The SC on July 15, 2021 {SACHIN KASHYAP & ORS. vs. SUSHIL CHANDRA SRIVASTAVA & ORS.} held that since there were neither pleadings nor any prayer with regard to the playing of music or DJ in public place, the direction of the High Court, with regard to the noise generated by DJ and restriction on playing music, cannot be justified in law. It was held that the Writ Petition having been filed for a particular cause and with a particular prayer cannot be expanded to cover within its ambit all the issues which may be of general or public importance without there being any pleadings or prayer with regard to a particular issue.
It was also held by the Bench, comprising of Justice VINEET SARAN and Justice DINESH MAHESHWARI, that in its view, no such directions could have been issued, especially in a private litigation which was not in the nature of Public Interest Litigation. It was held that particularly, because prior to passing any such order of public importance, the affected parties should be impleaded, at least in a representative capacity, which is not done in the present case. It was further held that the appellants herein are the affected parties who were neither impleaded nor given any opportunity to present their case.
In view of the above, the appeals were allowed by the SC.
]]>The SC on April 22, 2021 {RAHUL S SHAH vs. JINENDRA KUMAR GANDHI & ORS.} held that for execution of decrees, Executing Court must not go beyond the decree. It was however held that there is steady rise of proceedings akin to a re-trial at the time of execution causing failure of realisation of fruits of decree and relief which the party seeks from the courts despite there being a decree in their favour. It was held that experience has shown that various objections are filed before the Executing Court and the decree holder is deprived of the fruits of the litigation and the judgment debtor, in abuse of process of law, is allowed to benefit from the subject matter which he is otherwise not entitled to.
It was also held by the Bench, comprising of Justice S.A. BOBDE, Justice L. NAGESWARA RAO and Justice S. RAVINDRA BHAT that the delay caused in execution is anti-thesis to the scheme of Civil Procedure Code, which stipulates that in civil suit, all questions and issues that may arise, must be decided in one and the same trial.
It was held by the SC that CPC under Rules 30 to 36 of Order XXI provides for execution of various decrees, the modes of execution are common for all. Section 51 of CPC lists the methods of execution as by delivery of property; by attachment and sale; by arrest and detention in civil prison; by appointing a receiver or in any other manner as the nature of relief granted may require. Moreover, Order XL Rule 1 contemplates the appointment of the Receiver by the Court. In appropriate cases, it was held that the Receiver may be given possession, custody and/or management of the property immediately after the decree is passed. It was held that such expression will assist in protection and preservation of the property. It was held that this procedure within the framework of CPC can provide assistance to the Executing Court in delivery of the property in accordance with the decree.
It was held by the SC that as to the decree for the delivery of any immovable property, Order XXI Rule 35 provides that possession thereof shall be delivered to the party to whom it has been adjudged, or to such person as he may appoint to receive delivery on his behalf, and, if necessary, by removing any person bound by the decree who refuses to vacate the property.
It was held by the SC that while there may be genuine claims over the subject matter property, the Code also recognises that there might be frivolous or instigated claims to deprive the decree holder from availing the benefits of the decree. Sub-rule (2) of Rule 98 of Order XXI contemplates such situations and provides for penal consequences for resistance or obstruction occasioned without any just cause by the judgment debtor or by some other person at his instigation or on his behalf, or by the transferee, where such transfer was made during the pendency of the suit or execution proceedings. It was however held that such acts of abuse of process of law are seldom brought to justice by sending the judgment debtor, or any other person acting on his behalf, to the civil prison.
It was also held that under Order XXI Rule 97, a decree holder can approach the court pointing out about the obstruction and require the court to pass an order to deal with the obstructionist for executing a decree for delivering the possession of the property, the obstructionist can also similarly raise objections by raising new issues which take considerable time for determination.
It was observed that it also becomes necessary for the Trial Court to determine what is the status of the property and when the possession is not disputed, who and in what part of the suit property is in possession other than the defendant. Thus, the Court may also take recourse to the following actions:
a) Issue commission under Order XXVI Rule 9 of CPC.
A determination through commission, upon the institution of a suit shall provide requisite assistance to the court to assess and evaluate to take necessary steps such as joining all affected parties as necessary parties to the suit. Before settlement of issues, the Court may appoint a Commissioner for the purpose of carrying out local investigation recording exact description and demarcation of the property including the nature and occupation of the property. In addition to this, the Court may also appoint a Receiver under Order XL Rule 1 to secure the status of the property during the pendency of the suit or while passing a decree.
b) Issue public notice specifying the suit property and inviting claims, if any, that any person who is in possession of the suit property or claims possession of the suit property or has any right, title or interest in the said property specifically stating that if the objections are not raised at this stage, no party shall be allowed to raise any objection in respect of any claim he/she may have subsequently.
c) Affix such notice on the said property.
d) Issue such notice specifying suit number etc. and the Court in which it is pending including details of the suit property and have the same published on the official website of the Court.
It was held that if the above suggested recourse is taken and subsequently if an objection is received in respect of “suit property” under Order XXI Rule 97 or Rule 99 of CPC at the stage of execution of the decree, the Executing Court shall deal with it after taking into account the fact that no such objection or claim was received during the pendency of the suit, especially in view of the public notice issued during trial. It was held that such claims under Order XXI Rule 97 or Rule 99 must be dealt strictly and be considered/entertained rarely.
In Ghan Shyam Das Gupta v. Anant Kumar Sinha (AIR 1991 SC 2251), the Supreme Court had observed that the provisions of the Code as regards execution are of superior judicial quality than what is generally available under the other statutes and the Judge, being entrusted exclusively with administration of justice, is expected to do better. It was held that with pragmatic approach and judicial interpretations, the Court must not allow the judgment debtor or any person instigated or raising frivolous claim to delay the execution of the decree. For example, in suits relating to money claim, the Court, may on the application of the plaintiff or on its own motion using the inherent powers under Section 151, under the circumstances, direct the defendant to provide security before further progress of the suit. It was held that the consequences of non-compliance of any of these directions may be found in Order XVII Rule 3.
The SC held that there is urgent need to reduce delays in the execution proceedings as such the court deems it appropriate to issue few directions to do complete justice. It was held that these directions are in exercise of the court jurisdiction under Article 142 read with Article 141 and Article 144 of the Constitution of India in larger public interest to subserve the process of justice so as to bring to an end the unnecessary ordeal of litigation faced by parties awaiting fruits of decree and in larger perspective affecting the faith of the litigants in the process of law. It was directed by the SC that all Courts dealing with suits and execution proceedings shall mandatorily follow the below-mentioned directions:
The SC on December 1, 2020 {The State of Jharkhand and Ors. vs. Brahmputra Metallics Ltd., Ranchi and Anr.} held that the basis of the doctrine of promissory estoppel in private law is a promise made between two parties, the basis of the doctrine of legitimate expectation in public law is premised on the principles of fairness and non-arbitrariness surrounding the conduct of public authorities.
It was held by the Bench, comprising of Justice Dr. Dhananjaya Y. Chandrachud & Justice Indu Malhotra that the doctrine of promissory estoppel cannot be used as a ‘sword’, to give rise to a cause of action for the enforcement of a promise lacking any consideration. It was held that its use has been limited as a ‘shield’, where the promisor is estopped from claiming enforcement of its strict legal rights, when a representation by words or conduct has been made to suspend such rights.
It was further held that once the High Court has held the respondent’s writ petition to be legally sustainable on merits, the Court should not interfere on grounds on delays and laches alone.
It was held that the delay of the respondent in filing a writ petition by itself should not defeat the claim unless the position of the State has been so altered that it cannot be retracted on account of a lapse of time or the inaction of the writ petitioner. It was held that the State has not in the present case either pleaded or argued any hardship if the respondent were to be granted relief.
It was held that the doctrine of unjust enrichment could have been attracted if the respondent had passed on the electricity duty to its customers and then retained the refund occasioned by the 50 per cent rebate in its own pocket. It was held that this is not demonstrated to be the factual position and hence, the respondent cannot be denied relief on the application of the doctrine.
