Thus, the present Appellant
would be having 2/9th share in the suit property

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Minor – Sale of Minors property – By father (Natural Guardian) – Without prior permission of Court – Voidable at instance of minor. Hindu Minority and Guardianship Act 1956, section. 8 (2):

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Rameshwar Lal & Ors vs. Jai Prakash & Ors AIR 2014 Rajasthan 72.

The present Respondent Nos. 1 and 2 – (original plaintiffs) had filed a suit for cancellation of sale deed and for possession of the suit property against the appellants and respondent No. 4 Bhagwan Lal (their father) with the averments that the plaintiffs had purchased the suit property by a registered sale deed dated 01-02-1974 from Suresh Chandra for a sum of Rs. 26,000. The defendant Nos.1 to 3 were tenants in the said house and a sum of Rs.1,000/- were deposited with Suresh Chandra as earnest money.

The rent deed has been executed by the eldest brother in favour of Suresh Chandra, which has been handed over to the plaintiffs by Suresh Chandra on the date of sale. By notice dated 06-02-1974, Suresh Chandra had informed defendant No.1 (i.e., tenants) by a registered notice that he has sold the house to the plaintiffs and therefore, the rent be paid to them and the deposit of Rs.1,000/- had also been transferred to them. The defendants admit them to be owners of the house and one months rent was sent by money order and therefore, based on attornment, the defendant Nos. 1 to 3 have become plaintiffs tenants. On 23-06-1974, the plaintiff No.1 became major and plaintiff No. 2 was still a minor. The suit property was required by the plaintiffs reasonably and bonafidely. However, the respondent No. 4, their father sold the suit house to the defendant Nos. 1 to 3 for a sum of Rs. 28,000/- on 15-06-1974 and has executed a sale deed and therefore, the defendants do not treat them as landlord which is incorrect. The defendant No. 4 had not obtained permission u/s. 8 of the Hindu Minority and Guardianship Act,1956 (the Act) from the competent court and therefore, the sale deed was illegal and void and the plaintiffs are entitled for getting the same cancelled. The plaintiff was becoming a major eight days after the date of sale and therefore, the defendant No. 4 had no reason to sale the same to the defendant Nos. 1 to 3; the defendant No. 4 had no requirement as guardian of the money; as the defendants are plaintiffs tenants, they are entitled for possession and therefore, the suit be decreed and the sale deed dated 15-06-1974 be cancelled and possession of the suit house alongwith the due rent be decreed.

Once the property is owned by a minor, the provisions of section 8 of the Act are attracted. While s/s. (1) confers power on a natural guardian of a Hindu minor to do all acts which are necessary or reasonable and proper for the benefit of the minor or for the realisation, protection or benefit of the minors estate. The guardian can in no case bind the minor by a personal covenant, however, the said power is subject to the other provisions of section 8.

S/s. (2) provides for such conditions/restrictions, which inter alia mandates that a natural guardian shall not, without the previous permission of the court mortgage, charge, transfer by sale, gift, exchange or otherwise any part of the immovable property of the minor and s/s. (3) provides that any disposal of immovable property by a natural guardian in contravention of s/s. (1) and (2) is voidable at the instance of minor or any person claiming under him. Even the grant of permission by the court is circumscribed by s/s. (4), wherein except in case of necessity or for an evident advantage to the minor such permission cannot be granted.

Though, s/s. (1) permits a natural guardian to do all acts necessary for the benefit of minor and for benefit of minors estate, but the same is subject to other provisions of section and s/s. (2) clearly provides that without previous permission of the court transfer by sale of immovable property shall not be made by the guardian and any sale in contravention of s/s. (2) is voidable at the instance of the minor. The said s/s. (2) does not admit of any exception, whereby for any condition the minors estate could be transferred by the natural guardian without previous permission of the court.

It is for the minor, on attaining majority, not to question the transfer which is in contravention of s/s. (2) of section 8, but if he decides to question the same, the same is voidable at his instance. In the present case, the Plaintiff No.1 has on attaining majority chosen to question the transfer made by the defendant No.4 Bhagwan Lal, his father in favour of the defendant Nos. 1 to 3 (tenants) without seeking previous permission from the Court and therefore, the same was rightly declared void by the trial court.

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Gift – Validity – Delivery of possession is not an essential prerequisite for making of valid gift in case of immovable property: Transfer of property Act. Section 123.

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Renikuntha Rajamma (D) by LRS vs. AIR 2014 SC 2906

A reference was made to a larger bench for an authoritative pronouncement as to the true and correct interpretation of sections 122 and 123 of The Transfer of Property Act, 1882. The Plaintiff-Respondent in this appeal filed for a declaration to the effect that revocation deed dated 5th March, 1986 executed by the Defendant-Appellant purporting to revoke a gift deed earlier executed by her was null and void.

The Plaintiff’s case as set out in the plaint was that the gift deed executed by the Defendant- Appellant was valid in the eyes of law and had been accepted by the Plaintiff when the donee-Defendant had reserved to herself during for life, the right to enjoy the benefits arising from the suit property. The purported revocation of the gift in favour of the Plaintiff-Respondent in terms of the revocation deed was, on that basis, assailed and a declaration about its being invalid and void ab initio prayed for.

The suit was contested by the Defendant-Appellant herein on several grounds including the ground that the gift deed executed in favour of the Plaintiff was vitiated by fraud, misrepresentation and undue influence. The parties led evidence and went through the trial with the Trial Court eventually holding that the deed purporting to revoke the gift in favour of the Plaintiff was null and void. The Trial Court found that the Defendant had failed to prove that the gift deed set up by the Plaintiff was vitiated by fraud or undue influence or that it was a sham or nominal document. The gift, according to Trial Court, had been validly made and accepted by the Plaintiff, hence, irrevocable in nature. It was also held that since the donor had taken no steps to assail the gift made by her for more than 12 years, the same was voluntary in nature and free from any undue influence, misrepresentation or suspicion. The fact that the donor had reserved the right to enjoy the property during her life time did not affect the validity of the deed, opined the Trial Court.

The First Appellate Court also held that the gift deed was not a sham document, as alleged by the Defendant and that its purported cancellation/revocation was totally ineffective.

The first Appellate Court also affirmed the finding of the Trial Court that the donee had accepted the gift made in his favour. The appeal filed by the Defendant (Appellant herein) was dismissed.

The High Court declined to interfere with the judgments and orders impugned before it and dismissed the second appeal of the Appellant, holding that the case set up by the Defendant that the gift was vitiated by undue influence or fraud had been thoroughly disproved at the trial.

The Court observed that Chapter VII of the Transfer of Property Act, 1882 deals with gifts generally and, inter alia, provides for the mode of making gifts. Section 122 of the Act defines ‘gift’ as a transfer of certain existing movable or immovable property made voluntarily and without consideration by one person called the donor to another called the donee and accepted by or on behalf of the donee. In order to constitute a valid gift, acceptance must, according to this provision, be made during the life time of the donor and while he is still capable of giving the gift. It stipulates that a gift is void if the donee dies before acceptance.

Section 123 regulates mode of making a gift and, inter alia, provides that a gift of immovable property must be effected by a registered instrument signed by or on behalf of the donor and attested by at least two witnesses. In the case of movable property, transfer either by a registered instrument signed as aforesaid or by delivery is valid u/s. 123.

When read with section 122 of the Act, a gift made by a registered instrument duly signed by or on behalf of the donor and attested by at least two witnesses is valid, if the same is accepted by or on behalf of the donee. That such acceptance must be given during the life time of the donor and while he is still capable of giving is evident from a plain reading of section 122 of the Act. A conjoint reading of sections 122 and 123 of the Act makes it abundantly clear that “transfer of possession” of the property covered by the registered instrument of the gift duly signed by the donor and attested as required is not a sine qua non for the making of a valid gift under the provisions of Transfer of Property Act, 1882. Judicial pronouncements as to the true and correct interpretation of section 123 of the T.P. Act have for a fairly long period held that section 123 of the Act supersedes the rule of Hindu Law if it contained any stipulation in making delivery of possession an essential condition for the completion of a valid gift.

Section 123 of the T.P. Act is in two parts. The first part deals with gifts of immovable property while the second part deals with gifts of movable property. Insofar as the gifts of immovable property are concerned, section 123 makes transfer by a registered instrument mandatory. This is evident from the words “transfer must be effected” used by the Parliament insofar as immovable property is concerned. In contradistinction to that requirement the second part of section 123 dealing with gifts of movable property, simply requires that gift of movable property may be effected either by a registered instrument signed as aforesaid or “by delivery.” The difference in the two provisions lies in the fact that insofar as the transfer of movable property by way of gift is concerned, the same can be effected by a registered instrument or by delivery. In the case of immovable property no doubt requires a registered instrument, but the provision does not make delivery of possession of the immovable property gifted as an additional requirement for the gift to be valid and effective.

There is indeed no provision in law that ownership in property cannot be gifted without transfer of possession of such property. As noticed earlier, section 123 does not make the delivery of possession of the gifted property essential for validity of a gift.

The recitals in the gift deed also prove transfer of absolute title in the gifted property from the donor to the donee. What is retained is only the right to use the property during the lifetime of the donor which does not in any way affect the transfer of ownership in favour of the donee by the donor.

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Family Settlement – Registration – Document not compulsorily registrable –Registration Act, section 17:

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Vikaram Singh & Anr. vs. Ajit Indersingh; AIR 2014 Del 173

The learned Single Judge held that Memorandum of Family Settlement not being a registered document was inadmissible in evidence and also held that family arrangements are governed by special equities and principles applicable to dealings between strangers do not apply to dealings within the family.

On appeal, the division Bench held that the tenth recital records that a family settlement was being reduced into writing because it had already been acted upon by the parties. Thus, it is clear that the Deed of Family Settlement is a Memorandum i.e., a written record of what the parties had orally agreed upon at an earlier point of time and had acted thereupon. The second thing which emerges is that parties have acknowledged antecedent title. Thus, the court agreed with the view taken by the learned Single Judge in view of the law declared in the decisions. AIR 1958 SC 706 Nanibai & Ors. vs. Geeta Bai Kom Rama Gunge, AIR 1976 SC 807 Kale & Ors. vs. Deputy Director of Consolidation & Ors., and AIR 2007 SC 18 Hansa Industries vs. Kidar Sons Industries Ltd. The Deed of Family Settlement does not require any registration u/s. 17 and is a document admissible in evidence.

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Coparcenary property – Right of daughters – Section 6 as amended by Amendment Act (2005) is available to all daughters living on date of coming into force of 2005 Amendment Act : Hindu Succession Act, 1956:

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Badrinarayan Shankar Bhandari & Ors vs. Omprakash Shankar Bhandari AIR 2014 Bombay 151 (FB).

The Full Bench of the Bombay High Court held that the provisions of amended section 6 are retroactive in operation, and daughters living on 9th September, 2005 get rights in coparcenary property with effect from 9th September, 2005.

The Amendment Act applies to daughters born any time provided the daughters born prior to 9th September, 2005 are alive on the date of the coming into force of the Amendment Act i.e., on 9th September,2005. There is no dispute between the parties that the Amendment Act applies to daughters born on or after 9th September, 2005.

A bare perusal of sub-section (1) of section 6 would, thus, clearly show that the legislative intent in enacting clause (a) is prospective i.e. daughter born on or after 9th September, 2005 will become a coparcenary by birth, but the legislative intent in enacting clauses (b) and (c) is retroactive, because rights in the coparcenary property are conferred by clause (b) on the daughter who was already born before the amendment, and who is alive on the date of Amendment coming into force. Hence, if a daughter of a coparcener had died before 9th September, 2005, since she would not have acquired any rights in the coparcenary property, her heirs would have no right in the coparcenary property. Since section 6(1) expressly confers right on daughter only on and with effect from the date of coming into force of the Amendment Act, it is not possible to take that view of the heirs of a deceased daughter would get such a right.

On examination of amendment section 6 of the principal act and bearing in mind the words ‘on and from commencement of the Hindu Succession Act, 2005 found in section 6’, it must follow that the rights under the amended section 6 can be exercised by a daughter of a coparcener only after the commencement of the Amendment Act, 2005. Therefore, it is imperative that the daughter who seeks to exercise such a right must herself be alive at the time when the Amendment Act, 2005 was brought into force. It would not matter whether the daughter concerned is born before 1956 or after 1956. This is for the simple reason that the Hindu Succession Act, 1956, when it came into force applied to all Hindus in the country irrespective of their date of birth. The date of birth was not a criterion for application of the Principal Act. The only requirement is that when the Act is being sought to be applied, the person concerned must be a existence/ living. The Parliament has specifically used the word “on and from the commencement of Hindu Succession(Amendment) Act, 2005″ so as to ensure that rights which are already settled are not disturbed by virtue of a person claiming as heir to a daughter who had passed away before the Amendment Act came into force.

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Citizenship by Registration – Eligibility Criteria not fulfilled:Citizenship Act, 1955 section 5(1)(a):

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Shah Mohammed Anwar Ali & Ors vs. The State of Assam & Ors. AIR 2014 Gauhati 156

The appellant Nos. 1 and 2 filed a writ petition, praying for a direction to the respondents to consider their applications filed u/s. 5(1)(a) of the Citizenship Act, 1955 and to pass appropriate orders thereon, in accordance with law, contending inter alia that both the petitioners were born in Gauhati and the petitioner no. 1’s father was also initially a citizen of India born in undivided India. It has further been contended that after partition, the father of the petitioner no. 1 permanently settled in Shylet district of the then East Pakistan (now Bangladesh) and due to his old age ailments, the petitioners along with their first child Shah Mohammad Aminul Islam, who is the appellant no. 3 went to Bangladesh in the month of September, 1991 and stayed in Bangladesh up to the month of March, 1992, during which period the second child, namely, Jakia (appellant no. 4) was born in Bangladesh on 30-12-1991. The further contention of the writ petitioners was that they again went to Bangladesh in the month of November, 1996 to attend to the ailing father of the appellant no. 1 with the intention to return to India as early as possible, but unfortunately as the father of the petitioner no. 1 fell seriously ill, for which they had to stay back in Bangladesh.Thereafter though they wanted to return to India, they could not do so and under compelling circumstances they had to obtain the passports from the Government of Bangladesh and entered India on 10-05-1997 as Bangladeshi nationals. It has also been pleaded that after the expiry of the initial period of visa, they filed an application for extension from time to time and accordingly the visa was extended and though their application for further extension of visa dated 21-03-1998 was under active consideration of the Government, they were arrested along with their minor children on the ground that they overstayed in India beyond the period for which visa was granted.

The court observed that sub-section (2) of section 9 of 1955 Act, empowers the Central Govt. to determine the question as to whether, when or how any citizen of India has acquired the citizenship of another country, if such question arises for consideration. It is, therefore, the Central Government and no other authority, who can determine such question. The writ court would also, ordinarily, not enter into such determination unless of course the determination made by the Central Government is put to challenge by the aggrieved party.

In the instant case, the applicants never at any point of time, prior to filing of the writ petition, claimed that they had under compulsion and not voluntarily acquired the citizenship of Bangladesh. On the other hand, they had filed the application u/s. 5(1)(a) of 1955 Act seeking registration of their names as Indian citizen, upon accepting that they had voluntarily acquired the citizenship of Bangladesh.

Since the question as to whether, when or how the applicants acquired citizenship of Bangladesh, did not arise at all, there was no question of determination of such question by the Central Government, before passing an order of deportation.

The appellants having approached the writ Court for a direction to the respondent authorities to consider their applications filed u/s. 5(1)(a) of the 1955 Act, they must demonstrate that they have fulfilled the requirement of the said provisions of law for getting their names registered, which they had failed to do. The writ Court rightly refused to issue directions, which if issued, would be a futile writ, when the appellants on their own admission have accepted that they have not fulfilled the requirement of section 5(1)(a) of the said Act.

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Bombay Stamp Act, 1958 – Delay in filing application before Chief Controlling Revenue Authority – Specific exclusion of Limitation Act – Executive cannot condone delay taking recourse of limitation Act: Limitation Act section 5, 29:

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Jayminbhai Navinbhai Doshi & Ors vs. State of Gujarat & Ors AIR 2014 Gujarat 220

The petitioners challenged the orders passed by the authority u/s. 53 of the Bombay Stamp Act, 1958, by which, the said authority, viz., the Chief Controlling Revenue Authority refused to condone the delay in filing the proceedings on the ground that those were not filed within 90 days from the date of order passed by the competent authority because of lack of power with such authority to condone the delay.

The Bombay Stamp Act is a self contained code dealing with all relevant matters exhaustively therein and its provisions show an intention to depart from the common rule, qui facit per lalium facit per se. In the Bombay Stamp Act, 1958, there is no provision incorporated by which the provision of the Limitation Act is extended to the proceedings under the said statute. The provision of the Limitation Act applies only to courts and courts alone, and it does not even apply to any Tribunal or any other authority unless by virtue of the statute creating such Tribunal or the Authority, the provisions of the Limitation Act have been specifically made applicable.

Thus, in the instant case, the authority u/s. 53 of the Act not being a Court could not take the assistance of the provisions contained in section 29(2) of the Limitation Act. Section 54 of the Bombay Stamp Act however, unlike section 53, specifically gives power to the Chief controlling Revenue Authority to condone delay in preferring an application beyond the period of limitation fixed therein, namely, 60 days, but that power of condonation by the Chief Controlling Revenue Authority is also limited to only to a further period not exceeding 30 days.

Thus, if the Chief Controlling Authority has no power of condonation, it necessarily follows that the High Court in exercise of power under Article 226 of the Constitution against the order of the Chief Controlling Revenue Authority cannot condone the delay.

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Precedent – Reference to Full Bench – Cannot be made inview of larger Number of cases filed in subject matter. [Constitution of India Article 225.]

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Kalpana Rani vs. The State of Bihar AIR 2014 Patna 173 (FB)

The
reference had been made keeping in view the large number of cases filed
in the subject matter and not because the Bench did not agree with the
view expressed in the matter of Smt. Renu Kumari Pandey [(2011) (4) PLJR
297]. In the opinion of the Court, unless the latter Bench, for cogent
reasons, disagrees with the earlier view taken by the collateral Bench,
the question of referring the matter to a larger Bench shall not arise.
Reference can be had to the judgment of the Full Bench of this Court in
the matter of Akhauri Krishna Kumar Sinha and Ors. vs. Mundrika Prasad
[MANU/BH/0108/1985 : 1986 PLJR 1119]. Nevertheless, as the Appeal has
come up for hearing before this Bench, the Appeal is heard and is
decided on merits.

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Precedent – Binding nature – Reference to Full Bench – Co-ordinate Bench cannot decide appeal on merits by taking contrary view.

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Jagadish Deka vs. The State of Assam & Ors. AIR 2014 Gauhati 143.

Once a decision was rendered by one Division Bench in one appeal arising out of common order, a fortiorari, such decision was binding on another Division Bench (whether consisting of the same Judges or other) to avoid passing of 2 conflicting orders in one case. If for any reason, the later Division Bench did not agree to the view taken by the earlier Division Bench, then it had no option but to refer the matter to a larger bench (Full Bench) to resolve the conflict, after setting out the reasons for their disagreement and the area of difference. The later Division Bench had no jurisdiction to decide the appeal on merits by taking contrary view except to follow the reasoning and the conclusion arrived at by the earlier Division Bench and if they formed an opinion to take a contrary view then it was obligatory on the Division Bench to make a reference to the larger Bench and if they formed an opinion to take a contrary view then it was obligatory on the Division Bench to make a reference to the larger Bench to resolve the conflict. The jurisdiction to take a contrary view or/and to declare the decision “per incuriam” was with the Full Bench on a reference made by the later Division Bench and lastly: since no one brought the earlier decision to the notice of later Divison bench, a situation had arisen where a judgment came to be passed, which is in conflict with the earlier Division Bench judgment. Therefore, it has to be held as per incuriam.

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Tenancy – Statutory Tenancy – Can be bequeathed by Will – Unless it is specifically barred by some provision – Powers of Appellate Court – Subsequent Events – Mould relief accordingly: Section 96 of CPC:

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Gaiv Dinshaw Irani & Ors. vs. Tehmtan Irani & Ors. AIR 2014 SC 2326

One Bomanji Irani, who was the predecessor of Appellants herein, acquired tenancy rights in respect of the premises. The premises comprised of residential Bungalow. Bomanji executed a Will dated 15th October, 1934 in favour of his children and wife Daulatbai, appointing Daulatbai as a residuary legatee of the Will. Bomanji Irani died on 27th September, 1946 leaving behind his wife Daulatbai; five sons, and three daughters. The Will was probated with consent of all the legal heirs and Daulatbai had rights over the suit premises and the tenancy rights which, as claimed, could be bequeathed as per law. Daulatbai executed a Will on 2nd January, 1949 in favour of her son Dinshaw who was the original Defendant No. 2. However, the said Will was not probated.

The then Bombay Municipal Corporation (‘BMC’) acquired ownership rights in respect of the suit premises and issued eviction notices to the heirs and legal representatives of Bomanji, comprising Daulatbai and five sons. In response to the eviction notices, the legal heirs and representatives of Bomanji objected to the same but they consented to the tenancy being transferred in the name of Dinshaw Irani (original Defendant No. 2).

Daulatbai addressed a letter to the BMC requesting for transfer of rent bills in the name of her son Dinshaw. The BMC passed an eviction order against the heirs and legal representatives of Bomanji. Against the said eviction order passed by the BMC, the heirs and legal representatives of Bomanji jointly filed a suit as joint tenants,. Daulatbai died during the pendency of this suit. On 11th July 1977, the said suit was decreed in favour of the Plaintiffs and the order passed by the BMC terminating the tenancy was set aside. By letter dated 18th September, 1981, BMC transferred the tenancies in favour of Dinshaw, subject to certain conditions. Respondent No. 1 (son and legal heir) and Respondent No. 5 (son of the legal heirs) objected to the transfer of tenancy in the name of Dinshaw Irani.

The Respondents (legal heirs of Homi and Ardeshir Irani) on coming to know about the transfer of tenancy of the suit premises, issued a notice and subsequently filed Long Cause Suit challenging transfer of tenancy before the City Civil Court at Bombay. The City Civil Court dismissed both the suits by two separate judgments.

On further Appeal, the Court observed that divesting of tenancy rights by means of a Will is a highly debated topic and is subject to the tenancy laws of the concerned State. In the present matter, the tenancies being the suit premises are owned by the local authority of Mumbai and are subject to the State Act being the Bombay Rents, Hotel And Lodging House Rates Control Act, 1947. The said Act, since repealed, exempts the present tenancy from its purview as per section 4(1). The BMC Act is also silent on this aspect.

In the case of Gian Devi Anand vs. Jeevan Kumar and Ors. (1985) 2 SCC 683, four Judges of a five-Judge Constitution Bench held that the rule of heritability extends to statutory tenancy of commercial as well as residential premises in States where there is no explicit provision to the contrary and tenancy rights are to devolve according to the ordinary law of succession unless otherwise provided in the statute.

The Court observed held that, in general, tenancies are to be regulated by the governing legislation, which favour that tenancy be transferred only to family members of the deceased original tenant. However, in the light of the majority decision of the Constitution Bench in Gian Devi vs. Jeevan Kumar (supra), the position which emerges is that in absence of any specific provisions, general laws of succession to apply.

The BMC by means of a letter dated 19th September, 1961 treated all the heirs of Bomanji as joint tenants; and the heirs of Bomanji by means of letter dated 25th October, 1961 also claimed themselves to be joint tenants; Daulatbai in her letter dated 3rd February, 1962 also claimed joint tenancy along with her sons and sought transfer of the rent receipts only in the name of her son Dinshaw.

The High Court taking note of the subsequent events moulded the relief in the appeal u/s. 96 of the Code of Civil Procedure and the same has been challenged by the Appellants. In ordinary course of litigation, the rights of parties are crystallised on the date the suit is instituted and only the same set of facts must be considered. However, in the interest of justice, a court including a court of appeal u/s. 96 of the Code of Civil Procedure is not precluded from taking note of developments subsequent to the commencement of the litigation, when such events have a direct bearing on the relief claimed by a party. The entire purpose of the suit the Courts taking note of the same should mould the relief accordingly. This rule is one of ancient vintage adopted by the Supreme Court of America in Patterson vs. State of Alabama 294 US 600 followed in Lachmeshwar Prasad Shukul vs. Keshwar Lal Choudhury AIR 1941 FC 5. The abovementioned principle has been recognised in a catena of decisions.

The normal rule is that in any litigation the rights and obligations of the parties are adjudicated upon as they obtain at the commencement of the lis. But this is subject to an exception. Wherever subsequent events of fact or law which have a material bearing on the entitlement of the parties to relief or on aspects which bear on the moulding of the relief occur, the court is not precluded from taking a ‘cautious cognisance’ of the subsequent changes of fact and law to mould the relief.

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Precedent – Manner of citing – Whenever any issue is decided by the Supreme Court or/and High Court, it is to be first referred to by the Authorities/ Tribunals and then decision should be rendered on the issue involved in the case:

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Commr. of Customs and Central Excise vs. Advani Oerlikon Ltd (2014) (306) ELT 66 (Chhattisgarh)

The Tribunal dismissed the appeal filed by the Revenue and upheld the order passed by the Commissioner of appeals.

The short question that arises for consideration in the reference application before the Hon’ble Court is whether any referable legal question arises out of the order passed by the Tribunal for being answered by this Court in its reference jurisdiction.

The Hon’ble Court observed that though while deciding the issue, the Tribunal did not refer to any case law on the subject, yet the view taken by the Tribunal was in accordance with the law laid down by the Supreme Court. In fact, it would have been better if the Tribunal had taken note of the law on the subject laid down by the Supreme Court and then would have expressed its view.

The Court further observed that whenever, any issue is decided by the Supreme Court or/High Court then it has to be first referred to by the Authorities/Tribunals and then decision should be rendered on the issue involved in the case keeping in view the law laid down in decided cases.

