Subscribe to the Bombay Chartered Accountant Journal Subscribe Now!

Category: Corporate And Other Laws

Order — Order passed without jurisdiction is nullity

New Page 1

  1. Order — Order passed without jurisdiction is nullity


[ Chandrabhai K. Bhoir & Ors. v. Krishna Arjun Bhoir &
Ors., AIR 2009 SC 1645]

The question that arose for consideration was in respect of
application filed u/s.302 of the Indian Succession Act 1925.

One Mr. K. B. Mhatre executed a will on or about 1963, the
legatee whereunder are the respondents. On his expiry an application for grant
of probate in respect of the said will was filed by the respondents. The
appellant filed a caveat pursuant to which a suit was registered. In the said
suit a compromise was entered into by and between the parties. Subsequently
the appellant cancelled the said agreement. Thereafter pursuant to certain
orders passed by the Court in Chamber Summons the matter reached the Court by
appeal filed by the appellant. The appellant contended that the contract
between the parties could not be specifically enforced by the High Court while
exercising its testamentary jurisdiction.

The Court observed that the effect of termination of such
agreement entered into by and between the parties was required to be gone into
in an independent suit and not in a proceeding u/s.302 of the Act. The
testamentary Court in exercise of its jurisdiction u/s.302 of the Act cannot
enforce a contract qua
contract only because the executor is a party thereto.

The submission of the appellant that the decision of the
High Court constitutes res judicata cannot be accepted. Thus, the issue
did not attain finality. In view of the matter, an order passed without
jurisdiction would be a nullity. It will be a coram non judice. It is
non est in the eye of law. Principles of res judicata would not
apply to such cases.

As S. 302 of the Act was not attracted in the facts and
circumstances of this case, the principles of res judicata would also
not apply. If the agreement was not a part of the will, S. 302 will have no
application.

The testamentary Court must give effect to the will and not
an agreement by and between the Executor and the third party, which would be
contrary to the wishes of the testator.

The appeal was allowed. The order of High Court was set
aside.

levitra

Tenancy : Right to take possession of secured asset would not include right to extinguish pre-existing tenancy : Securiti-sation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

New Page 1

30 Tenancy : Right to take possession of
secured asset would not include right to extinguish pre-existing tenancy :
Securiti-sation and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002.


Tenancy is a creation of a contractual relationship between
the parties. Such tenancy would thereafter be statutory tenancy governed by the
provisions contained in the Bombay Rents, Hotel and Lodging House Rates Control
Act, 1947.

Where tenancy in respect of part of secured asset was created
long before the borrower (landlord) mortgaged the property to secure debt from
the secured creditor, then the provisions of the Securitisation Act would not
authorise secured creditor to extinguish such tenancy.

 

In view of relation between the borrower and the bank
(secured creditor), it may be open for the bank to take all such measures as may
be authorised under the Securitisation Act, including the measures enumerated in
Ss.(4) of S. 13. Such measures, however, would not permit the secured creditor
to extinguish the pre-existing tenancy between the tenant and the borrower. The
case would have been different if the tenancy was created subsequent to creation
of charge over the secured asset. The case perhaps also would have been
different had the case of tenancy been set up after creation of mortgage by the
borrower in favour of the secured creditor.

 

When there is a pre-existing admitted tenancy, in exercise of
powers U/ss.(4) of S. 13 of Act, even if it is open for the secured creditor to
take physical possession (as understood in contradiction to symbolic possession)
of property in question, such physical possession would not necessarily mean
vacant possession thereof. Thus, while asserting its rights u/s.13(4), it would
not be open to the secured creditor to summarily evict the pre-existing tenant
and extinguish his tenancy contrary to contract between landlord and tenant or
the Rent Act.

 

Neither the right to take possession, nor the right to sell
the property would include the right to extinguish the pre-existing tenancy.

 

The concept of possession and occupation are not necessarily
one and same. In legal terminology, both have distinct and different meanings.
The Legislature also recognises taking possession of the secured asset even
where it is not necessarily free from all encumbrances. The property can be put
to sale only after possession is taken by authorised officer. However, at the
time of putting property to sale, either by tender or by public auction, proviso
to sub-rule (6) of Rule 8 envisages issuance of public notice which will include
besides other details, the details of encumbrances on immovable property being
sold.

Therefore, despite overriding effect given to the provisions
contained in the Securitisation Act u/s. 35 over any other law for the time
being in force, the Act does not empower the secured creditor to extinguish a
pre-existing tenancy.

[ Dena Bank v. Shri Sihor Nagarik Sahakari Bank Ltd. & Ors., AIR 2008
Gujarat 110]

levitra

Medical services — State cannot avoid its constitutional obligation to provide medical services on account of financial constraints — Constitution of India, Art : 47.

New Page 1

  1. Medical services — State cannot avoid its constitutional
    obligation to provide medical services on account of financial constraints —
    Constitution of India, Art : 47.

[ B. Krishna Bhat v. State of Karnataka & Ors., AIR
2009 (NOC) 1787 (Kar.)]

Maintenance and improvement of public health is joint
obligation of Central as well as State for which they have to provide medical
services. State cannot avoid its constitutional obligation in that regard on
account of financial constraints. Govt. hospitals or public hospitals (run by
local authorities) are ill-equipped as they lack infrastructure both in terms
of buildings, medical equipments, adequate drugs, etc., and adequate manpower.
It is irrational, unjustifiable, unethical, unhygienic and antisocial to plan
a slum colony inside a hospital. All efforts to curb corruption in hospitals
be made. The Court suggests facilities required to be provided in hospital.

Stay : Tribunal has got inherent power to extend stay granted : Central Excise Act, 1944.

New Page 1

29 Stay : Tribunal has got inherent power to
extend stay granted : Central Excise Act, 1944.


The appellants were granted full waiver of pre-deposit of the
amounts and the appeal was listed for hearing. In the meanwhile the Revenue
proceeded to recover the amounts and hence the appellants filed the application
for extension of stay.

 

The Bangalore Tribunal held that the Tribunal has got
inherent powers to extend the stay granted in a matter as held by the Apex Court
in the case of CC & CE Ahmedabad v. Kumar Cotton Mills Pvt. Ltd., (2005)
(180) E.L.T. 434 (SC). Therefore the action of the Revenue to resort to coercive
steps was held to be unjustified.

[ R. S. Avatar Singh & Co. v. Commissioner of C. Ex.
Visakhapatnam-I, 2008 (226) E.L.T. 457 (Tri-Bang.)

 


levitra

Registration : Reconveyance deed not compulsorily registrable : Registration Act, 1908, S. 17(1)(b).

New Page 1

28 Registration : Reconveyance deed not
compulsorily registrable : Registration Act, 1908, S. 17(1)(b).


Whether a non-testamentary document in respect of immovable
properties is compulsorily registrable or not depends on the facts and
circumstances and the terms of the document. No hard and fast rule can be laid
down. The crucial test in each case is as to the nature of the document itself,
if it does create a right, title or interest in itself, whether in present or in
future, it is compulsory registrable u/s.17(1)(b). However, if by itself it does
not create any right but visualises creation or extinction of a right by some
other document, then it falls squarely within the ambit of S. 17(2)(v) and,
hence, not registrable.

In the instant case, the agreement in dispute was a simple
agreement to reconvey property under certain conditions mentioned therein and,
thus, was not compulsorily registrable. Under the circumstances, even provisions
of S. 92(4) of the Evidence Act are not applicable in such case and therefore
subsequent document varying the terms of recoveying deed would not required to
be registered.

[Bhikkilal & Ors v. Smt. Shanti Devi & Ors., AIR
2008 Rajasthan 128]

 


levitra

Guarantor — Liability : Rights of corporation to make recovery only against defaulting industrial concern and not against surety or guarantor : State Financial Corporation Act, 1951, S. 29 and S. 31.

New Page 1

26 Guarantor — Liability : Rights of
corporation to make recovery only against defaulting industrial concern and not
against surety or guarantor : State Financial Corporation Act, 1951, S. 29 and
S. 31.


AP Rocks Private Limited is an industrial concern. It
approached the appellant Corporation for grant of loan in the form of
non-convertible debenture.

Respondents who were Directors of Company executed deeds of
guarantee, agreeing to guarantee repayment/redemption by the company to the
Corporation of the said non-convertible debenture subscription together with
interest, etc. The said Company also executed a deed of hypothecation, whereby
and whereunder its plants and machinery were hypothecated. A collateral security
agreement was also executed. The ‘Industrial Concern’ allegedly committed
defaults.

 

The appellant-Corporation in exercise of its power u/s.29 of
the Act directed that the possession of the said properties of the guarantors be
taken over.

 

The Karnataka High Court held that the appellant-Corporation
could not have proceeded against the guarantors u/s.29 of the Act.

 

The Court observed that the heading of S. 29 states ‘Rights
of financial corporation in case of default’. The default contemplated thereby
is of the industrial concern. Such default would create a liability on the
industrial concern. Such a liability would arise inter alia when the
industrial concern makes any default in repayment of any loan or advance or any
instalment thereof under the agreement. In the eventualities contemplated u/s.29
of the Act, the Corporation shall have the right to take over the management or
possession or both of the industrial concern. It confers an additional right as
the words ‘as well as’ are used which confer a right on the corporation to
transfer by way of lease or sale and realise the property pledged, mortgaged,
hypothecated or assigned to the Corporation. S. 29 nowhere states that the
Corporation can proceed against the surety even if some properties are mortgaged
or hypothecated by it. The right of the financial corporation in terms of S. 29
must be exercised only on a defaulting party. There cannot be any default as is
envisaged in S. 29 by a surety or a guarantor. The liabilities of a surety or
the guarantor to repay the loan of the principal debtor arises only when a
default is made by the latter. The words ‘as well as’ play a significant role.
It confers two different rights but such rights are to be enforced against the
same person, viz., the industrial concern.

 

The liability of a surety is made co-extensive with the
liability of the principal debtor only by virtue of S. 128 of the Contract Act.
The rights and liabilities of a surety and the principal borrower otherwise are
different and distinct.

 

An implied power of Corporation to proceed against a surety
or guarantor cannot be read in S. 29 on principle that a construction which
effectuates the legislative intent and purpose must be adopted. A statutory
authority may have an implied power to effectuate exercise of substantive power,
but the same never means that if a remedy is provided to take action against one
in a particular manner, it may not only be exercised against him, but also
against the other in the same manner.

 

Therefore, the intention of the Parliament in enacting S. 29
and S. 31 was not similar. Whereas S. 29 consists of the property of the
industrial concern, S. 31 takes within its sweep both the property of the
industrial concern and that of the surety. None of the provisions control each
other. The Parliament intended to provide an additional remedy for recovery of
the amount in favour of the Corporation by proceeding against a surety only in
terms of S. 31 and not u/s.29 thereof.

[ Karnataka State Financial Corporation v. N.
Narasimahaiah & Ors., AIR 2008 Supreme Court 1797]

 


levitra

Passport Renewal : Renewal of passport cannot be withheld indefinitely for want of police verification : Passport Act S. 5, S. 6.

New Page 1

27 Passport Renewal : Renewal of passport
cannot be withheld indefinitely for want of police verification : Passport Act
S. 5, S. 6.


The petitioner had applied for issuance of passport, but
neither the same had been issued, nor the issuance has been declined by the
Passport Authority. The respondents stated that on receipts of the applications
for issuance/renewal of passports, the cases were sent for clearance by the CID
and either the same has not been received back or received with the inconclusive
report or received with the recommendation that the same should not be issued,
therefore, no decision in the matter has yet been taken by the Authority.

The High Court observed that on receipt of the application
the Passport Authority is empowered to make such inquiry which he may consider
necessary before issuance of a passport. It is because of such power of making
inquiry the Passport Officer is entitled to seek Police verification report in
regard to the antecedents of the person who has applied for the issuance of a
passport. The purpose of such inquiry by the Passport Authority is to enable
himself to make up his mind as to whether the passport or travel documents
should be issued or refused in the circumstances of each particular case. The
decision over the issue of a passport or travel documents has to be taken by the
Passport Authority alone and for taking such decision he may keep the
intelligence report in view. Merely because the intelligence report received is
adverse, the Passport Authority cannot defer his own decision on the issue of
passport, nor can he refuse the same without applying his mind to the facts
stated in the report. Adverse Police verification report per se does not
disentitle a citizen from his legal right to have a passport. It is for the
Passport Authority to take into consideration the facts/antecedents of the
person who has applied for issuance of a passport, alleged by the intelligence
agency in its report, for deciding whether passport should be issued or refused.
The Passport Authority is not bound by the recommendations of the intelligence
agency.

Where a complete police verification report has not been
received within thirty days, the Passport Authority is to take a decision by
following instructions of the Chief Passport Officer. Therefore, in no case the
Passport Officer can withhold consideration of the question of issuance of
passport or travel documents indefinitely and same shall be true about the cases
of renewal or re-issue of passports or travel documents.