It was held that the state must discard the colonial notion that it is a sovereign handing out doles at its will. It was held that its policies give rise to legitimate expectations that the state will act according to what it puts forth in the public realm. It was held that in all its actions, the State is bound to act fairly, in a transparent manner. It was held that this is an elementary requirement of the guarantee against arbitrary state action which Article 14 of the Constitution adopts. It was further held that a deprivation of the entitlement of private citizens and private business must be proportional to a requirement grounded in public interest. It was held that this conception of state power has been recognized by the Court in a consistent line of decisions.
Thus, it was held that the doctrine of legitimate expectation cannot be claimed as a right in itself, but can be used only when the denial of a legitimate expectation leads to the violation of Article 14 of the Constitution.
Therefore, it was held that it is clear that the State had made a representation to the respondent and similarly situated industrial units under the Industrial Policy 2012. It was held that this representation gave rise to a legitimate expectation on their behalf, that they would be offered a 50 per cent rebate/deduction in electricity duty for the next five years. It was held that however, due to the failure to issue a notification within the stipulated time and by the grant of the exemption only prospectively, the expectation and trust in the State stood violated. It was held that since the State has offered no justification for the delay in issuance of the notification, or provided reasons for it being in public interest, it holds that such a course of action by the State is arbitrary and is violative of Article 14.
]]>The SC on November 24, 2020 {CHIEF EXECUTIVE OFFICER AND VICE CHAIRMAN GUJARAT MARITIME BOARD vs. ASIATIC STEEL INDUSTRIES LTD AND ORS.} held that in this case, conduct of the Board betrays a callous and indifferent attitude, which in effect is that if Asiatic Steel wished for its money to be returned, it had to approach the court. It was held that despite its knowledge that at least three other identically placed entities had asked for return of money and, upon approaching the court, were refunded the amounts given by them promptly. It was further held that nothing prevented the Board from deciding to refund the amount, without forcing Asiatic Steel to approach the court.
It was observed by the Bench, comprising of Justice Indira Banerjee and Justice S. Ravindra Bhat, that the Board‟s action is entirely unacceptable. It was held that as a public body charged to uphold the rule of law, its conduct had to be fair and not arbitrary. It was held that if it had any meaningful justification for withholding the amount received from Asiatic Steel, such justification has not been highlighted ever. It was held that on the other hand, its conduct reveals that it wished that the parties should approach the court, before it took a decision. It was held that this behavior of deliberate inaction to force a citizen or a commercial concern to approach the court, rather than take a decision, justified on the anvil of reason (in the present case, a decision to refund) means that the Board acted in a discriminatory manner.
It was held that in the opinion of the court, the Board‟s complete silence in responding to Asiatic Steel‟s demand for refund, coupled with the absence of any material placed on record by it suggesting that the complaints had no substance leaves it vulnerable to the charge of complete arbitrariness. It was held that the Board‟s conduct or indifference in regard to the refund sought (in respect of which there was no meaningful argument on its part before the High Court) can be only on the premise that it wished the parties to approach the court, till a decision could be taken to refund the amounts received by it.
The present appeal before the SC was directed against a judgment of the High Court of Gujarat dated 24.07.2015. The respondent (“Asiatic Steel”) had filed a writ petition before the High Court seeking refund of contract consideration of ₹3,61,20,000/- paid by them to the appellant (“the Board”). The High Court allowed the writ petition. The appeal against the HC judgment was dismissed by the SC.
]]>The SC Bench, comprising of Justice S. Abdul Nazeer & Justice Sanjiv Khanna further held that it is often said that procedure is the handmaid of justice. It was held that procedural and technical hurdles shall not be allowed to come in the way of the court while doing substantial justice. It was held that if the procedural violation does not seriously cause prejudice to the adversary party, courts must lean towards doing substantial justice rather than relying upon procedural and technical violation. It was held that one should not forget the fact that litigation is nothing but a journey towards truth which is the foundation of justice and the court is required to take appropriate steps to thrash out the underlying truth in every dispute. It was held that therefore, the court should take a lenient view when an application is made for production of the documents under sub-rule (3).
It was held that the defendants have filed an application assigning cogent reasons for not producing the documents along with the written statement. It was held that they have stated that these documents were missing and were only traced at a later stage. It was held that it cannot be disputed that these documents are necessary for arriving at a just decision in the suit. It was held that the SC is of the view that the courts below ought to have granted leave to produce these documents.
Therefore, for the foregoing reasons, the appeal succeeded and it was accordingly allowed by the SC.
]]>The SC on August 05, 2020 {M/S. EXL CAREERS AND ANOTHER vs FRANKFINN AVIATION SERVICES PRIVATE LIMITED} held that presentation of the plaint in a court contrary to the exclusion clause could not be said to be proper presentation before the court having jurisdiction in the matter.
It was further held by the Bench, comprising of Justice R. F. Nariman, Justice Navin Sinha and Justice Indira Banerjee, that it is no more resintegra that in a dispute between parties where two or more courts may have jurisdiction, it is always open for them by agreement to confer exclusive jurisdiction by consent on one of the two courts.
In the present case, the question of law was referred to a larger bench and required to be answered was that if a plaint is returned under Order VII Rule 10 and 10A of the Code of Civil Procedure 1908, (herein called as “the Code”) for presentation in the court in which it should have been instituted, whether the suit shall proceed de novo or will it continue from the stage where it was pending before the court at the time of returning of the plaint.
The SC (Three Judge Bench) held that statutory scheme now becomes clear. In cases dealing with transfer of proceedings from a Court having jurisdiction to another Court, the discretion vested in the Court by Sections 24(2) and 25(3) either to retry the proceedings or proceed from the point at which such proceeding was transferred or withdrawn, is in marked contrast to the scheme under Order VII Rule 10 read with Rule 10-A where no such discretion is given and the proceeding has to commence de novo.
However, in the peculiar facts and circumstances of the present case, because the appellant did not raise the objection under clause 16B of the agreement at the very first opportunity, the first order of rejection attained finality, the objection under clause 16B was raised more as an afterthought, the second application under Order VII Rule10 had to be preferred by the respondent, that pleadings of the parties have been completed, evidence led, and that the matter was fixed for final argument on 03.07.2017, the SC opined that despite having concluded that the impugned order is not sustainable in view of the settled law, in exercise of its discretionary jurisdiction under Article 136 of the Constitution and in order to do complete and substantial justice between the parties under Article 142 of the Constitution in the peculiar facts and circumstances of the case nonetheless it declines to set aside the impugned order of the High Court dated 13.03.2018. The appeal accordingly stood disposed of by the SC.
]]>The SC on July 13, 2020 {SRI MARTHANDA VARMA (D) THR. LRs. & ANR. vs STATE OF KERALA & ORS.} held that the expression Shebait is derived from “sewa” which means service and Shebait, in literal sense, means one who renders “sewa” to the idol or a deity. It was held that every Ruler of Travancore would call himself “Padmanabhadasa” i.e. one who is engaged in the service of Sri Padmanabhaswamy.
It was also held by the Bench, comprising of Justice UDAY UMESH LALIT and Justice INDU MALHOTRA, that the unequivocal stand taken by the appellants in the grounds of appeal that “the Temple is a public temple and no claim can probably be made by the Petitioner or anyone to owning the Temple or its treasures” and that what was being sought was only the right as a trustee of the Temple to manage and administer it, must be noted. It was held that the said stand was expressly referred to in the Orders passed by the Court, and the consideration of the instant case has been premised on the said stand.
The issues concerning the status and entitlement of the appellant No.1 including the relationship vis-à-vis the “Sree Padmanabhaswamy Temple” were involved in present appeals before the SC.
The SC held that according to Hindu law, when the worship of a thakoor has been founded, the Shebaitship is held to be vested in the heirs of the founder, in default of evidence that he has disposed of it otherwise, or there has been some usage, course of dealing, or some circumstances to show a different mode of devolution.
It was held that unless the founder has disposed of the Shebaitship in any particular manner - and this right of disposition is inherent in the founder - or except when usage or custom of a different nature is proved to exist, Shebaitship like any other species of heritable property follows the line of inheritance from the founder.
It was held that in a Hindu religious endowment the entire ownership of the dedicated property is transferred to the deity or the institution itself as a juristic person and the Shebait or Mahant is a mere manager. It was held that it is not open to the Court to lay down a new rule of succession or to alter the rule of succession completely.