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Coparcenary property – Right of daughter – No partition affected prior to enforcement of Amendment Act – Death of father (co-parcener) – Daughter will have right at par with son. Hindu Succession Act, 1956, Section 6 (as amended in 2005)

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Jamanbhai Maganbhai Mavani & Another vs. Bhanuben Maganbhai Mavani & Others AIR 2014 Gujarat 185

The short facts of the case are that the respondent Nos. 1 and 2 were the original plaintiffs [‘Sisters’] who had filed the suit for partition of the coparcenary property of their father’s family contending inter alia that they were daughters of the deceased Maganbhai Mohanbhai Mavani and the defendants were the brothers, in possession of the family property and they were entitled to the share in the family property.

The appellant together with respondent No. 3 – the defendants resisted the suit contending inter alia that the Will was executed by the father during his lifetime in favour of the mother, original defendant No. 1 and it was contended that the partition had taken place and further, after marriage of the original plaintiffs, they were not entitled to get any share in the property.

The court observed that the Will was not proved. Apart from the said aspect, if the property was a coparacenary property, the right would accrue to the members of the coparcenary from the very beginning.

Once the partition was not proved or there was no partition, coparcenary property would continue to have same character and it cannot be said that since the right accrued on the date when the father had expired. Such right is saved by amendment made in provision of section 6 of the Hindu Succession Act. As such on the date of death of the father, if the property remained as coparcenary property and no division or partition is made prior to the amendment, the right cannot be extinguished of Hindu female in coparcenary property. There was no satisfactory evidence, produced before the trial Court nor before the High Court to show that the property was partitioned prior to the amendment. If the property was not partitioned prior to the amendment, merely, because the father, one of the coparceners of the property had expired, such right cannot be said to have extinguished nor could be it said that the right of partition had accrued only on the death of the father. If on the date of amendment, the property has continued as coparcenary property, Hindu female will have right at par with the son.

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Coparcenery property – Karta – When male member is available, female in such circumstances would not be eligible to become a karta of family–Section 6–Hindu Succession Act, 1956.

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Jagannath Rangnath Chavan vs. Suman Sahebrao Ghawte & Ors AIR 2014 (NOC) 491 (Bom)

One Mr. Nana had three children – one son by name Tukaram and two daughters Suman (Plaintiff No.1) and Shanti aka Vimal (Plaintiff No.2). The two daughters had filed a suit against the present appellant, who was defendant no.1 and another defendant, challenging the sale deed dated 28-03-1968 executed by their brother Tukaram in favour of the present appellant/defendant no.1 and, in the alternative, for partition and separate possession.

Nana had died on 19-07-1967. The plaintiff no.1, Suman was already married and had gone to reside with her husband at her matrimonial place; whereas plaintiff no.2 Shanti aka Vimal was a minor, who resided with Tukaram. Tukaram had the responsibility of marrying plaintiff no.2 Shanti aka Vimal, since there was no other male member in the family except him. Tukaram vide sale deed on 29- 12-1967 sold the suit land on 28-03-1968 to defendant no.1. As there was no other source of livelihood/income to Tukaram, he applied the sale proceeds for performing rituals, maintenance of the family and for performing marriage of Shanti aka Vimal (Plaintiff No.2). Tukaram died on 03-12-1971. After his death, both the sisters had filed the suit on 29-09-1973.

The appellant (defendant no.1) filed his written statement and contested the claim made by the plaintiffs, principally on the ground that Tukaram, after the death of Nana, became the Karta of the family, being the eldest son remaining in the family due to marriage of plaintiff no. 1 and for legal necessity, he was compelled to sell the suit land and the said transaction of sale was binding on the plaintiffs who could not have questioned the sale deed. On one of the issues, the trial Court held that Tukaram was the Karta of the family and the legal necessity was duly proved and, therefore, the sale deed was binding and could not be questioned.

The court observed that it will be revolutionary of all accepted principles of Hindu law to suppose that the seniormost female member of a joint Hindu family, even though she has adult sons who are entitled as coparceners to the absolute ownership of the property, could be the manager of the family. She would be the guardian of her minor sons till the eldest of them becomes a major, but she would not be manager of the joint family for she is not a coparcener.

Thus, the court held that a female, in normal circumstances and particularly as in the instant case when a male is available is not eligible to become a manager or Karta of the family, he being the son and, as such, it was only Tukaram the major son who was left Karta sui juris in the family. Hence, Tukaram was the only eligible and competent person of the family after the death of Nana to act as Karta/manager.

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Coparcenary property – Hindu Law – Partition – Wife cannot demand partition of joint family property – She would get a share only if partition is demanded by her husband or sons and property is actually partitioned.

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Jayamati Narendra Shah (deceased by L.Rs) and Others vs. Narendra Amritlal Shah. AIR 2014 Bombay 119.

The plaintiff was the son of the defendant (Father). The defendant’s wife, the plaintiff’s mother, expired on 10th June, 2013 leaving behind a registered will dated 2nd July 2011. The plaintiff sought administration of her estate. The plaintiff also sought disclosure of the remainder of the estate which the plaintiff had no knowledge of. The plaintiff was the sole beneficiary under the will of the deceased (Mother) which had been sought to be probated. The plaintiff claimed to be the owner of the properties bequeathed by the deceased (Mother) to him. In the suit, the plaintiff claimed partition of immovable properties that had been bequeathed to him and mandatory injunction directing the defendant to handover those properties to the plaintiff and the permanent injunctions against alienation.

The plaintiff claimed 1/2 undivided share which the deceased had in a flat. The defendant resides in that flat. The plaintiff had left that premises upon certain disputes between the parties prior to the death of the deceased.

The title of the deceased to give her a right to bequeath the property would have to be seen in the context of a HUF of her husband, the defendant herein. The husband was alive on the date of the Will as also on the date of her death. The deceased was not a widow.

In a HUF, only sons (vertically) and brothers (laterally) would constitute a coparcenary in a Joint Hindu Family. Their wives may be members of the joint Hindu family but are not coparceners. The proprietary rights are of a coparcener if the joint Hindu family owns any joint property. The wives of coparceners do not get any interest in joint property owned and held by coparceners who are co owners. The wives of the co-owners do not get any interest by virtue of their birth. It is only a Hindu widow who gets the interest of her husband in the coparcenary or joint family property upon the death of her husband. That interest enables her to claim maintenance and residence. Only a widow can demand partition of the interest which her deceased husband would have been entitled. Consequently a wife has no share, right, title or interest in the HUF in which her husband is a coparcener with his brothers, father or sons and after the amendment of section 6 of the Hindu Succession Act in 2005 with his sisters and daughters also. The wife, may be a member of a joint Hindu family. But by virtue of being a member in the joint Hindu family she cannot get any share, right, title or interest in the joint Hindu property which that family owns. A wife cannot demand partitition unlike a daughter. She would get a share only if partitition is demanded by her husband or sons and the property is actually partitioned. The claim by a wife during the life time of the husband in the share and interest which he has as a coparcener in his HUF is wholly premature and completely misconceived.

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Partnership – Dissolution of Firm – Expiry of tenure of firm – Dissolution is automatic: Section 42, 59 and 63: Partnership Act, 1932.

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Kuriachan Chacko and Ors vs. The Registrar of Firms, Office of Inspector General of Registration, AIR 2014 Kerala 109

The Registrar of firm rejected the request of the petitioners to record the amendment brought about to Clause No. 12 of Partnership Deed dated 12-11-2002, whereby the specified tenure of ‘five years’ was sought to be amended as ’30 years’ with some other modifications, which was refused to be registered on the ground that the tenure of the firm was already over in 2007. The petitioners constituted a firm in the name and style as “M/s. LIS Ernakulam.”

Admittedly, the tenure of the firm was stipulated as ‘five years’. But according to the petitioners, as per Resolution 3 dated 30-10-2006, the members of the firm, had amended Clause No. 12 of the partnership deed, stipulating that the duration of the firm shall be for a minimum period of ’30 (thirty) years’; and that the firm shall not stand dissolved on the death of any of the partners and shall continue the business of the firm with the legal representatives of such deceased partner’s. The petitioners contend that, even though the resolution was taken as early as in the year 2006, it was unfortunately omitted to be brought to the notice of the respondent, for being incorporated in the Register. The lapse was noticed only in September, 2013 and immediately thereupon, the first petitioner who is described as the Managing Trustee/Partner as per Partnership Deed, preferred representation before the respondent, also forwarding a copy of the Minutes dated 30-10-2006 and an affidavit to that effect, seeking to have the modifications incorporated in the relevant Register. After considering the request, it was rejected by the respondent as mentioned hereinbefore, which in turn is under challenge in the Writ Petition.

The Hon’ble Court observed that the point to be considered is whether resolution stated as taken on 30-10-2006, amending Clause 12 of Deed of Partnership, modifying the tenure of the firm from five years to 30 years could be directed to be incorporated in the Register, for the reason that sub-Rule (2) of Rule 4 of the Partnership (Registration of Firms) Rules 1959 has been declared as illegal and ultra vires and struck off from the relevant Rules.

Evidently, sub-Rule (2) of Rule 4 of the Rules prescribes a time limit of 15 days from the occurrence of the event with reference to statement/notice in relation to the firm under s/s. 60, 61, 62, 63(1) and 63(2). Section 60 deals with recording of alteration in firm name and principal place of business. Section 61 is in respect of noting of closing and opening of branches. Coming to Section 62, it is in respect of noting of changes in names and addresses of the partners. Section 63 deals with recording of changes in and dissolution of the firm. Even a plain or casual reading is enough to hold that the situations contemplated under s/s. 60, 61 and 62 are not attracted to the situation of the case in hand.

On expiry of tenure of firm, dissolution is automatic. Amendment of tenure from five years to 30 years was not brought to notice of Registrar nor incorporated in Register at time firm was in existence. Amendment sought to be incorporated subsequent to dissolution cannot be allowed as the firm stood automatically dissolved and lost colour and characteristics of a registered firm. Therefore, refusal to incorporate amendment was proper.

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Co-operative Society – Membership – Discretion to refuse Membership to person not duly qualified – Not violative:Of Art 19(1)(c) Constitution of India and section 24(1): Gujarat Co-op Soc. Act, 1962

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Laxmi Niwas Co-op Housing Soc. Ltd. vs. District Registrar & Ors AIR 2014 Gujarat 159 (Full Bench) The appellant is a Co-op Society registered under the Gujarat Co-op Society Act.

A Society validly constituted under the provisions of the Act has the right to admit any new member provided such member is duly qualified for admission under the provisions of the Act. Rules and the Bye laws of such society. Subsection (1) of section 24 however, gives a discretion to the Society to refuse admission to a new member who has applied and has requisite qualifications, subject however, that sufficient cause exists for refusing such membership. What is `sufficient cause,’ although, has not been defined under the Act, sub-section (3) of section 24 makes it mandatory for the society to give reasons in writing within a specified period and in terms of the scheme provided in sub-section (4) to sub-section (6), such reason is subject to challenge before the Registrar by way of an appeal. Although sub-section (6) of section 24 states that decision of the Registrar under sub-section (4) shall be final and shall not be called in question in any court, it is well settled that such provision does not stand in the way of the High Court for exercising judicial review. Decision of the Society being subject to appeal before a statutory authority and being subject to further judicial review before the concerned High Court under Article 226 of the Constitution of India, none of the aforesaid provisions of section 24 can be said to be ultra vires any of the provisions of the Constitution of India.

Further, providing for the deemed membership to a person, who is not communicated the decision of the society to which he is seeking the membership within a period of three months, as provided in section 22(2) of the Act, does not violate Article 19(1)(c) of the Constitution of India. There are several such deeming provisions in various statutes and it is a consistent view of the courts that such provision is valid provided the applicant has the requisite qualifications. Thus, the provisions of section 24 or section 22(2) of the Act do not violate any of the provisions of the Constitution.

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Appellate Tribunal – Rectification of Mistake –Issue of limitation of demand raised but not considered – Rectification justified – Section 35C(2) of Central Excise Act, 1944.

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Commissioner of C. Ex. Mumbai III vs. N.T.B. International Pvt. Ltd. 2014 (302) ELT 481 (Bom.)

The
question that arose in the appeal was whether or not the exercise of
jurisdiction u/s. 35C (2) of the Act by the Tribunal to rectify an error
is justified .

By a final order dated 1st September, 2004
passed u/s. 35C of the Act, the Tribunal inter alia, upheld the duty
demand of Rs. 42.07 lakh. On 27th December 2004, the Respondent-Assessee
filed an application for rectification of mistake u/s. 35C(2) of the
Act seeking to rectify the order dated 1st September 2004. In its
rectification application, the Respondent-Assessee pointed out that
though the issue of limitation was raised before the Tribunal and also
urged at the hearing, the order did not deal with the same, thus leading
to an error apparent from the record warranting rectification of the
final order dated 1st September, 2004 of the Tribunal.

On 20th
December, 2005, the Tribunal after hearing the parties, allowed the
application for rectification of the mistake and held that the longer
period of limitation was not invocable in the present facts.
Consequently, the duty demand was reduced on appeal by revenue.

The
Hon’ble Court observed that the jurisdiction of the Tribunal u/s.
35C(2) of the Act is to rectify mistakes apparent from the record i.e.,
the mistake must be obvious and selfevident. The discovery of mistakes
must not require a long process of reasoning. The question whether there
is a mistake in the order sought to be rectified or not should not be a
subject of debate. Once a mistake is brought to the notice of the
Tribunal, it is duty bound to correct the mistake in its order, where an
issue has been argued and/ or submission made on the issue and the same
is not recorded and/or considered in the order, it follows that there
is a mistake apparent from the record.

Thus, non-consideration
of an issue urged before the Tribunal but not dealt with by it would
give rise to a mistake apparent from the record.

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Advocate appearing as litigant in person – Is not practicing his profession – Cannot be permitted to argue with his robes: Section 30: Advocates, 1961.

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R. Muthukrishnan vs. UOI & Ors.AIR 2014 Madras 133.

The petitioner in the writ petition is an Advocate and the writ petition has been designed as a Public Interest Litigation with a prayer to issue a writ of Declaration, declaring that the Direct Benefit Transfer Scheme for Liquefied Petroleum Gas announced by the Union of India is inconsistent with public law and constitutional requirements. When the case was posted for admission, the petitioner appeared in person with his robes. The petitioner was asked as to whether he being the petitioner in this writ petition would be entitled to argue with his robes. The petitioner insisted that he is an Advocate enrolled with the Bar Council of Tamil Nadu and in terms of the Rules framed under the Advocates Act, in particular the Rules governing Advocates given in Appendix I of the Rules, is duty bound to wear Bands and Gown while appearing, failing which he would be contravening the statutory provisions and therefore, was entitled to represent the matter with his robes. On such insistence, this Court framed the following preliminary question for consideration:-

Whether an Advocate is entitled to argue in a PIL, with his robes, on the ground that he is appearing as an advocate, or is entitled to argue with his robes when he is a petitioner in person in a Public Interest Litigation.

The Hon’ble Court observed that the contention raised by the petitioner is thoroughly misconceived. In the present case, the petitioner is appearing before the Court not as an Advocate of an any party, but on behalf of himself as he is the sole writ petitioner in the writ petition. Though the prayer in the writ petition is designed as a Public Interest Litigation, it is the specific case of the petitioner that he is also aggrieved and like him there are several others and therefore, he has filed this writ petition. If such is the case, we have no hesitation in holding that the petitioner himself is the litigant and he shall not be entitled to any rights and privileges as an Advocate while appearing in person for his own cause.

The Court further observed that a person cannot appear or plead before a Court of law in dual capacity, one as party and other as an Advocate and if an Advocate is appearing as party-in-person, he should in order to maintain the norms and decorum of the legal profession, appear before the Court of law as party in person putting off the band and robes prescribed for legal practitioner.

The Petitioner pleading his own cause though under the guise of a Public Interest Litigation, cannot seek recourse to any of the provisions of the Advocates Act, more particularly section 30 of the Act, inasmuch as no question has arisen as regards the right of the petitioner under the provisions of the Advocates Act and no rights conferred on him under the Act has been denied to him, while he is appearing in person. The word “practise” connotes exercise of a profession and when the petitioner an Advocate is a litigant in person, he does not practise his profession and therefore, he is not entitled to argue his case with his robes.

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Right to Information – School run by Society– Society covered under the Act. : Right to Information Act, 2005.

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Shahada Taluka Co-op. Education Society vs. Kalyan Sajan Patil 2014 (301) E.L.T. 234 (Bom.)(HC)

It is the case of the petitioner, Shahada Taluka Co-operative Education Society Limited, that the said society has been registered under the provisions of the Cooperative Societies Act in the year 1952 i.e., prior to coming into existence in the Maharashtra Cooperative Societies Act and the said registration is continued inadvertently and later on in the year 1955, it came to be registered under the provisions of the Bombay Public Trust Act, 1950.

It is the case of the petitioner society that on 16.03.2011, the respondent No.1 herein submitted an application seeking information under the Right to Information Act, 2005 before the petitioner society in the capacity of Chairman of the Shahada Taluka Co-operative Education Society.

It is the contention of the petitioner society that, as the petitioner society is registered under the Societies Registration Act and under the Bombay Public Trust Act, as per the Right to Information Act the petitioner society does not fall under the definition of “public authority”, and hence the petitioner society is not duty bound to supply information sought by the respondent No.1.

The Court observed that it was not in dispute that the schools run by the petitioner society are receiving grant in aid from the State Government. The distinction which is sought to be made by the counsel for the petitioner is that the petitioner is the Chairman of the Shahada Taluka Cooperative Education Society and the information sought is in respect of the affairs of the society and not about the school which is receiving grant in aid directly in the account of the Head Master, and therefore, the petitioner is not obliged to give information sought for. It clearly appears that the Shahada Taluka Cooperative Education Society is established for imparting education. The sole purpose of forming such society is for establishing school and imparting education.

Therefore, the distinction which is tried to be made by the petitioner, as aforementioned, needs no consideration. Though the Information Officer is appointed, the petitioner, when called upon to furnish the information, is bound to supply the same to the respondent No.1.

By way of impugned order, only direction is issued to the petitioner to furnish the information as sought by the respondent no.1 within 15 days. Acceptance of the interpretation of the arguments of the petitioner that information sought is in respect of affairs of the society and not in respect of the school receiving grant in aid, would defeat the object of introducing the Right to Information Act, 2005. The Right to Information Act, 2005 has been introduced with laudable object and said cannot be defeated by accepting narrow interpretation as canvassed by the petitioner.

In that view of the matter, the contention of the petitioner was not accepted.

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Registration – Document not compulsorily registrable: Registration Act, 1908.

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Brahaman Swarnkar Samaj, Pali & Others vs. Medh Kshatriya, Swarnkar Samaj Vikas Samiti, Pali & Another AIR 2014 Raj. 37

The respondent No.1 – plaintiff filed a suit for cancellation of a trust deed, getting it declared void and for permanent injunction against the petitioner-defendants, inter alia, seeking relief for cancellation of the trust deed registered on 31- 05-1997 by the defendant Samaj and permanent injunction in the nature of non-interference in the right of the plaintiff to worship in the temples, which were subject matter of the trust deed. The suit was, inter alia, founded on an agreement dated 15-07-1968 said to have been executed qua the temples between the parties.

The said document dated 15-07-1968 was filed and the same was sought to be exhibited in evidence; petitioner No.1 filed the application, inter alia, with the averments that as in the document dated 15-07-1968, there is a version relating to the property being joint, the same is undervalued and requires registration u/s. 17 of the Registration Act, 1908 and as the document has been undervalued and is unregistered, the same cannot be led in evidence and cannot be marked as an exhibit; it was prayed that it be held that the document was inadmissible.

The Court observed that a bare reading of the document dated 15-07-1968 reveals that the parties therein have termed the same as writing between two temples and further goes on to state that the said both temples have been joint from the beginning and the same would remain so in future also.

The contents of said document, which start with an indication that both the temples are joint merely indicate the existing state of affairs, as on the date of executing the document, recites the status from before the execution of the document and as to what was to continue in future. As per the said document, the property i.e., the temples in question were joint from the beginning and would continue to remain so, does not bring into existence any new state of affairs different from what was existing. The document thereafter merely goes on to indicate that none of the two Samaj would claim exclusive possession and both would be entitled to spend money on the said temples, but would not claim reimbursement of the same.

For a document to be compulsorily registrable u/s. 17(1)(b) of the Act of 1908, it is necessary that the same should purport or operate to create, declare, assign, limit or extinguish whether in present or in future, any right, title or interest to or in the immovable property. So far as the creation of any right, title or interest as submitted by learned counsel for the petitioners is concerned, in view of the clear language of the document, which indicates a pre-existing right, it cannot be said that any right was ‘created’ by the said document in favour of any of the parties.

In so far as the ‘declaration’ as envisaged by section 17(1)(b) of the Act of 1908 is concerned, as the word ‘declare’ has been placed alongwith create, limit or extinguish and the said words imply a definite change of legal relation to the property by an expression of will embodied in the document referred to, the said word ‘declare’ has to be read ejusdem generis with the words create, assign or limit. For a document to fall within the ambit of 17(1)(b) of the Act of 1908 on its declaration, it must imply a declaration of will and not a mere statement of fact, as there is a clear distinction between a mere recital of a fact and something which in itself create a title.

Therefore, the document in question is not compulsorily registrable under provisions of section 17(1)(b) of the Act of 1908.

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Negligence-Torts–Medical Practitioner– Liability to pay damages-It does not Transcend into criminal liability as to make him liable – Section 338 of the Indian Penal Code, (1860).

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Dr. P.B. Desai vs. State of Maharashtra & Anr. AIR 2014 SC 795

In the instant case, a patient suffering from cancer was examined by the appellant, a renowned surgeon who advised an ‘Exploratory Laparotomy (Surgery)’, in order to ascertain whether the patient’s uterus could be removed in order to stop vaginal bleeding. The main allegation against the appellant was that he did not take personal care and attention by performing the operation himself. On the contrary, he did not ever bother to even remain present when another doctor started the surgical procedure and opened the abdomen. Moreover, when the other doctor, on opening of the abdomen, found that cancer was at a very advanced stage and it would not be possible to proceed because there was fluid and intestines were plastered, he called the appellant for advice. Even then the appellant did not examine the patient minutely. Instead, after seeing her from the entrance of the operating room, he advised him to close the abdomen. So such so, even after the formation of the fistula and the pathetic condition of the patient, the appellant never bothered to examine or look after her. It was thus alleged that the aforesaid acts of omission and commission amounted to professional misconduct as well as an offence punishable u/s. 338 of the I.P.C. Since there was no overt act on the part of the appellant, as the surgical procedure was performed by another doctor, the charge of abetment u/s. 109 of I.P.C. was also leveled against the appellant. Held, the decision of the appellant advising Exploratory Laparotomy was not an act of negligence, much less wanton negligence, and under the circumstances it was a plausible view which an expert like the appellant could have taken, keeping in view the deteriorating and worsening health of the patient. As a consequence, opening of the abdomen and performing the surgery cannot be treated as causing grievous hurt. It could have been only if the doctors would have faltered and acted in a rash and gross negligent manner in performing that procedure. At the same time, his act of omission, in not doing the surgery himself and remaining absent from the scene and neglecting the patient, even thereafter, when she was suffering the consequences of fistula, is an act of negligence and is definitely worthy of blame (though that is not the part of criminal charge). However, the omission is not of a kind which will give rise to criminal liability. No doubt, he did not do it himself, but it is not the case of the prosecution that another doctor did not do it deftly either. It is because of the condition of the patient, the surgery could not be completed, as on the opening of the abdomen, other complications were revealed. This would have happened in any case, irrespective of whether the abdomen was opened by another doctor or by the appellant himself. The appellant’s omission in not rendering complete and undivided legally owed duty to the patient and not performing the procedure himself has not made any difference. It was not the cause of the patient’s death which was undoubtedly because of the acute chronic cancer condition. The negligent conduct in the nature of omission of the appellant is not so gross as to entail criminal liability on the appellant u/s. 338 of the I.P.C. Thus, though the conduct of the appellant constituted not only professional misconduct for which adequate penalty has been meted out to him by the Medical Council, and the negligence on his part also amounts to actionable wrong in tort, it does not transcend into a criminal liability, and in no case makes him liable for offence u/s. 338, I.P.C. as the ingredients of that provision have not been satisfied.

If the patient has suffered because of negligent act/omission of the doctor, it undoubtedly gives the right to the patient to sue the doctor for damages. This would be a civil liability of the doctor under the law of tort/contract.

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Market Value – Sale Deed-Stamp Duty-Circle rate by itself does not provide true market value of property: Stamp Act, 1899.

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Amit Kumar Tyagi & Another vs. State of U.P. & Others AIR 2014 All 40

The issue raised in the petition was that the authorities have determined market value of the property by enhancing it by 25% without giving any reason.

The instrument was executed and registered on 13-08-2010 in respect of the house’s total area of 252.42 sq. mtrs. The proceedings u/s. 47-A(iv) of Indian Stamp Act, 1899 were initiated pursuant to a spot inspection made by the Additional District Magistrate, Finance and Revenue, Ghaziabad and his report dated 20-10-2010, stated that the value set forth in the instrument appears to be less than the minimum residential circle rate prescribed by the Collector and, therefore, the proceedings for determining market value should be initiated.

The same officer, who submitted the inspection report dated 20-10-2010 and at whose instance the proceedings were initiated, took upon himself to consider the matter finally u/s. 47-A(4) and passed order dated 23-02-2011. He held that 25% should be added to the circle rate prescribed at the relevant point of time and accordingly thereto, the market value of the property comes to Rs. 68,47,060/-, whereupon the the stamp duty payable is Rs. 4,79,300/- and since only Rs. 3,91,000/- has been paid, therefore, there was a deficiency of stamp of Rs. 88,300/-.

It is contended that on the one hand, the Assistant Collector suggested that the stamp duty was to be paid according to the prescribed circle rate/ market value of the commercial land, but while passing the impugned order he has increased the value by 25% from the circle rate for which no reason has been assigned at all. On this ground, the petitioners challenged the order.

The Hon’ble Court observed that it goes without saying that proceedings u/s. 47-A(4) can be initiated only when there exists a ground that the correct market value has not been set forth in the instrument. The determination of market value does not depend on the fancy, imagination and conjectures of the Collector or any other competent authority.