[Anwar-ul-Haq v. UOI & Ors., AIR 2008 Jammu and
Kashmir 35]

 


levitra

Liability for delayed delivery by post office : Post Office Act 1898 S. 6.

New Page 1

  1. Liability for delayed delivery by post office : Post Office
    Act 1898 S. 6.

 

[Branch Post Master, Village & Post Jaipur PS Bhagwanpur
& Ors., v. Chandra Shekhar Pandey, AIR 2009 (NOC) 1670 (NCC)]

The Post Office was held liable to pay compensation of
Rs.25,000 for delay in delivery of the letter. The plea taken that addressee
was not found available on given address was not accepted as there was no
endorsement on day-to-day basis on the envelope about non-availability of the
addressee. It was held to be a clear case of negligence.

levitra

Appellate Tribunal — Reasoned order — Judgment cited but no reference found in the order, nor any discussion with respect to rival submission found.

New Page 1

21 Appellate Tribunal — Reasoned order — Judgment cited
but no reference found in the order, nor any discussion with respect to rival
submission found.

The appeal was filed before the High Court against the order
of the CESTAT. The Revenue contented that the contention raised by the Revenue
was not discussed and the order was cryptic and unreasoned. No reference was
made to the judgment cited by the Revenue.

The Court held that the order is in breach of principles of
natural justice. There is no discussion with respect to rival submissions made
by the parties. There is no consideration or any discussion with regard to the
nature of goods imported, Exim policy or clauses thereof.

The first paragraph of the order was a preamble to the order,
whereas the second para of the order refers to the findings given by the
adjudicating Commissioner, whereas the third para takes notice of the definition
of word ‘goods’ and finally in the fourth para, a conclusive finding without
there being any threadbare discussion is recorded. The Court held that such
order cannot be said to be a reasoned order with application of mind.

The Court further observed that when the said judgment was
cited before the Tribunal, it was expected on the part of the Tribunal either to
consider the said judgment or distinguish it or to refer it to the larger Bench
if contrary view was warranted.

The Tribunal should bare in mind that the judgments of the
Tribunal were subject to scrutiny by High Courts, especially, in exercise of
appellate jurisdiction and/or writ jurisdiction. The higher Courts are expected
to read the mind of the lower authority. In absence of reasons, it become
difficult for the higher Courts to consider the issue involved in the case and
the view taken therein. Reasons substitute subjectivity by objectivity. Right to
reason in an indispensable part of sound judicial system, reasons at least
sufficient to indicate an application of mind to the matter before the Court.
Another rationale is that the affected party can know why the decision has gone
against him. One of the statutory requirements of natural justice is spelling
out reasons for the order made, in other words, a speaking out. The order was
set and matter was remanded for fresh disposal.


[Commissioner of Customs (Import), Mumbai v. Wartsila India
Ltd., 2010 (254) ELT 406]

levitra

Power of attorney executed by owner of property for executing sale : Such power of attorney cannot be treated as conveyance for consideration for the purpose of stamp duty : Stamp Act 1899, and Power of Attorney Act, 2(21).

New Page 1



  1. Power of attorney executed by owner of property for
    executing sale : Such power of attorney cannot be treated as conveyance for
    consideration for the purpose of stamp duty :     Stamp Act 1899, and Power
    of Attorney Act, 2(21).



[ Suman Kumar Sinha v. The State of Jharkhand & Ors.,
AIR 2009 Jharkhand 53]

A registered power of attorney was executed by the owner of
plot in favour of petitioner authorising the petitioner to manage, sell, to
defend, or file any case including transfer of the said property by executing
sale deed in the name of and on behalf of the executant and receive the
consideration amount and pay the same to the executant i.e., the owner.

The petitioner being the power of attorney holder beside
doing other things in respect of the said property executed various sale deeds
in favour of different persons. However, the petitioner received the impugned
notice issued by the District Sub-Registrar, Hazaribagh, whereby the
petitioner was directed to pay a sum of Rs.82,112 being the stamp duty payable
on the said power of attorney treating the same as an instrument of sale.

S. 2(21) of the Power of Attorney Act, 1822 defines the
word ‘Power of Attorney’ which reads as :


“(21) Power-of –attorney — Power-of-attorney “includes
any instrument (not chargeable with a fee under the law relating to court
fees for the time being in force) empowering a specified person to act for
and in the name of the person executing it.”


The Court observed that Power of Attorney is a formal
document whereby one person authorises another to represent him and act in his
name in relation to any transaction or a number of transactions.

In case the power of attorney was given for consideration
authorising the attorney to sell any immovable property, then the same duty
was payable in respect of conveyance for a consideration on the market value
equal to the amount of consideration.

From the contents of the power of attorney, it was clear
that the executant has authorised the donee, in whom he has full faith, to
look after and manage his property as he was not in a position to look after
the property because of his preoccupation. The executant, therefore, inter
alia, authorised the donee to enter into an agreement to sell or sell the
property in his name and on his behalf. It was specifically mentioned in the
instrument that whatever consideration for sale of the property is received by
the donee shall be paid to the executant.

It was therefore, held that the power of attorney was
without any consideration.

Further there was much difference between the general power
of attorney and an irrevocable power of attorney. Where the authority of an
agent was required to be conferred by a deed, or where an agent was appointed
to formally act for the principal in one transaction or a series of
transactions, or to manage the affair of the principal generally, such
document was known as power of attorney. Such an instrument confers a right to
the donee to use the name of the principal. Whereas an agreement is entered
into on sufficient consideration for the purpose of securing some benefits to
the donee of the authority, such an authority is irrevocable and was known as
irrevocable power of attorney.

In the instant case, there was no consideration for the
power of attorney executed by the executant in favour of the petitioner, nor
any benefit is derived in favour of the petitioner. There was no consideration
for the authority given to the petitioner.

Conveyance of sale is, therefore, an instrument whereby any
property is legally or equitably transferred or vested in the purchaser.

As the power of attorney in question was not a conveyance
by which executant transferred or alienated the property in favour of the
petitioner for valuable consideration, rather it authorises the donee,
inter alia, to initiate for sale and to sell the property and to pay the
consideration amount so received to the executant. Such power of attorney
cannot be treated as conveyance for consideration. Hence, no fresh stamp duty
was payable on such document.

The impugned notice issued by the Sub-Registrar was
palpably illegal, arbitrary, mala fide and without jurisdiction.

levitra

Reference to Larger Bench : In all Larger Bench matters registry should provide copies of appeal papers and issue notice of hearing to Bar Association : S. 129C(5) of the Customs Act, 1962.

New Page 1

  1. Reference to Larger Bench : In all Larger Bench matters
    registry should provide copies of appeal papers and issue notice of hearing to
    Bar Association : S. 129C(5) of the Customs Act, 1962.

[ Amit Sales v. Commissioner of Central Excise, Japipur-I,
2009 (238) ELT 467 (Trib. L.B.)]

A Division Bench taking into account the submission made by
the appellant referred the matter to Larger Bench.

On behalf of Bar it was submitted that in respect of Larger
Bench cases as per direction of the Hon’ble President, copies of appeal papers
as well as referral orders along with hearing notice were required to be given
to Bar Association. This practice was being followed generally in all Larger
Bench matters. However, in this particular case, the Bar Association has not
been given a copy of these papers.

The Tribunal observed that the issues considered by the
Larger Bench has wide implication and if there is a decision already taken to
enlist the views of the members of the Bar and that if this practice was being
followed, the registry should follow the same in this case also. The registry
was directed to do the needful in this regard. The notice was to be given to
the appellants as well as to the Bar Association for the next date of hearing.

levitra

Authorised representative : Counsel appearing without Vakalatnama : Directed to file memo of appearance and client with NOC if any : CESTAT Rules, 1982.

New Page 1

  1. Authorised representative : Counsel appearing without
    Vakalatnama : Directed to file memo of appearance and client with NOC if any :
    CESTAT Rules, 1982.

[Pneumatic Power Tools & Co. v. Commissioner of C.Ex,
Raipur, (2009) (238) ELT 605 (Trib. Del)]

In a case before the CESTAT New Delhi the Tribunal found
that the counsel had not filed the Vakalatnama. The Tribunal directed him to
file a memo of appearance in support of his appearance and also Vakalatnama
duly executed by his client with no objection from the previous counsel who
appeared on the previous occasions. The Court noticed that Counsel Shri N. K.
Choudhary appeared on 28-1-2008. Counsel Shri Hargun Jaggi appeared on
2-4-2008, Counsel Shri Hargun Jaggi and Shri C. N. Kali appeared on 11-4-2008.
Counsel Shri A. K. Panikar appeared on 19-5-2008. Counsel Shri A. K. Panigrahi
appeared on 7-8-2008. Similarly on 15-9-2008 Counsel Shri A. K. Panigrahi also
appeared. Counsel Shri Raja Chaterjee appeared on 17-3-2009. The Tribunal
directed the counsel to explain by way of a memo whether all the previous
learned counsels who had appeared in the matter were signatory to the
Vakalatnama and also whether he was signatory to the Vakalatnama. The Registry
was directed to place a report to the Bench getting compliance by way of memo
from the ld. counsel Shri Choudhary appearing in the matter.

levitra

Hindu Law : Daughters are entitled to a share in ancestral properties as a co-parcener : Hindu Succession Act, 1950, S. 6.

New Page 5

24 Hindu Law : Daughters are entitled to a share in ancestral
properties as a co-parcener : Hindu Succession Act, 1950, S. 6.


One Shri Jagatram was the common ancestor of the parties. He
was owner in possession of the property. After his death, one Shri Byasadev
succeeded to the suit properties. Shri Byasadev died, leaving behind his widow
defendant No. 1 and two daughters i.e., plaintiff and defendant No. 2 as
his legal heirs, the other defendants are coparceners. While the father of the
plaintiff was alive, she out of her own income constructed the house on the suit
property with consent of her parents.

After the death of Byasadev, the plaintiff demanded for
partition of the suit house claiming exclusive share.

The High Court observed that after the amendment made in S. 6
of the Hindu Succession Act in the year 2005, the daughters are entitled to a
share in the ancestral properties as coparceners. The parties belong to Hindu
Mitakshara family and plaintiff and defendant No. 2 are daughters. Defendant No.
1 is the widow and other defendants are the successors of common ancestor
Jagatram. Since they are coparceners, each of them is entitled to a share. All
the parties in the suit are entitled to a share and that there was no previous
partition.

[ Santilata Sahu v. Sabitri Sahu & Ors., AIR 2008
Orissa 86]


levitra

Hindu Law : Widow inheriting property of her husband on his death cannot be divested on subsequent remarriage : Hindu Widow’s Remarriage Act, S. 2 (Repealed) and Hindu Succession Act 1956.

New Page 5

25 Hindu Law : Widow inheriting property of her husband on
his death cannot be divested on subsequent remarriage : Hindu Widow’s Remarriage
Act, S. 2 (Repealed) and Hindu Succession Act 1956.


The properties in dispute belong to one Sri Perva-kutty. He
had three sons and two daughters. He executed a will bequeathing the said
properties in favour of his sons and also made provisions for payment of monthly
allowance to the wife Sri Perva-kutty and one of his sons Shri Sukumaran who
died.


The widow of Shri Sukumaran remarried one Shri Sudhakasen
Sudhakaran who also died. Thereafter she filed a suit for partition claiming

ard
share in the suit property.


The Hindu Succession Act, 1956 brought about a sea change in
Shastric Hindu Law. Remarriage of a widow stands legalised by reason of the
incorporation of the Act. Hindu widows were brought on equal footing in the
matter of inheritance and succession alongwith the male heirs. S. 14(1) of the
Act stipulates that any property possessed by a female Hindu, whether acquired
before or after the commencement of the Act, will be held by her as a full owner
thereof. Upon death of Sukumaran, his share vested in his wife absolutely by
reason of inheritance in term of S. 14(1) of the Act. The provisions of the 1956
Act, thus shall prevail over the text of any Hindu Law.

The Act of 1956 in terms of S. 8 permits the widow of a Hindu
male to inherit simultaneously with the son, daughter and other heirs specified
in class I of the Schedule. Therefore, the subsequent remarriage does not divest
the widow of her property in view of provisions of Hindu Succession Act, 1956.

[ Cherotte Sugathan (D) by L. Rs & Ors v. Cherotte Bharathi & Ors.,
AIR 2008 SC 1467]

levitra

Deficiency in service : By building and developing firm : Consumer Protection Act : S. 2(1)(g).

New Page 5

22 Deficiency in service : By building and developing firm :
Consumer Protection Act : S. 2(1)(g).


The building and developing firm refused to refund the loan
amount alongwith interest. The affidavit of one of the partners of the firm and
cheques proved the transaction of loan.