It was held that if the instant case is considered on the touchstone of the settled principles, it is clear that after the major fire that occurred in the year 1686, the Temple was reconstructed and a new idol was installed by the King of Travancore Shri Marthand Varma and since then right upto the day the Covenant was signed, the management of the Temple had always been with the Kings of Travancore. It was held that the shebaitship or the managership of the Temple passed on to the succeeding Kings, coming from the royal family of Travancore. It was held that this chain was unbroken till the then Ruler of Travancore signed the Covenant in May 1949.
The SC concluded that as on the day when the Covenant was entered into by the Ruler of the Covenanting State of Travancore, apart from other incidents which normally follow the rulership, he was holding the office of Shebait of the Temple and represented a continuous and unbroken line of successive Shebaits traced from the original founder; and being a Shebait of the Temple, he was having all the rights and interest.
It was held that despite the Constitution (Twenty Sixth Amendment) Act, 1971, the private properties of the Ruler would continue to be available for normal succession and devolution in accordance with the law and custom. It was held that though concepts such as Ruler or Rulership have ceased to operate, succession to the Gaddi as an incident may still operate. It was held for instance, there could be a sword or any other ceremonial weapon, or a sarpech, or heirloom jewellery, which must go by rule of primogeniture, as against the normal way of succession with regard to other personal properties. It was held that all such incidents have not been terminated.
In that premises, the SC concluded that the Constitution (Twenty Sixth Amendment) Act, 1971 which omitted Articles 291 and 362 did not in any way impact or affect the administration of the Temple, Sri Pandaravaga properties and the properties of the Temple, which continued to be under the control and supervision of the Ruler of Travancore.
In the circumstances, it was held by the SC that the death of Sree Chithira Thirunal Balarama Varma who had signed the Covenant, would not in any way affect the Shebaitship of the Temple held by the royal family of Travancore; that after such death, the Shebaitship must devolve in accordance with the applicable law and custom upon his successor; that the expression “Ruler of Travancore” as appearing in Chapter III of Part I of the TC Act must include his natural successors according to law and custom; and that the Shebaitship did not lapse in favour of the State by principle of escheat.
The SC directed that Administrative Committee and the Advisory Committee shall do well to discharge all their functions including performance of the worship of the deity, maintenance of its properties, diligently and in the best interest of the Temple, and provide adequate and requisite facilities to the worshippers. The appeal was allowed by the SC.
]]>The SC on July 6, 2020 {REEPAK KANSAL vs SECRETARY GENERAL, SUPREME COURT OF INDIA & ORS.} held that it is to be remembered by worthy lawyers that they are the part of the judicial system; they are officers of the Court and are a class apart in the society.
The SC Bench, comprising of Justice Arun Mishra and Justice S. Abdul Nazeer held that it expects members of the noble fraternity to respect themselves first. It was held that they are an intellectual class of the society. It was held that what may be proper for others may still be improper for them, the expectations from them is to be exemplary to the entire society, then only the dignity of noble profession and judicial system can be protected.
In the present Writ Petition before the SC, the case of the petitioner was that equal treatment had not been given to the ordinary lawyers/ litigants. It was alleged that the registry favour some law firms or Advocates for reasons best known to them.
The SC held that Registry is nothing but an arm of the Court and an extension of its dignity. It was held that bar is equally respected and responsible part of the integral system, Registry is part and parcel of the system, and the system has to work in tandem and mutual reverence. The Court held that it also expects from the Registry to work efficiently and effectively. It was held that at the same time, it is expected of the lawyers also to remove the defects effectively and not to unnecessarily cast aspersions on the system.
Thus, it was held that the Court finds no ground to entertain the petition. The SC held that the petitioner to be more careful and live up to the dignity of the profession which it enjoys.
The SC dismissed the petition and imposed cost of Rs.100/ (Rupees One Hundred only) on the petitioner as a token to remind his responsibility towards noble profession and that he ought not to have preferred such a petition.
]]>The SC on June 24, 2020 {RAJASTHAN STATE WAREHOUSING CORPORATION vs STAR AGRIWAREHOUSING AND COLLATERAL MANAGEMENT LIMITED & ORS. } held that though the Court does not generally interfere in an interim order passed in an appeal under Article 136 of the Constitution but when after the dismissal of the writ petition, the Division Bench has passed an order of stay without recording any reason affecting revenue of the State, the Court cannot not permit the public interest to suffer.
It was further held by the Bench, comprising of Justice HEMANT GUPTA and Justice ANIRUDDHA BOSE, that the fact remains that once the bidding process is complete, the appellant is entitled to take work from the successful bidders rather than taking work from the short-term tenderers who were granted contract in exigency of the situation. It was also held that in the matters of contract, the grant of interim order to restrain the successful bidders from executing the contract is not in public interest, more so, when the tender is for storage of food articles in the warehouses of the State Government undertaking.
The present appeals before the SC were directed against the interim order passed by the High Court of Judicature for Rajasthan on 29th May, 2020 and 10th June, 2020 whereby in an intra-court appeal, the High Court passed an order of status quo with a further direction that other formalities may proceed but the contract shall not be signed.
The SC held that the grant of interim order which impinges upon the grant of contract by the appellant is not in public interest that too without recording any reasons when the Writ Petition was dismissed by the Learned Single Judge.
Consequently, the SC set aside the orders dated 29th May, 2020 and 10th June, 2020 granting status quo while allowing the present appeals.
]]>The SC on June 05, 2020 {Shakti Bhog Food Industries Ltd. vs The Central Bank of India & Anr.} held that it is well established position that the cause of action for filing a suit would consist of bundle of facts. Further, it was held that the factum of suit being barred by limitation, ordinarily, would be a mixed question of fact and law. Even for that reason, invoking Order VII Rule 11 of the CPC is ruled out.
It was held by the Bench, comprising of Justice A.M. KHANWILKAR, Justice INDIRA BANERJEE & Justice DINESH MAHESHWARI, that in the present case, the assertion in the plaint is that the appellant verily believed that its claim was being processed by the Regional Office and the Regional Office would be taking appropriate decision at the earliest. It was held that belief was shaken after receipt of letter from the Senior Manager of the Bank, dated 8.5.2002 followed by another letter dated 19.9.2002 to the effect that the action taken by the Bank was in accordance with the rules and the appellant need not correspond with the Bank in that regard any further. It was also held that this firm response from the respondent Bank could trigger the right of the appellant to sue the respondent Bank. It was held that moreover, the fact that the appellant had eventually sent a legal notice on 28.11.2003 and again on 7.1.2005 and then filed the suit on 23.2.2005, is also invoked as giving rise to cause of action. It was held that whether this plea taken by the appellant is genuine and legitimate, would be a mixed question of fact and law, depending on the response of the respondents.
The central question before the SC was: whether the plaint as filed by the appellant could have been rejected by invoking Order VII Rule 11(d) of the CPC?
The SC held as noticed from the trial Court judgment, it is evident that the trial Court did not make any attempt to analyse the plaint as per law. It was held that even the District Court dealing with first appeal and the High Court with second appeal omitted to do. It was held that it is the bounden duty of the Court to examine the plaint as a whole and not selected averments therein.
The argument was raised before the SC that mere sending of letters cannot extend the period of limitation, and number of judgments were also referred. The SC held that Art 113 is differently worded, and also dealt & distinguished all the judgments cited by the respondents.
The SC negated the argument that exchange of letters or correspondence between the parties cannot be the basis to extend the period of limitation. It was held by the SC that inasmuch as, having noticed from the averments in the plaint that the right to sue accrued to the appellant on receiving letter from the Senior Manager, dated 8.5.2002, and in particular letter dated 19.9.2002, and again on firm refusal by the respondents vide Advocate’s letter dated 23.12.2003 in response to the legal notice sent by the appellant on 28.11.2003; and once again on the follow up legal notice on 7.1.2005, the plaint filed in February, 2005 would be well within limitation.
The SC held that in cases governed by Article 113 of the 1963 Act, such as the present case, however, what is required to be noted is – “when the right to sue accrues” (and not when the right to sue “first” accrues).