The Court further observed that under the provisions of the Act, 1899 stamp duty is payable on the market value of the property in transacted by the sale deed. It is also true that the market value does not mean the circle rate itself but it is only a guiding factor. The Collector has to determine the market value taking into account various factors. In the case in hand, the Additional Collector has simply referred to the circle rate and in a mechanical way, passed the impugned order enhancing the circle rate by 25%.

U/s. 47-A of the Act, the obligation is on the Collector to find out the correct market value of the property which is alleged to have not been mentioned in the instrument. For the purpose of determining the market value, no machinery is provided in statutory provisions. However, a procedure has now been provided vide U.P. Stamp (Valuation of Property) Rules, 1997 (hereinafter referred to as the “1997 Rules”) in accordance whereto the Collector would determine the market value.

The term “market value” has not been defined under the Act. However, there are some precedents laying down certain guidelines as to how and in what manner a market value would be determined. The consensus is that the market value of any property is the price which the property would fetch or would have fetched if sold in the open market, if sold by a willing seller, unaffected by the special need of a particular purchaser. It is interesting to note that the Act provides first for the determination of minimum value of the property and further says that if the market value of the property set forth in the instrument is less than the minimum value determined under the Act, then before registering the instrument the registering authority shall refer the instrument to Collector for determination of the market value of the property and the proper duty payable thereon. Therefore, a market value of the property in all cases cannot be said to be higher than the minimum value determined under the rules by the concerned authority, inasmuch as, it is only a kind of guideline provided to the authorities for the purpose of considering as to whether the proper stamp duty is being paid by setting forth the true market value of the property in question in the instrument. The entire object of legislature in the various provisions of the Act is to require the parties concerned to set forth the correct market value of the property at which the transaction has taken place so that appropriate duty in accordance with the Act is paid by them. The various provisions with respect to the minimum value etc. are only in aid and assistance of the authorities to find out the true amount of consideration on which the parties have entered into transaction so that the correct duty is collected therefrom.

It is thus clear that the circle rate by itself does not provide a true market value of the property, which is the subject matter of the instrument. It is only a guiding factor. In the present case, interestingly, the proceedings were initiated on the assumption that the stamp duty has not been paid according to the prevailing circle rate/market value treating the market value at par with the circle rate, but when the impugned order has been passed instead of confining to the circle rate, the Additional Collector has gone on to increase the value by 25% further to the prescribed circle rate and in doing so he has not given any reason. The proceedings in question show a complete nonapplication of mind on the part of the authorities. Such proceedings are nothing but amounting to a sheer harassment of public at large and in particular, the person who actually suffers due to such whimsical order passed by the authorities. A serious statutory duty has been cast upon the respondents but instead of doing justice with their statutory requirement, the authorities are passing unmindful, arbitrary orders, whereby not only the large public is being harassed but it also results in burdening the Courts though such litigation otherwise could have been avoided. The petition was allowed.

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Interpretation – Three months – Does not mean 90 days – Bar of Limitation – Application filed on next day after limitation period due to holiday on the said date – Not barred by limitation.

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Subodh Chandra Dash vs. M/s. B. Engineers & Builders Ltd., Bhubaneswar AIR 2014 Orissa 50

An agreement was executed between the parties. The bills were submitted by the petitioner, but they were not settled. The Arbitrator was appointed and the award was passed by the Arbitrator in favour of the petitioner. On 28- 01-2008, the opposite party obtained copy of the award. On 29-04-2008, Arbitration Petition was filed by the opposite party before the learned District Judge, Bhubaneswar u/s. 34 of the Arbitration and Conciliation Act, 1996. The opposite party filed objection to the said petition. The impugned order was passed on 18-08-2011 holding that the application filed u/s. 34 of the Act is within time.

The sole question that arose for consideration in the application is, whether the limitation of three months as provided in section 34 proviso to s/s. (3) of the Act should be calculated as ninety days.

The Court observed that in the case of State of H.P. and another vs. Himachal Techno Engineers and another,: 2010 SAR (Civil) 711, wherein the Supreme Court held that to equate 90 days to the expression of “three months” mentioned in section 34(3)of the Act is erroneous. The Supreme Court further held that a ‘month’ does not refer to a period of 30 days, but refers to the actual period of a calendar month. If the month is April, June, September or November, the period of the month will be thirty days. If the month is January, March, May, July, August, October or December, the period of the month will be thirty-one days. The Supreme Court further held that if the month is February, the period will be twenty-nine days or twentyeight days depending upon whether it is a leap year or not. In the aforesaid case, the Supreme Court further held that section 12 of the Limitation Act, 1963 provides for exclusion of time in legal proceedings.

The Court further held that section 9 of General Clauses Act, 1897 provides that in any Central Act, when the word ‘from’ is used to refer to commencement of time, the first of the days in the period of time shall be excluded. Therefore, to apply the said principle to the present case, while calculating the date of limitation, the date on which the copy of the award has been received by the opposite party i.e., on 28-01-2008 shall be excluded from computation of the limitation.

Therefore, computing the period of limitation from 29-01-2008, 3 days of January, 29 days of February (as 2008 was a leap year), 31 days of March and 28 days of April shall be included in the limitation. Thus, a total period of 91 days is the period of limitation for the present opposite party to prefer an application u/s. 34 of the Act. However, it was not disputed that the period of limitation ended on 28-04-2008. However, the application was filed on 29-08-2008. Therefore, it is seen that there is delay of one day in preferring the application u/s. 34 of the Act. However, it is not disputed that 28-01-2008 was a holiday, because the same was Lawyer’s Day, it is a holiday observed in the State of Odisha. Therefore, the application was filed on 29-01-2008 and is not barred by limitation.

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Hindu Succession-Co-parcenary property – Rights of daughter – Section 6, Hindu Succession Act 1956

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Pratibha Rani Tripathy and Anr vs. Binod Bihari Tripathy & Ors. AIR 2014 Orissa 74

The Appellants had filed an appeal for partition of the immovable & movable properties as described in Schedules-‘ A’ & ‘B’ of the plaint and for recovery of possession of the Schedule-‘C’ properties.

The late Shri Durga Charan Tripathy was the son of the Defendants 1 & 2. He was married to Plaintiff No. 1 as per the Hindu rites and customs and the Plaintiff No. 2 was born out of their wedlock on 16-12-2000. Durga Charan Tripathy expired on 29-06-2002. The suit land, which was the ancestral property of the Defendant No. 1 & his deceased son, was never partitioned between them at any point of time. After the death of Durga Charan Tripathy, the Plaintiffs & Defendant No. 2 succeeded to the interest of Durga Charan Tripathy over the Schedule ‘A’ property i.e., the land.

During the course of the hearing of the appeal, the Defendant Nos. 5 & 6, who are daughters of Defendant Nos. 1 & 2 & sisters of late Durga Charan Tripathy, have filed a cross objection, inter alia, claiming that they have equal share in Schedule ‘A’ property with their late brother Durga Charan Tripathy to which they are entitled to in view of the amendment of the Hindu Succession Act, 1956 by the Hindu Succession (Amendment) Act 2005. Admittedly, the said amendment came into force with effect from 09- 09-2005 i.e., during pendency of the suit.

The moot question, therefore, arose as to whether after amendment of the Hindu Succession Act in the year 2005, the Court below should have held that the Defendant Nos. 5 & 6 (daughters) have equal share with their brother late Durga Charan Tripathy in the property along with their mother Defendant No. 2.

The Hon’ble Court observed that, by the date the suit was disposed of i.e., in the year 2007, the amendment had come into force. Hence, the amended provisions of section 6 of the Hindu Succession Act with regard to right of the daughter will operate in the instant case as there has been no partition effected prior to 20-12-2004 as per s/s. (5) of the said section. Thus, the Trial Court, while determining the share of the parties over the joint family property described in Scheduled ‘A’, should have considered the amendment brought into the Hindu Succession Act by the commencement of the Hindu Succession (Amendment) Act 2005. Applying the aforesaid provision of section 6 as well as the amendment to section 23 of the Act, it would be seen that late Durga Charan Tripathy along with Defendant Nos. 1 & 2 & Defendant Nos. 5 & 6 would have been entitled to equal share in Schedule ‘A’ property & therefore, each of them would have got 1/5th share. 1/5th Share of late Durga Charan Tripathy is succeeded by the Plaintiffs as well as Defendant No. 2.

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Evidence – Printout generated from computer seized not admissible for non fulfillment of statutory conditions: Section 138C customs Act:

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Agarvanshi Aluminium Ltd vs. Commr. Of Cus. (I) NHAVA Sheva; 2014 (299) ELT 83 (Tri. Mum)

The brief facts of the case are that the importer imported aluminium scrap during the period July, 2004 to June, 2006 through various ports. The total quantity of aluminium scrap imported was 3889.998 MTs and the value declared was Rs. 23,84,81,992/-. The DRI, which investigated the imports, came to the conclusion that the appellant had misdeclared the value of imports and the actual value of imports amounted to Rs. 28,40,85,648/- and accordingly issued a show cause notice dated 31-12-2007 demanding differential duty of Rs.1,40,76,571/-.

This demand of duty was based on the evidence unearthed from the indenting agents premises involving differential duty of Rs. 48,80,774/- contemporaneous value of imports involving duty of Rs. 42,06,213/- and on the basis of LME prices minus permissible discount involving a duty of Rs. 49,89,584/-.

The appellant submitted that the demands towards differential duty is based on computer printouts recovered from the premises of the indenting agent (Shri Purshottam Parolia) cannot be relied upon as per section 138C of the Customs Act, 1962. As per the said provisions, the computer printouts can be taken as evidence only subject to fulfilling the terms and condition specified in the section and same have not been complied with in the instant case. The Hon’ble Tribunal observed that in this case, demands have been confirmed against the importer on three counts:

(a) On the basis of computer printout and statement of the indenter and the partner of the importer.
(b) On the basis of contemporaneous imports and
(c) On the basis of LME price,

As per the panchnama, in the list of the documents seized, initially the list of document typed was till Sr. No. 99, thereafter five items were added in handwritten form and Sr. No. 103, it is mentioned that four computer units without any mouse, keyboard, monitor and other accessories i.e., peripherals is mentioned. In the panchanama, the description of the item i.e., make, model, serial no. of the CPU were not mentioned. Moreover, they are handwritten and other 99 items are typed. Further, it was found that as per the panchanama, 4 CPU were seized, but as per the report of Directorate of Forensic Science, computers are found to be five in number and printouts are taken from these five CPUs which has been relied on in the impugned order. Therefore, the veracity of the panchanama is doubtful.

From the above provisions, it was clear that for admissibility of computer printout there are certain conditions which have been imposed in section 138C. Admittedly, the condition of the said section has not been complied with.

The Tribunal relied on the decision in case of Premier Instruments & Control Ltd. (2005) 183 ELT 65 (Trib.) wherein it was held that “computer printout were relied on by the adjudicating authority for recording a finding of clandestine manufacture and clearance of excisable goods. It was found by the Tribunal that printouts were neither authenticated nor recovered under Mahazar. It was also found that the assessee in that case had disowned the printout and he was not even confronted. The Tribunal rejected the printouts and the revenues finding of clandestine manufacture and clearance. Thereafter, it was found that there is a strong parallel between the instant case and the case cited. Nothing contained in the printout generated by the PC can be admitted as evidence for non- fulfillment of the statutory condition”.

Therefore, the printout generated from the PC seized cannot be admitted into evidence for non-fulfillment of statutory condition of section 138C of the Customs Act, 1962.

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Development Agreement – Conditional sale – Suit by developer for specific performance – maintainable: Contract Act section 202 and 204, Transfer of property Act 1882, section 54

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Ashok Kumar Jaiswal vs. Ashim Kumar Kar AIR 2014 Calcutta 92 (FB)

A development agreement is in the nature of an agreement for sale subject to certain conditions. It is an agreement for a conditional sale. A suit at the instance of a developer (where the developer is the non-owner party to a development agreement) is not prohibited by section 14(3) (c) of the Specific Relief Act, 1963.

A contract between a developer and an owner would also consist of reciprocal rights and obligations. It would be preposterous to say that only the owner can maintain a suit against the developer for enforcing his rights and not vice versa. If the developer has a right under the contract, he must have a remedy in the form of approaching a forum for grievance redressal. This is not to say that the developer will necessarily succeed in such a legal action. A question of maintainability of a suit is completely different from the question of whether the suit will succeed or not on the facts of the case and in the light of the applicable law. Section 14(3)(c) of the Specific Relief Act can in no manner be interpreted as debarring a developer from approaching the legal forum for redressal of his grievance. To that extent, a suit at the instance of a developer is maintainable and not barred by section 14(3) (c) of the Specific Relief Act.

Ordinarily, a Power of Attorney executed by an owner in favour of the developer for effectuating the terms and conditions of the development agreement does not give a bare agency to the developer but it gives the developer an interest in the property which forms the subject-matter of the agency. However, merely because such a power of attorney gives the developer such an interest, it cannot be said that the agency cannot be revoked or terminated. Further, merely because such a power of attorney may be revoked, it would not imply that the development agreement can otherwise not be specifically enforced if the facts in a particular case so warrant

Section 53A of the Transfer of Property Act would suggest, if a proposed transferee of an immovable property under an agreement for sale is put in possession and continues in possession in part performance of the contract and does some act in furtherance of the contract and is willing to perform the balance part, his possession would be protected and the transferor would be debarred from dispossessing him other than under a right expressly provided by the terms of the contract. If a developer files a suit for specific performance of a contract and the owner files a suit for recovery of possession, one may have to dismiss both on different logic. A court of law is duty-bound to resolve the controversy that is brought before it, as far as practicable. The Court of law is not entitled to complicate the issue by making the controversy more complicated.

Section 202 of the Indian Contract Act 1872, provides that when the agent had interest in the property under the agency agreement in the absence of an express provision, the contract could not be terminated to the prejudice of such interest. Section 203 permits the principal to revoke the authority of his agent. However, when the agent partly exercised his authority, such revocation would not be permissible u/s. 204. If one reads these three provisions together, one would find that the Power of Attorney so revoked by the owner should not be looked at in an isolated manner. The Power of Attorney generally issued to the developer, is in continuation of the original agreement for development of the property, meaning thereby, that the developer who was entrusted to develop the property would be given authority to further act, as per the contract, including dealing with the property to the extent permissible under the contract. Hence, the Power of Attorney was nothing but an agency agreement executed in furtherance of the original contract.

If the original contract creates an interest in favour of the developer even if the Power of Attorney is revoked such interest would not evaporate.

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Settlement Deed – Cancellation – Registered Settlement deed cannot be cancelled by executing cancellation deed: Transfer of Property Act, 1882, section 9:

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V. Ethiraj vs. S. Sridevi & Ors.; AIR 2014 Karnataka 58

Once, the settlement deed was executed by mother in favour of her daughter, mother lost her right, title and interest in the schedule property. Subsequently, on the day mother executed cancellation deed, she had no right in the property. The registered settlement deed cannot be cancelled by executing a cancellation deed. If at all the said document is to be canceled, it had to be done under the provisions of Specific Relief Act, by approaching a competent civil Court for cancellation of such document. If the fact of fraud, undue influence, mistake or any other ground which is alleged for cancellation of the said documents is proved, the Court may order for cancellation. That is the only mode known to law to cancel the registered settlement deed. Otherwise, the parties by consent have to annul the settlement by executing the document of reconveyance. Therefore, by execution of the cancellation deed, the registered settlement deed did not stand cancelled. Unilaterally, the settler cannot execute a cancellation deed of settlement.

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Hindu Undivided Family – Not in existence prior to the coming into force of Hindu Succession Act, 1956 – Suit for Partition – Suit not maintainable

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Sushant vs. Sunder Shyam Singh AIR 2014 (NOC) 90 (Del.)

A Hindu Undivided Family was not in existence prior to the Hindu Succession Act coming into force. The Properties in question, inherited by the deceased owner on the demise of his father, would become his persona properties. The son of the deceased owner would not acquire any coparcenary share in the properties till the owner was alive. The suit property would devolve on the son of the deceased in his individual capacity on the death of the owner. Therefore, the claim of the grandson of the deceased for partition of suit properties on the grounds that the same were ancestral, was held not maintainable.

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Instrument – Chargeability to stamp duty – Document executed before Notary – Creating rights in land – Stamp Act, 1899, section 17, 2(14)

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Om Prakash Umar vs. State of U.P. through Secretary Fund & Revenue Dept. U.P. Shashan, Lucknow & Ors ARI 2013 Allahabad 209

A document before the Notary was executed on 14-12- 2009 by one Mr. Mahadeo and others by which they withdrew their rights on the abadi land admeasuring 80 ft. x 70 ft. and transferred them in favour of the petitioner for a consideration of Rs. 50,000/- only. The aforesaid document was written on a stamp paper of Rs. 150/- only. The Additional Commissioner (Stamp) vide order dated 18-04-011 held the above document to be an instrument of conveyance and assessing its market value determined the deficiency in stamp duty and imposed a penalty. The appellate authority affirmed the aforesaid order vide its order dated 25-11-2011.

The above two order dated 25-11-2011 and 18-04-2011 were under challenge by way of writ petition before the Allahabad High Court. The Hon’ble Court observed that section 17 of the Indian Stamp Act, 1899 provides that all instruments chargeable with duty and executed by any person in the India shall be stamped before or at the time of execution. Therefore, stamp duty on an instrument is payable at the time of execution of the instrument. The moment an instrument is executed stamp duty is payable on it. The validity of its execution or its non-registration has nothing to do with its execution and consequently the payment of stamp duty.

An instrument as defined u/s. 2(14) of the Act includes every document and record by which any right or liability is, or purports to be created, transferred, limited, extended, extinguished or recorded. The above document executed before the Notary, with whatever name it may be called, creates rights in the land in favour of the petitioners, after extinguishing those of Mr. Mahadeo and others therein. It is, therefore, undoubtedly, an instrument as defined u/s. 2(14) of the Act.

In view of the aforesaid facts the aforesaid document dated 14.12.2009 is an ‘instrument’ within the meaning of Section 2(14) of the Act and its execution is not denied, it is chargeable to stamp duty.

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Evidence – Commission of Enquiry – Statements made before commissioner cannot be used as evidence before civil or criminal court – Conclusions based on such statements cannot be used as Evidence:

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SBI through General Manager vs. National Housing Bank & Ors(2013) 180 Comp. Cas 15 (SC)

The National Housing Bank drew a cheque on 3rd January, 1992, for an amount of Rs. 95.39 crore approximately on the Reserve Bank of India in favour of the State Bank of Saurashtra, a subsidiary of the appellant, which later merged with the appellant. Towards the end of April, 1992, the National Housing Bank found that it did not possess any bank receipts or supporting documents or any securities in respect of such transaction and addressed letters to the State Bank of Saurashtra requesting it to make delivery of bank receipts/securities or for return of the amount. The state bank of Saurashtra denied the existence of any “outstanding transaction”. The National Housing Bank filed a suit before the Special Court established under the Special Court (Trial of Offences Relating to Transactions in securities) Act, 1992 against (i) the State Bank of Saurashtra, (ii) HM, (iii) 2 employees of HM and (iv) the Custodian appointed u/s. 3(1) of the 1992 Act for recovery of an amount of Rs. 95.39 crore with interest alleging conspiracy, collusion and fraud between the defendants in the suit thereby causing loss to the National Housing Bank. The Special Court passed a decree in favour of the National Housing Bank and against the state bank of Saurashtra. The State Bank of Saurashtra challenged that part of the decree which was against, it and the National Housing Bank challenged that part of the decree of the Special Court directing it to deliver certain amounts to the Custodian:

The Hon’ble Court observed that u/s. 9A(1) of the Act, the Special Court has jurisdiction to adjudicate any matter or claim arising out of a transaction in securities entered into during the period specified in the section in which a notified person is involved in whatever capacity. Therefore, the Special Court was authorised by law to adjudicate the claim of the defendant, HM, without being shackled by the procedural fetters imposed under the code.

Further that though the 1992 Act declares that the Special Court is not bound by the Code of Civil procedure, 1908, it does not relieve the Special Court from the obligation to follow the Indian Evidence Act, 1872. The findings of even a statutory commission appointed under the Commissions of Inquiry Act, 1952, are not enforceable proprio vigore and the statements made before such commission are expressly made inadmissible in any subsequent proceedings civil or criminal. Therefore, courts are not bound by the conclusions and findings rendered by such commissions. The statements made before such commission cannot be used as evidence before any civil or criminal court. It should logically follow that even the conclusions based on such statements can also not be used as evidence in any court.

The Special Court had based its conclusions on Janakiraman Committee Report and the correspondence between the various parties (whose details are not even specified in the judgment).

The Court observed that the course adopted by the learned Judge of the Special Court of looking into the correspondence between the parties, which even according to the learned Judge had not been proved is not permissible in law. The Special Court Act though declares that the Court is not bound by the Code of Civil Procedure, it does not relieve the Special Court from the obligation to follow the Evidence Act. Further, the learned Judge extensively relied upon the second interim report of the Jankiraman Committee on the ground that the same was tendered by the 1st Defendant.

It is well settled by a long line of judicial authority that the findings of even a statutory Commission appointed under the Commissions of Inquiry Act, 1952 are not enforceable proprio vigore as held in Ram Krishna Dalmia vs. Justice S.R. Tendolkar and Ors.: AIR 1958 SC 538 and the statements made before such Commission are expressly made inadmissible in any subsequent proceedings civil or criminal.

In our view, the courts, civil or criminal, are not bound by the report or findings of the Commission of Inquiry as they have to arrive at their own decision on the evidence placed before them in accordance with law.

Therefore, Courts are not bound by the conclusions and findings rendered by such Commissions. The statements made before such Commission cannot be used as evidence before any civil or criminal court. It should logically follow that even the conclusions based on such statements can also not be used as evidence in any Court. Janakiraman Committee is not even a statutory body authorised to collect evidence in the legal sense. It is a body set up by the Governor of Reserve Bank of India obviously in exercise of its administrative functions, The Governor, RBI set up a Committee on 30th April, 1992 to investigate into the possible irregularities in funds management by commercial banks and financial institutions, and in particular, in relation to their dealings in Government securities, public sector bonds and similar instruments. The Committee was required to investigate various aspects of the transactions of SBI and other commercial banks as well as financial institutions in this regard.

The Court dismissed the suit.

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Doctrine of merger – Appeal to Appellate Tribunal – Not applicable when appeal rejected on limitation.

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Raja Mechanical Co.(P) Ltd vs. Commissioner of C. Ex, Delhi – I 2012 (279) ELT 481 (SC)

The facts in nutshell are that the assessee is a manufacturer of dutiable excisable goods. The assessee availed a MODVAT Credit of Rs. 1,47,000/- by filing a declaration dated 30-06-1995 under Rule 57T(1), whereby it declared the receipt of the goods from M/s. DGP Windsor India Ltd. vide invoice dated 18- 06-1995, alongwith the application for condonation of delay, before the adjudicating authority/assessing authority. Accordingly, the adjudicating authority had issued a show cause notice.

As there was a delay in filing the prescribed forms before the assessing authority. Therefore, the assessing authority had rejected the claim of the assessee and accordingly, had directed him for payment of the Excise duty credit availed by the assessee. Aggrieved by that order, the assessee had belatedly filed an appeal before the proper appellate authority. Since there was delay in filing the appeal and since the same was not within the time that the appellate authority could have condoned the delay, accordingly had dismissed the same. It is that order which was questioned before the Tribunal. Before the Tribunal, as we have already noticed, the assessee had requested the Tribunal to first condone the delay and next to decide the appeal on merits, i.e. to decide whether the adjudicating authority was justified in disallowing the benefit of the Modvat credit that was availed by the assessee. The Tribunal had not conceded to the second request made by the assessee and only accepted the findings and conclusions reached by the Commissioner of Appeals, who had rejected the appeal. The assessee’s stand before the Tribunal and before this Court is that the orders passed by the adjudicating authority would merge with the orders passed by the first appellate authority and the Tribunal ought to have considered the appeal filed by the assessee on merits also. In our opinion, the same cannot be accepted. In view of the plethora of decisions of this court, wherein this court has, categorically, observed that if for any reason an appeal is dismissed on the ground of limitation and not on merits, that order would not merge with the orders passed by the first appellate authority.

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Contract of guarantee and contract of indemnity – Difference – section 124 and 126, Contract Act, 1872:

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Punjab National Bank vs. Ram Dutt Sharma & Ors AIR 2013 Allahabad 198

Plaintiffs Sri Ram Dutt Sharma and his wife Smt. Saroj, instituted a Suit, impleading New Bank of India, Sri Chhote Lal Sharma, son of Sri Khacheru Singh and Smt. Saroj, wife of Sri Shiv Charan as defendants. The relief sought in the aforesaid suit was a mandatory injunction directing defendant No. 1 to auction Truck No. UHN 1077, belong to defendant Nos. 2 and 3, and in possession of defendant-Bank towards security/ guarantee against the amount of loan, advanced to defendant Nos. 2 and 3, and realise outstanding dues, before encashing Fixed Deposit Receipts of plaintiffs, lying with defendant-Bank.

The plaintiff’s case was that defendant Nos. 2 and 3 were running a transport business. They purchased a new Truck in 1985. The financial assistance in the aforesaid transaction was tendered by the Bank, advancing a loan of Rs. 1,50,000/-, against which Truck itself was hypothecated. Besides, the plaintiffs’ FDRs of Rs. 10,000/- and Rs. 70,000/- were pledged in security for a period of three years or till repayment of loan amount, whichever is earlier. There appears to be some default towards repayment of loan amount, on the part of defendant Nos. 2 and 3, but defendant No: 1, instead of realising defaulted amount from defendant Nos. 2 and 3, by sale/auction of mortgaged vehicle, proceeded to encash FDRs of plaintiffs lying in security with the bank, hence the suit.