The Hon’ble Commission held that the complaint under the Act
is maintainable and the firm was held deficient in its service in not refunding
part of deposited amount with interest.

[ T. Shahul Mameed & Anr. v. M/s. Ullal Hari Vaman Nayaj
& Ors., AIR 2008 (NOC) 1500 (NCC)]


levitra

Tenancy created after creation of charge by borrower on property : No protection in law available to such tenant : Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

New Page 5

23 Tenancy created after creation of charge by borrower on
property : No protection in law available to such tenant : Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest Act,
2002.


The petitioner has challenged the notice issued u/s.13(4) of
the Securitisation and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002. The petitioner had claimed that he is a tenant in
the property in dispute since August, 2006 and the notices have been issued to
the borrowers after recalling the huge outstanding amount of loan with interest.
The charge on the property was created much earlier to the commencement of
tenancy. In such a situation, a tenant of the present nature would not enjoy any
protection as the property was already been encumberated by the charge created
over it by the owner/borrower.

Tenancy has to be proved by a document or otherwise prior to
the date of creation of charge of equitable mortgage. It is well settled that a
mortgage or mortgagor cannot induct a tenant without mutual agreement and confer
upon a tenant any right to the prejudice of either of the parties. In the
instant case, the relationship of the petitioner as a tenant with the borrower
as a landlord admittedly came into existence after the creation of charge by the
borrower on the property which is under the tenancy of the petitioner and,
therefore, no protection in law would be available to such a tenant. It was held
that the petitioner in his capacity as tenant does not enjoy any right qua the
charge holder respondent Bank.

[ M/s. Delhi Punjab Goods Carrier P. Ltd. v. Bank of
Baroda, AIR 2008 P & H 107]


levitra

Dishonour of cheque : Only the drawer of cheque can be held liable for the offence : Negotiable Instruments Act, 1881, S. 138, S. 141.

New Page 5

21 Dishonour of cheque : Only the drawer of cheque can be
held liable for the offence : Negotiable Instruments Act, 1881, S. 138, S. 141.


Where the wife was joint account holder alongwith her husband
and cheque was issued by husband, which was dishonoured, the wife cannot be held
liable for the offence u/s.141 of the Act.

The Court observed that there is no such provision regarding
taking cognisance against a person other than the ‘drawer’ of the cheque. It is
manifest from the expression of the words used in S. 138 of the Act “such person
shall be deemed to have committed the offence” related to the person who has
drawn the cheque in favour of the payee and if the said cheque is returned
unpaid on account of the conditions mentioned u/s.138 of the Act, such person
alone is liable, but not other except the contingencies mentioned u/s.141 of the
Act. The accused husband could alone be saddled with culpable liability as he
was the only ‘drawer’ of the cheque.

[ Smt. Bandeep Kaur v. S. Avneet Singh, AIR 2008 (NOC)
1301 (P&H)]


levitra

Alimony pendente lite can be claimed by wife by resorting to both provision u/s.125 of Criminal Procedure Code and also u/s. 24 of Hindu Marriage Act.

New Page 1

17 Alimony pendente lite can
be claimed by wife by resorting to both provision u/s.125 of Criminal Procedure
Code and also u/s. 24 of Hindu Marriage Act.


An application was filed u/s 13 of Hindu Marriage Act for
dissolution of the marriage solemnised between the petitioner/husband and
respondent/wife.

 

In the said proceedings, respondent/wife filed an application
u/s.24 of the Hindu Marriage Act, seeking maintenance pendente lite and
expenses for the proceedings. In the application filed u/s.24 of the Hindu
Marriage Act, the respondent/wife claimed a sum of Rs.2000 per month as
maintenance and a sum of Rs.500 as litigation expenses.

 

Apart from filing this application u/s.24 of the Hindu
Marriage Act in the proceedings pending under the Hindu Marriage Act, the
respondent/wife also filed an application claiming maintenance u/s.125 of Cr. P.
C. before the same Family Court. In this application also the respondent wife
claimed a sum of Rs.2,000 as maintenance and Rs.500 as litigation expenses. In
both these cases, the Family Court had directed for payment of Rs.1,000 as
maintenance and a sum of Rs.500 as litigation expenses. The petitioner husband
filed an application for adjustment of the maintenance granted in both the
proceedings, which was rejected.

 

The petitioner husband filed petition under Article 227 of
the Constitution, challenging the rejection of the application for adjustment of
the maintenance granted in both the proceedings.

 

The Court observed that, the Court, which decided the
applications u/s.24 of the Hindu Marriage Act and S. 125 of Cr. P. C. was alive
to the situation that proceedings under both these Sections are pending and
decided both the applications on the same day by passing two different orders.
The Court while passing one order could take note of the same and thereafter
could have granted adjustment of the amount while passing the other order. Where
the Court after evaluating totality of circumstances found that maintenance
granted in each case i.e., u/s.125, Criminal P. C. and S. 24 of the Hindu
Marriage Act is sufficient and no adjustment is necessary, dismissed the
application of the husband for adjustment, no error of law was committed
warranting interference.

 

There is nothing under the law which lays down as a mandatory
requirement the principle for granting adjustment or deducting the amount of
maintenance or alimony granted in a proceeding u/s.125 Criminal P. C. or u/s.24
of the Hindu Marriage Act or vice versa. The principle laid down is that
maintenance u/s.125 of Criminal P. C. and alimony pendente lite u/s.24 of
the Hindu Marriage Act can be claimed by resorting to both these provisions and
the Court is competent under these provisions to grant relief to the person
concerned and the question of adjustment to be granted has to be decided after
taking into consideration the totality of the circumstances, the amount granted,
and the capacity of the person directed for making the payment. There is nothing
to suggest that as a thumb-rule adjustment to the amount is to be granted in
each and every case.

[ Ashok Singh Pal v. Smt. Manjulata, AIR 2008 Madhya
Pradesh 139]

 


levitra

Will — Suspicious circumstances — Attestation of Will Succession Act, S. 63.

New Page 2

20. Will — Suspicious
circumstances — Attestation of Will Succession Act, S. 63.


[Smt. Subasini
Choudhary v. Smt. Bisakha Kar & Ors., AIR 2010 Orissa 174.]

The petitioner had filed
the said case for probate of a Will u/s.276 of the Indian Succession Act. The
case of the petitioner was that the residential house site over plot No. 3 in
Unit-III, Bhubaneswar City belongs to late Rama Chandra Kar, S/o. Late
Banchhanidhi Kar of Dargha Bazar, Cuttack. The said Rama Chandra Kar died on
5-3-1996. Before his death, he executed his last Will and testament in favour
of the petitioner on 14-11-1995 in presence of witnesses. When the matter was
pending before the Court below, a finding has been recorded in the impugned
order that in spite of sufficiency of service of notice, the opp. parties, who
were arrayed as parties, did net appear in the said case, except the State of
Orissa. The lower Court below, ultimately dismissed the Probate Misc. Case.
The Court observed that there is nothing in law which requires the
registration of a Will and Wills are in a majority of cases not registered at
all. The Supreme Court in the case of Ishwardeo Narain Singh, AIR 1954 SC 280
held that to draw any inference against the genuineness of the Will on the
ground of its non-registration was wholly unwarranted.

In the instant case, there
are materials appearing on the face of the Will that the testator was
neglected by all his kith & kin which by implication includes his daughter
also. It was therefore, more fortified that no suspicious circumstances can be
presumed as because, the testator had only one daughter who was debarred by
execution of the Will. It is well settled in law that the mode of proving the
Will does not ordinarily differ from that of proving any other document except
as to the special requirement of attestation prescribed in the case of a Will
in S. 63 of the Indian Succession Act. The onus of proving the Will is on the
propounder and in the absence of suspicious circumstances surrounding the
execution of the Will, proof of testamentary capacity and the signature of the
testator as required by law is sufficient to discharge the onus. Slight
discrepancy in their evidence is plausible when they are giving evidence after
a gap of eight or nine years.

levitra

Appeal dismissed for default restored as there was no lapse on part of the applicant.

New Page 1

16 Appeal dismissed for default restored as
there was no lapse on part of the applicant.


The appeal notice to the respondent was returned unserved and
thereafter no steps for effecting service was taken. The Bombay High Court
restored the appeal by observing that the lapse in effecting proper service was
on part of the counsel or his staff and for which the applicant should not
suffer.

[ Commissioner of Central Ex. & Customs v. Suyash
Engineering Works, (2008) 225 ELT 22 (Bom.)]

 


levitra

Hindu Law — Joint family property inherited by brothers from their father — Not a coparcenary Hindu joint property.

New Page 1

29 Hindu Law — Joint family property inherited by brothers
from their father — Not a coparcenary Hindu joint property.


[Hardial Singh v. Nahar Singh, (Deceased through LR’s
& Ors.) AIR 2010 (NOC) 1087 (P&H)]

The plaintiff (present respondent) brother of Inder Singh
claimed that the disputed suit land to be joint Hindu coparcenary property of
the plaintiff and the defendant. The defendant was the Karta of joint Hindu
family. Suit land was inherited by the plaintiff and the defendant from their
father Pali alias Nika Singh who had inherited it from his father.

It was the case of the plaintiff that the defendant was not
competent to transfer the suit land without legal necessity. Therefore, the
transfer was said to be against the law. The Trial Court held that suit property
was joint Hindu family coparcenary property. The Appellate Court further held
that the half share of the property inherited by the plaintiff’s father Shri
Pali was ancestral.

The Court held that the property, even if joint between the
plaintiff and the defendant, could only be treated to be the joint property and
not Hindu joint coparcenary property.

The Court further observed that a father cannot change the
character of the joint family property into absolute property of his son by
merely marking a will and bequeathing it or part of it to the son as if it was
the self-acquired property of the father. In the hands of the son, the property
will be ancestral property and the natural or adopted son of that son will take
interest in it and be entitled to it by survivorship, as joint family property.
However, an affectionate gift of his self-acquired property by a father is not
ipso facto ancestral property in the hands of the son.

Property inherited by a Hindu male from his father, father’s
father, or father’s father’s father, is ancestral as regards his male issue,
even though it was inherited by him after the death of a life-tenant. Thus, if a
Hindu settles the income of his property on his wife for her life, and the
property after her death passes to his son as his heir, it is ancestral property
in the hands of the son as regards the male issue of such son.

Thus, when the property is held by brothers, it could be said
to be only joint property in their hands, but not a coparcenary Hindu joint
property in which the plaintiff could claim interest by birth qua the share of
the defendant.

levitra

Internal communications within Government Departments/Officer — Not govt. order unless issued in accordance with law.

New Page 1

30 Internal communications within Government
Departments/Officer — Not govt. order unless issued in accordance with law.


[ UOI & Anr. v. Kartick Chandra Mondal and Another,
AIR 2010 SC 3455]

The respondents Shri K. C. Mondal and Shri S. K. Chakraborty,
were engaged to work as casual labours in the office of the Ordnance Factory
without going through the regular process of recruitment of their names being
sponsored by the Employment Exchange, which was the extant policy at the
relevant point of time. After their engagement as casual labours, they worked
for two years with appellant no. 2, i.e., till 1983 and they were
disengaged from service in the month of April, 1983 on the ground that their
names were not sponsored by the Employment Exchange.

The respondents thereupon filed an application before the
CAT. The Tribunal, granted the prayer of the respondents on the ground that 10
other similarly placed casual workers of the Ordnance Factory Board were
regularised. The Tribunal relying on a office memo issued a direction to the
appellants to re-engage the respondents as casual labours if there was
work/vacancy in preference to freshers and those who rendered lesser length of
service as casual labours.

The Court held that the said office memorandum stated that
the same would apply only to those persons who might have been continuing as
casual workers for a number of years and who were not eligible for regular
appointment and whose services might be terminated at any time. Therefore, it
envisaged and could be made applicable to only those persons who were in service
on the date when the aforesaid office memorandum was issued. Unless and until
there is a clear intention expressed in the notification that it would also
apply retrospectively, the same cannot be given a retrospective effect and would
always operate prospectively. Further the aforesaid communication were exchanged
between the officers at the level of board hierarchy only. An order would be
deemed to be a Government order as and when it is issued and publicised.
Internal communications while processing a matter cannot be said to be orders
issued by the competent authority unless they are issued in accordance with law.

The Court further observed that even assuming that the
similarly placed persons were ordered to be absorbed, the same if done
erroneously cannot become the foundation for perpetuating further illegality. If
an appointment is made illegally or irregularly, the same cannot be the basis of
further appointment. An erroneous decision cannot be permitted to perpetuate
further error to the detriment of the general welfare of the public or a
considerable section. This has been the consistent approach of the Court.

levitra

Appeal — Order — Non-reasoned order — Absence of reasons suggestive of order being arbitrary and in breach of principle of natural justice.