It was held that in the present case, the trial Court had failed to advert to and analyse the averments in the plaint, but selectively took notice of the assertion in the plaint in question that the appellant became aware about the discrepancies in July, 2000, and then proceeded to reject the plaint being barred by law of limitation having been filed in February, 2005.
It was held that taking overall view of the matter, therefore, the SC is of the considered opinion that the decisions of the trial Court, the first appellate Court and the High Court in the fact situation of the present case, rejecting the plaint in question under Order VII Rule 11(d) of the CPC, cannot be sustained. As a result, the same were quashed and set aside. The appeal stood allowed.
]]>The SC on May 26, 2020 {GURU NANAK INDUSTRIES, FARIDABAD AND ANOTHER vs AMAR SINGH (DEAD) THROUGH LRS} held that there is a clear distinction between ‘retirement of a partner’ and ‘dissolution of a partnership firm’. It was held that on retirement of the partner, the reconstituted firm continues and the retiring partner is to be paid his dues in terms of Section 37 of the Partnership Act. In case of dissolution, it was held that accounts have to be settled and distributed as per the mode prescribed in Section 48 of the Partnership Act. It was also held that when the partners agree to dissolve a partnership, it is a case of dissolution and not retirement.
The SC Bench, comprising of Justice N.V. Ramana, Justice Sanjiv Khanna & Justice Krishna Murari observed that in the present case, there being only two partners, the partnership firm could not have continued to carry on business as the firm. It was held that a partnership firm must have at least two partners. It was held that when there are only two partners and one has agreed to retire, then the retirement amounts to dissolution of the firm.
In the present case, the primary claim and submission of the appellants before the SC was that Amar Singh had resigned as a partner and, therefore, in terms of clause (10) of the partnership deed (Exhibit P-3) dated 6th May 1981, he would be entitled to only the capital standing in his credit in the books of accounts. However, the argument was rejected by the SC and held, that in the present case there were only two partners and there is overwhelming evidence on record that Amar Singh had not resigned as a partner. It was held that on the other hand, there was mutual understanding and agreement that the partnership firm would be dissolved.
It was also held that the receipt Exhibit P-9 dated 17th October 1988 refers to part payment of Rs.1,00,000/- towards settlement between the two partners. The SC held that it also refers to the date of dissolution as 24th August 1988, which clearly indicates that payments were still to be made whereupon the two sides would have completely severed their relationship although there was a mutual agreement that the date of dissolution was 24th August 1988.
Therefore, the SC dismissed the appeals and upheld the judgment and decree passed by the ADJ, Faridabad (first appellate court) and sustained by the High Court, except it was directed that the date of dissolution of the firm would be taken as 24th August 1988 and not 31st of March 1989.
]]>The SC on May 19, 2020 {The Workmen through the Convener FCI Labour Federation v. Ravuthar Dawood Naseem} held that concededly, the subject References, as well as, the direction issued by the Tribunal, which has been upheld upto this Court is silent about the system in which the concerned workers have to be regularised and departmentalised. It was also held that it is incomprehensible as to how it would be a case of disobedience, much less wilful disobedience, so as to entail in contemptuous conduct of the concerned officers of the Corporation especially when the eligible enlisted workers have already been regularized under the Direct Payment System (DPS) as per the applicable policy of 1991.
It was further observed by the SC Bench, comprising of Justice A.M. Khanwilkar & Justice Dinesh Maheshwari, that to constitute civil contempt, it must be established that disobedience of the order is wilful, deliberate and with full knowledge of consequences flowing therefrom.
It was held that it is seen that even the Division Bench of HC did not issue any specific direction to the respondent Corporation to regularise the concerned workmen under the Departmental Labour system and not to do so under the Direct Payment System (DPS) as per the policy of 1991. The Supreme Court has merely affirmed the view taken by the Tribunal and the Madras High Court.
The grievance in these petitions is about alleged non-compliance of direction given to the respondent, Food Corporation of India, to regularise and departmentalise the concerned workers who had initiated industrial disputes.
The SC held that the issue as to regularisation of the concerned workmen under particular labour system had not been put in issue before the Tribunal and upto this Court. It was held that a general direction came to be issued to regularise and departmentalise them. Resultantly, it was held that the respondents were left with the only option to regularise the concerned workmen as per the extant applicable policy of the Organisation, under the Direct Payment System (DPS).
Thus, it was held by the SC that no contempt action can be initiated on the basis of general direction to the respondents to regularise and departmentalise the concerned workmen. Accordingly, the contempt petitions failed and were dismissed. Show cause notices stood discharged by the SC.
]]>The SC on May 6, 2020 {Punjab National Bank & Ors. v. Atmanand Singh & Ors.} held that when the petition raises questions of fact of complex nature, such as in the present case, which may for their determination require oral and documentary evidence to be produced and proved by the concerned party and also because the relief sought is merely for ordering a refund of money, the High Court should be loath in entertaining such writ petition and instead must relegate the parties to remedy of a civil suit. It was observed that had it been a case where material facts referred to in the writ petition are admitted facts or indisputable facts, the High Court may be justified in examining the claim of the writ petitioner on its own merits in accordance with law.
It was further held by the SC Bench, comprising of Justice A.M. Khanwilkar & Justice Dinesh Maheshwari, that even if the impugned judgments were to be read as a whole, there is no analysis of the relevant documents and in particular, the stand taken by the appellant Bank expressly denying the existence of the stated agreement and genuineness thereof, which plea was reinforced from the affidavits of the concerned Bank officials and the report of the District Magistrate. It was observed that the District Magistrate in the affidavit filed in compliance of the order dated 18.3.2016 had clearly denied the existence of the stated proceedings for want of contemporaneous official record in that regard. It was held that this aspect has not been taken into account by the High Court at all. The SC, therefore, held that the High Court committed manifest error in disregarding the core jurisdictional issue that the matter on hand involved complex factual aspects, which could not be adjudicated in exercise of writ jurisdiction.
The SC observed that despite having noticed the objection regarding maintainability of the writ petition taken by the appellant Bank, the learned single Judge, by a cryptic judgment and order, allowed the writ petition filed by the respondent No. 1. It was further held that despite the specific plea taken by the appellant Bank, disputing the transactions and documents in question, on the basis of which the respondent had sought relief by way of writ petition, the Division Bench proceeded to dismiss the LPA filed by the Bank
A priori, the SC held that in the facts of the present case, the High Court should have been loath to entertain the writ petition filed by the respondent No. 1 and should have relegated the respondent No. 1 to appropriate remedy for adjudication of all contentious issues between the parties.
Accordingly, the SC allowed the appeal. As a consequence, the impugned decisions of the learned single Judge and the Division Bench were set aside and the writ petition filed by the respondent No. 1 stood dismissed by the SC, with liberty to respondent No. 1 to take recourse to other alternative remedy as may be permissible in law.
]]>The SC on April 22, 2020 {WEST U.P. SUGAR MILLS ASSOCIATION & ORS. v. THE STATE OF UTTAR PRADESH & ORS.} held that by virtue of Entries 33 and 34 List III of seventh Schedule, both the Central Government as well as the State Government have the power to fix the price of sugarcane. It was held that the Central Government having exercised the power and fixed the “minimum price”, the State Government cannot fix the “minimum price” of sugarcane. However, at the same time, it was held that it is always open for the State Government to fix the “advised price” which is always higher than the “minimum price”, in view of the relevant provisions of the Sugarcane (Control) Order, 1966, which has been issued in exercise of powers under Section 16 of the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953.
In the present reference before the Constitutional Bench of SC, comprising of Justice Arun Mishra, Justice Indira Banerjee, Justice Vineet Saran, Justice M.R. Shah & Justice Aniruddha Bose, it was held by the SC that the Sugarcane (Control) Order, 1966 which has been issued under Section 16 of the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 confers power upon the State Government to fix the remunerative/advised price at which sugarcane can be bought or sold which shall always be higher than the minimum price fixed by the Central Government.