The Hon’ble Court observed that it would be necessary to determine the nature of contract between the plaintiffs and the Bank. The contract between the Bank and respondents 3 and 4 was admittedly that of loaner and loanee. A “contract of guarantee” is defined in Section 126 of I.C. Act, 1872. It says that a “contract of guarantee” is a contract to perform the promise or discharge liability of a third person in case of his default. The person who gives the guarantee is called “surety”, person in respect of whose default the guarantee is given is called the “principal debtor” and the person to whom the guarantee is given is called the “creditor”. In case this Court found that the plaintiffs entered into a contract of guarantee with the Bank in terms of Section 126 of I.C. Act, 1872 the plaintiffs would be “surety”, respondents 3 and 4 would be the “principal debtor”, and the Bank would be “the creditor”. A guarantee, therefore, is an accessory. It is essentially a contract of accessory nature being always ancillary and subsidiary to some other contract or liability on which it is founded without support of which it must fail.

The distinction between the “contract of guarantee” and “contract of indemnity” comes out from the definitions of two. The phrase “contract of indemnity” is defined in Section 124 of I.C. Act, 1872 which states that a contract by which one party promises to save the other from loss caused to him by the conduct of promisor himself or by the conduct of any other person is called “contract of indemnity”. One of the apparent distinctions between two is that a “contract of guarantee” requires concurrence of 3 persons, namely, the principal debtor, surety and the creditor, while “contract of indemnity” is a contract between two parties and promisor enters into such contract with other party. In other words, a person who is party to a contract, if he executes a promise to other party to save him from loss on account of promiser’s conduct or by the conduct of any other person, it, is a “contract of indemnity”, while for the purpose of “contract of guarantee”, it requires presence of three parties at least.

“Surety” is always liable to the extent of precise terms of his commitment and not beyond that. In the case of “contract of guarantee”, section 128 of I.C. Act, 1872 says that the liability of surety is co-extensive with that of principal debtor, unless it is provided otherwise by the contract.

The initial term of guarantee/surety was alleged to be three years or earlier thereto till the entire loan money is paid. The loan agreement was executed in 1985. Mere renewal of FDRs does not mean renewal of contract of guarantee between the surety and creditor. After the expiry of period of contract of guarantee, there was no occasion for the Bank to proceed to retain FDRs of plaintiffs surety as a collateral guarantee against the loan amount. Lower Appellate Court, had rightly read the averments contained in the plaint vis-à-vis the contract between the surety and the creditor that the renewal of FDRs, if matured before payment, were referable to a period prior to 3 years from the date of such contract and not to the extent of period of contract beyond 3 years. To that extent, there was a clear averment that contract was only for three years or earlier thereto when the entire loan amount was paid. The word “earlier” rules out any possibility of a continuing contract of guarantee beyond 3 years.

Collateral security of FDRs was, therefore, available to the bank for a period of 3 years only and not beyond that, unless consented by surety, i.e. plaintiffs. Admittedly, no such consent was obtained by plaintiffs-surety and, on the contrary, the Bank on its own gave extension to the principal debtor in the matter of re-payment of loan amount. The appeal was allowed.

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Release Deed – Chargeability : Stamp Act, 1899:

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M. Suseelamma & Ors vs. The Chief Controlling Revenue Authority Chennai and Anr. AIR 2014 Madras 43.

The Late M. Krishnaiah Chetty had purchased the subject property from one, Sheela Devi. Subsequently, after the demise of M. Krishnaiah Chetty, who died intestate on 16-04-2000, leaving behind the appellants 1 to 7, wife, sons and daughters, as his class I legal heirs, a document, dated 09-10-2003, has been presented and numbered as 50 of 2003, on the file of the sub registrar (District Registrar Cadre), captioned as Deed of Release.

Where the husband of the appellant had purchased the subject property from its original owner by virtue of registered sale deed and husband died intestate leaving behind wife (appellant), sons and daughter as Class I heirs, then the wife, sons and daughter would inherit the property as Class I heirs in terms of the Hindu Succession Act. However, since the parties do not belong to HUF, the grandsons, when their father is alive would have no pre-existing right over property. Therefore, the release deed by appellant alongwith her sons, daughters and grandson in favour of another son was rightly treated as conveyance under Article 23 of Schedule.

In the light of section 8 of the Hindu Succession Act, the releasees 2 to 4 do not have any preexisting right over the subject property. They have not inherited any property, as per section 8 of the Hindu Succession Act. The value of the property shown in the document is Rs. 2 lakh. As per section 5 of the Indian Stamp Act, any instrument comprising, or relating to several distinct matters shall be chargeable with the aggregate amount of the duties, with which separate instruments, each comprising or relating to one of such matters, would be chargeable under the Indian Stamp Act.

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Precedent – Ratio decidendi – Must be understood in the background of the facts of the case – Judgements are not to be read as a statute: Constitution of India.

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Arasmeta Captive Power Company P. Ltd. & Anr vs. Lafarge India Pvt. Ltd. AIR 2014 SC 525

The judgments rendered by a court are not to be read as statutes. In Union of India vs. Amrit Lal Manchanda and another (2004) 3 SCC 75, it has been stated that observations of courts are neither to be read as Euclid’s Theorems nor as provisions of a statute. The observations must be read in the context in which they appear to have been stated. To interpret words, phrases and provisions of a statute, it may become necessary for Judges to embark into lengthy discussions but the discussion is meant to explain and not to define. Judges interpret statutes, they do not interpret judgments. They interpret words of statutes; their words are not to be interpreted as statutes.

Words used in a judgment should be read and understood contextually and are not intended to be read literally. Many a time a judge uses a phrase or expression with the intention of emphasising a point or accentuating a principle or even by way of writing style. Ratio decidendi of a judgment is not to be discerned from a stray word or phrase read in isolation.

In this context the following words of Lord Denning are significant.

“Precedent should be followed only so far as it marks the path of justice, but you must cut the dead wood and trim off the side branches, else you will find yourself lost in thickets and branches. My plea is to keep the path to justice clear of obstructions which could impede it.”

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Partnership firm – Unregistered – Not be barred from enforcing their rights under Transfer of Property Act: Partnership Act 1932 Section 69(2):

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Sandhya Anthraper & Anr vs. Manju Kathuria & Ors AIR 2014 Karnataka 21

Appellants who are plaintiffs/partners of an unregistered firm of M/s. Windsor Wings Developers, filed a suit against the defendants , for the relief of declaration that the registered Sale deed dated 26.04.2003 executed by defendant No. 1 is invalid, illegal and not binding on the plaintiffs, for cancellation of the sale deed and for permanent injunction restraining the defendants 2 to 5 from selling, leasing, mortgaging or otherwise alienating and interfering with their peaceful possession of the property. It is the case of the plaintiffs that the suit property was purchased in the name of the Firm. The plaintiffs suspected the conduct of the 1st defendant and they made enquiries about the suit property in the Office of the Sub-Registrar and discovered that the 1st defendant, who had no authority to sell the immovable property belonging to the Firm, without their consent had executed a sale deed dated 26-04-2003 on behalf of the Firm, in favour of the 2nd defendant for a consideration of Rs. 16,66,620/- though the property was worth more than Rs. 30,00,000/-. It is contended that the sale deed is invalid, void, fraudulent and the same is executed clandestinely with an intention of cheating the plaintiffs.

The defendants contented that the Suit is barred u/s. 69(2) of the Partnership Act. The trial Court, after hearing on the preliminary issue, answered the same in the affirmative in favour of the defendants and dismissed the Suit as not maintainable u/s. 69(2) of the Act.

Sum and substance of s/s. (1) of section 69 of the Act is that no suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any Court and the person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm.

The defendants have not pleaded that the suit is barred under s/s. (1) of section 69, but it is contended that the suit is not maintainable both under s/s. (1) and (2) of Section 69 of the Act.

The Hon’ble Court observed that the plaintiffs who are partners of the unregistered firm are neither enforcing their right arising from a contract nor the right conferred by the Act. The plaintiffs are enforcing their right under the contract of partnership deed dated 29-12-1995 and specifically Clause 25(d) which says that no partner of the firm shall, without the consent in writing of the other partners, be entitled to transfer immovable property belonging to the Firm, but the defendant No.1, as a partner of the partnership firm, has sold the suit land in favour of defendants 2 to 5. Though it is stated in sub-Clause (d) of Clause 25 of the partnership deed that no partner of the firm shall without the consent in writing of the other partner, be entitled to transfer immovable property belonging to the firm, the appellants/ plaintiffs seek to enforce their right conferred upon them under the Transfer of Property Act. It is well settled principle that a ‘partnership firm’ has ‘no separate legal entity’. It is always understood that ‘firm’ means ‘partners’, ‘partners’ means collectively a ‘firm’. Thus the property belonging to a partnership firm is the property of the partners of the firm.

In view of the above, under the Transfer of Property Act, each of the partner is entitled to claim his right to the immovable property of the firm, as co-owner. Under such circumstances, the contention that the suit filed by the plaintiffs enforcing their right under the contract of partnership deed, holds no water

As regards to s/s. (2) of section 69 no suit to enforce a right arising from a contract shall be instituted in any Court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the Register of Firms as the partners in the firm. In the instant case, there is no contract between the plaintiffs on one side and defendants 2 to 5 on the other and thus, there is no question of plaintiffs enforcing a right arising from a contract and thus the Suit is not hit under s/s. (2) of section 69 of the Act.

As per section 69(1) of the Act, an unregistered partnership firm or partners are prohibited from enforcing a right arising from a contract or the right conferred by the Partnership Act, 1932, but the provision does not take away the right of the partners of an unregistered firm to enforce their right under other enactments. According to Article 300-A of the Constitution of India, no person shall be deprived of his property save by authority of law. The property of the partnership firm, was purchased under three registered Sale deeds dated 20-01-1996 by the partnership firm, viz., M/s.Windsor Wings Developers, out of the funds of the firm. Thus, the property becomes the property of the partners and they are co-owners. Therefore, the plaintiffs are entitled for the relief sought for. Defendant No.1 has committed breach of trust, which is an offence under the Indian Penal Code. The plaintiffs are enforcing their right as co-owners of the suit property conferred under the Transfer of Property Act and the Partnership Act does not bar the partners of an unregistered firm from enforcing their right conferred under the other enactments. In other words, at the cost of repetition, it must be mentioned that what is prohibited u/s. 69 of the Act is enforcement of contract of partnership, provisions of the Partnership Act, 1932 and enforcement of right arising from a contract (between the firm and third party) and not the rights conferred under the other enactments. Therefore, the trial Court erred in dismissing the suit as barred by s/s. (2) of section 69 of the Partnership Act, 1932.

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Lease – Amount of security deposit – No stamp duty on security deposit. Stamp Act 1899, Article 35(c):

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Moideen Koya vs. K. Girish Kumar & Anr. AIR 2014 Kerala 30

A lease agreement was executed between the landlord and the tenant on 29-09-2010, in which the monthly rent payable was fixed as Rs.3,500/. An amount of Rs. 50,000/- was given by the tenant as security deposit which was refundable on termination of the lease. The Rent Control Court refused to mark the lease agreement for the reason that the same was under stamped and the court ordered payment of the stamp duty alongwith penalty for security and the rent payable as per the lease agreement.

The legal question therefore arose as to whether Article 33(c) will cover a refundable security provided in a lease agreement, even though the same is adjustable towards the rent in arrears.

The Government letter dated 24-02-1983 addressed to the Inspector General of Registration reads as follows:

“In supersession of the instruction issued in Govt. letter No. 18769/E2/75/TD, dated 15-12-1975 and in accordance with the decision of the Delhi High Court in AIR 1980 Delhi 249, the following principles may be observed while classifying lease deeds.

(1) Duty is not chargeable under Article 35(c) of Schedule IA of the Indian Stamp Act, 1899 on the amounts of security/deposit/advance, which is refundable on determination of the lease, in addition to the duty paid on the rent reserved under Article 35(a) of the Schedule.

(2) It will not make any difference in the changeability of duty, if such deposit/advance is adjustable in rent/other charges dues payable under the lease.

(3) The amount of security deposit paid for the due performance of the contract of lease is chargeable under Article 57 of the Schedule read with section 5 of the Act.

Amount of security deposit – cannot be treated as “money advanced” in terms of Article 33(c) – Fact that it is adjustable to – wards unpaid rent – Immaterial – since it paid for due performance of obligations of lease and on termination of lease, it is refundable, such an amount which is refundable will not get character of `money advanced’ – Lessor consequently not bound to pay stamp duty on security deposit.”

A reading of Article 33(a), will show that it covers cases where the rent is fixed and no premium is paid or delivered. Going by Article 33(c), the provision is attracted where the lease is granted for a premium or for money advanced and the same will be in addition to rent reserved. Apparently, the Rent Control Court has treated the security deposit as money advanced for attracting section 33(c) in addition to the rent.

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Circulars – Binding nature – Circulars cannot override statutory provisions: Administrative Law:

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Glaxo Smithkline Pharmaceuticals Ltd vs. UOI & Others, AIR 2014 SC 410

The following principles emante out of this decision of the Supreme Court in relation to the Circulars issued by the Government under the fiscal laws (Income-tax Act and Central Excise Act):

1. Although a circular is not binding on a court or an assessee, it is not open to the Revenue to raise a contention that is contrary to a binding Circular by the Board. While a circular remains in operation, the Revenue is bound by it and cannot be allowed to plead that is not valid nor that it is contrary to the terms of the statute.

2. A show cause notice and demand contrary to the existing Circulars of the Board are ab initio bad.

3. It is not open to the Revenue to advance an argument or file an appeal contrary to the Circulars.

The above legal position is re-emphasised in Commissioner of Customs vs. Indian Oil Corporation (AIR 2004 SC 2799: 2004 AIR SCW 1310) has been followed in UOI vs. Arviva Inds. (I) Ltd.: (2007) 209 ELT 5 (SC)

4. It is well settled that if the departmental Circular provides an interpretation which runs contrary to the provisions of law, such interpretation will not bind the Court.

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Probate of Will – Delay in filing Application – May arouse suspicion – But not absolute bar of limitation : Succession Act 1925 section 222:

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Wilma Levert Canuao & Others vs. Allan Sebastian D’souza & Anr. AIR 2013 (NOC) 415 ( Bom)

The testator died on 5th September 1999. The two Respondents were the sons who are the original Plaintiffs. The testator was survived besides his two sons, by six daughters, three of whom, the Appellants, had lodged caveats in response to the Testamentary Petition seeking probate of the will alleged to have been executed by the testator on 20th March, 1989. Under his will, the testator directed his executors and trustees to pay a sum of Rs. 30,000/- to each of his daughters and an amount of Rs. 1.00 lakh to his wife. The residue was bequeathed to his two sons who are appointed as executors. Pauline, the wife of the testator, died on 20th July 1994. There were two attesting witnesses to the will of the testator. Both of them were solicitors and advocates. One of them, Jaswant Chimanlal Shah had filed an affidavit dated 18th December, 2006 in the testamentary petition. He died on 9th May 2008 before he could be examined in evidence. The second attesting witness Kantibhai R. Thakkar was also a solicitor but he too died in 1993. The learned Single Judge held that the will had been duly proved and directed that probate shall issue.

The Hon’ble Court observed that section 63 of the Succession Act, 1925 specifies the manner in which a will has to be executed. Clause (c) of section 63 requires attestation of a will by two or more witnesses each of whom has to have seen the testator sign or to have received from the testator a personal acknowledgement of the signature. Each of the two witnesses must sign the will in the presence of the testator but it is not necessary that more than one witness should be present at the same time. Section 68 of the Evidence Act specifies the requirements for adducing proof of the execution of a document which is required by law to be attested. U/s. 68, if a document is required to be attested by law, it cannot be used as evidence unless one attesting witness has been called for proving the execution of the document, if an attesting witness is alive. Section 69 deals with a contingency where no attesting witness can be found. In such a situation, section 69 requires proof that the attestation of one attesting witness at least is in his handwriting and that the signature of the person executing the document is in the handwriting of that person.

The Hon’ble Court observed that there is no warrant for the assumption that the right to apply for the grant of probate as envisaged in Article 137 of the Schedule to the Limitation Act necessarily accrues on the date of the death of the deceased. The Court held that such an application is to seek the permission of the Court to perform a duty created by the will or for a recognition as a testamentary trustee and the right to apply is a continuous right which is capable of being exercised so long as the object of the trust exists or any part of the trust, if created, remains to be executed.

Finally it was held construing the provisions of Rule 382 that while any delay beyond three years after the death of the deceased would arouse suspicion, but such delay, while it has to be explained, cannot be equated with an absolute bar of limitation.

Moreover, once the execution and attestation of will are proved a suspicion based on delay would no longer operate. In the circumstances, the contention that the delay should result in the dismissal of the suit was declined.

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Mortgage by conditional sale or sale with condition of repurchase – Suit for redemption – Dismissed: Transfer of property Act, 1882 section 58(c):

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Vanchalabai Raghunath/Ithape (D) by LR vs. Shankarrao Baburao Bhilare (D) by LRS & Ors A I R 2013 SC 2924

The Appellant is the legal heir of the original Plaintiff/widow who was admittedly the owner of the suit property.

Plaintiff’s case is that a deed was executed by Vanchalabai Raghunath Ithape (the original Plaintiff-now deceased) in favour of Defendant No. 1 Shankarrao Baburao Bhilare (the original Defendant/Respondent No. 1) on 12-07-1967 for a consideration of Rs. 3,000/-, by which the suit land along with 4 annas share in the mango trees was transferred to Defendant No. 1 and possession of the same was handed over, with a specific stipulation to the effect that the land was sold on the condition that after receiving Rs. 3,000/- in lump sum within 5 years before end of any Falgun month, by the Defendant, the land was to be returned to the Plaintiff. The Plaintiff’s case is that it was a mortgage transaction and the land was to be returned by the original Defendant after receiving the said consideration of Rs. 3,000/- within 5 years.

He denied of having any relationship of mortgagee and mortgagor between him and the Plaintiff. According to him, the Plaintiff had sold the suit property to him as per the said sale deed, but only as a concession the period of 5 years was mentioned in the deed to reconvey the said suit property and since there was no repayment in 5 years no re-conveyance could be claimed.

Admittedly, the Plaintiff filed the suit claiming a decree for redemption of the suit property. The trial court decreed the suit by passing a decree of redemption. The first appellate court reversed the findings recorded by the trial court and allowed the appeal and set aside the judgment and decree of the trial court. As against that, the Plaintiff preferred the second appeal. The High Court did not interfere with the findings of fact recorded by the first appellate court.

The Court observed that the document in question has been described as Sale Deed transferring the land along with the fixtures and possession was handed over to the Defendant

From a perusal of the aforesaid provisions especially, section 58(c) it is evidently clear that for the purpose of bringing a transaction within the meaning of ‘mortgage by conditional sale’, the first condition is that the mortgagor ostensibly sells the mortgaged property on the condition that on such payment being made, the buyer shall transfer the property to the seller. Although there is a presumption that the transaction is a mortgage by conditional sale in cases where the whole transaction is in one document, but merely because of a term incorporated in the same document it cannot always be accepted that the transaction agreed between the parties was a mortgage transaction, referred the case in Williams vs. Owen 1840 5 My. and Cr. 303 : English Reports 41 (Chancery) 386.

The Court held that the instant case, the trial court committed grave error in construing the document and erroneously held that the transaction is mortgage and hence, the Plaintiff is entitled to decree of redemption.

By reading the documents as a whole, it is found that there is a debt and the relationship between the parties is that of a debtor and a creditor. This is a vital point to determine the nature of the transaction.

The Court, therefore, held that the document was not a mortgage by conditional sale, rather the document was transfer by way of sale with a condition to repurchase.

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Govt. servant – Not consumer – Dispute regarding retrial benefits, PF Gratuity cannot be entertained by consumer for a Jurisdiction – Issue – Goes to root of matter – Can be raised at any stage – Doctrine of waiver does not apply:

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Dr. Jaymattar Sain Bhagat vs. Dir, Health Services, Haryana & Ors AIR 2013 SC 3060

The Appellant joined Health Department, of the Respondent State, as Medical Officer on 05-06-1953 and took voluntary retirement on 28-10-1985. During the period of service, he stood transferred to another district but he retained the government accommodation.

Appellant claimed that he had not been paid all his retrial benefits, and penal rent for the said period had also been deducted from his dues of retrial benefits without giving any show cause notice to him. Appellant made various representations, however, he was not granted any relief by the State authorities. Aggrieved, the Appellant preferred a complaint before the District Consumer Disputes Redressal Forum, the said Forum vide order dated 24.3.2000 dismissed the complaint on merits

The Appellant approached the appellate authority, i.e., the State Commission. The State Commission dismissed the appeal and revision application was also dismissed observing that though the complaint was not maintainable as the District Forum did not have jurisdiction to entertain the complaint of the Appellant as he was not a “consumer” and the dispute between the parties could not be redressed by the said Forum.

On further appeal the learned Senior AAG, Haryana, raised preliminary issue of the jurisdiction submitting that the service matter of a government servant cannot be dealt with by any of the Forum in any hierarchy under the Act. Therefore, the matter should not be considered on merit at all.

The Hon’ble Court observed that by no stretch of imagination a government servant can raise any dispute regarding his service conditions or for payment of gratuity or GPF or any of his retiral benefits before any of the Forum under the Act. The government servant does not fall under the definition of a “consumer” as defined u/s. 2(1)(d)(ii) of the Act. Such government servant is entitled to claim his retrial benefits strictly in accordance with his service conditions and regulations or statutory rules framed for that purpose. The appropriate forum, for redressal of any grievance, may be the State Administrative Tribunal, if any, or Civil Court but certainly not a Forum under the Act.

The Court further observed that conferment of jurisdiction is a legislative function and it can neither be conferred with the consent of the parties nor by a superior court, and if the Court passes a decree having no jurisdiction over the matter, it would amount to nullity as the matter goes to the roots of the cause. Such an issue can be raised at any stage of the proceedings. The finding of a court or Tribunal becomes irrelevant and unenforceable/inexcutable once the forum is found to have no jurisdiction. Similarly, if a Court/ Tribunal inherently lacks jurisdiction, acquiescence of party equally should not be permitted to perpetuate and perpetrate, defeating the legislative animation. The court cannot derive jurisdiction apart from the statute. In such eventuality the doctrine of waiver also does not apply.

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Dishonour of Cheque – Criminal liability – Joint Account holder -Drawer of cheque alone can be prosecuted: Negotiable Instruments Act section 138.

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Mrs. Aparna A. Shah vs. M/s. Sheth Developers P. Ltd & Anr AIR 2013 SC 3210

M/s. Sheth Developers P. Ltd. is the respondent a company engaged in the business of land development and constructions. Aparna A. Shah (the appellant) and Ashish Shah, her husband, are the land aggregators and developers and are the owners of certain lands in and around Panvel.

According to the appellant, in January, 2008 since the company was interested in developing a Township Project and a special economic Zone (SEZ) project in and around Panvel. The Broker, introduced them to the appellant and her husband as the land owners holding huge land in Panvel.

The respondent company agreed for the development of the said land jointly with the appellant herein and her husband. The appellant and her husband agreed for the same upon the entrustment of a token amount of Rs. 25 crore with an understanding between the parties that the said amount would be returned if the project is not materialise. Agreeing the same, the respondent company issued a cheque of Rs. 25 crore. However, for various reasons, the proposed joint venture did not materialise and it was claimed by the appellant herein that the whole amount of Rs. 25 crore was spent in order to meet the requirements of the initial joint venture in the manner as requested by the respondent company.

According to the appellant, again the respondent company expressed interest to start a new project. With regard to the same, the respondent Company approached the appellant herein and her husband and informed that they are not having sufficient securities to enable the bank to grant the facility and the bank is to show receivales in writing. Therefore, on an understanding between the respondent and the appellant, a cheque of Rs.25 crores was issued by the husband of the appellant from their joint account. It is the case of the appellant that in breach of the aforesamentioned understanding, on 05-02-2009, the respondent deposited the cheque with IDBI bank at Cuffe Parade, Mumbai and the said cheque was dishonoured due to “insufficient funds”.

On Complaint filed by the Respondent against the appellant the case was registered by the Magistrate the court held that u/s. 138 of the Act, it is only the drawer of the cheque who can be prosecuted. In the present case, the appellant is not a drawer of the cheque and she has not signed the same. A copy of the cheque brought to the notice of the Supreme Court though contains the name of the appellant and her husband, the fact remains that her husband alone put his signature. In addition to the same, bare reading of the complaint as also the affidavit of examination in chief of the complainant and a bare look at the cheque would show that the appellant has not signed the cheque. In case of issuance of cheque from joint accounts, a joint account holder cannot be prosecuted unless the cheque has been signed by each and every person who is a joint account holder. The said principle is an exception to section 41 of the N.I. Act which would have no application in the case on hand. The proceedings filed u/s. 138 cannot be used as an arm twisting tactics to recover the amount allegedly due from the appellant. It cannot be said that the complaint has no remedy against the appellant but certainly not u/s. 138. The culpability attached to dishonor of a cheque can, in no case “except in a case of section 141 of the N.I. Act” be extended to those on whose behalf the cheque is issued. This court reiterates that it is only the drawer of the cheque who can be made an accused in any proceeding u/s. 138 of the Act. Thus, criminal proceedings against appellant quashed.

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Compounding of offences – Can be compounded by CLB even after prosecution has been instituted: Interpretation of Statute: Companies Act

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V.L.S. Finance Ltd vs. UOI AIR 2013 SC 3182

The Registrar of Companies, NCT of Delhi and Haryana filed complaint in the Court of Chief Metropolitan Magistrate, Tis Hazari, inter alia alleging that during the course of inspection it was noticed in the balance sheet of 1995-96 Schedule of the fixed assets included land worth Rs. 21 crore. According to the complaint, M/s. Sunair Hotels Ltd., for short ‘the Company”, had taken this land from New Delhi Municipal Corporation on licence and the Company only pays the yearly licence fee thereof. Thus, according to the complainant, without any right land has been shown as land in the Schedule of fixed assets, which is not a true and fair view and punishable u/s. 211(7) of the Companies Act. The Company and its Chairman-cum-Managing Director, S.P. Gupta were arrayed as accused.