New Page 1

28 Appeal — Order — Non-reasoned order — Absence of reasons
suggestive of order being arbitrary and in breach of principle of natural
justice.


[Shapoorji Pallonji & Co. Ltd. v. Commissioner of C. Ex.
Pune-1, 2011 (263) ELT 206 (Bom.)]

The appeal was filed by the assessee against the order passed
by CESTAT. The appellant challenged the order of the Tribunal for want of
reasons and contended that the impugned order was arbitrary. It was submitted
that the impugned order of the Tribunal was arbitrary and suffered from
non-application of mind.

The issue that arose for consideration was whether it was
permissible for the Tribunal to brush aside the submission advanced by the
appellant without threadbare discussion and without recording reasons in support
of the view taken.

The Court held that the impugned order passed by the Tribunal
did not state any reasons for the view taken. In absence of reasons in support
of the order it was difficult to assume that the Tribunal had properly applied
its mind before passing the order directing predeposit.

It was further observed that no doubt, it was true that there
is no precise statutory or other definition of the term ‘arbitrary’.
Arbitrariness in making an order by the authority manifests itself in different
forms. Non-application of mind by the authority making an order was only one of
them. Every order passed by the judicial or quasijudicial authority must
disclose due and proper application of mind by the person making the order. This
may be evident from the order itself or the record contemporaneously maintained
by the authority. Application of mind is best demonstrated by disclosure of its
mind by the authority making the order. Absence of reasons either in the order
passed by the authority or in the record contemporaneously maintained, is
clearly suggestive of the order being arbitrary and in breach of the principles
of natural justice, hence illegal and unsustainable. In the result, the impugned
order was set aside.

levitra

Appeal — Defect in Memorandum of Appeal filed by Department.

New Page 1

27 Appeal — Defect in Memorandum of Appeal filed by
Department.


[Commissioner of C. Ex and Customs, Daman v. J. M. Mehta,
2011 (263) ELT 57 (Guj.)]

During the course of hearing of appeals filed by the Revenue
against a consolidated order passed by CESTAT, various errors/defects had been
noticed; one of the principal error being non-swearing of the affidavit
accompanying each of the appeals and non-mentioning of the dates on which the
appeal Memorandum had been signed. In each of the appeals various fundamental
defects had occurred rendering the appeals invalid in law.

The deponent stated that the affidavit was signed for and on
behalf of the appellant viz. the Commissioner without specifying as to
whether the said gentleman had been authorised to make the affidavit for and on
behalf of the appellant. The affidavit was neither sworn before a Judicial
Magistrate, nor an Executive Magistrate, nor a Notary Public, nor any other
Gazetted Officer who is empowered to administer the oath. Thus, the affidavit
was a mere sheet of paper without being an affidavit as understood in the legal
parlance.

Thus, the appeals had been filed in contravention of the
statutory requirements of High Court Rules and were not valid appeals in the
eyes of law. However, bearing in mind the larger interest of the exchequer, the
appeals were not dismissed as such and permission was granted to withdraw the
appeals so as to enable the appellant to prefer fresh set of appeals.

However, in order that such serious lapses do not recur the
same was brought to the notice of the persons higher up in hierarchy so as to
enable them to put in place an appropriate procedural machinery.

levitra

Marriage Registration: Presence of both parties to marriage before local Registrar not necessary: Hindu Marriage Act, section 8:

New Page 1

30 Marriage Registration: Presence of both parties to
marriage before local Registrar not necessary: Hindu Marriage Act, section 8:


Nishana Mol. N. vs Alappuzla Municipality & Anr

AIR 2009 Kerala 203

The question raised in this writ petition was whether both
the parties to a marriage have to be present in person before the authority for
registration of the marriage under the Common Rules.

The marriage of the petitioner was solemnized on 8.3.2009.
The couple submitted the memorandum for registration of their marriage,
prescribed under the Common Rules, before the local registrar. The petitioner
says that the certificate of marriage issued by the religious authority
concerned as document of proof of the marriage and other relevant materials were
produced along with the memorandum. The husband of the petitioner returned to a
foreign country where he works. The petitioner complains that the local
registrar was insisting on the presence of both the parties to the marriage for
registration.

The respondents submitted that the insistence on the presence
of both the parties to the marriage was only to exclude possible fraud.

The court observed that a record of marriages is kept so that
to a large extent disputes concerning solemnisation of marriages could be
avoided. Rule 6 of the Common Rules states that all marriages solemnised in the
state, after the commencement of the Rules, shall compulsorily be registered,
irrespective of the religion of the parties. Therefore, the Common Rules, in no
manner, deal with solemnisation of marriage but only provide for registration of
marriages which are solemnised otherwise. As regards a marriage solemnised as
per religious rites, a copy of the certificate of marriage issued by the
religious authority concerned may be a document of proof of the marriage.
According to Rule 9 (1) of the Common Rules, the parties to a marriage are
required to prepare a memorandum in a prescribed form and submit the same to the
local registrar within a period of forty-five days from the date of
solemnisation of their marriage. The memorandum for registration of the marriage
is required to be accompanied by certain documents and a prescribed registration
fee. Rule 10 provides for registration of a marriage after one year on payment
of a fine, etc. Rule 11 provides that on receipt of the memorandum, the local
registrar shall verify the entries in the memorandum for its accuracy and
completeness and enter the particulars thereof in the Register of Marriages
(Common), to be maintained in the prescribed form. Issuance of the certificate
of marriage, etc. follows. The Common Rules do not specifically provide for the
appearance of both the parties to the marriage before the local registrar for
the purpose of submitting the memorandum for registration of marriage or for any
other purpose. The provisions clearly show that the presence of both the parties
to the marriage is not necessary.

In view of the provisions in Rule 9 of the Common Rules, there was no
compulsion that both the parties to the marriage should be present before the
local registrar. The registration, under the Common Rules, cannot constitute a
marriage; such registration is intended only to evidence a marriage which has
been solemnised otherwise.

levitra

Amalgamation — Conveyance — Order of Company Court approving scheme of amalgamation resulting in transfer of property to transferee company is a conveyance — Indian Stamp Act 1899, S. 2(10), (14).

New Page 1

26 Amalgamation — Conveyance — Order of Company Court
approving scheme of amalgamation resulting in transfer of property to transferee
company is a conveyance — Indian Stamp Act 1899, S. 2(10), (14).


[Delhi Towers Ltd. v. G.N.C.T. of Delhi, (2010) 159
Comp. Cas 129 (Del.)]

The applicant was aggrieved by refusal of the authorities of
the Government of NCT of Delhi to accept the scheme of amalgamation approved by
the Court in exercise of jurisdiction u/s.394 of the Companies Act, 1956 without
the payment of a stamp duty.

It was urged that the stamping authorities are not accepting
the scheme of amalgamation without payment of stamp duty thereon.

The Delhi High Court held that a proposed scheme of
amalgamation of companies is a voluntary act of the parties (companies) without
any compulsion, statutory or otherwise at all. The scheme when approved by the
majority of members and creditors, binds the minority dissenters as well. The
Court exercises only a supervisory jurisdiction while examining it. No element
of adjudication is involved in the order of approval. The Court is not empowered
to consider the merits of the terms on which the scheme for amalgamation has
been proposed by the consenting parties. The role of the Court is confined to
considering whether the scheme was not violative of the principles of law,
public policy, and was not opposed to public interest. The order of approval of
the scheme results in amalgamation and absorption of the assets and assets and
liabilities of the transferor company with those of the transferee company which
includes immovable property.

It is the “instrument whereby property is legally and
equitably transferred” which is made liable for payment of stamp duty. Section
349(2) of the Companies Act, 1956 provides that the properties and liabilities
of the transferor company stand transferred to the transferee company by virtue
of the order of the Court. The statute does not provide any exception to the
definition of ‘instrument’ or ‘conveyance’. Transfer of property on effectuation
of a scheme of amalgamation after its acceptance by the approval of the Court is
not a transfer by any statutory prescription. Merely because a scheme for
amalgamation requires approval by Court, it makes no difference at all to its
real nature. It is nothing better than and remains a compromise or settlement.
It would be immaterial for chargeability to stamp duty that approval and
effectuation of the scheme or arrangement required Court intervention by way of
the necessary approval. Thus, for the purposes of imposition of stamp duty, it
would be immaterial whether the conveyance was by operation of law, statutory
operation, or by virtue of a private contract between parties. Exemption has to
be by specific statutory provision.

Section 2(10) of the Indian Stamp Act, 1899 contains an
inclusive definition of ‘conveyance’. The definition of ‘conveyance’ in the
Bombay Stamp Act, 1958 was an inclusive definition. The amendment to that Act by
the Maharashtra Act No. 27 of 1985 was only with a view to setting at rest any
doubts and to clarify and explicitly state what was already included in the
unamended definition of conveyance. A scheme of amalgamation approved by a Court
in exercise of jurisdiction under the Companies Act, 1956 and given effect
thereafter, where under property is conveyed from one company to another, was
covered within the unamended definition of the term ‘conveyance’ in the Bombay
Stamp Act as well. Merely because the Legislature has not amended the existing
statutory provision as applicable to Delhi to specifically include transfer of
property under an order approving a scheme of amalgamation in the definition of
conveyance, it does not amount to exclusion from applicability of the Indian
Stamp Act and chargeability to stamp duty thereon. The statutory definition of
‘conveyance’ u/s.2(10) of the 1899 Act is an inclusive definition of wide import
which cannot be confined to specific instruments mentioned in the statute. An
order passed by the Company Court in exercise of jurisdiction u/s.394 of the
Companies Act, 1956 approving a scheme of amalgamation proposed by the parties,
is covered under the definition of ‘conveyance’ u/s.2(10) of the Indian Stamp
Act, 1899.

A scheme of amalgamation which was placed before the Court
and stands approved u/s.391 to 394 of the Companies Act, 1956 would be covered
under the definition of ‘instrument’ as contained in Section 2(14) and would be
chargeable to stamp duty.

Accordingly, an approved scheme of amalgamation amounts to a
transfer inter vivos between two companies who were juristic persons in
existence at the time of passing of the order and sanctioning of the scheme
whereby right, title and interest in the immovable property of the transferor
company are transferred to the transferee company. The transfer takes place in
the present and is not postponed to any later date and is covered under the
definition of conveyance u/s.2(10) of the Stamp Act.

levitra

Hindu Law – Mother falls in the category of class I legal heir – cannot be denied the family pension: Jammu and Kashmir Hindu Succession Act, 1956

New Page 1

29 Hindu Law – Mother falls in the category of class I legal
heir – cannot be denied the family pension: Jammu and Kashmir Hindu Succession
Act, 1956


Maha Lakshmi Tikoo vs State Bank of India & Ors AIR 2009
Jammu and Kashmir 67

 

The son of the petitioner, late Shri Virender Kumar Tikoo,
who was working as a senior manager in the respondent bank and remained
unmarried during his life time, expired. The petitioner, being the sole legal
heir, was dependent on him. After the death of the son, the petitioner, who had
become a qualified member for the pension on the date of his death, she being
the sole dependent of her son, applied for grant of benefit of family pension.
The claim of the petitioner was rejected on the ground that under the rules,
only a widow/widower or the surviving children of the deceased employee are
entitled to this benefit.

The respondent bank had introduced the scheme of family
pension w.e.f. 1st January, 1987 by way of framing Rule 23(5) of the State Bank
of India Employees Pension Fund Rules. It is stated in the said rule that the
mother of a deceased employee is not entitled to claim the benefit of family
pension. It was further stated that the deceased Virender Kumar Tikoo had not
even nominated the petitioner for grant of terminal benefits like provident fund
and gratuity. It was thus stated that the petitioner was not entitled to family
pension.

The respondent bank also contended that the property of a
Hindu who has died intestate can devolve as per the provisions of the Act, but
pension was not covered by the term “property”, and as such, in this case, the
mother, who has been shown to be one of the legal heirs as per the Act, but not
included as such in the rules, cannot seek the benefit of family pension.

As per the list of heirs, being a relative specified in Class
I of the Schedule, the `mother’ has been kept on the same footing as that of
son, daughter, widow and other relatives.

The respondent bank, in its rules for family pension, has
excluded the mother from getting this benefit. The policy adopted in this
regard, i.e., excluding the mother from the list of legal heirs so far as grant
of pension is concerned, had been challenged by the petitioner as being a
violation of Art. 14 of the Constitution.

It was held that there was no rationale in excluding the
mother from the said list and denying her the benefit of family pension when she
is a class I legal heir under the Act. Thus, the rule framed by the respondent
bank in this regard was discriminatory and in violation of Art. 14 of the
Constitution and the provisions of the Act and the schedule attached thereto.