It was further held that Section 16 of the U.P. Sugarcane (Regulation of Supply and Purchase) Act, 1953 is not repugnant to Section 3(2)(c) of the Essential Commodities Act, 1955 and Clause 3 of the Sugarcane (Control) Order, 1966 as, the price which is fixed by the Central Government is the “minimum price” and the price which is fixed by the State Government is the “advised price” which is always higher than the “minimum price” fixed by the Central Government and therefore, there is no conflict. It was held that it is only in a case where the “advised price” fixed by the State Government is lower than the “minimum price” fixed by the Central Government, the provisions of the Central enactments will prevail and the “minimum price” fixed by the Central Government would prevail. It was observed that so long as the “advised price” fixed by the State Government is higher than the “minimum price” fixed by the Central Government, the same cannot be said to be void under Article 254 of the Constitution of India.
It was concluded that the view earlier taken by the Constitutional Bench of the Supreme Court in the case of U.P. Cooperative Cane Unions Federations vs. West U.P. Sugar Mills Association and Others (2004) 5 SCC 430, is the correct law.
The core issue before the SC in present reference was whether the State of U.P. has the authority to fix the State Advised Price (SAP) [referred to as “SAP”], which is required to be paid over and above the minimum price fixed by the Central Government?
The same was answered in affirmative, and the reference was disposed of by Five Judges Bench of the SC - remitting the matter back to the concerned three judges Bench, which has sent the reference, for disposal of remaining & actual controversy in the cases.
]]>The Bombay High Court on 21 April, 2020 {N Sampath Ganesh v. Union Of India} held that Direction under S. 212(14) of the Companies Act, 2013 dated 29/05/2019 issued by Union of India to SFIO is unsustainable and it is quashed & set aside. It was held that the consequential prosecution lodged by the SFIO vide Cr. Complaint on the file of Special Court (Companies Act) and Additional Sessions Judge, Greater Mumbai; is therefore not maintainable and it is also quashed & set aside.
It was held by the Bench of Bombay High Court comprising, Chief Justice B.P. DHARMADHIKARI & Justice NITIN R. BORKAR, that Company petition filed by Union of India (MCA) before NCLT on 10th June 2019 is held not tenable qua these petitioners after M/s BSR resigned as statutory auditors of IL & FS Financial Services Limited.
The order dated 29/05/2019 has been questioned by the petitioner(s) on the ground that the report which runs into more than 750 pages & has annexures running into 32,000 pages, has been alleged to be examined in about 30 hours by Union of India and filing of prosecution has been ordered. Petitioners submitted before the HC that this shows non application of mind. It is also contended that the report submitted by SFIO was not a final report but an interim report and as such prosecution cannot be filed on its strength.
It was held by the HC that SFIO's report itself show the absence of application of mind to relevant facets having bearing on it. It was held that the direction by the Central Government under S. 212(14) itself should have shown whether any one instance of financial bungling has been fully investigated into & it prima-facie shows commission of an offence or not. It was held that such an application of mind would have revealed that examination of cross-linkages with other group companies would not have any impact on it. It was further held that this assumes significance since the report itself indicates need of further investigation into cross-linkages & cross-check of transactions with other companies. It was observed that absence of such a positive prima-facie finding in the impugned direction does not permit or require leading of any evidence to support the decision contained in said direction. It was held that the stand of the Respondents that the precedents cited need to be distinguished into two categories – one dealing with “no sanction” and the others dealing with “defective sanction”, therefore, does not hold any water. It was held that the direction dated 29/05/2019 is therefore untenable in law.
It was held that to evaluate the arguments on non-application of mind by the Central Government while issuing direction to lodge prosecution in less than 30 hours after a 732 page report of SFIO with about 32,000 pages as annexures came to it, the reference to observations of Hon. Apex Court – K.K. Mishra vs. State of Madhya Pradesh (2018) 6 SCC 676 become relevant in the present lis. It was observed in that case, there the cross-examination of Public Prosecutor demonstrated that the wholesome requirement spelt out by Sections 199(2) and 199(4) CrPC, as expounded by Apex Court in Subramanian Swamy, has not been complied with. It was observed that Hon. Supreme Court states that a Public Prosecutor filing a complaint under Section 199(2) CrPC without due satisfaction that the materials/allegations in complaint discloses an offence against an authority or against a public functionary which adversely affects the interests of the State would be abhorrent to the principles on the basis of which the special provision under Sections 199(2) and 199(4) CrPC has been structured. It was held by the Bombay High Court that these observations also apply to present case, inasmuch as, requirement of application of mind in S. 212(14) of 2013 Act. It was held that the Public Prosecutor in terms of the statutory scheme under the Criminal Procedure Code plays an important role. He is supposed to be an independent person and apply his mind to the materials placed before him.
BACKGROUND OF THE DISPUTE
In the present case, Union of India requested for declaration before the NCLT that M/s. BSR & Associates ceased to be statutory auditors of IL & FS (IFIN) with immediate effect. Permission was also sought to appoint independent auditor for IL & FS (IFIN) so as to replace M/s. BSR & Associates in terms of first proviso to section 140(5) of the Companies Act read with explanation (ii) thereto. The Union of India also sought relief in terms of the said second proviso read with explanation (I) that respondent no.1 in those proceedings namely Deloitte Haskins was not eligible to be appointed as an auditor of any company for the period of five years from the order passed by NCLT in view of serious fraud committed which required intervention of the MCA to prevent the destabilization impact on the company at the request of the department of Economic Affairs and sought debarment for the period of five years.
The SFIO accordingly submitted a report which was looked into by the Union of India, Ministry of Corporate Affairs (MCA) and on 29/5/2019 in exercise of the powers available to it under section 212 (14) of the Companies Act, 2013, it directed the SFIO and Regional Director (Western Region) to proceed further. This communication recommends prosecution of petitioners under various provisions and SFIO has been directed to file a complaint by next day i.e. 30/05/2019 without fail and to submit the compliance report.
The Bombay High Court has allowed the Writ petition, by quashing the criminal prosecution initiated by SFIO in terms of its report, and held petition for declaration of deemed removal of statutory auditors of IL & FS by MCA was found to be untenable - due to resignation of the auditors.
]]>CJ S. A. BOBDE, JUSTICE B.R. GAVAI & JUSTICE SURYA KANT
The SC on March 18, 2020 {The Bharat Coking Coal Ltd. & Ors. v. AMR Dev Prabha & Ors.} held that it is thus imperative that in addition to arbitrariness, illegality or discrimination under Article 14 or encroachment of freedom under Article 19(1)(g), public interest too is demonstrated before remedy is sought. Although the threshold for the latter need not be high, but it is nevertheless essential to prevent bypassing of civil courts and use of constitutional avenues for enforcement of contractual obligations.
It was held that such conscious restraint is also necessary because judicial intervention by itself has effects of time and money, which if unchecked would have problematic ramifications on the State’s ability to enter into contracts and trade with private entities. Further, it was held that it is not desirable or practicable for courts to review the thousands of contracts entered into by executive authorities every day. It was held that the Courts also must be cognizant that often-atimes the private interest of a few can clash with public interest of the masses, and hence a requirement to demonstrate effect on ‘public interest’ has been evolved by the SC.
It was held thus, it is clear that there was neither any public law right of the first respondent which was affected, nor was there any public interest sought to be furthered.
It was held that on merits also, the impugned order is incorrect in its conclusion that there were substantial procedural lapses on part of BCCL and C1India which amount to arbitrariness, and ought to be remedied by way of judicial review.
Further held that even if there had been a minor deviation from explicit terms of the NIT, it would not be sufficient by itself in the absence of malafide for courts to set aside the tender at the behest of an unsuccessful bidder. It was held that this is because notice must be kept of the impact of overturning an executive decision and its impact on the larger public interest in the form of cost overruns or delays.
It was held that the High Court ought to have deferred to this understanding, unless it was patently perverse or mala fide. It was also held that given how BCCL’s interpretation of these clauses was plausible and not absurd, solely differences in opinion of contractual interpretation ought not to have been grounds for the High Court to come to a finding that the appellant committed illegality.
Accordingly, the Division Bench judgment of the High Court dated 12.04.2018 was set aside and the writ petition filed by AMRDev Prabha was dismissed by the SC.
In present case, the appeals have been preferred by Bharat Coking Coal Ltd. (herein as, “BCCL”) being aggrieved by the order dated 12.04.2018 passed by a Division Bench of the High Court of Jharkhand at Ranchi, wherein a writ petition filed by AMRDev Prabha (Respondent No. 1) had been allowed and the auction process conducted by M/s C1 India Pvt Ltd (Respondent No. 4, hereinafter “C1India”) was set aside and the resultant award of tender by BCCL to M/s RK Transport Co (Respondent No. 6) had also been quashed. The appeal was allowed by the SC - setting aside the judgment of DB of HC.