From a plain reading of section 621A(1), it is evident that any offence punishable under the Act, not being an offence punishable with imprisonment only or with imprisonment and also with fine, may be compounded either before or after the institution of the prosecution by the Company Law Board and in case, the minimum amount of fine which may be imposed for such offence does not exceed Rs. 5000/-, by the Regional Director on payment of certain fine.

The punishment provided u/s. 211(7) of the Act comes under category of offences punishable with fine or imprisonment or both aforesaid. Section 621A(1) excludes such offences which are punishable with imprisonment only or with imprisonment and also with fine. As the nature of offence for which the accused has been charged necessarily does not invite imprisonment or imprisonment and also fine. Hence, the nature of the offence is such that it was possible to be compounded by the Company Law Board.

Now the question is whether in the aforesaid circumstances the Company Law Board can compound offence punishable with fine or imprisonment or both without permission of the court. It is pointed out that when the prosecution has been laid, it is the criminal court which is in seisin of the matter and it is only the magistrate or the court in seisin of the matter who can accord permission to compound the offence. The Court observed that both s/s. (1) and s/s. (7) of section 621A of the Act start with a non-obstante clause. As is well known, a non-obstante clause is used as a legislative device to give the enacting part of the section, in case of conflict, an overriding effect over the provisions of the Act mentioned in the non-obstante clause.

As is well settled, while interpreting the provisions of a statute, the court avoids rejection or addition of words and resort to that only in exceptional circumstances to achieve the purpose of Act or give purposeful meaning. It is also a cardinal rule of interpretation that words, phrases and sentences are to be given their natural, plain and clear meaning. When the language is clear and unambiguous, it must be interpreted in an ordinary sense and no addition or alteration of the words or expressions used is permissible. As observed earlier, the aforesaid enactment was brought in view of the need of leniency in the administration of the Act because a large number of defaults are of technical nature and many defaults occurred because of the complex nature of the provision.

Ordinarily, the offence is compounded under the provisions of the Code of Criminal Procedure and the power to accord permission is conferred on the court excepting those offences for which the permission is not required. However, in view of the non-obstante clause, the power of composition can be exercised by the court or the Company Law Board. The legislature has conferred the same power to the Company Law Board which can exercise its power either before or after the institution of any prosecution whereas the criminal court has no power to accord permission for composition of an offence before the institution of the proceeding. The legislature in its wisdom has not put the rider of prior permission of the court before compounding the offence by the Company Law Board and in case the contention of the Appellant is accepted, same would amount to addition of the words “with the prior permission of the court” in the Act, which is not permissible.

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Natural justice – Bias – Judicial conduct– No one can act in judicial capacity if his previous conduct gives ground for believing that he cannot act with an open mind or impartially

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Narinder Singh Arora vs. State (Govt. of NCT of Delhi) 2012 (283) ELT 481 (SC)

The Appellant had filed a complaint against the Respondents. Subsequently, the charges were framed against the Respondents u/s. 498A, 304B read with section 34 and Section 302 of the Indian Penal Code by Shri. Prithvi Raj, learned Additional District & Sessions Judge dated 15-05-1995. Thereafter, the case was listed before Shri. S.N. Dhingra, Additional Sessions Judge for the trial, however, the learned Judge had recused from hearing the matter for personal reasons vide Order dated 25-09-2000.

Accordingly, the case was withdrawn from the Court of Shri. S.N. Dhingra, Additional Sessions Judge and transferred to the Court of Shri. S.M. Chopra, Additional Sessions Judge vide the Order dated 29-09- 2000 of the Sessions Judge. Eventually the accused Respondents were tried and acquitted vide judgment and Order dated 22-03-2003 passed by Ms. Manju Goel, Additional Sessions Judge. Being aggrieved by the judgment and Order, the Appellant preferred a revision petition before the High Court. The same was dismissed vide impugned final judgment and Order dated 01-09-2010 passed by learned Judge, Shri. Justice S.N. Dhingra.

The Court observed that it is apparent that the fact of earlier recusal of the case at the trial by learned Shri Justice S.N. Dhingra himself, was not brought to his notice in the revision petition before the High Court by either of the parties to the case. Therefore, Shri Justice S.N. Dhingra, owing to inadvertence regarding his earlier recusal, has dismissed the revision petition by the impugned judgment. In our opinion, the impugned judgment, passed by Shri Justice S.N. Dhigra subsequent to his recusal at trial stage for personal reasons, is against the principle of natural justice and fair trial. It is well settled law that a person who tries a cause should be able to deal with the matter placed before him objectively, fairly and impartially. No one can act in a judicial capacity if his previous conduct gives ground for believing that he cannot act with an open mind or impartially. The broad principle evolved by this Court is that a person, trying a cause, must not only act fairly but must be able to act above suspicion of unfairness and bias.

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Transfer of title occurs only with execution and registration of document — Possession in part — Performance of contract does not confer any title to buyer — Transfer of Property Act, 1882, section 53A, 55.

Transfer of title occurs only with execution and registration of document — Possession in part — Performance of contract does not confer any title to buyer — Transfer of Property Act, 1882, section 53A, 55.

Limitation — Setting aside ex parte order — CPC 0.9 R.13

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[K. Surekha Reddy v. Chandraiah, AIR 2011 (NOC) 192 AP] The appellant filed application to set aside the ex parte decree pleading that she was not even served with summons in the suit. The respondent, on the other hand, pleaded that not only summons were served upon the appellant, but also an advocate was engaged by her. The Trial Court dismissed the application on two grounds, viz., (a) that no application was filed for condonation of delay, and (b) that the record discloses that the appellant engaged an advocate in the suit, and thereafter remained ex parte.

The Court observed that so far as the first ground is concerned, though the limitation for filing an application under Order IX Rule 13 C.P.C., is 30 days, from the date on which the ex parte decree was passed, a different approach becomes necessary, in case the defendant, who suffered the ex parte decree did not have any knowledge of the ex parte decree. In this regard, a distinction needs to be maintained between the defendant who entered appearance in the suit, but was set ex parte, before the ex parte decree came to be passed, on the one hand; and the one, who was not served with the summons at all, and accordingly was not aware of the ex parte decree.

In the first category of cases, the limitation for filing application starts from the date of ex parte decree. The reason is that, once the defendant is served with summons, or has entered appearance, he is supposed to be in the knowledge of the development, that takes place in the suit.

In the second category of cases, the Court cannot impute knowledge to him, as regards any step, including the passing of ex parte decree. If it is established that a defendant was not served with summons at all, before the ex parte decree was passed, the limitation starts from the date of knowledge of the ex parte decree, and not from the date of the decree. In the instant case, if the appellant proves that she was not served with summons at all, the date of order becomes irrelevant.

As regards the second ground, it needs to be seen that the Trial Court proceeded on the assumption that the appellant was served with summons and engaged an advocate also. When a specific plea was raised by the appellant herein, that she was neither served with notice, nor did she engage an advocate at all, the Trial Court was under obligation to verify the record, and come to a definite conclusion.

If vakalat is filed, the Court does not even have to verify whether summons were served, or not. It proceeded on the assumption that the appellant had engaged an advocate.

Nowadays, it is not uncommon that plaintiffs, who are smart enough, resort to arrange for filing vakalats on behalf of the defendants also, with the object of misleading the Court, and obtain an ex parte decree. The Trial Court can verify the record and arrive at proper conclusions. Hence, the plea is allowed, and the order is set aside. The matter is remanded to the Trial Court for fresh consideration and disposal.

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Gift by Muslim — Unregistered gift deed cannot be recognised — Section 123 of Transfer of Property Act.

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[Mayana Saheb Khan v. Mayana Gulab Jan & Ors., AIR 2011 (NOC) 97 AP] The 1st respondent is the wife of late Raheem Khan. Raheem Khan died on 24-6-1997 leaving behind him certain items of movable and immovable properties. The appellant, one of the son filed a suit in the Court against the respondents (being wife, sisters and other sons) for partition and separate possession of the assets left by late Raheem Khan. He claimed his share in those properties in the capacity of sharer of the properties of the deceased. The respondent (wife of deceased) however pleaded that her husband had gifted items 1 and 2 of the suit schedule in her favour and as such, they are not available for partition. The trial Court dismissed the suit. The appellant’s appeal was also dismissed.

In the second appeal the Court observed that the only question for consideration in this case was as to whether a gift said to have been made by a Muslim, which in turn was evidenced through a written document, could be recognised in law, unless the document is registered.

The Court further observed that neither the relationship was disputed, nor the fact that the deceased left behind him, the suit schedule items, was denied. The only dispute was about items 1 and 2 of the suit schedule, in respect of which the 1st respondent claimed gift in her favour. She did not plead ignorance about the document, nor did she plead loss of the same. Therefore, the case of the 1st respondent was to stand or fall, on the proof or otherwise of the gift.

The first respondent did not file the gift khararu-nama. The record discloses that an effort was in fact made by the 1st respondent to make the said document as a part of the record, but when the Court raised an objection as to the stamp duty, the document remained inadmissible, and no efforts were made by the first respondent to rectify the same. Even if it was assumed that the document was part of the record and the deficiency as to stamp duty was rectified, it was still inadmissible. The reason is that it was not registered.

It is a settled principle of law that it is the prerogative of a Muslim, to effect gift of immovable properties without even executing a written document, much less registering the same. Oral gift in respect of such persons is permissible. Where however, the gift is said to have been made through a written document, it is required to conform with section 123 of the Act. It was held that a document which evidences a gift, though made by a Muslim, cannot be acted upon, unless it accords with section 123 of the Act. In the instant case, the document was admittedly unregistered and as such, the gift pleaded by the 1st respondent could not have been accepted at all. The Trial Court and the lower Appellate Court committed serious error of law in recognising the gift pleaded by the 1st respondent.

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Contempt of Court — Malicious imputation against Judicial Officer — Apology not accepted — Contempt of Court Act, section 6.

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[High Court on its own motion v. Dnyandev Tulshiram Jadhav and State of Maharashtra, 2011 Vol 113(2) Bom. L.R. 1145]

In this case there was unfounded malicious attack on the character of a Judicial Officer, by a party who had been directed to pay maintenance allowance to the wife and minor child. The contemner and other co-accused were acquitted by the Judicial Magistrate, Shri U. T. Pol, in the matter of offence punishable u/s. 498-A of the Indian Penal Code. A Criminal Misc. Application was filed by the wife of the contemner, which was decided on 23rd April, 2007 by the same Magistrate wherein the present contemner was directed to pay costs of the said litigation. The contemner wrote an open letter dated 5th August, 2009 to the Chief Justice of the High Court of Judicature at Bombay and a copy thereof was sent to the President of India for taking action against the Judicial Officer. The imputations cast against the Judicial Officer by the contemner were per se malicious and scandalous.

In the contempt proceeding the contemner had given unconditional apology by way of filing reply affidavit. The Court observed that in view of per se mala fide attitude spelt out from the conduct of the contemner, inasmuch as he wrote the offending letter making wild, malicious and reckless allegations against the Judicial Officer, the apology was not acceptable.

It was a deliberate act on the part of the contemner to scandalise the Judicial Officer and to bring Courts or Judicial system into contempt, disrepute, disrespect and to lower its authority and offend its dignity. In other words, the conduct of the contemner is far more than causing the defamation simplicitor or aspersions against a particular judge. It was a fit case for inflicting appropriate punishment upon the contemner.

The Court relied on the Apex Court decision in the case of M. R. Parashar v. Dr. Farooq Abdullah, AIR 1984 SC 615 wherein it was observed that the Judges cannot defend themselves. They need due protection of law from unfounded attacks on their character. Law of Contempt is one of such laws.

The court pointed out that judiciary has no forum from which it could defend itself. The Legislature can act in defence of itself from the floor of the House. It enjoys privileges which are beyond the reach of law. The executive is all powerful and has ample resources and media at its command to explain its actions and, if need be, to counter-attack. Those, who attack the judiciary must remember that they are attacking an institution which is indispensable for the survival of the rule of law but which has no means of defending itself.

The sword of justice is in the hands of Goodess of Justice, not in the hands of mortal Judges. Therefore, Judges must receive the due protection of law from unfounded attacks on their character.

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Compensation — For violation of human rights during the search and seizure operation conducted by Income-tax Department.

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[Bihar Human Rights Commission (www.itatonline .com)] The applicant Rajendra Singh has approached the Commission complaining of violation of his human rights in course of the search and seizure operations conducted by officials of the Income-tax Department in his residential premises from 8-9-2010 to 10-9-2010. The grievance of the applicant is that he belongs to the minority Sikh community. He is earning his livelihood by doing timber business in the name and style of M/s. Bhargo Saw Mill at Mithapur in the town of Patna. On 8-9-2010 the authorities of the Income-tax Department came to his house and closed the main gate which is the only point of ingress and egress. They took the mobile phones of the applicant and others and did not allow them to contact any person outside during the course of the raid. They did not allow them to cook the food. They misbehaved and abused members of the family including the female inmates. They smoked with impunity; they also threw cigarette butts and empty packets of cigarettes on the images of Sikh Gurus and the Golden Temple, which hurt their religious feelings. They did not even allow them to go to the toilet. The applicant sent for his lawyer and he was made to leave the place. They also in the course of the raid held out threats of punitive action.

Notice was issued to the Chief Commissioner of Income-tax, Bihar who referred it to the Director General of Income-tax (Inv.) as the search and seizure operations were conducted by the Investigation Wing of the Department.

The Commission observed that it was the admitted position that the search and seizure operations commenced at 9.30 a.m. on 8-9-2010 and concluded at 9.20 p.m. on 10-9-2010. The grievance of the applicant was that he was continuously interrogated during this period for more than 30 hours. The operations having admittedly commenced at 9.30 a.m. on 8-9-2010 it was clear that question was being asked at about 10 p.m. on 9-9-2010.

The fact that question no. 15 was asked at about 10 p.m. or question no. 31 was asked at 3.30 a.m. on 10-9-2010 cannot be the basis to conclude that the interrogation took place for a few hours. The statement u/s. 132 of the Income-tax Act was the result of sustained interrogation which in the instant case apparently commenced from the morning of 9-9-2010. And even if anyone were to visualise the sequence of events liberally in favour of the Income-tax Department, there was no basis for taking the view that the interrogation/recording of statement was with breaks/intervals.

The Commission was of the view that the members of the raiding party may take their own time to conclude the search and seizure operations but such operations must be carried out keeping in view the basic human rights of the individual. They have no right to cause physical and mental torture to him. If the officer-in-charge of the interrogation/recording of statements wanted to continue with the process he should have stopped the same at the proper time and resumed it next morning. But continuing the process without any break or interval at odd hours up to 3.30 a.m., forcing the applicant and/ or his family members to remain awake when it was time to sleep was a torturous act which cannot be countenanced in a civilised society. It was violative of their rights relating to dignity of the individual and therefore violative of human rights. Even diehard criminal offenders have certain human rights which cannot be taken away. The applicant’s position was not worse than that.

In the opinion of the Commission, the Income-tax Department should ensure that the search and seizure operations at large in future are carried out without violating one’s basic human rights.

The Commission was prima facie satisfied that there had been violation of the applicant’s human rights by the concerned officials of the Incometax Department while continuing the search and seizure operations for which he was entitled to be monetarily compensated.

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Limitation – Sale of Minors property without permission of court – Suit not filed by minor within 3 years from date of attaining majority – Barred by limitation : Limitation Act 1963 and Hindu Minority and Guardianship Act, 1956 section 8(2)(3).

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H.M. Rudraradhya vs. Uma & Ors AIR 2014 Karnataka 2.

The plaintiff after her marriage instituted a suit for declaration that the sale deed is not binding on her interest in the suit property and for partition of her share.

The trial court dismissed the suit holding that it is barred by limitation. It was of the opinion that Article 60 of the Limitation Act is applicable to the suit and it was not filed within 3 years from the date of attaining of majority by the plaintiff.

The Hon’ble Court observed that it is not in dispute that the suit property was gifted to Lingarajamma i.e., the mother of the plaintiff and defendants 2 and 3. The father of Lingarajamma, by name Gurusiddappa, had gifted the suit property under the Gift Deed dated 01-04-1975. Therefore, Lingarajamma was the absolute owner of the suit property on the basis of the gift. It is for this reason, it could be safely concluded that the suit land was not a joint family property. Hence, the provisions of sections 6 and 8 of the Hindu Succession Act, 1956 are not applicable as the said provisions either deal with a joint family property or succession to the property of a male. As Lingarajamma was the exclusive owner of the suit property on the basis of the gift by her father it is general rule of succession in the case of female, Hindu, apply, wherein on the death of Lingarajamma it is her husband, the sons and the daughters are entitled to succeed to her interest in the suit land.

The validity of a sale transaction in respect of the joint family property by ‘Karta’ or ‘adult member’ of a joint Hindu Family depends upon the existence of the legal necessity. At the time of its alienation, though a minor in the joint family has an undivided interest in the property alienated, if a suit is instituted challenging such alienation of a joint family property by a ‘Karta’ or an ‘adult member’ of the joint Hindu family and if it is proved that the same was not for legal necessity, the plaintiff who is not a party to the sale transaction could ignore the alienation and claim her share even in the property alienated. In such circumstances, it is the provisions of Article 109 of the Limitation Act which are attracted and the plaintiff can institute the suit within 12 years from date of alienee takes possession of the property.

Admittedly, the sale of the suit property in favour of the 1st defendant was on 04-06-1987. The suit instituted by the plaintiff is not within 3 years of her attaining the age of majority. Therefore, in view of the provisions of Article 60 of the Limitation Act, the suit was barred by time.

When the sale transaction is voidable transaction and it is for the plaintiff, to sue for possession of the property and it is incumbent upon him to pray for such a relief. Even otherwise, the plaintiff has prayed for a declaration that the Sale Deed is not binding on her interest in the suit property and this relief is similar to setting aside the sale, which is contemplated under Article 60 of the Limitation Act and in the absence of the said relief, the suit itself cannot be maintained.

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Limitation – Acknowledgement of debt – By email – constitutes valid and legal acknowledgement: Information Technology Act, section 4.

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Sudarshan Cargo P. Ltd. vs. M/s. Techvac Engineering P. Ltd. AIR 2014 Karnataka 6.

On account of non-payment of the amounts due under the invoices by respondent to the petitioner there was exchange of correspondence by email between the parties. Respondent company by its email dated 14-01-2010 has informed the petitioner that on account of delay in tie up of its funds payments were not made and respondent has also informed the petitioner that it would be sending its statement of accounts for reconciliation and will make arrangements of funds to pay the dues of the petitioner. Subsequently, on 06-04-2010 there was one more email from respondent to petitioner, whereunder, it has categorically admitted that it is in a position to make a commitment of settling the dues of the petitioner starting from the said month. It is also agreed to, thereunder, that first payment would be made between 10th and 15th of the said month namely April, 2010. Respondent has also categorically stated that it would clear all the dues by the end of May, 2010. Having said so, respondent did not pay the amounts to the petitioner and as such a statutory notice came to be issued by the petitioner on 04-12-2012

The petition was filed u/s. 433(e), (f) and 436 read with section 434 of the Companies Act, 1956 seeking winding up of the respondent Company on the ground that it is unable to pay debt due to petitioner.

An objection was raised that alleged debt due to the petitioner by respondent was time barred. It was contended that invoices were raised by the petitioner during September, October and November, 2008 and present petition has been filed in 2013 and as such debt in question is barred by limitation. Elaborating the submissions it was contended that alleged acknowledgement of debt from respondent to petitioner by email dated 06- 04-2010 is not duly signed by respondent and as such it cannot be construed as an acknowledgement of debt since it does not satisfy the criteria prescribed u/s. 18 of The Limitation Act, 1963. Hence, the petitioner is not entitled to recover the amount alleged to be due from respondent.

The Hon’ble Court observed that the word ‘sign’ or ‘signed’ employed in explanation (b) to section 18(2) has not been defined under the Limitation Act, 1963. Explanation merely says ‘signed’ means either personally or by a agent duly authorised in this behalf. It requires to be noticed that even u/s. 3(56) of the General Clauses Act, 1897 the word ‘sign’ has not been defined but has its extended meaning with reference to a person who is unable to write his name to include mark with its grammatical variation and cognate expressions. Undisputedly, an email is a communication addressed to a definite person and it means a person who is intended by ‘originator’ to receive such electronic record as per section 2(b) of IT Act, 2000 and the ‘originator’ would mean a person who sends or transmits any electronic message to any other person as defined u/s. 2(za) of IT Act, 2000. Thus, if an acknowledgment is sent by a ‘originator’ to the ‘addressee’ by email, without any intermediary, it amounts to electronic communication by email which is an alternative to the paper based method of communication. This mode of transaction is legally recognised u/s. 4 of the IT Act, 2000.

A harmonious reading of section 4 together with definition Clauses would indicate that on account of digital and new communication systems having taken giant steps and the business community as well as individuals are undisputedly using computers to create, transmit and store information in the electronic form rather than using the traditional paper documents and as such the information so generated, transmitted and received are to be construed as meeting the requirement of section 18 of the Limitation Act, particularly in view of the fact that section 4 contains a non-obstante clause. Since respondent did not dispute the information transmitted by it is in electronic form to the petitioner by way of message through the use of computer and its network as not having been sent by it to the petitioner, the acknowledgement as found in the emails dated 14-01-2010 and 06-04-2010 originating from the respondent to the addressee namely, petitioner, such emails have to be construed and read as a due and proper acknowledgement and it would meet the parameters laid down u/s. 18 of the Limitation Act, 1963 to constitute a valid and legal acknowledgement of debt due.

Thus, the Hon’ble Court held that an acknowledgement of debt by email originating from a person who intends to send or transmit such electronic message to any other person who would be the ‘addressee’ would constitute a valid acknowledgment of debt and it would satisfy the requirement of section 18 of the Limitation Act, 1963 when the originator disputes having sent the email to the recipient.

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Precedent – Law settled by Supreme Court or Division Bench of High Court – Binding Nature – In case of doubt by another bench, matter to be referred to larger bench: However, the Binding effect will prevail court should not wait for Larger Bench decision:

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Masusmi SA Investment LLC vs. Keystone Realtors P. Ltd. & Ors (2013) 181 Comp Cas. 525 (Bom)

The law laid down by the Supreme Court and the Division bench of the High Court will prevail and is binding on a single judge of the court. An order referring certain issues to be decided by a larger bench does not lay down any law. Only because the correctness of a portion of a judgement has been doubted by another bench, that would not mean that the court should wait for the decision of the larger bench.

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Family Arrangement Document not compulsorily Registrable – Memorandum of family arrangement – Admissible in evidence without being registered or stamped:

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Rasbihart and another vs. The Additional District Judge (Fast Track), Sawai Madhopur, Rajasthan & Others.

The plaintiffs instituted a suit for declaration and cancellation of a registered sale deed dated 11-08- 2004 and mutation No. 1216 dated 20-08-2004 in favour of Bithaldas and consequential injunction. It was the claim of the plaintiff that the suit property was ancestral in nature and hence their predecessor Ballabhdas, arrayed as defendant No. 1 in the suit, had no right to execute the release deed dated 11-08-2004 in favour of Bithaldas defendant No. 3 in the suit.

The plaintiff claimed that this document was a partitition deed and for want of stamp and registration was inadmissible in evidence. According to the plaintiff, from the language of this document, it clearly emerged that it was not a recording of a past event but partition was effected through the document itself and hence as per the provisions of the Stamps Act and Registration Law, the document ought not only to be liable to be properly stamped but registered as well and as the document fell short of both these mandatory requirements, it was inadmissible for all purposes.

The defendant claimed that the document in question was not a partition deed but merely a memorandum of family arrangement and hence was neither required to be stamped nor registered and was admissible for all purposes. It was further contended that the family arrangement had already been acted upon and consequently a second family arrangement was executed and hence the plaintiff cannot challenge the validity of the document dated 23-09-1972.

The court observed that for a document, to be termed as an instrument of partition, leviable to be stamp duty it must be a document effecting transfer. The title to the property in question has to be conveyed under the document. The document has to be a vehicle for the transfer of the right, title and interest. The document has to be the sole repository for the ascertainment of the rights. Each and every document involving the fact of partition cannot be included within the expression ‘instrument of partitition’. A paper, which is recording a fact or attempting to furnish evidence of an already concluded transaction under which the title has already passed, cannot be treated to be such an instrument.

In the instant case, the writing in question was merely a memorandum of family arrangement and not an instrument of partititon requiring levy of stamp duty or required to be compulsorily registered. The property involved was the joint family property of ‘B’ and his three sons and the said fact was admitted in the writing. So, the rights of sons were not created for the first time through this document. The document was not the vehicle for transfer of rights. By the mere fact that the document contained the word like ‘today’ does not make it an instrument of partition, therefore, the writing has held to be a memorandum of family arrangement and admissible in evidence without it being stamped or registered.

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Authorisation Notice not served – Chartered Accountant received the notice on behalf of assessee without authorisation:

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ABG Infralogistics Ltd. vs. State of Maharashtra & Ors Writ Petition (L) No. 2935 and 2936 of 2013 Bombay HC dated 25-11-2013

The Petitioner has raised various contentions including the contention that the petitioner was never served with the notice for the relevant years and that the petitioner or its representative had never appeared before the AO and still the impugned assessment order refers to a Chartered Accountant having attended on 24th June, 2011 and requesting the Assessing Officer for adjournment and considering his request the said Chartered Accountant was called on 26th June 2013, but he did not appear till the date of passing of the asst. order nor any communication was received from him. Hence, the orders were passed u/s. 23(2) of the Maharashtra Value Added Tax Act.

The respondents opposed the petition and submitted that the representative of the petitioner did appear before the Assessing Officer on 24th June, 2013 as mentioned in the ‘roznama’ for the aforesaid two asst. years, 2005-06 and 2008-09, and has therefore received the notice for the asst. years 2005-06 and 2008-09.

The Learned Counsel for the petitioner submits that those two authorisations for the asst. years 2006-07 and 2007-08 were purportedly issued on 28th June 2013, but according to the AO, the said Chartered Accountant appeared for the petitioner on 24th June, 2013 without any authorisation having been produced at the hearing before him.