The nomination of the niece by the deceased employee would
not affect the right of the petitioner so far as getting the family pension was
concerned, because a nominee was only authorized to receive the amount for which
he/she has been nominated.

levitra

Co-operative Societies – Housing Society – Redevelopment: Minority members of co-operative society bound by the resolution passed by the majority: Co-operative Societies Act.

New Page 2

24 Co-operative Societies – Housing Society – Redevelopment:
Minority members of co-operative society bound by the resolution passed by the
majority: Co-operative Societies Act.


Girish Mulchand Mehta and Durga Jaishankar Mehta Vs. Mahesh
S. Mehta and Harini Co-op. Hsg. Soc. Ltd. & Ors

Appeal No. 338 of 2009 (unreported Bombay High Court)

Dated 10.12.2009

The respondent society entered into an agreement dated
7.5.2008 to demolish an existing old building and to develop the plot/ property
as agreed.

There is no dispute that the agreement provides a time bound
schedule: to complete the project within 18 months from the date of receipt of
the full commencement certificate from MCGM. It also provides that pending
construction, the developer has to provide alternate suitable residential
accommodation to the respective members. Out of the 12 members, 10 members have
already shifted to the premises provided by respondent society.

The appellants are the members who objected in the Special
General Body Meeting, dated 2.3.2009, by endorsing ‘not agreeable’. However, the
resolution was passed by a majority. This resolution remained unchallenged.

The dispute was pending before the Arbitrator as the society
was unable to handover the possession to the developer. As the relief claimed in
the petition could not be granted under Sec. 17 of the Act, the Society had
invoked Sec. 9 of the Arbitration Act in the given background. The Hon’ble High
Court allowed the petition of the respondent society by appointing a receiver.
Against the said order, the minority members had preferred the present appeal.

The Hon’ble Court held that the appellant minority members
were bound by the agreement between the developer and the society. The purpose
of the society which is governed and run in pursuance of the MCS Act is to have
cooperation from all its members to fulfil its aims and objectives as per the
bye-laws of the society. Therefore, merely because two members are objecting to
the said resolution, it in no way affects the special resolution passed by the
majority and the agreement entered into between the parties accordingly. The
parties are bound by the same. It was a well established position that once a
person becomes a member of the co-operative society, he loses his individuality
with the society and has no independent rights except those given to him by the
statute and the bye-laws. The member has to speak through the society or rather
the society alone can act and speaks for him qua the rights and duties of the
society as a body. So, as long as the resolutions passed by the general body of
the Respondent No. 2 Society were in force, and not overturned by a forum of
competent jurisdiction, the said decisions would bind the appellants.

Sec. 9 of the Act, as invoked in the present matter, was
basically against Respondent No. 1 Society, as in its reluctance, it was unable
to hand over the premises, and, therefore the necessary commencement certificate
could not be obtained to proceed and complete the construction within 18 months;
because the minority members were not cooperating. Any delay was not in the
interest of the parties as well all the society members. The society has no
objection if the relief as prayed was granted by way of appointing a receiver.
Thus

Sec. 9 was rightly invoked in aid of the main relief/claim
which was pending before the Arbitral Tribunal. The appellants were not parties
to the agreement in question. The society had entered into the said agreement,
where there was a clause of arbitration. At this stage, all the members are
bound by the same. The relief under Sec. 9 of the Act, therefore, was rightly
granted against the consenting society.

In the present case the majority decision/ resolution
followed by the agreement binds the society and its members under the law.
Hence, the receiver appointed to handover vacant possession to the developer for
demolition and redevelopment was upheld.

levitra

Carrier and Insurer – Liability: Carriers Act 1863 – sec 8 & 9

New Page 1

28 Carrier and Insurer – Liability: Carriers Act 1863 – sec 8
& 9

Maharashtra State Electricity Board (MSEB) and etc. vs P.B.
Salunke & Anr AIR 2009 Bombay 185.

The MSEB placed an order with M/s. Kirloskar Electric Co. for
supply of a transformer. The transformer was to be unloaded at Nandgaon Railway
Station and then transported to Aurangabad. The respondent, Shri Sanjay Salunke
had undertaken the contract of transporting the transformer. The MSEB insured
the operation of unloading the transformer and transporting it to the concerned
sub-station with the Government Insurance Fund. There was no privity of contract
between Mr. Salunke and the Government Insurance Fund (the defendants).

While unloading the transformer within the premises of
Nandgaon Railway Station, it toppled down from the trailer of Shri. Salunke and
was damaged. Thereafter, the transformer was sent back for repairs to Bangalore,
and M/s. Kirloskar Electric repaired it and sent it back. The MSEB contended
that due to negligence of the defendant, i.e., Mr. Salunke, it suffered loss
and, therefore, both the defendants, i.e., Mr. Salunke and the Government
Insurance Fund were liable to pay for the same.

The Hon’ble Court observed that under section 9 of the
Carriers Act, 1865, negligence on the part of the carrier need not be
established by the complainant, i.e., the owner of the goods. Therefore, Mr.
Salunke was liable for the damage caused to the transformer. The insurance was
taken during transport so as to save the appellant company from possible losses;
so, merely because the contractor was negligent, the Government. Insurance Fund
cannot avoid its responsibility. At most it will be in a position to recover the
amount, if paid, from the transport contractor. The court, therefore, held that
both the defendants were jointly and severally liable to bear the loss suffered
by the appellant, the MSEB.

levitra

Co-op. Housing Society : BMC cannot sanction the modified plan without fresh NOC from society : Appellate Court, must pass reasoned order : Bombay Municipal Corporation Act S. 354A.

New Page 1

4. Co-op. Housing Society : BMC cannot
sanction the modified plan without fresh NOC from society : Appellate Court,
must pass reasoned order : Bombay Municipal Corporation Act S. 354A.


The appellant is a co-op. hsg. society. A building plan was
submitted by the respondent No. 2 to the appellant society for approval and the
approval was granted by the appellant. Earlier a lease was granted by the
appellant society (the lessor) with respect to the plan in question in favour of
one Shri J. C. Patel and it has been provided therein that any structural
alternatives and additions by the lessee in the building required consent in
writing of the appellant. The condition to be complied with before the starting
of the work of building on the plot, the respondent No. 1 has mentioned that NOC
from the society along with resolution of general body for development will be
submitted before commencement certificate.

Thus the terms of the lease deed have been approved by the
respondent No. 1. The lessee made substantial changes in the original plan
without getting NOC from the appellant society. It was alleged by the appellant
that the respondent No. 2 suppressed the subsequent plan and was wilfully
deceiving the appellant by giving false representation.

The appellant expelled respondent No. 2 and Patel from the
membership of the appellant society. The appellant society terminated the lease
deed and initiated eviction proceeding against the respondents. The appellant
society represented to respondent No. 1 that the unamended plan was illegal. On
receiving the representation, the respondent No. 1 BMC issued a ‘stop-work
notice’ u/s. 354 A of the BMC Act.

Subsequently the respondent No. 1 withdrew the stop-work
notice against which the writ-petition was filed in the High Court by the
appellant society which was dismissed by the Single Judge and was upheld by the
Division Bench on appeal.

The Supreme Court held that respondent No. 2 had violated the
conditions of lease deed and the construction as the amended plan was wholly
illegal. There was a specific stipulation in the lease deed that NOC from the
lessor has to be obtained for the purpose of obtaining sanction of the building
plan from the BMC. The BMC cannot sanction/modify the plan unless a fresh NOC
had been obtained by the lessee from the appellant society. The order of the
High Court is set aside and the order of the BMC withdrawing the ‘stop-work
notice’ was quashed.

The Court also observed that when a judgment is written, the
learned Judge should at least briefly mention the facts of the case, the
controversy and then give his reasoning. Even in a judgment of affirmance, he
must show that it has properly applied his mind to the case and not acted as a
rubber stamp. There must be own independent reasoning.


[The New India Co-operative Housing Society Ltd. v.
Municipal Corporation of Greater Mumbai and Anr. (unreported) Civil Appeal
No. 5426 of 2008 (Arising out of Special Leave Petition (Civil) No. 20670 of
2006) order dated 2-9-2008]

 


levitra

Claim for compensation for Fatal Accident can be made only for benefit of spouse, parent and child of deceased and not for benefit of brother or other relations of deceased. Expression ‘Legal Representative’ : Motor Vehicles Act (59 of 1988) : S. 68.

New Page 1

2. Claim for compensation for Fatal Accident
can be made only for benefit of spouse, parent and child of deceased and not for
benefit of brother or other relations of deceased. Expression ‘Legal
Representative’ : Motor Vehicles Act (59 of 1988) : S. 68.


The appellants were the father, mother and brother of
deceased. The claimants challenged the quantum of compensation. The deceased had
died in a motor vehicle accident. The deceased was aged 21 years at the time of
her death and was a famous cine artist and dancer. According to the appellants
the compensation claimed was about Rs.60,00,000. The question which arose for
consideration was whether a brother of a person killed in a motor vehicle
accident can claim compensation.

 

S. 166(1) of the Motor Vehicle Act states the different set
of persons who can file applications for compensation arising out of an accident
of the nature specified in S. 165(1) of the M.V. Act.

 

The expression ‘legal representative’ has not been defined in
the M.V. Act. Definition of the expression ‘legal representative’ has been
incorporated in S. 2(11) of the Code of Civil Procedure, 1908. The said
definition, no doubt, in terms does not apply to a case before the Claims
Tribunal, but it has to be stated that even in ordinary parlance the said
expression is understood almost in the same way in which it is defined in the
Code of Civil Procedure. The definition reflects the sense in which the
expression is understood ordinarily and, therefore, must govern cases before the
Tribunal. Ordinarily, heirs of the deceased are the persons who represent the
estate of the deceased and must be taken to be his legal representatives. A
legal representative in a given case need not necessarily be the wife, husband,
parent and child. Thus in case of death of a person in a motor vehicle accident,
compensation can be claimed only by the legal representatives. They may claim
besides special damages, etc. compensation for economic loss and loss to the
estate. A brother of the deceased may be a legal representative of the deceased
in the absence of preferential heirs under the personal law governing the
parties and if so, he can claim compensation. But he cannot do so, if he is not
a legal representative entitled to succeed to the estate of the deceased. This
is so even if as a matter of fact they were dependent on the deceased for
financial help.

[ P. N. Unni & Ors. v. Baby John & ors., AIR 2008
Kerala 157]

 


levitra

Banking — Date of maturity of fixed deposit lapsed — Yet payment of maturity value should be along with interest @ 6% p.a.

New Page 1

26 Banking — Date of
maturity of fixed deposit lapsed — Yet payment of maturity value should be along
with interest @ 6% p.a.


(Tausif Ali v. State of
Jharkhand & Ors., AIR 2010 Jharkhand 108)

The savings made from the
daily earnings of the petitioner’s father, deposits of amount were made by the
petitioner’s father in the name of the petitioner, with the bank. As per the
terms of the deposit, the period of fixed deposits was for one year and on the
date of maturity, the amount of the fixed deposits together with interest
accrued, was to be paid to the nominee. Upon maturity of the fixed deposits,
when the demand for payment of the amounts was made, the manager of the
respondent bank refused to make payment. The petitioner thereafter approached
the Registrar, Co-operative Societies, since the bank was registered under the
Co-operative Societies Act, but the Registrar also did not entertain the
petitioner’s claim.

The Court observed that the
date of maturity of the fixed deposits had long lapsed, yet the payment of the
maturity value had not been made by the respondent bank to the petitioner.

The respondent bank was
directed by the Court to pay the maturity value of the fixed deposit to the
petitioner along with interest calculated at the rate of 6% per annum on the
maturity value, within four weeks from the date of receipt of a copy of the
Court order.

levitra

Accident claim: Widow of deceased entitled to seek compensation for death of husband – This is a vested right in her that cannot be denied merely on ground of her remarriage during pendency of claim petition: Motor Vehicles Act, 1988, section 166

New Page 1

27 Accident claim: Widow of deceased entitled to seek
compensation for death of husband – This is a vested right in her that cannot be
denied merely on ground of her remarriage during pendency of claim petition:
Motor Vehicles Act, 1988, section 166




The State of Tripura & Anr vs Smt. Bela Dey (Das) & Anr AIR 2010 (NOC) 156 (Gau).