]]>Justice Deepak Gupta & Justice Aniruddha Bose
The SC on March 17, 2020 {BANK OF BARODA v. KOTAK MAHINDRA BANK LTD.} held that the limitation period for executing a decree passed by a foreign court (from reciprocating country) in India will be the limitation prescribed in the reciprocating foreign country. Obviously, this will be subject to the decree being executable in terms of Section 13 of the CPC.
It was also held that limitation would start running from the date the decree was passed in the cause country and the period of limitation prescribed in the forum country would not apply. It was held that in case the decree holder does not take any steps to execute the decree in the cause country within the period of limitation prescribed in the country of the cause, it cannot come to the forum country and plead a new cause of action or plead that the limitation of the forum country should apply.
It was held that the period of limitation would start running from the date the decree was passed in the foreign court of a reciprocating country. However, it was held that if the decree holder first takes steps-in-aid to execute the decree in the cause country, and the decree is not fully satisfied, then he can then file a petition for execution in India within a period of 3 years from the finalisation of the execution proceedings in the cause country.
It was further held that Section 44A only enables the District Court to execute the decree and further provides that the District Court shall follow the same procedure as it follows while executing an Indian decree, but it does not lay down or indicate the period of limitation for filing such an execution petition.
What is the limitation for filing an application for execution of a foreign decree of a reciprocating country in India ? The said question was considered by the SC in the present case and was answered accordingly as aforesaid. The appeal was dismissed by the SC of the Decree Holder - as barred by limitation - but for the reasons as stated above by the SC.
]]>Justice L. Nageswara Rao & Justice Deepak Gupta
The SC {Indian Social Action Forum (INSAF) v. Union of India} holds that a balance has to be drawn between the object that is sought to be achieved by the legislation and the rights of the voluntary organisations to have access to foreign funds. It was held that the purpose for which the statute prevents organisations of a political nature from receiving foreign funds is to ensure that the administration is not influenced by foreign funds. It was further held that Prohibition from receiving foreign aid, either directly or indirectly, by those who are involved in active politics is to ensure that the values of a sovereign democratic republic are protected. It was held that, on the other hand, such of those voluntary organisations which have absolutely no connection with either party politics or active politics cannot be denied access to foreign contributions. Therefore, it was held that such of those organisations which are working for the social and economic welfare of the society cannot be brought within the purview of the Act or the Rules by enlarging the scope of the term ‘political interests’. The SC directed that the expression ‘political interests’ in Rule 3 (v) has to be construed to be in connection with active politics or party politics.
It was held by the SC that to save the provision from being declared as unconstitutional, it was directed that it is only those organisations which have connection with active politics or take part in party politics, that are covered by Rule 3 (vi). Further held, to make it clear, such of those organisations which are not involved in active politics or party politics do not fall within the purview of Rule 3 (vi).
In the present case, the Appellant filed a Writ Petition in the High Court of Delhi for a declaration that Sections 5 (1) and 5 (4) of the Foreign Contribution (Regulation) Act, 2010 and Rules 3 (i), 3 (v) and 3 (vi) of the Foreign Contribution (Regulation) Rules, 2011, are violative of Articles 14, 19 (1) (a), 19 (1) (c) and 21 of the Constitution of India. The High Court dismissed the Writ Petition, aggrieved by which this appeal had been filed before the SC. The SC disposed of the appeal by directing as aforesaid.
]]>Justice V. Ramasubramanian, Justice Rohinton Fali Nariman & Justice Aniruddha Bose
The SC {INTERNET AND MOBILE ASSOCIATION OF INDIA v. RESERVE BANK OF INDIA} holds that till date, RBI has not come out with a stand that any of the entities regulated by it namely, the nationalized banks/scheduled commercial banks/cooperative banks/NBFCs has suffered any loss or adverse effect directly or indirectly, on account of the interface that the Virtual Currency ( referred to as VC) exchanges had with any of them. It was held that there must have been at least some empirical data about the degree of harm suffered by the regulated entities (after establishing that they were harmed). It was also held that it was not the case of RBI that any of the entities regulated by it has suffered on account of the provision of banking services to the online platforms running VC exchanges.
Further held that it is no doubt true that RBI has very wide powers not only in view of the statutory scheme of the enactments, but also in view of the special place and role that it has in the economy of the country. It was held that these powers can be exercised both in the form of preventive as well as curative measures. It was also held that but the availability of power is different from the manner and extent to which it can be exercised. It was held that the proportionality of such measure, for the determination of which RBI needs to show at least some semblance of any damage suffered by its regulated entities. But there is none. It was also held that when the consistent stand of RBI was that they have not banned VCs and when the Government of India was unable to take a call despite several committees coming up with several proposals including two draft bills, both of which advocated exactly opposite positions, it was not possible to hold that the impugned measure is proportionate.
Accordingly, the impugned Circular dated 06-04-2018 was set aside on the ground of proportionality by the SC. Accordingly, the writ petitions were allowed.
In the present case, Reserve Bank of India (hereinafter, “RBI”) issued a “Statement on Developmental and Regulatory Policies” on April 5, 2018, paragraph 13 of which directed the entities regulated by RBI (i) not to deal with or provide services to any individual or business entities dealing with or settling virtual currencies and (ii) to exit the relationship, if they already have one, with such individuals/ business entities, dealing with or settling virtual currencies (VCs).
Following the said Statement, RBI also issued a circular dated April 6, 2018, in exercise of the powers conferred by Section 35A read with Section 36(1)(a) and Section 56 of the Banking Regulation Act, 1949 and Section 45JA and 45L of the Reserve Bank of India Act, 1934 (“RBI Act, 1934”) and Section 10(2) read with Section 18 of the Payment and Settlement Systems Act, 2007, directing the entities regulated by RBI (i) not to deal in virtual currencies nor to provide services for facilitating any person or entity in dealing with or settling virtual currencies and (ii) to exit the relationship with such persons or entities, if they were already providing such services to them.
Challenging the said Statement and Circular and seeking a direction to the respondents not to restrict or restrain banks and financial institutions regulated by RBI, from providing access to the banking services, to those engaged in transactions in crypto assets, the petitioners had filed these writ petitions, which came to be allowed by the SC.
]]>Justice R Banumathi & Justice A S Bopanna
The SC {AVIATION TRAVELS PVT. LTD. v. BHAVESHA SURESH GORADIA AND OTHERS} while setting aside the ex-parte judgment holds that the suit claim was for damages. It was held that the damages to the property if any, can be ascertained only after the parties adduce the oral and documentary evidence. Further held that there is no reason to believe that the appellant would have benefitted by deliberately not contesting the suit as they would in any event be saddled with interest if their conduct was to drag and prolong the suit. Considering the nature of the claim and other facts and circumstances and in the interest of justice, It was held that an opportunity has to be given to the appellant to contest the suit subject to terms.
It was held by the SC that though various contentions have been raised as to whether appellant was served or not and entered appearance in the suit, the SC was not inclined to go into the merits of the contentions. It was held that an opportunity has to be given to the appellant for contesting the suit. It is because the suit was filed for recovery of damages of Rs.1 crore and respondent No.1 claimed interest @ 24% per annum.
The Single Judge of HC dismissed the Notice of Motion No.580 of 2018. The learned Single Judge noted that the ex-parte decree dated 07.10.2003 shows that an advocate was engaged on behalf of the appellant and respondent No.2 and the said advocate has filed vakalatnama and there is no question of having to thereafter serve a party personally. The High Court held that along with the affidavit, a Power of Attorney dated 29.04.1993 was said to have been executed by the appellant in favour of one K. Shrinivas Rao and there is also a rubber stamp and circular common seal of the appellant in the Power of Attorney and the Power of Attorney is said to have been notarized in Mumbai and the seal of the Notary is also visible. Pointing out that the defendant No.1 through its Power of Attorney had engaged a lawyer and there was a validly executed vakalatnama by a constituted attorney K. Shrinivas Rao and also that writ of summons was in fact served on the appellant and respondent No.2 (original defendant No.1A) by bailiff attached to the office of Sherrif of Mumbai, the learned Single Judge dismissed the Notice of Motion No.580 of 2018.