The Hon’ble Court observed that the petitions involve serious disputed questions of fact as well as questions of law on merits of the controversy and, therefore, it would be appropriate for the petitioner to avail the alternative remedy of filing appeal before the Dy. Commissioner of Sales tax (Appeals). The court directed the petitioner to file appeals before the Dy. Commissioner of Sales Tax (Appeals) within 2 weeks and directed the appellate authority to entertain the appeals and examine all contentions without raising the plea of limitation as far as the filing of appeals was concerned and decide the appeals in accordance with law as expeditiously as possible.

The court further directed that till the appellate authority decided the appeals, the impugned demand notices shall not be implemented or enforced.

As regards the contention of the petitioner that the petitioner had not received any notice for the aforesaid years and had not issued any authorisation in favour of the concerned Chartered Accountant, learned counsel for the respondents has relied upon the authorisation issued by the petitioner in favour of the said Chartered Accountant for the asst. years 2006-07 and 2007-08. The Learned Counsel for the respondents submitted that since the Chartered Accountant was appearing for the petitioner for those two years, the AO proceeded on the basis that the same Chartered Accountant was appearing for the petitioner for the two years under consideration, i.e., 2005-06 and 2008-09.

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Recognised agent or pleader cannot appear as witness in place of principal — CPC order 3.

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[(Smt.) Kulshree & Anr. v. Smt. Shanta Meena, AIR 2011 Rajasthan 99]

It is a case where matter was fixed for the plaintiff’s evidence in which the plaintiff submitted affidavit. She could not appear in the Court for cross-examination. In her place, her husband filed affidavit in the capacity of power of attorney. Objection was taken by the respondents that her husband can be examined as a witness, but cannot be examined as the plaintiff. The application aforesaid was allowed. The only rider was that he should not be treated as the plaintiff. The Court observed that if the interpretation of Order 3, Rules 1 and 2 is to mean that appearance of recognised agents or pleader is permissible for all purposes including deposition of statement in place of the principal, then it would mean that the pleader can also depose for the principal.

The Court should give interpretation to the provisions which are not only harmonious, but remain applicable in all situations with same interpretation. If the interpretation of Order 3, Rules 1 and 2 is that power of attorney can depose in place of principal in all circumstances, then the same interpretation will apply to the pleader, in view of the heading of the provision.

The purpose of Order 3, Rule 1 is not for appearance of a recognised agent or pleader as witness in place of the principal. They are authorised to appear as representative of the party to the extent it is permissible, but not in the manner that they may replace the principal itself. If the power of attorney has acted in place of principal prior to filing of the suit, he can depose for the principal, but not in all circumstances.

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Registration — Partition deed or memorandum of oral partition — Registration Act, 1908 section 17(1)(b), 49.

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[Pilla Muniyappa & Ors v. H. Anjanappa & Ors., AIR 2011 Karnataka 103]

The plaintiffs were residents of Bangalore. They claim that the suit properties were their joint family properties. The family consisted of over one hundred and twenty members. It was the case of the plaintiffs that in order to enjoy the family properties separately a ‘panchayath partition’ was effected and was reduced to writing on 20-2-1990. The particulars of the items of the property allotted to the plaintiffs’ branch forms the suit properties. The plaintiffs as well as the other members of the several branches of the family had subscribed their hand to the family arrangement and settlement and the respective parties had over a period of time enjoyed their respective shares. The revenue records were similarly effected in the names of the respective parties. It is the plaintiffs’ claim that they have secured one acre of land as their share. The defendant No. 4, who is a stranger to the family sought to interfere with the a part of land. It was found that the claim of the fourth defendant was that he had purchased the same from the first defendant without the knowledge or consent of the plaintiffs, though it was allotted to the share of the plaintiffs. The first defendant had no right or interest which he could convey in favour of the fourth defendant. It was in that background that the suit was filed for declaration in respect of the said item of land. The moot question was whether the document of panchayath partition was a memorandum of partition or it was to be construed as a partition deed, and whether it was invalid for want of registration, in which event, it could not be relied upon in evidence and could not be the basis for the appellant’s case.

The Court observed that as per the tenor of the document in question, it is not as if there was an oral arrangement between the parties several years prior to the execution of the document. Such an agreement preceded the execution of the document. Therefore it was a continuous process whereby the parties had discussed the terms of settlement and had reduced it into writing, dividing the properties amongst themselves and therefore, it was in the nature of a partition deed and cannot be construed as a memorandum of oral partition. If that position is accepted, the law of the land would require that the document be registered. Though partition amongst the Hindus may be effected orally, if the parties reduce it in writing to a formal document which is intended to be evidence of partition, it would have the effect of declaring the exclusive title of the coparcener to whom a particular property was allotted in partition and thus the document would be required to be compulsorily registered u/s. 17(1) (b) of the Registration Act, 1908. However, if the document did not evidence any partition by metes and bounds, it would be outside the purview of section 17(1)(b) of the Registration Act.

In view of the above, there is no substance in the contention put forth that the document in the case on hand was a mere record of a family arrangement that had taken place much earlier. It was a partition deed which was compulsorily registerable u/s. 17(1)(b) of the Indian Registration Act, 1908. Therefore, it was inadmissible in evidence for want of registration and could not have been relied upon as the basis to claim that there was an earlier partition.

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International Commercial Arbitration — Jurisdiction of Indian Court — Arbitration and Conciliation Act 1996 section 9.

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[ Videocon Indus. Ltd. v. UOI, AIR 2011 SC 2040]

A production sharing contract was executed between the 5 parties in regards to exploration of natural resources. As per the contract, the seat of arbitration was Kuala Lumpur (Malaysia). In 2000, disputes arose between the respondents and the contractor with respect to correctness of certain cost recoveries and profit. Since the parties could not resolve their disputes amicably, the same were referred to the Arbitral Tribunal as per the contract. The Arbitral Tribunal fixed the date of hearing at Kuala Lumpur (Malaysia), but due to outbreak of epidemic SARS, the Arbitral Tribunal shifted the venue of its sittings to Amsterdam in the first instance and, thereafter to London where on 31-3-2005 partial award was passed. The respondent No. 1 (Govt. of India) challenged the partial award by filing a petition in the High Court of Malaysia at Kuala Lumpur. The appellant questioned the maintainability of the case before the High Court of Malaysia by contending that in view of the contract, only the English Courts have the jurisdiction to entertain any challenge to the award. At that stage, the respondents filed a petition u/s. 9 of the Arbitration and Conciliation Act, 1996 in the Delhi High Court for stay of the arbitral proceedings. The High Court held that it had jurisdiction to entertain the petition filed u/s. 9 of the Act. The said order was challenged before the Supreme Court.

The first issue which arose for consideration was whether Kuala Lumpur was the designated seat or juridical seat of arbitration and the same had been shifted to London. The issue was important as the procedure for the conduct of arbitral proceeding would depend upon the procedural law of the country where the seat of arbitration is seated. The Court observed that as per the terms of the contract entered into by five parties, the seat of arbitration was Kuala Lumpur, Malaysia. However, due to outbreak of epidemic SARS, the Arbitral Tribunal decided to hold its sittings first at Amsterdam and then at London and the parties did not object to this. In the proceedings held at London, the Arbitral Tribunal recorded the consent of the parties for shifting the juridical seat of arbitration to London. Whether this amounted to shifting of the physical or juridical seat of arbitration from Kuala Lumpur to London?

As per the terms of agreement, the seat of arbitration was Kuala Lumpur. If the parties wanted to amend clauses of the contract they could have done so only by written instrument which was required to be signed by all of them. Admittedly, neither any agreement was there between the parties to the contract to shift the juridical seat of arbitration from Kuala Lumpur to London, nor was any written instrument signed by them for amending clause of the contract. Therefore, the mere fact that the parties to the particular arbitration had agreed for shifting of the seat of arbitration to London cannot be interpreted as anything except physical change of the venue of arbitration from Kuala Lumpur to London. Under the English law the seat of arbitration means juridical seat of arbitration, which can be designated by the parties to the arbitration agreement or by any arbitral or other institution or person empowered by the parties to do so or by the Arbitral Tribunal, if so authorised by the parties. In contrast, there is no provision in the Act under which the Arbitral Tribunal could change the juridical seat of arbitration which, as per the agreement of the parties, was Kuala Lumpur. Therefore, mere change in the physical venue of the hearing from Kuala Lumpur to Amsterdam and London did not amount to change in the juridical seat of arbitration.

The next issue for consideration was whether the Delhi High Court could entertain the petition filed by the respondents u/s. 9 of the Act. It was held that once the parties had agreed to be governed by any law other than Indian law in cases of international commercial arbitration, then that law would prevail and the provisions of the Act cannot be invoked questioning the arbitration proceedings or the award. The parties had agreed that the arbitration shall be governed by the laws of England. This necessarily implies that the parties had agreed to exclude the provisions of Part I of the Act. It was held that the Delhi High Court did not have the jurisdiction to entertain the petition filed by the respondents u/s. 9 of the Act and the mere fact that the appellant had earlier filed similar petitions was not sufficient to clothe that the High Court had the jurisdiction to entertain the petition filed by the respondents. The appeal was allowed.

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Professional conduct and Etiquette of Advocates — Duty of Advocate towards Court and client.

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[O. P. Sharma & Ors. v. High Court of P & H, AIR Dr. K. Shivaram Ajay R. Singh Advocates Allied laws 2011 SC 2101]

In a criminal matter an accused was remanded to police custody. When the order of the police remand was not found favourable, his advocate started hurling abuses and detrogatory remarks against the Magistrate. The advocate uttered unparliamentarily words and also threatened the Magistrate with dire consequences. The Magistrate requested fellow advocates who were called, also abused the Magistrate and wanted to assault him physically.

The High Court initiated contempt proceedings. The High Court found the advocates guilty of criminal contempt and convicted them u/s. 12 r.w.s. 15 of the Contempt of Court Act, 1971. On appeal, the Supreme Court accepted the unconditional apology and discharged the contemnors.

The Court observed that a Court, be that of a Magistrate or the Supreme Court, is sacrosanct. The integrity and sanctity of an institution which has bestowed upon itself the responsibility of dispensing justice is ought to be maintained. All the functionaries, be it advocates, Judges and the rest of the staff, ought to act in accordance with morals and ethics.

An advocate’s duty is as important as that of a Judge. Advocates have a large responsibility towards the society. A client’s relationship with his/her advocate is underlined by utmost trust. An advocate is expected to act with utmost sincerity and respect. In all professional functions, an advocate should be diligent and his conduct should also be diligent and should conform to the requirements of law by which an advocate plays a vital role in preservation of society and justice system. An advocate is under an obligation to uphold the rule of law and ensure that the public justice system is enabled to function at its full potential. Any violation of the principles of professional ethics by an advocate is unfortunate and unacceptable. Ignoring even a minor violation/ misconduct militates against the fundamental foundation of the public justice system. An advocate should be dignified in his dealings to the Court, to his fellow lawyers and to the litigants. He should have integrity in abundance and should never do anything that erodes his credibility. An advocate has a duty to enlighten and encourage the juniors in the profession. An ideal advocate should believe that the legal profession has an element of service also and associates with legal service activities. Most importantly, he should faithfully abide by the standards of professional conduct and etiquette prescribed by the Bar Council of India in Chapter II, Part VI of the Bar Council of India Rules.

As a rule, an advocate being a member of the legal profession has a social duty to show the people a beacon of light by his conduct and actions rather than being adamant on an unwarranted and uncalled for issue.

Compilers Comment — The ratio is equally applicable to other professionals.

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Concession made by counsel on facts — Binds his client.

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[ Vimaleshwar Nagappa Shet v. Noor Ahmed Sheriff & Ors., AIR 2011 SC 2057]

An agreement was entered to sell a house by all co-owners except one. As the parties failed to execute the sale deed, a suit for specific performance by the plaintiff purchaser was filed. The co-owner who was not party to the agreement proposed to purchase shares of other co-owners. The counsel for the plaintiff gave consent to such purchase by the co-owner, not party to agreement, at reasonable market value within a stipulated period. The valuation of property at reasonable market value was agreed to, by both parties. Order was passed to execute sale deed in favour of the co-owner not party, by a consent order. Against this, an appeal was filed before the Supreme Court.

The Court observed that apart from both parties including the plaintiff-appellant had agreed for a reasonable market valuation. The statement made by the counsel before the High Court, as recorded in the impugned judgment and order, cannot be challenged before this Court. It was also clear that the High Court had recorded in the impugned judgment that the counsel agreed with instructions from the plaintiff. A concession made by a counsel on a question of fact is binding on the client, but if it is on a question of law, it is not binding.

It is a consent order. As per section 96(3) of the Code of Civil Procedure Code, no appeal lies from a decree passed by the Court with the consent of the parties. For all the reasons, more particularly, the statement of fact as noted in the impugned judgment under Article 136, the Apex Court would not interfere with the order of the High Court which has done substantial justice.

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Right to appear and practice — General power of attorney holder is not entitled to appear and argue — Advocates Act, 1961.

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[ Madupu Harinarayana v. The ld. 1st Addl. District Judge & Ors., AIR 2011 (NOC) 233 AP] A conspectus of Rules 1 and 2 of Order III of the Code of Civil Procedure, section 2(a) and sections 29, 30, 33, 34 of the Advocates Act, Rule 2 of Rules made by the High Court of Andhra Pradesh u/s. 34(1) of the Advocates Act and Code of Criminal Procedure would show that all the pleadings in a proceeding shall be made by the party in person, or by his recognised agent. A party in person, and a recognised agent, have to make an appointment in writing (vakalatnama) duly authorising the advocate to appear and argue the case. Only an advocate entered on the rolls of the Bar Council of Andhra Pradesh, who has been given vakalat and which has been accepted by such advocate, can have the right of audience on behalf of the party, or his recognised agent, who engaged the advocate. Sections 29 and 30 of the Advocates Act make it clear that advocates are the only recognised class of persons entitled to practise law, and such an advocate should have been enrolled as such under the Advocates Act. Section 32 of the Advocates Act empowers the Court to permit any non-advocate to appear in a particular case. This only means that any person has to seek prior permission of the Court to argue a case if he is not an advocate enrolled under the Advocates Act. Further, it is an offence for a non-advocate to practise under the provisions of the Advocates Act.

It is only advocates, whose names are entered on the rolls of the State Bar Council, who have the right to practise in any Court. If a person practises in any Court without any such authority, and without such an enrolment, it would be committing an offence u/s. 45 of the Act, punishable with imprisonment for a term which may extend to six months. Therefore GPA Shri T. D. Dayal was not entitled to appear and argue for the appellant. He had no right of audience in the case or any other case.

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Recovery of debt — DRT has no jurisdiction to prohibit borrower from leaving country without prior permission of Tribunal — Constitution of India, Article 21 — Debts Recovery Tribunal Act, 1993.

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[ State Bank of India v. Prafulchandra V. Patel & Ors., AIR 2011 Gujarat 81]

The appellant State Bank of India preferred application before the Debts Recovery Tribunal, Ahmedabad. Though a prayer was made to restrain the defendant borrowers from leaving India without prior permission of the DRT, originally no such order was passed.

The case was not decided for more than six years. After 6 years, the bank filed an interlocutory application for various interim reliefs including the direction to the Regional Passport Authorities to provide passport numbers and addresses of the defendant borrowers, for bringing them from the USA to India and for a direction to surrender the passports. Further prayer was made to direct the defendant Nos. 1, 2 and 3 not to leave India without prior permission of the DRT. The DRT, passed certain interim orders and also restrained defendant Nos. 1, 2 and 3 from leaving India without prior permission of the Tribunal. The borrowers preferred appeal to the Appellate Tribunal. The Appellate Tribunal in its order observed that the borrowers, had not approached the Tribunal for seeking permission to leave the country, and further observed that they could approach the DRT, justifying the travel abroad and seek permission accordingly. At this stage the borrowers filed a writ petition holding that — DRT had no power to control physical movements or to impound the passport. The bank filed appeal against this order.

The Court observed that Article 21 of the Constitution safeguards the right to go abroad against executive interference which is not supported by law; and law here means ‘enacted law’ or ‘State law’. Thus, no person can be deprived of his right to go abroad unless there is a law made by the state prescribing the procedure for so depriving him and the deprivation is effected strictly in accordance with such procedure.

Sub-sections (12), (13A), (17) and (18) of section 19 do not empower the Tribunal to issue any prohibitory order prohibiting the borrower from leaving the country without prior permission. Section 22 deals with the procedure and powers of the Tribunal and the Appellate Tribunal. It relates to summoning and enforcing the attendance, requiring the discovery and production of documents, receiving evidence on affidavits, issuing commissions for the examination of witnesses or documents, reviewing its decisions, dismissing an application for default or deciding it ex parte, setting aside any order of dismissal of any application for default or any order passed by it ex parte, or any other matter which may be prescribed, but no provision has been made therein or by a separate Notification issued by the Central Govt. empowering the Tribunal to deprive a person of his personal liberty to move abroad as guaranteed under Article 21 of the Constitution of India. In absence of any such ‘Enacted Law’ or ‘State Law’, it was held that the Tribunal had no jurisdiction to deprive the defendants, the respondents herein, of their right to go abroad.

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International Arbitration — Jurisdiction of Indian Court ousted — Arbitration and Conciliation Act, 1996 section 37(2)(b).

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[ Yograj Infrastructure Ltd. v. Ssangyong Engineering & Const. Co. Ltd., AIR 2011 (NOC) 189 (MP)]

Though contractual work under work order has been carried out in territorial jurisdiction of India the parties had agreed to refer their dispute to arbitration in Singapore in accordance with Singapore International Arbitration Center (SAIC) Rules. According to the said Rule during subsisting of arbitration proceedings under such rules, law of arbitration shall be governed by the International Arbitration Act. Any of party aggrieved by any interim ruling or order of arbitrator, may resort remedy for under Rule 32 of SIAC Rules of the International Arbitration Act. International Arbitration Act (2002 Ed. Statutes of the Republic of Singapore), Chap. 143A, Rule 32 deals with Jurisdiction of the Court. Where parties agreed to refer dispute to arbitration in Singapore in accordance with SIAC rules, whereby during subsisting arbitration proceedings, jurisdiction of the Indian Court was expressly or impliedly ousted. Arbitration being carried out by arbitrator according with SIAC rules. Indian courts has no jurisdiction to entertain any appeal against award of arbitrator. After referring dispute to the arbitrator, parties could not be permitted to approach Court in India, specially when the parties are bound by SIAC Rules. The same cannot be challenged under the Arbitration and Conciliation Act 1996 or any other enactment except the International Arbitration Act. No appeal would lie u/s.37(2)(b) of the Act of 1996.

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Guarantor — Recovery of loan — Corporation cannot sell out properties mortgaged to it by guarantors — State Financial Corporation Act — Section 29, section 31.

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[Gunamani Swain & Ors. v. Orissa State Financial Corporation & Ors., AIR 2011 Orissa 83]

The properties in question were the ancestral properties of one the late Manmohan Swain. One Smt. Sanjukata Swain purchased a TATA truck by availing a loan from Orissa State Financial Corporation (‘OSFC’). Accordingly, an agreement was entered into between the parties. In the said loan, the late Manmohan Swain, and other two persons, namely, Ganeswar Swain and Ghanashyam Swain stood as guarantors and created equitable mortgage in respect of the properties in question in favour of OSFC. Since the loan amount was not paid, the OSFC published a notice for sale of the mortgaged properties in the newspaper. The said properties were put to auction and the sale was finalised in favour of Shri Subhransu Sekhar Padhi for a total consideration of Rs.10,09,000. Pursuant to such sale, sale deed was executed between OSFC and Shri Subhansu. Thereafter, OSFC sent a notice by Registered Post to the petitioner Prafulla Chandra Swain, the son of the late Manmohan Swain to take refund of Rs.2,85,486. Being dissatisfied with such action of OSFC, the petitioners filed the writ petition.

The High Court observed that section 29 speaks about the right of financial corporation in case of default in repayment of loan. The default contemplated thereby is of the industrial concern. When an industrial concern makes any default in repayment of any loan or advance or any instalment thereof under the agreement or in meeting its obligation in relation to any guarantee given by the corporation, the financial corporation has the right to take over the management or possession or both of the industrial concern. It further gives right to the corporation to transfer by way of lease or sale and realise the property pledged, mortgaged, hypothecated as assigned to the financial corporation by the industrial concern. The right of financial corporation in terms of section 29 must be exercised only on a defaulting party. Section 29 does not empower the corporation to proceed against the surety even if some properties are mortgaged or hypothecated to it. The said view is further strengthened by the provisions of sub-section (4) of section 29 which lays down appropriation of sale proceeds with reference to only industrial concern and not surety or guarantor. In view of the above, the Court held that the OSFC in exercise of power vested u/s. 29 of the SFC Act cannot sell out the properties mortgaged to it by the guarantors. The Court further observed that section 31 of the SFC Act provides for a special provision for enforcement of claims by the financial corporation against a surety or guarantor. The financial corporation can proceed against a surety or mortgagor invoking the provision u/s. 31 for the default committed by the industrial concern, and also where the financial corporation requires the industrial concern to make immediate repayment of loan or advance in terms of section 30 and the industrial concern fails to make such repayment. To exercise power u/s. 31, the OSFC is required to apply to the District Judge having appropriate jurisdiction. Thus, section 29 is concerned with the property of industrial concern, while section 31 takes within its sweep both the property of industrial concern and that of the surety. The statute provides an additional remedy for recovery of the amount in favour of the OSFC by proceeding against the surety in terms of section 31 of the OSFC Act. Such a power is not vested with the corporation u/s. 29.

Needless to say that public money has to be recovered from the defaulters, who do not repay the loan amount to the financial institutions. This does not mean that financial institutions are at liberty to dispose of the secured asset of the defaulters in unreasonable or arbitrary manner in flagrant violation of the statutory provisions and principles of natural justice.

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Counsel — Withdrawal of Counsel — Permission of Court is necessary — Civil Procedure Code.

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[Anabik Gupta & Ors. v. Swapan Saha, AIR 2011 Gauhati 100]

In a suit when the counter-claim was pending for cross-examination of the witnesses of the opposite party, Shri P. Deshmukhya, counsel for the plaintiff-petitioners, filed an application, stating to the effect, inter alia, that the plaintiff-petitioners had taken away all their papers, documents/files from him as they had decided to engage another lawyer and that he (P. Deshmukhya) and Shri B. K. Acharyya, another counsel, had accordingly withdrawn from the suit. On considering the application, so filed, the learned Munsiff passed an order dispensing with the cross-examination of the defendant, namely, Swapon Saha, (i.e., opposite party No. 1) and fixed the counter-claim, on next date, for cross-examination of further witness of the counter-claimant.

On the date so fixed, while the defendant’s counsel was present, none appeared on behalf of the plaintiffs. The learned Trial Court, then, passed an order dispensing with the cross-examination of the defendant’s witness, closed the evidence of the defendant’s side and fixed the counter-claim, for argument. Before the date, so fixed, the plaintiffpetitioner, namely, Anamika Gupta filed a petition, with the prayer to adjourn the argument and give another opportunity to the plaintiff-petitioners to cross-examine the defendant and his witness. The plaintiff-petitioners stated that Shri Acharyya, advocate, had expressed his inability to conduct the suit and advised the plaintiff-petitioners to engage another lawyer; the plaintiff-petitioners came to know that their engaged counsel had already withdrawn from their case, but the relevant papers/files remained with the said counsel and all the efforts made by the plaintiff-petitioners to obtain the papers/files from the said counsel did not yield any result; thereafter, the plaintiffpetitioner No. 1 applied for certified copies of the plaint, written statement, counter-claim, evidence, orders, etc., which were received in May 2010, and it was after receipt of the said certified copies that they were able to engage, in June 2010, Shri P. Deb, advocate, as their counsel. The Trial Court rejected the application.

Aggrieved by order rejecting the application, the same was challenged before the High Court. The Court observed that while considering the provisions, embodied in Rules 1, 2 and 4 of Order III of CPC, it may be noted that in a civil suit, it is not necessary for a party to remain present, in person, on every date of hearing unless there is a specific order passed, in this regard, by the Court. It is for this reason, therefore, that order III Rule 1 provides that appearance, on behalf of the parties, may be made by recognised agents. A party or his recognised agent may also appoint a pleader and every such appointment shall be filed in the Court. Once duly appointed, the engagement of the pleader subsists until engagement is determined with the leave of the Court. It logically follows that withdrawal of engagement cannot be an arbitrary act and the permission of the Court is necessary to terminate engagement of a counsel.

It is also worth noticing that the appointment of a pleader, filed in the Court, shall be deemed to have remained in force until determined ‘with the leave of the Court’ by (i) a writing, signed by the client or the pleader, as the case may be, and filed in the Court, or (ii) until the client or the pleader dies, or (iii) until all proceedings, in the suit, have ended so far as regards the client. This clearly shows that until the client or the pleader dies or until all proceedings, in the suit, end as far as the client is concerned or until the leave of the Court is obtained determining the relationship of pleader and client, the appointment, once made and filed in a suit, shall continue to remain in force.

In the present case too, when no leave had been granted by the learned Trial Court, mere filing of the petition by the plaintiffs’ pleader intimating the Court that the plaintiffs had taken away all the papers or documents from their counsel had not determined the relationship of client and pleader, which had existed between the plaintiffs’ pleader and the plaintiffs. In such circumstances, the order, dispensing with the cross-examination of the defendant, could not have been made.

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Vicarious liability — Breach of contract — Damages for non-performances of contract — Contract Act.

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[ Padam Chandra Singhi & Ors. v. P. B. Desai & Ors., 2011, Vol. 113(5) Bom. L.R. 3409]

 The plaintiff No. 1 is the husband of the original plaintiff No. 2 who suffered from cancer and was consequently admitted to the hospital of defendants being the Trustees of Bombay Hospital Trust. The defendant No. 1 was an Honorary Surgeon attached to Bombay Hospital (BH). The plaintiffs’ case is that the original plaintiff No. 2 suffered from cancer since July 1977. She was admitted to BH. The husband i.e., plaintiff No. 1 desired the services of the defendant No. 1. He was informed that the defendant No. 1 would separately charge his fees. The plaintiffs accepted and agreed to those terms. It is the case of the plaintiffs that it was agreed between the defendant No. 1 and the plaintiffs that the defendant No. 1 will himself operate upon the plaintiff No. 2.