 

There is no restriction/bar prohibiting or disqualifying a
widow, who remarries during pendency of a claim petition, from getting
compensation for the death of her husband. In view of section 166,  a widow
becomes the legal representative, immediately on death of her husband in a
vehicular accident, and her right to seek compensation under the Motor Vehicles
Act accrues in her favour. There is no provision in the M. V. Act that in order
to get compensation, a widow is required to remain unmarried. In the absence of
any contrary provision, she cannot be divested from her statutory right to get
compensation to which she is lawfully entitled, only on ground of subsequent
remarriage. The option for remarriage being legally permissible, a widow should
be encouraged to remarry. Therefore, she should not be punished by depriving her
of the compensation for the death of her husband. A widow, if she can find a
suitable husband, even during pendency of her claim petition, cannot be expected
to wait to enter into remarriage till the disposal of the claim petition.
Therefore, there cannot be any impediment or restriction compelling a widow not
to remarry till disposal of her claim petition. Moreover, the right to get the
compensation had accrued to her much prior to her remarriage. The M.V Act does
not provide any provision by which such right can be taken away due to
subsequent remarriage and that too after filing claim petition! The loss, both
mental and financial, caused to her due to the death of her husband, cannot be
suitably compensated by the subsequent marriage.

levitra

Registration — Gift deed in respect of immovable property requires registration — Registration Act S. 17

New Page 5

  1. Registration — Gift deed in respect of immovable property
    requires registration — Registration Act S. 17

[ Naranji Bhimji Family Trust v. Sub-divisional Officer,
Ramtek & Ors., AIR 2009 (NOC) 1934 (Bom.)]

The petitioner claimed to be owner and landlord of the suit
premises. The property originally belonged to one Shamji Naranji and in the
year 1962, by order of the Charity Commissioner, the said property was
included in Naranji Bhimji Family Trust and accordingly entry was also taken
in the city survey record in the year 1969. The petitioner-trust allowed
respondent No. 2 & 3 in the year 1980-81 to occupy the suit premises
consisting of five rooms and two verandahs, etc. as licensee. Respondent no. 3
had filed Regular Civil Suit seeking declaration that he was owner of the
property on the basis of oral gift. That suit came to be dismissed on
8-2-2005. According to the petitioner, they had repeatedly asked the
respondent nos. 2 and 3 to vacate the premises but they avoided.

The petitioner filed application u/s.43 of the Maharashtra
Rent Control Act, 1999 for eviction. The competent authority granted the
respondent leave to appear and contest the above application. The said order
was challenged, wherein the Court held that S. 123 of the Transfer of Property
Act clearly provides that for the purpose of making gift of immovable
property, the transfer must be effected by registered instrument signed by or
on behalf of the donor and attested by at least two witnesses. A gift of
movable property may be made either by registered instrument or by delivery.
Thus immovable property cannot be transferred unless a gift of the same was
made by a registered instrument. Oral gift of immovable property is not
permitted u/s.123 of the Transfer of Property Act. Similarly, S. 17 of the
Registration Act, 1908 makes registration of an instrument of gift of any
immovable property compulsory, irrespective of value of the property. Other
non-testamentary instruments, which purport or operate to create, declare,
assign, limit or extinguish any right, title or interest in immovable
property, the value of which is Rs.100 or upwards are required to be
registered compulsorily. It means that if the value of the property is less
than Rs.100, in case of such documents, they are not compulsorily required to
be registered. However, exception on the basis of the value of the immovable
property is not made in respect of instrument of gift of immovable property.
Thus, it was clear that S. 123 of the Transfer Property Act as well as S. 17
of the Regis-tration Act make registration of the instrument of gift deed of
an immovable property, irrespective of the value, to be compulsory. In view of
this, the ground taken by the respondents in defence of the application for
eviction was not permitted to be raised and proved. In view of this, the order
of competent authority granting leave to defend was set aside.

levitra

Registration — Registration of sale deed pending — Purchaser cannot project himself as owner — Registration Act S. 17 and S. 49.

New Page 5

  1. Registration — Registration of sale deed pending —
    Purchaser cannot project himself as owner — Registration Act S. 17 and S. 49.

[ Arun Bhusan Guha & Ors v. Amal Roy & Anr., AIR
2009 Calcutta 182]

The plaintiff executed the deed of conveyance for conveying
his right, title and interest in the suit property in favour of the opposite
party No. 2 on 14-11-2002. The registration of the said deed of conveyance was
kept in abeyance till March, 2006 due to non-payment of deficit stamp duty.
The registration of the said deed was completed in March, 2006 on payment of
deficit stamp duty. The question that arose for consideration was what is the
position in law about the title of the property during the interregnum period
between the date of execution of the deed and the date of completion of
Registration of the said deed as per the Registration Act ? Can the purchaser
project himself as owner of the said property during this interregnum.

The Court held that S. 17 read with S. 49 of the
Registration Act provides that title of the property was conveyed only on
registration of the said deed where registration was compulsory; therefore it
was difficult to hold that the purchaser can project himself as the owner of
the said property prior to the completion of registration of the deed of sale
as per the Registration Act.

So long as the registration was not completed, the
purchaser cannot project himself as the owner of the property in question,
though it was true that all trappings of ownership were traceable from the
date of execution of the deed after its registration was completed. So long as
the sale deed was not registered or in other words the registration of the
sale deed was not completed, it was not a valid document. Therefore, no one
could claim title on the basis of such invalid document before completion of
its registration. However, once the invalid documents gain validity on
completion of registration upon fulfilment of the requirement required for
registration thereof, the title of the purchaser would relate back to the date
of execution of the document by operation of law, but during this interregnum
period i.e., between the date of execution of the document and the
completion of registration thereof, the purchaser cannot project himself as
the owner of the said property though his title will relate back to the date
of execution of the said deed immediately on completion of registration of the
said document.

Since the vendor executed the said deed of transfer with an
expressed intention to convey his title in the property in favour of its
purchaser from the very date of its execution, either upon receipt of the
consideration money for such sale or upon receipt of the consideration money
in part with a promise made by the purchaser to pay the balance amount in
future, the vendor has a legal and moral obligation to protect the title and
possession of the property in question until registration of the deed of
transfer was completed, so that on completion of such registration, the
purchaser can enjoy the fruits of such transfer with retrospective effect from
the date of execution of the deed of sale.

Sureties — Co-sureties are liable to pay each an equal share of whole debt — Contract Act S. 146.

New Page 5

  1. Sureties — Co-sureties are liable to pay each an equal
    share of whole debt — Contract Act S. 146.

[ Krushna Chandra Mallick v. Chief General Manager, SBI
and Ors., AIR 2009 Orissa 99]

The petitioner had filed a petition challenging the
impugned notice wherein the petitioner has been shown as one of three
guarantors for one principal borrower. The notice was issued pursuant to the
decree of the DRT providing for the joint and several liability of all the
three guarantors. The petitioner apprehended that his property would be put to
auction without touching the properties of other two guarantors who are family
members of the borrowers.

The Court held that liability u/s.128 of the Contract Act
is co-extensive to that of the borrower. S. 146 of the Contract Act provides
that co-sureties are liable to pay each an equal share of the whole debt. The
Court directed the Tribunal to dispose of the petitioner application after
hearing the legal and factual issues regarding application of the provision of
S. 146 of Contract Act and Rule 8(5) of the Security Interest (Enforcement)
Rule, 2002.

levitra

Service of order — Original receipt of service not produced — Statement of proprietor of courier service agency cannot be accepted.

New Page 1

Service of order — Original receipt of service not produced —
Statement of proprietor of courier service agency cannot be accepted.



[Carter Hydraulic Power P. Ltd v. UOI, 2010 (256)
ELT 394 Cal.]

The appeal filed before the Commissioner of Central Excise
(Appeal II) was barred by limitation, therefore, the appeal was dismissed. The
said order was upheld by the Tribunal. On further appeal before the High Court
the appellant submitted that the copy of order of adjudication from the
Department was not at all delivered, therefore the appeal was not barred by
limitation.

The advocate for the Department filed a photocopy of the
receipt allegedly obtained by the courier service agency at the time of
alleged delivery of the order to an employee of the appellant. It was
submitted that the original was not available. A copy of the statement by the
proprietor of the courier service agency was produced, which stated that he
personally delivered the envelope to one Mr. Das, who was an employee of the
appellant company. The appellant submitted that the copy of order was never
delivered. It was submitted that there was no such employee as ‘Sri Das’ in
the organisation of the appellant.

The Court held that it was not clear whether the
adjudication order was ever delivered to the appellant company. Unfortunately,
the original receipt was not available, therefore it would be too risky to
accept the contention of a proprietor of a private courier service in order to
frustrate a statutory right of a citizen. To avoid all future controversies in
the matter, the order of the Tribunal was set aside and held that the appeal
was presented in time. The Commissioner of Central Excise (Appeal II) to
consider the appeal on merits.

levitra

Dishonour of cheque — When cheque is issued by partnership firm from its bank account, the cheque is said to be issued by all partners — Partnership Act, 1932 S. 18.

New Page 1

Dishonour of cheque — When cheque is issued by partnership
firm from its bank account, the cheque is said to be issued by all partners —
Partnership Act, 1932 S. 18.



[Mukesh Raoji Navadhare v. Ajit Bhaskar Kasbekar & Anr.,
AIR 2010 (NOC) 817 (Bom.); 2010 (3) AIR Bom. R 195]

The petitioner and the complainant were carrying on
business in partnership in the name and style of M/s. Shantakrupa Corporation.
The firm issued a cheque to the complaintant. The cheque was signed on behalf
of the firm by the petitioner as its partner. The cheque was dishonoured.
Pursuant thereto a complaint u/s.138 of the Negotiable Instrument Act was
filed but the firm was not joined as a party. The issue arose whether such a
complaint was maintainable.

The Court held that a partnership firm is not a body
corporate. S. 4 of the Partnership Act defines ‘partnership’ as relation
between the persons who have agreed to share profit of a business carried on
by all or any of them acting for all. The persons who have entered into a
partnership with one another are called individually as partners and
collectively ‘a firm’. The name under which the business is carried on is the
firm name. The firm name is merely a compendious name given to group of
persons who have agreed to carry on business in partnership.

In this case, the cheque was drawn from an account in a
bank maintained in the name of the firm. It bears the rubber stamp of the firm
and the petitioner had signed it as a partner of the firm. In law, when a
cheque is issued by the firm and from an account maintained by the firm, the
cheque is issued by all the partners and one of the partners merely signs it
as an agent of the firm i.e., agent of all partners. The complainant
who is a partner of the firm would, therefore, be regarded as one of the
drawers being a part of the firm. Thus, the complainant is co-drawer as well
as payee of the cheque. He, therefore, cannot prosecute himself or other
partner u/s.138 of the Act. The position may be different when a firm issues a
cheque not to its own partner but to a third person. There, the firm would be
liable as also the partners subject, of course, to the provisions of S. 141 of
the Act and in particular Expl. (b) thereto.

levitra

Passports Act — Refusal to issue fresh passport on ground that divorce deed was not registered or authenticated by Court — Improper — Passport Act, 1967 S. 5.

New Page 1

Passports Act — Refusal to issue fresh passport on ground
that divorce deed was not registered or authenticated by Court — Improper —
Passport Act, 1967 S. 5.



[Sonalben Keyurbhai Patel v. Superintendent, Regional
Passport Office & Anr., AIR 2010 Gujarat 136]

The petitioner belongs to a village Valasan, District Anand.
The petitioner got married with one N. M. Patel according to Hindu rites and
customs at her village. The petitioner stayed with her husband at Nairobi. Due
to matrimonial dispute, the petitioner and her husband separated and divorce
deed was executed on 28-2-2001 in presence of relatives and witnesses.
Thereafter the petitioner married one K. B. Patel according to Hindu rites and
customs. This marriage was registered with the Registrar of Marriage at Anand.
The petitioner had two children and their birth was also registered. The
petitioner had applied for passport as her earlier passport had expired. The
petitioner had approached the Passport Office and had explained that in Patel
community of Anand District, customary divorce was permissible and therefore
not registered. The petitioner had also explained to the Passport Office that
u/s.29(2) of the Hindu Marriage Act, no divorce deed is required if customary
divorce was permissible. However the Passport Officer refused to issue
passport to the petitioner.

On a writ petition filed by the petitioner against the
Passport Authority, the Court held that the petitioner separated from her
first husband way back on 20-2-2001 and the deed of divorce was executed on
that day in presence of two witnesses. The facts regarding the divorce and
second marriage are not in dispute and more than nine years have passed. For
the purpose of issuance of fresh passport with change in the husband name, the
petitioner has already furnished the divorce deed and also an affidavit is
filed to that effect. It was true that the divorce deed was neither notarized
nor registered nor the petitioner has obtained decree of divorce from the
competent Court. However, divorce by custom was permissible. It was held in
the case of Twinkle Rameshkumar Dhameliya v. Superintendent, (AIR 2005
Guj. 267) that the stand taken by the Passport Authority insisting for divorce
deed duly registered before Sub-Registrar or authenticated by the Court cannot
be sustained since customary divorce can be said to be permissible, unless it
is objected to by either party to the divorce deed or any person who is
directly affected by the divorce deed. In the present case, in view of the
fact that more than nine years have passed since second marriage and the
petitioner has two issues from the second marriage, the affidavit of the
petitioner has already been filed and divorce deed has not been disputed by
anyone till date. The petitioner also belongs to Patidar community and
customary divorce is permissible in that community.