In the present case, the appeals arose out before the SC of the impugned judgment dated 09.07.2018 passed by the High Court of Judicature at Bombay in Appeal (Lodging) No.224 of 2018 in Notice of Motion No.580 of 2018 in Suit No.2865 of 1994 in and by which, the High Court dismissed the Notice of Motion filed by the appellant and declined to set aside ex-parte judgment and decree dated 07.10.2003 passed against the appellant in Suit No.2865 of 1994 and the impugned order dated 26.10.2018 passed in Review Petition (Lodg.) No.20 of 2018 whereby the review petition filed by the appellant was dismissed. The appeals were allowed by the SC - by setting aside the ex-parte judgment.
]]>Justice A S Bopanna & Justice Indira Banerjee
The SC {Jose v. Johnson} holds that the observations made by the High Court relating to the consideration required being only of possession since the suit was for perpetual injunction is without reference to the nature of contentions put forth in a suit, the issues that had been raised for consideration and the conclusion that had been reached by the trial court as also the lower appellate court in that background. It was held that in the facts and circumstance of the present case the High Court was not justified, but the conclusion of the lower appellate court to set aside the judgment and decree of the trial court and remand the matter for reconsideration by the trial court was the appropriate course.
It was held that each case will have to be examined on its own merits keeping in view the nature of the pleading put forth before the trial court and the understanding of the case with which the parties have gone to trial. If this aspect is kept in view the very nature of the plaint averments would indicate that the parties to the suit are related to each other and the property which was being commonly enjoyed by their predecessors was partitioned under the Deed No.2617/2007. The present dispute had arisen when the plaintiff was seeking to put up a construction of the wall and the defendants had objected to the same. And the issues were also framed in that regard. The SC upheld the approach of lower appellate court - as to question of title can be gone into in the case of perpetual injunction - the direction by the lower appellate Court to remand the matter to trial court for recording additional evidence on the application of the defendant qua identification of the suit property.
In the present case, the appeal filed by the plaintiff before the High Court, the High Court on taking note that the suit was for perpetual injunction only and in that light since the possession of the plaintiff not being in serious dispute, was of the opinion that the title to the property was not relevant. In that circumstance, the High Court was of the opinion that the learned Judge of the lower appellate court was not justified in arriving at the conclusion that the property is to be measured on the basis of the title deed. In that view, the High Court has set aside the judgment of the lower appellate court and restored the decree passed by the trial court. The said view of the HC was set aside by the SC.
]]>Justice M R Shah, Justice U U Lalit & Justice Indira Banerjee
The SC {Canara Bank v. P. Selathal and others} holds that the suits filed by the original plaintiffs are vexatious, frivolous and nothing but an abuse of process of law and court. Therefore, considering the law laid down by the SC in the earlier decisions, the suits being vexatious and frivolous, the plaints were rejected in exercise of powers under Order 7 Rule 11 of the CPC by the SC in present case.
Further, held considering the pleadings/averments in the suits and the allegations of fraud, that the allegations of fraud are illusory and only with a view to get out of the judgment and decree passed by the DRT. Therefore the suits are vexatious and are filed with a mala fide intention to get out of the judgment and decree passed by the DRT. It was held that the plaintiffs are claiming right, title on the basis of the sale deeds dated 30.01.1996 and 10.03.1997 respectively executed by Shri Kallikutty as power of attorney holder of the original owner. However, according to the averments in the plaints, they have purchased the suit property from their vendor which is factually incorrect.
It was held that the ritual of repeating a word or creation of an illusion in the plaint can certainly be unraveled and exposed by the court while dealing with an application under Order 7 Rule 11(a). Such proceedings are required to be nipped in the bud.
It was also held that specific instances and acts of fraud with evidence have to be pleaded in the plaint. It is further observed that mere statements are not enough. It is further observed that it is not sufficient if just fraud is pleaded and there must be material to show that the fraud is committed. If the suit lacks it - consequences should follow - including rejection of plaint.
In the present case, the plaints were vexatious, frivolous, meritless and nothing but an abuse of process of law. Both the courts below have materially erred in not rejecting the plaints in exercise of powers under Order 7 Rule 11(d) of the CPC. Both the courts below have materially erred in not exercising the jurisdiction vested in them. Accordingly, the appeal was allowed and the plaint was rejected by the SC - setting aside the orders of the courts below.
]]>Justice Deepak Gupta & Justice Aniruddha Bose
The SC {KERALA STATE ELECTRICITY BOARD REP. BY ITS SECRETARY & ANR. v. PRINCIPAL SIR SYED INSTITUTE FOR TECHNICAL STUDIES & ANR. } holds that no error was committed in fixing higher electricity tariff for the Self-Financing Educational Institutions categorising them as commercial entities. No undue preference has been given to the State run and State aided institutions in the tariff notification. The fact that SFEIs have been clubbed together with several commercial service providers wholly unrelated to education becomes insignificant once the purpose of the SFEIs could be differentiated from the Government run and Government aided educational institutions.
It was held that the writ petitioners’ contention is that the reason of their formation or existence is imparting education and this is so for the Government run and aided institutions also. On this basis, they argued before the SC that different tariffs could not be charged to these two sets of institutions. The SC negated the argument. It was held that though the Commission has not demonstrated through factual evidence the facilities provided by these two sets of institutions are different, it is of common knowledge, of which judicial notice can be taken, that the student profile of state run and state aided institutions is different from those of SFEIs.
Accordingly, the challenge was negated and the original writ petition was dismissed by the SC - while setting aside the judgment of the HC.
]]>Justice S Ravindra Bhat, Justice Arun Mishra & Justice M R Shah
The SC {AGRA DIOCESAN TRUST ASSOCIATION v. ANIL DAVID AND ORS.} holds that it is undisputed that the point in issue was with respect to valuation for purposes of court fee; equally, it is not in issue that since the plaintiff (i.e. petitioner herein) sought, in addition to a declaration, in both the suits, decrees of cancellation, the crucial point was what the correct value for purposes of court fee was. It was held that now, market value has been specifically defined, in the context of a litigation like the present one. According to Section 7 (iv-A), in case the plaintiff (or his predecessor-in-title) was not a party to the decree or instrument, the value was to be according to one-fifth of the value of the subject matter, “and such value shall be deemed to be” under Section 7 (iv-A),“if the whole decree or instrument is involved in the suit, the amount for which or value of the property in respect of which the decree is passed or the instrument executed”.
It was held by the SC that the question of what is the market value, based on the revenue payable, would be an issue to be tried in the suit.
In the present case, the trial court by its order dated 23.04.2016, recorded the findings against the plaintiff / petitioner and held that the suits filed were under-valued and the court fee paid by the plaintiff was insufficient.The High Court, by the impugned judgment, accepted the respondent/defendants’ contentions that the circle rate fixed by the collector to charge stamp duty took into account the actual market value of the property situated in the area. The appeal was allowed in above terms by the SC - setting aside judgment of the trial court and HC.
Justice Hemant Gupta and Justice S. Abdul Nazeer
The SC {C. DODDANARAYANA REDDY (DEAD) BY LRS. & ORS. v. C. JAYARAMA REDDY (DEAD) BY LRS. & ORS.} holds that the findings of fact cannot be interfered with in a second appeal unless, the findings are perverse. The High Court could not have interfered with the findings of the fact in the present case.
It was held by the SC that the learned High Court has not satisfied the tests laid down in the precedents. Further held, both the courts, the trial court and the learned First Appellate Court, have examined the School Leaving Certificate and returned a finding that the date of birth does not stand proved from such certificate. It was held that may be the High Court could have taken a different view acting as a trial court but once, two courts have returned a finding which is not based upon any misreading of material documents, nor is recorded against any provision of law, and neither can it be said that any judge acting judicially and reasonably could not have reached such a finding, then, the High Court cannot be said to have erred. Resultantly, no substantial question of law arose for consideration before the High Court.
Accordingly, it was held by the SC that the High Court committed grave error in law in setting aside the concurrent findings of facts recorded by the First Appellate Court and the Trial Court. Consequently, the appeal was allowed.