 It is the plaintiffs’ case that despite the contract between the plaintiffs and the defendant No. 1, the defendant No. 1 failed and neglected to operate upon the plaintiff No. 2 and accordingly committed a breach of the contract by non-performance. The surgery of the original plaintiff No. 2 was wholly unsuccessful. It was realised upon her abdomen being opened that nothing further could be done. Her abdomen was stitched up. She was given treatment in the hospital thereafter. The plaintiffs’ case in tort upon medical negligence is essentially that the advise of the defendant No. 1 itself was erroneous and was given without any care or caution despite having been shown the reports of the doctors from the USA who had earlier treated the plaintiff No. 2. Upon the complete non-performance by the defendant No. 1 of performing surgery or treating the plaintiff No. 2 the plaintiffs claim that BH itself through its trustees were vicariously liable in tort for the negligence of the defendant No. 1.

The Court observed that the contract between the parties was absolutely clear as to the contracting parties, as to the performance of the date of the contract as also the specific operation to be performed. It is admitted that the contract was not performed by the defendant No. 1 as to why it was not performed, calls for the consideration of the aspect on damages for its breach.

The Court observed that the attitude of the defendant doctor shows how the patients are treated by doctors of such standing and how much the patient can expect of the doctor. It shows the standard of care and the quality of the personal service given by the doctor and the extent of service accepted by the patient under extreme constraint and hopelessness. It however does not alter the legal obligations and rights of the parties. It would at best require the Court to see how the surgeon, who contracted with the patient, at least remained available near her and at her service. Availability cannot include a direction without a look at the patient. The damages can be claimed for breach of the contract as well as for negligence in tort. Since the contract was voluntarily entered into and was breached, the plaintiffs would be entitled to damages upon such breach of contract by nonperformance or misperformance even if there be no negligence in tort.

The extent of damages for the breach of the contract of professional services agreed and failed to be rendered and for the consequent mental agony, distress and anguish would be analogous to the damages which are grantable for similar effects upon a tort. The Court also observed that the breach of the contract of a personal nature more so by a professional involves violations of human rights and is the most acute and profound in case of doctors. Their breach by non-performance would result also in fatality. It would result in considerable mental distress and may lead to other mental problems including depression arising from such distress and agony. Such damages cannot be computed upon the precise monetary loss alone. The Court granted interest @ 16% p.a. for the entire period from the date of the surgery of the original plaintiff till the date of the judgment and thereafter @ 6% p.a. till payment/realisation.

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Unstamped document — Document not duly stamped not admissible even for collateral purpose — Stamp Act, 1899, section 35 — Public Document — Evidence Act, Section 74.

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[ Smt. Mamta Awasthy & Ors. v. Ajay Kumar Shrivastava, AIR 2011, Madhya Pradesh 166]

The Trial Court on the objection raised by the respondent with regard to admissibility of partition deed had held that the same was inadmissible in evidence on the ground that it was neither registered, nor properly stamped.

The Court on further appeal observed that section 36 of the Stamp Act provides that where an instrument had been admitted in evidence, such admission shall not, except as provided in section 61 thereof, be called in question at any stage of the same suit or proceeding on the ground that the instrument has not duly been stamped. Section 35 of the Act casts a duty on the Court not to admit in evidence any document which is not duly stamped. Similarly section 36 bars the objection with regard to admissibility of a document at any stage of the same suit or proceeding on the ground that the instrument has not been duly stamped. One of the essential elements of estoppels by conduct is that the party against whom it is pleaded, should have made some representation intended to induce a course of conduct by the party to whom it was made.

Section 74 of the Evidence Act, 1872 (1872 Act) provides that the documents which are on record of the acts of the Court are public documents within the meaning of section 74(1)(iii) of the 1872 Act. There is distinction between the record of the acts of the Court and record of the Court. A private document does not become public document because it is filed in the Court. To be a public document it should be a record of act of the Court. In the instant case, admittedly, the partition deed was marked as exhibit. Marking of an exhibit on the document is an act of the Court. Thus, the partition deed is record of the act of the Court and is thus a public document within the meaning of section 74(1)(iii) of the 1872 Act.

The other issue i.e., whether the partition deed which is unregistered and unstamped can be looked into for collateral purposes. It is well settled in law that relevancy, admissibility and proof are different aspects which should exist before a document can be taken into evidence. Mere production of certified copies of public documents does not prove the same, as the question of its admissibility involves that contents must relate to a fact in issue or a facet relevant under various sections of the Indian Evidence Act. Thus, merely because the document in question is a public document, it is not per se admissible in evidence. It is required to be stamped under the provisions of the Indian Stamp Act, 1899. The Court further relying on the Supreme Court decision in case of Avinash Kumar Chauhan v. Vijay K. Mishra, AIR 2009 SC 1489 held that if a document is not duly stamped it would not be admissible even for collateral purpose.

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Damages — Goods carried at ‘Owners Risk’ — Carrier cannot escape from the liability to make good loss — Contract Act, section 151 and Carriers Act, 1865, section 9.

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[ M/s. Sirmour Truck Operators Union (Regd.) v.National Insurance Co. Ltd., AIR 2011 (NOC) 389 (H.P.)]

In
a suit filed against the carrier for damage caused to insured goods the
Court observed that u/s.151 of the Contract Act, the carrier, as a
bailee, is bound to take as much care of the goods bailed to him as a
man of ordinary prudence would, under similar circumstances, take of his
own goods. If that amount of care, which a person would have taken of
his own goods, is not taken by the carrier, it would amount to
deficiency in service and the carrier would be liable in damages to the
owner for the goods bailed to him. The liability of a carrier to whom
the goods are entrusted for carriage is that of an insurer and is
absolute in terms, in the sense that the carrier has to deliver the
goods safely, undamaged and without loss at the destination, indicated
by the consignor. So long as the goods are in the custody of the
carrier, it is the duty of the carrier to take due care as he would have
taken of his own goods and he would be liable if any loss or damage was
caused to the goods on account of his own negligence or criminal act or
that of his agent and servants.

The plea that since the goods
were booked at ‘Owner’s Risk’ the carrier would not be liable for any
loss to those goods, is not acceptable because even where the goods were
carried at ‘owner’s risk’, the carrier is not absolved from his
liability for loss of or damage to the goods due to his negligence or
criminal acts. Section 9 of the Carriers Act provides that the common
carriers are liable for the loss, if any, caused to the goods entrusted
to the carriers and it is the duty of the carriers to carry the goods to
the destination station.

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Daughter — Does not include ‘Step daughter’ — Hindu Succession Act, 1956, section 15(1)(a).

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[ Raj Rani & Anr. v. Bimla Rani, AIR 2011, Delhi 170]

A suit was filed by one Bimla Rani (the plaintiff) seeking partition of the suit property. The plaintiff Bimla Rani is the daughter of late Bhola Ram and Smt. Lajo Devi. The defendants are the step-sisters of the plaintiff; the defendants are borne out of the wedlock of late Bhola Ram and Smt. Motia Rani (second wife). Father of the Plaintiff and the defendants late Bhola Ram is common.

The late Bhola Ram was the owner of the suit property. He had by a registered will bequeathed the property to Motia Rani. Motia Rani had by a subsequent will bequeathed the property to her two daughters i.e., the two defendants. There was no dispute that after the death of Bhola Ram by virtue of his will, Motia Rani had become the owner of this suit property. The contention of the plaintiff was that she also being the daughter of Bhola Ram was entitled to a share in the suit property, therefore the suit for partition had been filed. Contention of the defendants was that under the law of succession, the daughters of Motia Rani alone could have inherited this property from Motia Rani and Bimla Devi not being her ‘daughter’, (u/s.15 of the Hindu Succession Act, 1956); she had no interest in the suit property.

The High Court observed that u/s.14 of the Hindu Succession Act, 1956 (HSA) any property possessed by a female Hindu, whether acquired before or after the commencement of that Act, shall be held by her as full owner thereof and not as a limited owner. Thus, there is no dispute that the suit property had devolved upon the Motia Rani in her capacity as a full-fledged owner. The dispute between the heirs was as to whether the expression ‘daughter’ as appearing in section 15(1)(a) includes a step-daughter i.e., the daughter of the husband of the deceased by another wife. The word ‘daughter’ and ‘step-daughter’ have not been defined in the HSA. The expression ‘daughter’ in section 15(1)(a) of the Act would thus include:

(a) daughter borne out of the womb of the female by the same husband or by different husbands and includes an illegitimate daughter; this would be in view of section 3(j) of the HSA.

(b) adopted daughter who is deemed to be a daughter for the purpose of inheritance. Children of a pre-deceased daughter or an adopted daughter also fall within the meaning of the expression ‘daughter’ as contained in section 15(1)(a). If the Legislature had felt that the word ‘daughter’ should include the word ‘step-daughter’, it should have said so in express terms. Thus, the word ‘daughter’ appearing in section 15(1)(a) would not include a ‘step-daughter’ and such a step-daughter, would fall in the category of an heir of her husband as referred to in clause 15(1)(b). When once a property becomes the absolute property of a female Hindu, it shall devolve first on her children (including children of the predeceased son and daughter) as provided in section 15(1)(a) of the Act and then on other heirs, subject only to the limited change introduced in section 15(2) of the Act. The step-sons or step-daughters will come in as heirs only under clause (b) of section 15(1) or under clause (b) of section 15(2) of the Act.

The step-daughter of Motia Rani does not fall in the category of succession as contained in section 15 of the HSA; the expression ‘daughter’ in section 15(1)(a) does not make reference to a ‘stepdaughter’ i.e., a daughter borne to the husband of the deceased female Hindu out of the wedlock with another woman.

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Precedent — Judicial discipline — Contradictory decisions by Co-ordinate Benches — Institutional integrity.

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[Gammon India Ltd. v. Commissioner of Customs Mumbai, 2011 (269) ELT 289 (SC)]

In a civil appeal against the order of CESTAT the Court observed the conflicting orders on identical issues by the Bench of Tribunal.

After deciding the issues on merits the Court showed their deep concern on the conduct of the two Benches of the Tribunal while deciding appeals in the cases of IVRCL Infrastructures & Projects Ltd. (2004) 166 ELT 447 and Techni Bharathi Ltd. (2006) 198 ELT 33. In spite of noticing the decision of a Co-ordinate Bench in the present case, the Tribunal still thought it fit to proceed to take a view totally contrary to the view taken in the earlier judgment, thereby creating a judicial uncertainty with regard to the declaration of law involved on an identical issue in respect of the same Notification. It needs to be emphasised that if a Bench of a Tribunal, in identical fact-situation, is permitted to come to a conclusion directly opposed to the conclusion reached by another Bench of the Tribunal on an earlier occasion, it will be destructive of the institutional integrity itself. What was important is the Tribunal as an institution and not the personality of the members constituting it. If a Bench of the Tribunal wishes to take a view different from the one taken by the earlier Bench, the propriety demands that it should place the matter before the President of the Tribunal so that the case is referred to a larger Bench, for which provision exists in the Act itself. In this behalf, the Court referred to the following observations by a three-Judge Bench of the Court in case of Sub-Inspector Rooplal and Anr. v. Lt. Governor and Ors., (2000) 1 SCC 644.

“At the outset, we must express our serious dissatisfaction in regard to the manner in which a Coordinate Bench of the Tribunal has overruled, in effect, an earlier judgment of another Co-ordinate Bench of the same Tribunal. This is opposed to all principles of judicial discipline. If at all, the subsequent Bench of the Tribunal was of the opinion that the earlier view taken by the Co-ordinate Bench of the same Tribunal was incorrect, it ought to have referred the matter to a larger Bench so that the difference of opinion between the two Co-ordinate Benches on the same point could have been avoided. It is not as if the latter Bench was unaware of the judgment of the earlier Bench but knowingly it proceeded to disagree with the said judgment against all known rules of precedents . . . . .”

The Court directed that all the Courts and various Tribunals in the country shall follow the above salutary observations in letter and spirit.

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Compensation — Minor driving motorcycle without licence — Liability to pay compensation shifts on owner — Motor Vehicles Act 1988, section 168.

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[ Jawahar Singh v. Bala Jain & Ors., AIR 2011 SC 2436]

On 18th July, 2004, at about 1.20 p.m. the deceased, Mukesh Jain, was riding his two-wheeler scooter with his son, Shashank Jain, as pillion rider. According to the prosecution, when they had reached the SDM’s Office, Delhi, a motorcycle, being driven in a very rash and negligent manner, tried to overtake the scooter and in that process struck against the scooter with great force, as a result whereof the deceased and his son were thrown on to the road and the deceased succumbed to the fatal injuries sustained by him.

A claim was filed by the widow, two daughters and one son of the deceased before the Motor Accident Claims Tribunal, the Tribunal awarded a sum of Rs.8,35,067 in favour of the claimants together with interest @7%. The insurer was held liable to satisfy the Award and to recover the amount from the owner of the motorcycle.

The Supreme Court observed that Jatin was a minor on the date of the accident and was riding the motorcycle in violation of the provisions of the Motor Vehicles Act, 1988, and the Rules framed thereunder.

It was Jatin, who came from behind on the motorcycle and hit the scooter of the deceased from behind. Thus the responsibility in causing the accident was found to be solely that of Jatin. However, since Jatin was a minor and it was the responsibility of the petitioner to ensure that his motorcycle was not misused and that too by a minor who had no licence to drive the same, the Motor Accident Claims Tribunal quite rightly saddled the liability for payment of compensation on the petitioner and, accordingly, directed the insurance company to pay the awarded amount to the awardees and, thereafter, to recover the same from the petitioner.

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Liability of guarantor — After his death does not extinguish — Specific contract — Banker’s right of general lien — Contract Act, section 131.

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[ State Bank of India & Anr. v. Mrs. Jayanthi & Ors., AIR 2011 Mad. 179]

One late N.P.S. Mahendran was running two establishments under the name of M/s. Aarthi Bala Tea Plantations and M/s. Sanjay Bala Tea Plantations. The deceased availed loan from the appellant bank and deposited the title deeds by way of collateral security and also executed various documents in order to secure due payment of loan. After the death of the said N.P.S. Mahendran, the respondents petitioners (wife and sons) became liable to pay Rs.1,14,86,428.32, which was outstanding in several loan accounts. The 1st respondent, widow, liquidated the entire outstanding dues lying in the account. The bank, after acknowledging the same, issued ‘No Due’ certificate in her favour. The respondents, then, requested the appellant bank to return the title deeds relating to the properties, which were deposited with the bank by Late N.P.S. Mahendran. In spite of repeated requests, the documents were not returned. The respondents-petitioners approached the bank on many occasions requesting for return of documents, but the same were not returned.

The appellant bank contended that the bank was exercising a general lien on the title documents standing in the name of Late N.P.S. Mahendran, who stood as a guarantor for other facilities and liabilities outstanding against M/s. Somerset Tea Plantation. It was contended by the bank that such cash credit facilities were availed from another branch of the bank, by one M/s. Somerset Tea Plantation and the deceased, husband of the 1st respondent, stood as a guarantor for the said facilities. The said firm had committed default and more than Rs.2.03 crores was due from the said firm. Hence, the bank had initiated a proceeding against the firm and the guarantor and after the death of N.P.S. Mahendran, the present respondents have been impleaded as legal representatives.

The Court observed that the liability under the guarantee is not revoked or extinguished on the death of the guarantor. Section 131 of the Contract Act clearly provides that in case of death of guarantor, the date of guarantee/continuing of the guarantee executed in favour of the bank stands revoked in respect of future transactions. It is well settled that on the death of the guarantor, the liability exists and such liability can be fastened on the estate of the deceased being inherited by his legal heirs, and the creditor can recover the dues out of the estate of the deceased.

The borrower, (late) N.P.S. Mahendran, had admittedly deposited the title deeds of the property to secure a loan transaction availed in respect of two plantation companies. This fact had not being disputed by the appellant bank. Therefore, the contract/mortgage, had been created by the deceased borrower for a specific purpose and for a specific loan and the contract was self-contained and the terms and conditions were binding upon both the borrower as well as the bank. When such is the situation, the bank cannot contend that they could hold the documents for a balance due in a different loan account where the said N.P.S. Mahendran was not a borrower. Further, the language of section 171 of the Act is explicit to the fact that the bankers are entitled to retain as a security for a ‘general balance account’. Admittedly, it was not the case of the appellant bank that the amount, which was now said to be due on account of the borrowings of M/s. Somerset Tea Plantation, was a general balance account of the deceased borrower N.P.S. Mahendran.

Therefore, this agreement/mortgage has to be construed as a ‘contract to the contrary’ and therefore, held that the bank could not claim these documents by invoking the power of general lien u/s.171 of the Indian Contract Act, 1872. The bank was directed to return of title deeds.

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Power of attorney — Revocation by registered deed — Registration Act section 17(1)(b).

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[Chandrama Singh & Ors v. Mirza Anis Ahmed, AIR 2011 Allahabad 114]

The issue before the High Court was:

Whether the registered power of attorney under the provisions of section 32 r.w.s. 33 and section 17(1)(b) of the Indian Registration Act could be revoked without registration or cancellation thereof.

The power of attorney dated 17-3-1967 was relating to the agricultural land of the plaintiff and included the power to sell the land. When there is a transfer of all rights and liabilities over the land including the power to transfer, then it was required to be registered and was registered. The power of attorney contained a clause that it would not be disputed or that there shall be no dispute between the parties and it shall not be ignored. By its cancellation the rights created are sought to be extinguished. The rights created related to immovable property of a value of more than one hundred rupees. Hence u/s.17(1)(b) of the Registration Act a document that creates or extinguishes any right in such immovable property would require registration. In the event a document required to be registered u/s.17 is not registered the effects of non-registration are detailed u/s.49 of the Act. Such a document shall not affect any immovable property or confer any power or create any right or relationship. Therefore, the document whereby the registered power of attorney dated 17-3-1967 was cancelled required registration u/s.17 of the Act and since it was admittedly not registered the effect of non-registration u/s.49 of the Act would affect it.

In the present case a notice dated 20-2-1973 canceling the power of attorney was duly served and received by the attorney prior to the execution of the sale-deed dated 26-12-1975 by him. Admittedly it was a communication sent by the plaintiff to the attorney.

The power of attorney dated 17-3-1967 was revocable. It did not contain any clause that it would be irrevocable. It only said that the parties thereto will not dispute it or ignore it. Normally revocation is complete when it comes to the knowledge of the person against whom it is made. The power of attorney dated 17-3-1967 was not a mere proposal or just a promise. It was also not a simple agreement between the parties. An agreement between the parties would have to contain an element of consideration or act or omission to give it enforceability as a contract. The power of attorney created rights in immoveable property including that of alienation. Being revocable it could be revoked. But not just by a communication. Since it dealt with immoveable property of a value of more than one hundred rupees and created a right to transfer the property it was compulsorily registrable. And when it was registered it could be revoked only upon execution of a registered document of revocation. Hence due to non-registration of the communication/document of revocation it could not affect the sale deed dated 26-12-1975 executed by the attorney, nor could it affect the power of attorney dated 17-3-1967. The relationship of principal and agent established through a registered deed could be validly terminated by a registered deed in view of the Registration Act.

The conclusion would, therefore, be that when the document/notice of cancellation dated 20-2- 1973 was compulsorily registrable and it was not registered, then even upon its execution or service upon the attorney it would not in any manner affect the rights created under sale deed dated 26-12-1975. It did not extinguish the rights created or assigned on the attorney upon execution of a registered power of attorney.

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Dishonour of cheque — Cheque drawn in foreign country — Accused cannot be prosecuted in India — Negotiable Instruments Act, 1881.

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[ Pale Hourse Designs & Anr. v. Natarajan Rathnam, AIR 2011 (NOC) 274 (Mad.)]

The issue that arose for consideration before the High Court was as to whether a person who is not a citizen of India, who has issued a foreign country cheque on a drawee bank functioning in a foreign country could be prosecuted for an offence punishable u/s.138 of the Act.

The Court observed that a combined reading of sections 1, 11, 12 and 134 to 137 of the Negotiable Instruments Act, 1881, makes clear that a cheque made/drawn in a foreign country on a drawee bank functioning in the foreign country and made payable therein shall be a foreign instrument and the law of the country wherein the cheque was drawn or made payable shall be the law governing the rights and liabilities of the parties and dishonour of the cheque. As such the payee cannot select a country and present it through a bank therein for collection to confer jurisdiction on a Court functioning therein. If the payee is given such a right to proceed criminally against the drawer by selecting the jurisdiction, the same will encourage forum shopping making the payees to go to a country wherein the dishonour of the cheque is made a criminal offence and wherein the law is more favourable to the payee enabling him to collect the amount covered by the cheque by way of fine or compensation by resorting to criminal prosecution. A person who is not a citizen of India for an act committed in a foreign country wherein it is not a punishable offence, cannot be prosecuted in India. In this case, none of the petitioners is a citizen of India. The acts constituting the offence, namely, issuance of the cheque, the dishonour of the cheque, the failure to make payment of the cheque after receipt of the statutory notice were all committed by them not in India, but in the USA. Therefore, they cannot be prosecuted in India for the said act as an offence punishable u/s.138 of the Negotiable Instruments Act, 1881.

The Court further observed that the place of issuance of notice shall not be the only criterion conferring jurisdiction on the Court. All the transactions were made in the USA. The cheques were drawn on a bank in the USA. The cheques were payable at Massachusetts branch, United States of America. That being so, the respondent, with a view to invoke the provisions of section 138 of the Negotiable Instruments Act, 1881 in order to have a short-cut method of collecting the cheque amount, has chosen to present the cheques in a bank at Anna Nagar, Chennai, Tamil Nadu for collection, issue notice from Adyar, Chennai and prefer the complaint on the file of the IX Metropolitan Magistrate, Saidapet. The said act on the part of the respondent not only amounts to forum shopping, but also is an example of abuse of process of the Court. Therefore, the Court in order to avoid miscarriage of justice, to prevent abuse of process of the Court and to render complete justice, in exercise of its inherent power u/s.482 Cr. P.C. quashed the criminal proceedings.

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Will — Evidence — Genuineness of will — Attesting witness — Requirement of law — Evidence Act, section 68.

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[ Bahadur Singh v. Pooransingh & Ors., AIR 2012 Rajasthan 74]

In an application for grant of probate of the will, the issue arose as to genuineness of the will. The respondent Pooran Singh through his father and natural guardian Shishupal Singh had filed an application before the Trial Court seeking probate of the will executed by Joothar Singh in favour of Pooran Singh. It was submitted before the Court that so far as genuineness of the will was concerned, it created a suspicion, since most of the witnesses were illiterate, they did not know the contents of the will and that they being either relatives or acquaintance of the said Shishupal Singh, the possibility could not be denied that they had put their thumb marks below the said writing at the instance of Shishupal Singh. The Court observed that concerned witness Shri Tarachand in whose handwritings the said will was written had specifically stated in his evidence that he had written as per the direction of Joothar Singh and in presence of the witnesses Hari Singh, Raghunath Singh, Shishupal Singh and others.

He had also stated that after the writing was over, he had read over the same to Joothar Singh and thereafter Joothar Singh and the witnesses had put their thumb marks. Apart from the fact that other witnesses Hari Singh, Brij Singh, Raghunath Singh and Shishupal Singh have corroborated the said version, no such suggestion was put to them in their respective cross-examination that the thumb mark of Joothar Singh was obtained on plain paper and the writing thereon was made subsequently by Tarachand or Shishupal Singh and thumb marks of other witnesses were also put subsequently.

There is no requirement of law that the attesting witness should know the contents of the will. The only requirement is that the testator of the will should put his signature or thumb mark, as the case may be, in presence of two or more witnesses and that the said witnesses also should put their signatures in presence of the testator.

 In the instant case, the said witness had stated that Joothar Singh had put his thumb mark below the said writing of the will and they had also put their respective thumb marks and signatures on the said will. Therefore, in absence of any substantial defence put up in the evidence by the defendants, the suspicion raised in the present appeal could not be said to be well founded.

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Will — Settlement deed or Will — Joint Will or Joint Mutual Will — Succession Act, 1925 — Section 2(4).

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[ Narayani & Anr. v. Sreedharan, AIR 2012 Kerala 72]

The issue arose for consideration in the matter as to whether the document in question was a will or a settlement. The Court observed that if by execution of the document right is transferred in praesenti, it can only be treated as a settlement deed.

On the other hand, if no right is transferred in praesenti and by execution of deed, provision is made only for transfer of the right, after the death of either or both of the executants, it could only be treated as a will. Where two executants of the deed who were husband and wife and it was provided in the deed that it was jointly agreed by the executants that they shall jointly possess the properties and enjoy them jointly during their lifetime and that, on the death of any one of them the properties are still available, then the surviving executant shall possess the same absolutely with the right of alienation and that if on the death of the surviving executant, the properties are available, they shall go to their children, the deed was a will and not settlement deed. Though the deed provided that the properties shall ultimately go to the children, there was no transfer of right, in praesenti in their favour. So also though it was provided that on the death of one of the executants, properties shall go to the surviving executant, it is subject to the availability of the properties on the death of either of the executants. There was no transfer of the right of one of the executants, during his/her life time to the other.

Thus, there was no transfer of any right in praesenti on the other executants. The Court further observed that a joint will is a single testamentary instrument constituting or containing the will of two or more persons based on an agreement to make a conjoint will. Two or more persons can make a joint will, which, if properly executed by each so far as his property is concerned, is as much his will. That will comes into effect on his death. Joint wills are revocable at any time by either of the testators during the life of either or after the death of one of them by the survivor. If the joint will is executed in pursuance of an agreement or contract between the executants to dispose of their property to each other or to a third person in a particular mode or manner and reciprocal in their provisions, it is a joint and mutual will. In a mutual will there is an agreement that neither of the testator shall have power to revoke it.