The Court directed that the Passport Authority should act
on the basis of the divorce deed and the petitioner can get it certified by
the Public Notary on the basis of original divorce deed and such certified
copy can be placed before the Passport Authority.

levitra

Stamp Act — Document insufficiently stamped liable to be impounded — Stamp Act 1899 S. 33, S. 35, S. 38 and S. 40.

New Page 1

Stamp Act — Document insufficiently stamped liable to be
impounded — Stamp Act 1899 S. 33, S. 35, S. 38 and S. 40.



[Umesh Kumar Prakashchandra Sharma v. Rajaram Ramchandra
Jat and Anr., AIR 2010 Madhya Pradesh 158]

The petitioner Umesh Kumar had filed a civil suit for
specific performance of the contract and possession of the property. The
petitioner had produced a document dated 2-6-2001, which was admitted. The
document contained recital that the possession was delivered, therefore the
document was required to be executed on appropriate stamp paper and as it was
not on appropriate stamp paper it was liable to be impounded and to pay stamp
duty, penalty, etc. The Trial Court impounded the document in question and
directed the petitioner to pay duty and penalty.

The petitioner challenged the aforesaid order in writ
before the High Court. The High Court held that on perusal of S. 33 of the
Act, it was clear that when a person authorised under law or by consent of the
parties has powers to receive evidence, then such person would be obliged to
impound the document when any document which is insufficiently stamped is
produced before him. The word ‘impound’ does not mean that the Court which is
in possession of the document has immediately to recover duty and penalty. The
word ‘impound’ would only mean to authorise the Court to keep the document in
the custody, because the Court is of the opinion that the document is either
suspected or is insufficiently stamped.

Once a Court comes to the conclusion that the document is
insufficiently stamped, then it has to keep the document in its custody and
then proceed in accordance with law.

Article 5 of the Indian Stamp Act, deals with an agreement
or memorandum of an agreement. If the agreement is in relation to the property
or sale of the same, then ordinarily the stamp duty payable would be Rs.50,
but in case the document contains a recital that the possession of the
property has already been transferred or handed over to the proposed
purchaser, without executing a conveyance or it shall be handed over to the
purchaser without execution of the conveyance in future, then the document
shall come out of the definition of an ‘agreement’, but would become a
‘conveyance’, as provided under Article 23 of Schedule I-A. In the present
matter, the Court below was absolutely justified in holding that because of
the recital in the document, the agreement stood converted into a conveyance
and was chargeable with the duty of 7½% on the market value of the property.
The Court below was also justified in requiring the plaintiff to pay 7½% duty
on the face value of the document and pay ten times penalty in accordance with
S. 33, S. 35 and S. 38 of the Indian Stamp Act. The order passed by the Court
below is not bad.

levitra

Recovery — Directors of Pvt. Ltd company who were not co-borrowers nor guarantors not liable — Recovery of Debts due to Banks and Financial Institutions Act 1993.

New Page 1

  1. Recovery — Directors of Pvt. Ltd company who were not
    co-borrowers nor guarantors not liable — Recovery of Debts due to Banks and
    Financial Institutions Act 1993.

[Vijay Dashika Char v. Bank of Maharashtra, AIR 2009
(NOC) 2260 (Bom.)]

The plaintiff bank filed a suit for a monetary claim
against the defendants. The original defendant was a private ltd company who
had taken financial assistance from the plaintiff bank of Rs.2.50 lacs. In
security the defendant company had executed a demand promissory note.

The bank had contended that the managing director and
director had executed bond and were guarantors, however no such bond was ever
produced by the bank before the Court.

The Court observed that merely because the directors had
put their signatures on the credit note, would not render the promise made a
personal promise on part of directors. It was admitted position that the cash
credit facility was given only to the company. There was no personal cash
credit facility granted to any of the directors. Thus it was clear that there
was no personal facility granted in favour of any individual director. Thus,
the bank has no case against the directors, but was only for recovery from the
company. The plaintiff’s suit as against the directors’ was therefore
dismissed.

levitra

Stamp duty — Stamp duty is payable as per market value of property at time of submission of sale deed for registration — Stamp Act, 1899.

New Page 1

Stamp duty — Stamp duty is payable as per market value of
property at time of submission of sale deed for registration — Stamp Act, 1899.




[Iqbal Kaur v. State of Punjab & Ors., AIR 2010
Punjab & Haryana 130]

On 5-5-1970, an agreement to sell was executed for a sum of
`80,000 for
land. The agreement was renewed on 20-11-1995. However, when the vendor failed
to perform his part of the agreement by executing sale deed in favour of the
petitioner, the petitioner filed a suit for specific performance in the Civil
Court, which was decreed on 3-12-2001. For the execution of the decree passed
by the Civil Court, dated 3-12-2001, the sale deed was registered on
5-11-2008. The Collector exercising the powers u/s.47-A of the Indian Stamp
Act determined the market value of the property subject-matter of the sale
deed at the time of registration of the instrument. Order of the Collector was
confirmed by the Commissioner vide order dated 28-1-2009. A writ petition was
filed challenging the above order, which was dismissed.

On further appeal, the Court held that stamp duty is
payable at the time of submission of the sale deed for registration. The sale
deed was produced for registration on 5-11-2008, therefore, stamp duty on the
market value as on 5-11-2008 is payable. Agreement to sell has no relevance in
the matter of payment of stamp duty. The appeal was dismissed.


levitra

Gift — Gift deed of immovable property should be attested by two witness — Transfer of Property Act S. 123.

New Page 1

  1. Gift — Gift deed of immovable property should be attested
    by two witness — Transfer of Property Act S. 123.

[Lankeswar Malakar & Ors. v. Harendra Nath Deka (Dead) &
Ors., AIR 2009 (NOC) 2462 (Gau.)]

As per S. 123 of Transfer of Property Act, a document
whereby a gift of immovable property is made should be attested by two
witness. The document if not proved as required u/s.68 of Evidence Act, the
donee cannot claim title over suit land by means of such a Gift deed.

Inheritance — Children of void marriage would be treated as legitimate children of their father for purpose of inheriting separate property of father — Hindu Succession Act 1956.

New Page 1

  1. Inheritance — Children of void marriage would be treated as
    legitimate children of their father for purpose of inheriting separate
    property of father — Hindu Succession Act 1956.

[Govind Manohar Jadhav & Ors. v. Smt. Rukhminibai
Manohar Jadhav & Anr., AIR 2009 (NOC) 2366 (Bom.)]

One Mr. Manohar Jadhav married respondent No.1 Rukminibai.
During the subsistence of the said marriage, he married appellant No. 3
Popatbai. From the second marriage appellant No. 1 & 2 were born. One person
had purchased some property from Respondent No. 1 (i.e. first wife).
Mr. Manohar had received his share of property on partition from his brother.

The issue that arose for consideration was whether the
property received by Mr. Manohar on family partition was his separate property
and therefore whether the illegitimate children were entitled to inherit
share.

The Court observed that as per S. 314 of the Principles of
Hindu Law by Mulla, Volume I, 20h Edition, a wife cannot herself demand
partition, but if a partition does take place between her husband and his
sons, she is entitled to receive a share equal to that of a son. It does not
appear that in absence of any child, male or female, wife automatically
be-comes sharer in the property of husband during his life time. So, it cannot
be said that 1st wife-respondent No. 1 Rukminibai has more than
3 share in
the property of Manohar. The case would have been different if respondent No.
1, Rukminibai had a son, in that case such son would have been coparcener and
such son, Rukminibai and Manohar each would have
ard share
and property available for partition amongst heirs would have been
a share. The
2nd wife would not be entitled to any share. On partition between brothers,
the mother would have equal share with sons.

The Court held that the 2 children from the 2nd wife were
entitled to share in the property of their father, Manohar, though the second
wife had no such right.

levitra

Hindu Undivided Family — Sale of coparcenaries property for legal necessity — Hindu Succession Act 1956.

New Page 1

  1. Hindu Undivided Family — Sale of coparcenaries property for
    legal necessity — Hindu Succession Act 1956.

[Shankarlal Ramprasad Ladha (deceased by L.Rs.) v.
Vasnat Chandidasrao Deshmukh & Ors., AIR 2009 (NOC) 2367 (Bom.)]

The ancestral agricultural properties were kept undivided.
The respondent No. 4 was the karta of the family as he was the eldest male
member. He used to manage affairs of the joint family including cultivation of
the family lands. He was required to maintain himself and the other members of
the joint Hindu family. It was subsequently learnt that the Karta alienated
the suit houses.

The issue arose as to whether there was existence of legal
necessity for alienation of the suit house.

Concept of legal necessity as illustrated under Article 243
of the Hindu Law [By Mulla — 20th Edition (Vol. I) page 371]. It is well
settled that ‘legal necessity’ does imply pressure on the resources of the
joint Hindu family. So, if it is proved that there was considerable strain on
financial resources of the joint Hindu family at the relevant time, then the
sale transaction may be justified. The alienation by Manager of the joint
Hindu family may be permissible if it is for the benefit of the estate.
Article 244 of the Hindu Law (By Mulla) would make it manifest that purchaser
of the joint Hindu family property is under obligation to discharge burden of
proof to prove existence of the legal necessity or that his having made proper
and bonafide inquiry as to the existence of such necessity.

The Karta alienated the suit properties for improvement of
the lands, for maintenance of himself and education of the minors and for
meeting out his own marriage expenditure. It had come on record that in the
proximity of time of the sale deed, the karta got married.

It is explicit in view of Article 243(c) of the Hindu Law
(By Mulla) that marriage expenses of male coparceners can be regarded as
incidents of legal necessity. The marriage expenditure required for the
purpose of marriage of the Karta appears to be the reason for which the house
property was alienated by him.

The house property was sold by the Karta on account of
legal necessity, namely, to meet out expenditure of his own marriage. However,
the sale transaction of the other house property is not proved to be for the
purpose of legal necessity nor it could be for the benefit of the estate of
the joint family. Which is therefore held to be not on account of legal
necessity.

In the result, the appeal was partly allowed.

levitra

Affidavit — Evidence — Sworn before Notaries can be accepted by the Civil Court — Civil Procedure Code S. 139 Order 18 Rule 4.

New Page 1

  1. Affidavit — Evidence — Sworn before Notaries can be
    accepted by the Civil Court — Civil Procedure Code S. 139 Order 18 Rule 4.

[ Prashant Chandrashekhar Gundawar & Ors. v. Municipal
Council, Bhadrawati & Anr., AIR 2009 Bombay 144]

The issue which arose for consideration was whether
affidavits which are to be filed in the Court, can be sworn by on
administering the oath to the deponents, by any notary appointed under the
Notaries Act.

It was observed that notaries have power to administer oath
under the Notaries Act. In absence of statutory provision, the courts were
refusing to accept the affidavits sworn before the notary. S. 139 of CPC, was
amended to include a specific provision permitting the swearing of such
affidavits before the Notaries. The deponents are to be the persons who are
authorised u/s.139 of CPC to do so. Therefore, the result is obvious that the
notaries are authorised to administer oath to the deponents. The affidavits
which are to be under the Code, can be sworn by on administering the oath to
the deponents, by any notary appointed under the Notaries Act and under Order
18, Rule 4 of the CPC there is no bar requiring to exclude the affidavits
sworn before the Notaries for taking them on record as an examination in
chief. Thus, such affidavit sworn before Notaries can be accepted as evidence
by the Civil Court.

levitra

Deficiency in service — person — includes company : Consumer Protection Act S. 2(1)(m).

New Page 1

7. Deficiency in service — person — includes company :
Consumer Protection Act S. 2(1)(m).

[ Karnataka Power Transmission Corporation Ltd. & Anr.
v. Ashok Iron Works P. Ltd. with Ors., AIR 2009 SC 1905]

The definition of term person was never intended to exclude
a juristic person like company. The definition u/s.2(1)(m) is inclusive and
not exhaustive.

The Court held that non supply of electricity to consumer
by transmission company within time agreed upon even if the consumer is a
manufacturing unit, amounts to deficiency in service as per the definition of
consumer as it stood before 2002 Amendment. Therefore the complaint against
transmission company is maintainable before Consumer Forum.

The Court further observed that u/s.2(1)(o) ‘service’ means
service of any description which is made available to potential users and
includes the provision of facilities in connection with supply of electrical
or other energy. ‘Deficiency’ u/s.2(1)(g) means any fault, imperfection,
shortcoming or inadequacy in the quality, nature and manner of performance
which is required to be maintained by or under any law for the time being in
force or has been undertaken to be performed by a person in pursuance of a
contract or otherwise in relation to any service. As indicated in the
definition of ‘service’, the provision of facilities in connection with supply
of electrical energy is a service. Supply of electricity by the Board or for
that matter KPTC to a consumer would be covered u/s.2(1)(o) being ‘service’
and if the supply of electrical energy to a consumer is not provided in time
as is agreed upon, then u/s.2(1)(g), there may be a case for deficiency in
service.

levitra

Oral partition of joint family property is permissible and subsequent writing does not require registration or stamp duty : Hindu Law.