]]>JUSTICE S. ABDUL NAZEER & JUSTICE SANJIV KHANNA
The SC { MALLURU MALLAPPA(D) THR. LRS. v. KURUVATHAPPA & ORS.} holds that the First Appeal before the High Court involved both disputed questions of law and fact. The High Court without examination of any of these aspects cannot dismiss the appeal by a cryptic order as per mandate of CPC.
In the present case, the court below has neither reappreciated the evidence of the parties, nor it has passed a reasoned order. The High Court has failed to follow the provisions of Order XLI Rule 31 of the CPC while deciding the appeal. The question that the suit was well within time under Article 54 of the Schedule to the Limitation Act was also raised. Even this question has not been examined in its proper perspective. Therefore, the appeal was allowed and the matter was remanded back for decision on merits by the SC.
]]>Supreme Court of India
Justice Hrishikesh Roy and Justice D Y Chandrachud
In the present case, the key question to be considered by the SC was whether, without the school’s account being linked with net banking facility, any money from the bank account could have been siphoned out by the miscreants.
It was held by the SC {DAV Public School v. The Senior Manager, Indian Bank & Ors.} that the obvious answer to this question has to be in the negative. As concurrently found by the State Commission, the Banking Ombudsman and also by the NCDRC, the bank has rendered themselves liable by enabling net banking facility by linking the individual account of the school’s Principal, to the school’s account. The only reason why the State Commission as well as the NCDRC had limited the compensation sum to Rs. 1,00,000/- was because of the perceived complicity of the Principal. But the charge sheet filed by the police reveals how the fraudulent transaction was made by the two charge sheeted accused and more importantly the police did not find complicity of the Principal of the school, with those fraudulent transactions. The Banking Ombudsman too declared that the Bank was at fault which facilitated the loss to the School but declined to order refund as the demanded sum (Rs 30,00,000/-) was beyond the pecuniary jurisdiction of the Banking Ombudsman.
Considering the above, It was held by the SC that the denial of the compensation corresponding to the extent of the School’s loss, by the State Commission as well as by the NCDRC would not be justified.
It was held that the question then is whether the Bank should be asked to compensate the school for the entire loss through such fraudulent transaction when the siphoning of a large sum of Rs. 25,00,000/- was first detected by the school staff, the official complaint was not lodged immediately and only on the next date, the complaint was filed with the Bank authorities. Whether the Bank Manager was verbally informed on the very date of detection or on the next day is an aspect which is difficult to conclude conclusively and therefore the subsequent siphoning of Rs. 5,00,000/- by the next day, may have been occasioned by the contributory negligence of the school authorities.
It was held, but, insofar as the loss of Rs. 25,00,000/- is concerned, the complainant cannot be held responsible directly or even vicariously, either as an institution or the Principal, as an individual. The SC holds that the respondent Bank should be directed to compensate the School to the tune of Rs. 25,00,000/- transferred until 9.9.2014, when the misappropriation was first detected but not for the additional sum siphoned on the next date from the School’s account. The impugned orders were interfered to this extent by the SC.
]]>Supreme Court of India
Justice S. Ravindra Bhat and Justice R F Nariman
It was held by the SC {M/S DAFFODILLS PHARMACEUTICALS LTD. & ANR. v. STATE OF U. P. & ANR. } that before any executive decision maker proposes a drastic adverse action, such as a debarring or blacklisting order, it is necessary that opportunity of hearing and representation against the proposed action is given to the party likely to be affected.
In the present case, the appellant (hereafter “Daffodills”), a pharmaceutical supplier, was aggrieved by a decision of the Allahabad High Court, rejecting its challenge to an order (dated 21.08.2015) issued by the Principal Secretary, Government of U.P. to its Medical and Health Department, directing it to stop local purchase from the appellant. Daffodills had participated in a tender process, in which the state called for bids from interested parties, willing to supply various categories of pharmaceutical products.
It was held that the High Court fell into error in holding that in matters of award of public contracts, the scope of inquiry in judicial review is limited. The SC held granted, such jurisdiction is extremely circumscribed; no doubt the HC had refused to grant relief to Daffodils against its plea of wrongful rejection of its tender. However, it was held that what the impugned judgment clearly overlooks is that the action of the state, not to procure indefinitely, on an assumption of complicity by Daffodils, was in flagrant violation of principles of natural justice. Accordingly the order of the Government not to procure was set aside, and the appeal was allowed - setting aside the HC judgment.
]]>Justice R Banumathi, Justice A S Bopanna and Justice Hrishikesh Roy
The SC { CHENNAI METROPOLITAN DEVELOPMENT AUTHORITY v. D. RAJAN DEV AND OTHERS} holds that that no right accrued to the applicant-builder by mere filing of application for approval and the right accrues only after approval is granted by the Government/concerned authorities.
It was held that mere pendency of the application for planning permission does not create a vested right in an applicant. Right accrues only when the permission/sanction is granted by the Government/concerned authorities. It was held that this is because planning permission is accorded on the basis of scrutiny of application form and the concerned documents. There is always possibility of an application not meeting the requisite criteria for carrying out the proposed development and being rejected.
Further held that until and unless an application complete in all respect is approved, it remains a mere application and no right can be claimed on the basis of such an application. A proposal cannot be equated with an approval, otherwise the later will lose all significance. The obvious logical conclusion is that the right to an applicant accrues when the permission has been granted. Further, as a corollary, it can be said that the rates prevailing at the time of granting of permission are the rates which an applicant has to pay. The respondent/applicant cannot claim the benefit of the earlier guideline value existing prior to the date when approval was granted by the government. It was held by the bench that the respondent will have to pay FSI Premium charges based on the guideline value as existing on the date of grant of approval.
The issue in the present case was; whether to calculate the Premium FSI charges at the rate prevalent as on the date of filing of application by the first respondent or at the time of grant of approval. Allowing the appeal, the SC held it to be latter.
]]>Supreme Court of India
Justice Abhay Manohar Sapre and Justice Dinesh Maheshwari
It was held by the SC {M/S NATESAN AGENCIES (PLANTATIONS) v. STATE REP. BY THE SECRETARY TO GOVERNMENT ENVIRONMENT AND FORESTS DEPARTMENT} that for the applicability of Section 14 of the Limitation Act and exclusion of the time spent in earlier proceeding, the matter in issue in both the earlier and the later proceeding must be the same. This is apart from the other requirements that the previous proceeding had been civil proceeding, which were being prosecuted by the plaintiff with due diligence and in a Court which, from the defect of jurisdiction or other cause of like nature, was unable to entertain the same though the plaintiff had been prosecuting in that Court in good faith.
In the present case, it was held by the SC that except the fact that the earlier writ petition in challenge to the exclusion order dated 19.11.1993 was civil proceeding and the plaintiff might have been prosecuting with due diligence, none of the other requirements of Section 14 of the Limitation Act are satisfied.
It was held that the basic requirement, that the matter in issue in the earlier and the later proceeding ought to be the same; and both the proceedings, earlier and later, ought to relate to the same cause of action and for the same relief, is totally missing in present case. Rather, the matter in issue in the earlier proceeding could well be contradistinguished from the matter in issue in the present suit. It was held in the said earlier proceeding, the plaintiff-appellant joined the Mutt to assert that the respondent-State was not entitled to exclude the land in question from sanctuary; and that the State ought to take the land and ought to pay compensation as proposed by some of its officers. It was held, on the other hand, the claim in the present suit is founded on the ground that the plaintiff has suffered loss due to the proceedings under the Act of 1972 and then, due to exclusion of the subject land from acquisition. It was further held that the relief claimed in the present suit and matter in issue herein cannot be said to be the same as had been in issue in the earlier proceeding i.e., the said writ petition against the exclusion order dated 19.11.1993. Apart from the fact that the earlier proceeding i.e., the said writ petition was for a different relief for quashing the exclusion order dated 19.11.1993, it was held that the said writ petition was dismissed on merit and not for want of jurisdiction. Applicability of Section 14 of the Limitation Act was totally ruled out by the SC in the present case. And, accordingly, the appeal was dismissed, by the SC holding that suit was rightly dismissed by the courts below.
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