The surviving testator receives benefits from the document under the mutual will and hence the survivor is not entitled to revoke the will after the death of the testator as the deceased had agreed in pursuance of the agreement and hope and trust that the will be adhered to by the survivor. As the will takes effect only on the death of the testator, both the testators during their lifetime together can revoke or modify the mutual will. But on the death of one of the testators, the surviving testator is not competent to revoke the mutual will.

Where recitals in the will showed that though it was executed jointly by the husband and wife, there was no mutual agreement between them to divest their individual right and to vest his or her right in the other and it only provides that during their lifetime the properties shall be jointly possessed and enjoyed together and that on the death of one of the executants, if the properties are available, they shall go to the surviving executant to be enjoyed absolutely with even the power of alienation, it would be a joint will and not joint and mutual will, because it was clear that there was no divesting of the rights of the other executant and vesting of that right on first executant. It was more so as the will did not provide that executants have no right of revocation.

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Transfer — Transfer for benefit of unborn person — Transfer of Property Act, section 13.

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[ Sridhar & Anr. v. N. Revanna & Ors., AIR 2012 Karnataka 79]

 The appellants were minors when they instituted the suit through their natural guardian, their paternal grandmother. The case of the plaintiffs was that the suit properties were the self-acquired properties of their great-grandfather, Muniswamappa. He had, by three separate registered gift deeds dated 5-6-1957, one executed in favour of his wife Akkayamma and two in favour of his grandson Revenna (R) defendant in the suit, gifted the suit properties. It was further stated that the properties were in the occupation of tenants. Muniswamappa and his wife Akkayamma expired in the year 1960 and 1961, respectively. It is the case of the plaintiffs that under the gift deeds, neither Akkayamma nor Revanna had any right to alienate the suit properties as they were conferred with a limited interest to enjoy the properties during their lifetime and thereafter the properties were to devolve on the plaintiffs. Notwithstanding this limitation, the defendant No. 1

— Revanna had proceeded to alienate the suit properties under sale deeds in favour of the defendant Nos. 2 to 5. It is the case of the plaintiffs that such alienations were void and did not bind the plaintiffs. It was their case that they had a vested right immediately on their birth. The first plaintiff was born prior to the said sale deeds. The plaintiffs, therefore, alleged that the defendant Nos. 2 to 5 in collusion with the tenants in occupation of the suit properties were seeking to occupy the properties and to illegally demolish the same and therefore the plaintiffs would be deprived of their legitimate right and had proceeded to file a civil suit.

The Court observed that where the suit property was bequeathed by virtue of a gift deed by the donor in favour of his grandson ‘R’ and his unborn brothers and thereafter property was to devolve upon the male children of the grandson ‘R’, it could be said that gift deed created a life interest in favour of ‘R’ and since he did not have a brother, the property absolutely devolved upon the male children of ‘R’ i.e., the plaintiffs. Further ‘R’ had only life interest in the suit property and he had no right to alienate the same.

As soon the plaintiffs were born, ‘R’ would lose the right to alienate the property as an interest is created in favour of the plaintiffs under the gift deeds which would be a prohibition for ‘R’ to alienate the property. The fact that ‘R’ had executed the sale deed in favour of the defendants would be immaterial. Plaintiffs were born prior to the sale transaction. If that be so, the property stood vested in the plaintiffs on their birth. Thus the property devolved on the plaintiffs immediately after the lifetime of ‘R’ since there were no other persons, who were capable of deriving such interest. The plea that ‘R’ and defendant purchasers had acted on the basis of the same would not absolve the defendants of their conduct as being illegal, since it was clearly against the law and there can be no estoppels against statute, nor can the defendants plead equity on that ground. The condition against the alienation imposed in the gift deed was not void. The plaintiffs consequently were held entitled to sale consideration received by ‘R’ under the sale deeds. The Court however declined the claim of the plaintiffs to recover the property.

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Tax on land and building — Towers for wireless communication system cannot be construed as building — Karnataka Municipal Corporation Act, (14 of 1977) section 2(1A).

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[Wireless — TT Info Services Ltd. v. State of Karnataka & Ors., AIR 2012 (NOC) 180 (Kar.)]

The appellants herein who are the licensees under the provisions of the Telegraph Act, 1885 for providing telecommunication services to the general public had approached the Court by writ petitions. The petitioners had called in question the demands raised against the petitioners by the respective local bodies. The demands had been raised in respect of the erection of the base trans-receiver station. The contention on behalf of the petitioners therein was that the municipal authorities/local bodies have no authority to make physical demand in respect of the telecommunication towers installed.

The Court observed that the ‘structure’ which is the subject-matter in the instant case is considered, it is a metal pole or tower to which the antenna is attached and has the backup system at its base. No doubt, it would have to be fastened to the roof of the building or embedded to the land with concrete base, nuts, bolts and the height of the pole may vary from case to case. Such structure though may suggest an element of permanency, it does not belong to the genus of the type previously mentioned in the section defining the building. If the phrase used was ‘other structures’, the term would have been wider to include other structures without reference to the first part of the section. But when it states ‘other such structure’, the structure in question will have to be of nature of the items mentioned in the first part of the section. Therefore, the tower/post which is not relatable to the items mentioned in the first part cannot be construed as a building to bring it within the sweep of section 94 of the Karnataka Municipalities Act 1964, section 103(b) (i) of the Karnataka Municipal Corporations Act, 1976 and section 64 of the Karnataka Panchayath Raj Act, 1993.

The above provisions indicate that apart from the other specific items for which power to tax has been provided, the power is also to impose tax on land and building alone. In fact, in the Karnataka Municipalities Act, 1964, the provision for tax on advertisements is exhaustive and includes ‘post’ and ‘structure’ and the term ‘structure’ has been explained further, but it only relates to advertisement. This in fact indicates that the telecommunication structure has not been indicated separately, nor does it get included in the definition of ‘building’. Therefore, the Court held that the telecommunication tower/post was not liable to tax under the existing power available to impose tax on ‘land’ and ‘buildings’.

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Succession — Female Hindu dying intestate — Heirs related to an intestate by full blood shall be preferred to heir related to half blood — Hindu Succession Act, 1956, sections 15 and 18.

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[Heera Lal v. Smt. Tijiabai (since deceased) by L/ Rs, AIR 2012 (NOC) 189 (M.P)]

One Dwarka Prasad and plaintiffs Smt. Tijiabai and Smt. Dipiyabai were born out of the wedlock from the first wife of Ramratan. From the second wife of Ramratan the defendant No. 1 Heera Lal (step brother) was born, the defendant No. 2 Vinod Kumar is the son of defendant No. 1 Heera Lal.

The suit of the plaintiffs which was filed long back on 5-12-1985 is that the suit property was owned by Dwarka Prasad who had died in the year 1938 and after his death his widow Kalawati possessed the suit property and on coming into force of the Hindu Succession Act, 1956 Kalawati became the absolute owner. No child was born out of wedlock of Dwarka and Kalawati and after the death of Kalawati, the plaintiffs who are the sisters of Dwarka Prasad became Bhumiswami of the suit property because the property in dispute devolved on them. Further, it had been pleaded by the plaintiffs that the defendant Heeralal was making yearly payment of the agricultural produce, but the same had been stopped by him with effect from 1978. Thereafter the plaintiffs submitted necessary application to get their names mutated in the Revenue record to which the objections were submitted by the defendants 1 and 2. However, the Revenue Court directed to mutate the names of plaintiffs in the Revenue record which was assailed by defendants by filing appeal, but it was also dismissed. Hence a suit for possession had been filed by the plaintiffs.

The Court observed that the disputed property fell in the share of Dwarka Prasad in the family partition which took place during lifetime of their father Ramratan. Thus, Dwarka Prasad was the sole owner of the suit property till he died in the year 1938.

 The plaintiffs are the real sisters of Dwarka Prasad and the defendant No. 1 Heera Lal is his step-brother. Since admittedly Kalawati (widow of Dwarka Prasad) having died leaving behind no issue, according to section 16 of the Act of 1956, her right would devolve under Rule 1 among the heirs specified in s.s (1) of section 15. Since Kalawati and Dwarka Prasad did not have any sons, daughters including children of any predeced son or daughter and Dwarka Prasad already having died during the lifetime of Kalawati, the right in the disputed property would devolve in the heirs according to Rule 2 of section 16. But, in the present case there is no heir in terms of Rule 2, hence the devolution of property would take place in accordance to Rule 3 of section 16. According to this rule, the property of the intestate female Hindu would devolve upon the heirs referred to in clauses (b), (d) and (e) of s.s (1) and s.s (2) of section 15 of the Act of 1956, which shall be in the same order and according to the same rules as would have applied if the property had been the father’s or the mother’s or the husband’s, as the case may be, and such person had died intestate in respect thereof immediately after the intestate’s death.

The property in dispute was of Dwarka Prasad and Kalawati inherited the disputed property from her husband and since there is no heir of Kalawati mentioned in the category 15(1)(a) of the Act of 1956, the property would devolve upon the heirs of her husband. If section 16(3) and section 15(1) (b) and class II of the Schedule to section 8 are kept in juxtaposition to each other and are read conjointly on the touchstone and anvil of the settled position of the law, the plaintiffs being the real sisters of Dwarka Prasad, the entire property in dispute of Kalawati would devolve on them.

 It is true that the defendant No. 1 Heera Lal is the step-brother of Kalawati’s husband Dwarka Prasad but he is half blood brother of plaintiffs. Section 18 of the Act of 1956 provides that the heir of full blood have preferential right over half blood. According to this section the heirs related to an intestate by full blood shall be preferred to heir related by half blood, if the nature of relationship is the same in every other respect and therefore the plaintiffs being the real sisters of Dwarka Prasad have preferential right over the defendant No. 1 Heera Lal who is the heir related by half blood of Dwarka Prasad.

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Transfer of property — Adverse possession — Transfer of Proper for Act section 53A

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[ M. Gopal & Anr. v. K. Jangareddy & Ors., AIR 2011 (Andhra Pradesh) 185]
The original owner of the suit property (the defendant No. 1) with a view to sell away the land, had put it to private auction in which the second defendant was the highest bidder. On the same day the plaintiff offered to purchase the said land for which the both defendants agreed and an unregistered sale deed was executed.

The plaintiff’s version was that he had been in continuous possession of the schedule lands having been put in possession of the same under the private sale deed and has been raising seasonal crops. Thus, he asserts that after his purchase, he has been in possession of the schedule lands and the said fact is known to each and every body in and around the village, including the defendants. He also pleaded that by continuously remaining in possession and upon asserting his title to the knowledge of the defendants he perfected the title to the schedule property by adverse possession.

The defendants No. 3 and 4 alleged that the sale deed are sham and bogus documents and the property was coparcenery property, therefore the defendant No. 1 could not have sold the same.

The issue that arose was whether the plaintiff was entitled to protect his possession under law on the ground that since he remained in possession of the property for more than the period of 12 years and that he had perfected his title by adverse possession.

The Court observed that person who obtained the possession of the property under executory terms of contract of sale, cannot ask for declaration of his title on the ground that he remained in possession of the property for more than 12 years period and contending that his possession is adverse to the real owner. The Apex Court in Achal Reddi v. Ramakrishna Reddiar & Ors., AIR 1990 SC 553 held that possession of a purchaser is under a contract of sale, his possession cannot be adverse and he cannot set up the plea of adverse possession. Therefore, the Trial Court erred in declaring the title of the plaintiff holding that he perfected his title to the schedule mentioned property by adverse possession against the defendants.

However, by virtue of the doctrine of part performance embodied in section 53A of the Transfer of Property Act, the plaintiff can protect his possession from defendants 1 and 2 who sold the property to him under the simple sale deed, so also he can protect his possession from defendants 3 and 4 who had the knowledge of the earlier sale transaction in his favour under a sale deed. Further it is true that section 53A only operates as a bar against the defendants in the present case from enforcing any rights against the plaintiff other than those which were provided under simple sale deed. Although the section does not confer title on the person who took possession of the property in part performance of the contract, the law is now well settled that when all conditions of the section are satisfied as in the present case, the possession of the person must be protected by the Court whether he comes as a plaintiff or defendant. The only embargo is that section 53A cannot be taken in aid by the transferee to establish his right as owner of the property. But the transferee can protect his possession having recourse to section 53A, either by instituting a suit for injunction as a plaintiff or by defending the suit filed by the transferor or subsequent purchasers as a defendant. It is also well settled that the transferee can very well file a suit for injunction to protect his possession even though his remedy to file a suit for specific performance of contract is barred by limitation.

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Part performance of Contract — Conditions — The Limitation Act does not extinguish the defence, it only bars the remedy — Section 53A does not confer a title on transferee in possession — Transfer of Property Act, section 53A.

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[ Rajpal & Anr. v. Harswaroop, AIR 2011 (Del.) 203]

The suit of the plaintiff seeking possession of the suit property had been dismissed. The case of the plaintiff was that the defendants had entered into an agreement to sell dated 13-11-1992 with the father of the plaintiff, namely, Sh. Mangat Ram for the purchase of the aforenoted suit property; total consideration was Rs.2,80,000; a sum of Rs.1,05,000 was paid to Sh. Mangat Ram; the defendants agreed to pay the balance consideration on or before 13-9-1993. The balance amount was not paid. The defendants requested Sh. Mangat Ram to cancel the agreement; the defendants had agreed to vacate the property within three to four months. Sh. Mangat Ram expired on 21-4-1997. In spite of requests of the plaintiff to the defendant to vacate the suit property as also the legal notice dated 22-12-2001, the defendants failed to adhere to the said request. Thereafter the suit seeking possession of the suit shop as also damages at the rate of Rs.5,000 per month was claimed. The defendant took defence of part performance of contract u/s.53.

The Court observed that the conditions necessary for making out the defence of part performance to an action in ejectment by the owner are:

(a) That the transferor has contracted to transfer for consideration any immoveable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty;

(b) That the transferee has in part performance of the contract take possession of the property or any part thereof, or the transferee, being already in possession continues in possession in part performance of the contract;

(c) That the transferee has done some act in furtherance of the contract; and

(d) That the transferee has performed or is willing to perform his part of the contract.

The provision does not confer a title on the transferee in possession; it only imposes a statutory bar on the transferor. In the instant case, it is not in dispute that an agreement to sell dated 13-11-1992 had been executed by Mangat Ram (the father of the plaintiff) qua the disputed shop in favour of the defendant.

The essential ingredients of the doctrine of part performance had been made out entitling the defendant to seek shelter and protection under this statutory provision. Admittedly in terms of the agreement the defendant was put in possession of the suit shop. The defendant had been given possession of the suit shop; it has also been proved on record that a sum of Rs.2,15,000 had been paid by the defendant to the plaintiff in part performance of the contract; he was also ready and willing to perform his part of the contract and in fact his case was that the balance consideration had also been paid by him to the plaintiff. The case of the plaintiff on the other hand was that this amount had been returned back and a sum of Rs.80,000 had been paid. This document was rightly disbelieved; it did not even bear the signatures of Mangat Ram. In view of agreement to which there was no denial the defendanttransferee is entitled to protect his possession over the suit property taken in part performance of the contract even if the period of limitation to bring a suit for specific performance has expired. The Limitation Act does not extinguish the defence; it only bars the remedy.

Limitation — Date of judgment or date of communication of order.

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[ Prontos Steerings Ltd. v. Commissioner of C. Ex — Chandigarh-I, 2011 (274) ELT 218 (Trib.) (Del.)]

The dispute in the present case was in regards to refund claim, the relevant date for computing limitation period should be counted from the date of order of the Commissioner (Appeals), which was dispatched on 10-1-2007 and received on 27-1-2007 by the assessee or the limitation period will start from the date of communication of order.

The Commissioner (Appeals) upheld the order of the Asst. Commissioners observing that as per the records, the order had been handed over to the postal authority at GPO on 10-1-2007 and, hence, the same has to be taken as the date of dispatch and the words ‘date of the order’ in clause (ec) of the Explanation (B) to section 11B of Central Excise Act mean the date of dispatch and not the date of communication of the order.

On appeal, the Delhi Tribunal observed that the limitation period prescribed u/s.11B for filing the refund claim is one year from the relevant date. Unlike the judgments of the Courts or Tribunal which are either dictated in the open Court or are pronounced in the open Court and thus the date of the pronouncement and the date of communication to the affected parties are the same, in case of adjudication of any dispute by the Departmental adjudicating authorities or the Commissioner (Appeals), the judgments are not pronounced or dictated in presence of the parties but are sent by post and, thus, there would be a time gap between the date on which the order has been signed, the date of dispatch and the date on which the order is received by the assessee. The point of dispute, thus, in the case was as to whether the words ‘date of such judgment, decree order or direction’ used in clause (ec) of explanation (B) to section 11B refer to the date of signing of the order or date of dispatch order or the date of actual communication of the order to the assessee. It is clear that when some order of Court or an authority affects as assessee, the limitation would start from the date on which the order was communicated to the assessee or the date on which it was pronounced or published so that the party affected by it has reasonable opportunity of knowing the passing of such order and what it contains. The Apex Court in the case of CCE v. M. M. Rubber Co., 1991 (SS) ELT 289 (SC) held that the limitation period would start from the date of the communication of the order and not the date of signing of the order or the date of dispatch and as such with regard to the order passed by the Dept. adjudicating authority or the Commissioner (Appeals) the words ‘date of judgment’ have to be interpreted as the date of communication of the order. Thus, the refund claim was within time and the impugned order rejecting the same as time-barred, was not sustainable.

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Evidence — Proof of execution of document — Will — Evidence Act, section 68.

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[Alok Kumar Mallick v. Janardan Mahadani & Anr., AIR 2011 Jharkhand 146]

The appellants’ application for grant of letter of administration had been dismissed on the ground that the Will had not been proved, therefore the same could not be looked into.

On appeal it was observed by the High Court that a will is required to be attested by two witnesses. Section 68 of the Evidence Act lays down the procedure for proof of a document, which is required by law to be attested. Section 68 of the Evidence Act reads as follows:

“Proof of execution of document required by law to be attested. If a document is required by law to be attested, it shall not be used as evidence until one attesting witness at least has been called for the purpose of proving its execution, if there be an attesting witness alive, and subject to the process of the Court and capable of giving evidence.”

Thus in view of the aforesaid provision, if a Will (which is required under the law to be attested by witness) is not proved by adducing evidence of attesting witness, the same cannot be looked into evidence, unless the appellant shows that the said attesting witnesses are not alive and/or not capable to give evidence. In the instant case, both attesting witnesses of the Will were alive. Under the said circumstance, it was held that the Will had not been proved in accordance with law and therefore the same cannot be looked into.

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Merger — Review of High Court Order — SLP against the same dismissed by SC — No Review possible — Constitution of India Act, 136 and 226.

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[ Sri Ambal Mills P. Ltd. v. Commissioner of C. Ex. Coimbatore, 2011 (274) ELT 186 (Mad.)]

The applicant filed a review petition seeking to review the order passed by a Division Bench of the High Court. Against the said order SLP was preferred to the Apex Court, but the same was dismissed by SC. Subsequently, review of the order of High Court was sought.

The Court while dismissing the review petition held that it is not possible to review the order of the High Court which has been confirmed by the SC. The review petition was not maintainable.

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Remedies for breach of contract — Damages — Measure/quantification of damages — Contract Act 1872, sections 73 and 74.

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[ MSK Projects India (JV) Ltd. v. State of Rajasthan & Ors., (2011) 10 SCC 573]

The Public Works Department of the State of Rajasthan (‘PWD’) decided in September 1997 to construct the Bharatpur bye-pass for the road from Bharatpur to Mathura, which passed through a busy market of the city of Bharatpur. After having pre-bid conference/meeting and completing the required formalities, it was agreed between the tenderers and PWD that compensation would be worked out on the basis of investment made by the concerned entrepreneur. Concession agreement dated 19-8-1998 was entered into between the parties authorising collection of toll fee by MSK-Appellant. According to this agreement, period of concession had been 111 months including the period of construction. The said period was to end on 6-4-2008. The State issued Notification preventing the entry of vehicles into Bharatpur city stipulating its operation with effect from 1-10-2000. MSK-Appellant invoked arbitration clause raising the dispute with respect to delay in issuance of notification.

The Arbitral Award was made in favour of MSKAppellant, according to which there had been delay on the part of the State of Rajasthan in issuing the Notification and the State failed to implement the same and the contractor was entitled to collect toll fee even from the vehicles using Bharatpur-Deeg part of the road. The State of Rajasthan was directed to pay a sum of Rs. 990.52 lac to appellant as loss due up to 31-12- 2003 with 18% interest from 31-12-2003 onwards.

The District Judge set aside the award and held that appellant MSK was not entitled to any monetary compensation. The appeal was allowed by the Rajasthan High Court. The issue arose for consideration before the Supreme Court as to measure/quantification of damages. Damages was claimed for loss of expected profit. The Court observed that in common parlance, ‘reimbursement’ means and implies restoration of an equivalent for something paid or expended. Similarly, ‘compensation’ means anything given to make the equivalent.

 The Court further observed that while interpreting the provisions of section 73 of the Indian Contract Act, 1872, the Courts have held that damages can be claimed by a contractor where the government is proved to have committed breach by improperly rescinding the contract and for estimating the amount of damages, the Court should make a broad evaluation instead of going into minute details. It was specifically held that where in the works contract, the party entrusting the work committed breach of contract, the contractor is entitled to claim the damages for loss of profit which he expected to earn by undertaking the works contract. Claim of expected profits is legally admissible on proof of the breach of contract by the erring party. But that there shall be a reasonable expectation of profit is implicit in a works contract and its loss has to be compensated by way of damages if the other party to the contract is guilty of breach of contract. Section 74 emphasises that in case of breach of contract, the party complaining of the breach is entitled to receive reasonable compensation, whether or not actual loss is proved to have been caused by such breach.

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Partition — Right of pre-emption against stranger purchaser — Transfer of Property Act, Section 44.

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[ Bulu Sarkhel v. Kali Prasad Basu & Ors., AIR 2012 Calcutta 67 (High Court)]

One Shri Kali Prasad Basu and Shri Goutam Basu filed a title suit alleging that Manorama Bose, mother of present plaintiffs and defendants No. 1-4 was owner of a two-storeyed building and that on her death on 19th of October, 1974 the plaintiffs and defendant Nos. 1-4 inherited the said property each having 1/6th share in said undivided two-storeyed building having four flats, two in each row. It is stated that on 5th of September, 1976 the defendant No. 1 produced a typed paper for signature of other brothers and sisters for the proposal of construction of the said flat by the defendant No. 1 for accommodation of his family members. Other co-sharers signed in the said paper in good faith, but later on the defendant No. 1 illegally sold out the said flat to an outsider (defendant No. 5) though the said flat was an accretion to said joint property. The defendant No. 1 had no right to sell out a part of the joint dwelling house to a stranger (defendant No. 5) as there was oral agreement between the co-sharers that before selling to an outsider by a co-sharer, other cosharers should be approached first for purchase. Accordingly the plaintiffs filed suit for partition as well as for purchase of the flat sold to an outsider (defendant No. 5) by invoking section 4 of the Partition Act. The Trial Court decreed the suit and allowed the prayer of plaintiff and the defendant No. 2 for purchase of the property.

The Court observed that a mere assertion of a claim to a share without demanding separation and possession (by the outsider) is not enough to give other co-shares a right of pre-emption. In the case in hand admittedly the defendant No. 5 being stranger purchaser did not claim any partition. As such, section 4 of Partition Act had no application in the facts and circumstances of this case. It is true that the stranger purchaser (defendant No. 5) was put into possession of his vendor’s (defendant No. 1) flat since her purchase in 1990, and other co-sharers of the said dwelling house including the plaintiffs had a right to resist the said possession u/s.44 of the Transfer of Property Act, 1882. But that does not mean other co-sharers can exercise their right of pre-emption u/s.4 of the Property Act when the precondition of application of the said right as mentioned in the said Section was absent. The appeal filed by the defendant No. 5 (stranger purchaser) was allowed.

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Electricity dues of previous occupant — Demand from purchaser of premises — Electricity Act, 2003 section 43(1).

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[ Bhagya Nidhi Exports Ltd. Anr. v. Chhatisgarh State Power Distribution Co. Ltd., AIR 2012 Chhattisgarh 50 (High Court)]

The petitioner had challenged the correctness of two letters issued by Chhattisgarh State Power Distribution Co. Ltd. respondent No. 1, for depositing Rs.48,13,749, the amount of outstanding dues of electricity consumption by Kedia Distilleries, the earlier owner and occupier of the premises purchased by petitioner in auction-sale. The payment was called as a condition precedent for supplying new temporary connection to the premises now occupied by petitioner No. 1 as an auction-purchaser.

The petitioner contended that it had purchased the premises in auction-sale free from all encumbrances; therefore, imposing the condition of pre-deposit of the outstanding dues of Kedia Distilleries on the petitioner was not in accordance with law. The petitioner also contended that the dues of Kedia Distilleries were time-barred dues and they are not recoverable from the petitioner.

The Court observed that the Supreme Court in the case of Haryana SEB AIR 2010 SC 3835 concluded that the previous arrears do not constitute a charge over a property and in general law a transferee of the premises cannot be made liable for the dues of the previous owner/occupier, but if statutory rules or terms and conditions of supply, which are statutory in character, authorise the supplier of electricity to demand such dues from the purchaser claiming reconnection or fresh connection of electricity, the arrears due by the previous owner can be recovered from the purchaser. Therefore, so long as the provision is prevailing in the Supply Code, 2005, the demand made by the respondent No. 1 cannot be held to be illegal or arbitrary merely on account of challenge to the above provisions of the Supply Code.

The Court further observed that the rules of limitation are not meant to destroy the rights of the parties. Section 3 of the Limitation Act only bars the remedy, but does not destroy the right which the remedy relates to. Though the right to enforce the debt by judicial process is barred u/s.3 read with the relevant article in the Schedule, the right to debt remains. The time-barred debt does not cease to exist by reason of section 3. Only exception in which the remedy also becomes barred by limitation is that the right itself is destroyed. In Khadi Gram Udyog Trust v. Ram Chandraji Virajman Mandir, (1978) 1 SCC 44, it was observed that a debt may be time-barred, it would still be a debt due. Though the remedy may be barred, a debt is not extinguished. The petition was dismissed.

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