New Page 1

10 Oral partition of joint family property
is permissible and subsequent writing does not require registration or stamp
duty : Hindu Law.


The appellants were heirs of the original plaintiff Sonabai.
Sonabai’s husband Ganpatrao died leaving behind his son Motiram and two
daughters, namely, the appellants. Defendnat No. 1 was the widow of Motiram
while defendant no. 2 was daughter of defendant no. 1.

It was alleged that the suit property was the joint family
property left behind by Ganpatrao. The appellant submitted that there was no
partition of the suit property and as such they claimed one half share in the
suit property.

The defendant resisted the claim on the ground that soon
after the death of Motiram and his son, there was a partition and that the
appellants and defendants were cultivating and enjoying their separate share.

The learned Trial Judge held that there was already a
partition and the property did not continue to be joint. The learned Judge found
that the partition had taken place orally and subsequently in writing by
way of memorandum. The appeal was also dismissed.

In the instant case, it was not disputed that the suit
property was a joint family property. Where a document in respect of partition
comes into existence after the oral partition has already taken place, it will
neither require stamp nor registration. The partition deed would require
registration and stamp duty only if interest is created in specific property by
or under that document. If there is an oral partition, that oral partition
itself creates interest in that specific property and not the document which
comes into existence later. The document can be used for proving the severance
of status.

[Lilabai Chavan & Anr. v. Deokabai Kadam & Anr., AIR
2008 (NOC) 2050 (Bom.)]

 


levitra

Secured Creditor is entitled to apply for assistance of Court for taking over actual physical possession from borrower/secured debtor : Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 S. 14.

New Page 1

11 Secured Creditor is entitled to apply for
assistance of Court for taking over actual physical possession from
borrower/secured debtor : Securitisation and Reconstruction of Financial Assets
and Enforcement of Security Interest Act, 2002 S. 14.


On account of the first respondent’s liability under a
security agreement in term of the SARFAESI Act, 2002, proceedings were initiated
by the petitioner u/s.13(2) of the Act. The petitioner, a secured creditor,
took symbolic possession of the property leaving the first respondent in de
facto physical possession. The property was brought to sale, sale
certificate was also issued in favour of the auction purchaser.

 

It is within the wisdom and freedom of the secured creditor
as to whether in a given case it would, in exercise of authority u/s. 13(4) take
over de jure and de facto possession at one go, or whether it
would let the secured debtor to continue to hold de facto possession
after taking over only de jure possession, by publication in accordance
with the Act and rules, to aid the secured creditor to proceed with the sale
u/s.13. It is not the requirement of S. 13(6) or any other provisions of the Act
that a transfer by a secured creditor after taking over possession would be only
after taking over actual possession, de facto. The right to take
possession u/s.13(4)(a) is provided in such wide terms that it gives fair room
for the secured creditor to decide whether it would first proceed only to take
de jure possession. At any rate, a secured debtor, continuing to hold
de facto possession on the ground of not having been dispossessed, would
only be one who had been given the advantage to continue to hold on de facto
possession for the time during which different steps would have followed,
resulting in the confirmation of sale in favour of a third party auction
purchaser. In absence of any jurisdictional requirement for de facto
possession to make a transfer in terms of S. 13(6), there is no legal or
jurisdictional error in the sale being held by the secured creditor on the
strength of de jure possession. Such a sale or transfer has the complete
support of S. 13(6).

[ Kottakkal Co-op. Urban Bank v. T. Balakrishnan & Anr., AIR 2008
Kerala 179]

levitra

Rights of Overseas Citizen of India — International Sport Events — Constitution of India Article 9.

New Page 1

24 Rights of Overseas Citizen of India — International Sport
Events — Constitution of India Article 9.


The petitioner was born in the USA returned to India at the
age of one year and educated in India. The petitioner’s father was serving in
the State of Punjab Police. The petitioner was granted Oversea’s citizen of
India status by the Govt. of India in year 2007. The petitioner had represented
India in several international sport events and also secured medals. The issue
arose in view of a policy dated 26-12-2008 and 12-3-2009 formulated by the Union
of India whereby classification between players who are Indians and players who
are foreign nationals of Indian origin were made, the impugned rule restricted
foreign nationals of Indian origin from participation in the national teams.

The Court held that when an NRI is permitted to participate
for India in sports events and facilities analogous to the NRIs have been
granted to the Overseas Citizens of India, then OCI would also be entitled to
participate in international sports tournament representing India.

Article 9 relates to a consequence of voluntary acquisition
of citizenship of a foreign state by a citizen of India. In the instant case,
there was no voluntary acquisition of citizenship of the USA by the petitioner
because the petitioner was born in the USA and travelled to India at the age of
one year. At the time of birth, the petitioner obviously was not in a position
to voluntarily acquire the citizenship of a foreign state. If a person chooses
to voluntarily acquire the citizenship of a foreign state, he ceases to be a
citizen of India. This situation does not exist insofar as the petitioner was
concerned. Accordingly, participation cannot be denied on the basis of Article 9
of the Constitution of India.


[Sorab Singh Gill v. UOI & Ors., AIR 2010 Punjab &
Haryana 83]

levitra

Service — Service of order must be by registered post with acknowledgement due — Service by courier not proper.

New Page 1

25 Service — Service of order must be by registered post with
acknowledgement due — Service by courier not proper.


The order in original was sent to the appellant by courier by
the Revenue Authority. There was no modality of dispatch of orders by courier
prescribed under the law. In fact S. 37C specifically provides for service of
documents by registered post. If such a modality is not followed, the order in
original can be said to have been not served on the assessee. Therefore, the
appellant cannot be denied justice taking shelter of the order sent by courier.

The Court also observed that there was nothing brought to record that there
was emergency to serve the order by courier. S. 37C has made provision

levitra

Foreign judgment — Judgment of Court in USA would be conclusive and binding upon the parties — Hindu Marriage Act, 1955 S. 13 and Family Courts Act, 1984, S. 7.

New Page 1

22 Foreign judgment — Judgment of Court in USA would be
conclusive and binding upon the parties — Hindu Marriage Act, 1955 S. 13 and
Family Courts Act, 1984, S. 7.


Both the parties were domiciled in the USA. The husband was
Green Card holder of the USA, thus showing his intention to reside in the USA.
Parties last resided together in the USA. Merely because they resided together
in Pune when they last visited India would not give jurisdiction to Family Court
at Pune to decide divorce petition. The Court in the USA had territorial
jurisdiction to try their divorce disputes.

The wife had filed divorce petition before the Court in the
USA. Judgment was passed on merits after husband filed his written submission.

Judgment of the Court in the USA would be conclusive and
binding upon parties.


[Ms. Kashmira Kale v. Kishorekumar Mohan Kale,
AIR 2010 (NOC) 632 (Bom.)]

levitra

HUF — Joint family property — Neither a wife nor a mother has a right to file suit for setting aside alienation — Hindu Law.

New Page 1

23 HUF — Joint family property — Neither a wife nor a mother
has a right to file suit for setting aside alienation — Hindu Law.

The respondent (mother) filed a suit for partition and
separate possession. It was her case that the suit property belongs to her
husband. The defendant (sons) claimed that there was a partition amongst the
brothers and each of the brother was supposed to cultivate his own share of the
property.

The Court held that a co-parcener has a right to alienate his
share in the joint family property inter vivos. If the suit property was a joint
family property in the hands of the defendants, each of the sons of the
defendant had a right by birth in the suit property. It was therefore for the
sons of defendants who had interest in the suit property by birth to challenge
the alienation made by their father and uncles. A mother does not have a right
independently to challenge the alienation of the joint family property since she
does not have a right in it by birth. Even if one of the defendants may have
sold certain property exceeding his share, it was for the sons of defendants to
challenge the sales since they had interest in the joint family property.
Neither a wife nor a mother has a right to file a suit for setting aside
alienation since she does not have right by birth in the co-parcenery property
at all. Right to her to have a share in the joint family property accrues to her
only when the co-parceners decide to partition the joint family property,
otherwise she is bound to be joint with her sons. The suit at the instance of
mother was therefore, not maintainable for setting aside alienation made by her
sons.

Further S. 3(3) of the Hindu Women’s Right to Property Act,
1937 no doubt gives a right to the woman to seek partition. However, this Act
has been repealed by the Hindu Succession Act, 1956. If the provisions of the
Hindu Succession Act, 1956 are read, it would be clear that there is no
provision similar to Ss.(3) of S. 3 of the Hindu Women’s Right to Property Act.
The Legislature in its wisdom has not thought it fit to continue, this right in
a woman. The S. 14 of the Hindu Succession Act, 1956 confer upon a woman to own
absolutely a property in possession which she got against her right of
maintenance or for pre-existing right.


[Ananda Krishna Tate (deceased by L. Rs) v. Drawpadibai
Krishna Tate & Ors., AIR 2010 Bombay 83]

levitra

A. P. (DIR Series) Circular No. 116 dated 1st April, 2014

Advance Remittance for Import of Rough Diamonds

Presently, RBI had notified the names of 9 mining companies to whom an importer (other than a Public Sector Company (PSC) or a Department/Undertaking of the Government of India/State Government) could make advance remittance without any limit and without bank guarantee or stand by letter of credit for import of rough diamonds into India.

This circular provides that henceforth RBI will not notify the names of mining companies to whom an importer (other than a Public Sector Company (PSC) or a Department/Undertaking of the Government of India/State Government) could make advance remittance without any limit and without bank guarantee or stand by letter of credit for import of rough diamonds into India.

Henceforth, banks can decide, subject to certain conditions, on overseas mining companies to whom an importer (other than PSC or Department/Undertaking of Government of India/State Government) can make advance payments, without any limit / bank guarantee/stand-by letter of Credit for import of rough diamonds into India.

In case of an importer entity in the Public Sector or a Department/Undertaking of the Government of India/State Government/s, banks can permit advance remittance subject to satisfaction of the applicable conditions and a specific waiver of bank guarantee from the Ministry of Finance, Government of India, where the advance payments is equivalent to or exceeds US $ 100,000.

Banks have to submit a report of all advance remittances made without a bank guarantee or standby letter of credit, where the amount of advance payment is equivalent to or exceeds US $ 5,000,000, to the concerned Regional Office of Reserve Bank of India, in the format annexed to this circular, within 15 calendar days of the close of each half year.

Deposits made in post office monthly income account which was opened contrary to Rules — Depositor entitled to interest accrued on deposits. Govt. Saving Bank Act, 1879 S. 15.

New Page 1

9 Deposits made in post office monthly income
account which was opened contrary to Rules — Depositor entitled to interest
accrued on deposits. Govt. Saving Bank Act, 1879 S. 15.


The petitioner’s husband made deposits in multiple accounts
in post office monthly income scheme by opening 12 accounts. Subsequently the
accounts were converted into joint accounts. None of the post office staff
informed the petitioner that one should not invest beyond a certain amount in
joint a/c. In fact agents of post office persuaded the petitioner and her
husband to invest the amounts. When the petitioner asked for payment of the
amounts on maturity of the deposits the respondent deducted the interest amount
over and above the limit provided under the Post Office Monthly Scheme Rules.

The Court observed that it is an undisputed fact that the
petitioner has deposited different amounts into various accounts and none of
those accounts has exceeded the prescribed deposit limit. The first respondent
noticed that all the accounts were opened in the name of a single depositor in
various post offices and the amount put together exceeded the maximum amount
prescribed under the rules. Though the rules prescribed that more than two
accounts shall not be opened by any person, it was a mistake on the part of the
post master also in allowing the petitioner to open more accounts contrary to
the rules.

The petitioner contended that the agents who get com-mission
also made the petitioner and her husband to believe that there will not be any
problem if they open more accounts and they will also get interest on all the
accounts without any objection. Had there been any objection at the time of
opening of accounts or obtaining a declaration from the depositor that the
depositor did not open more than two accounts in any post office, that would
have made the petitioner and her husband to bind themselves that they have
knowledge about the rule that they should not open more accounts than two. There
was a mistake on the part of the post master also in allowing the petitioner to
open more accounts in the name of the petitioner and her husband. Therefore, as
the deposits were not made intentionally after knowing the rules, the petitioner
cannot be deprived of the interest accrued thereon.

The petitioner is entitled for interest on the entire amount
kept in the various post offices.

[ Smt. K. Susheela v. Ministry of Communications Dept.
of Post & Ors., AIR 2008 Andhra Pradesh 179.]

 


levitra