मंगलवार, 20 अप्रैल 2010

113. Disposal of seazed vehicles

In Sunderbhai Ambalal Desai (2002) 10 SCC 283, the Supreme Court while quoting the provisions Sections 451 and 457 of the Cr.PC, observed in para 7 as under:-

"7. In our view, the powers under Section 451 Cr PC should be exercised

expeditiously and judiciously. It would serve various purposes, namely:

1. owner of the article would not suffer because of its

remaining unused or by its misappropriation;

2. court or the police would not be required to keep the

article in safe custody;

3. if the proper panchnama before handing over possession of the article is prepared, that can be used in evidence instead of its production before the court during the trial. If necessary, evidence could also be recorded describing the nature of the property in detail; and

4. this jurisdiction of the court to record evidence should be exercised promptly so that there may not be further chance of tampering with the articles."

To safeguard the interests of the prosecution, it was directed that following measures should be adopted giving instances contained in para 12 reproduced hereinbelow:

"12 For this purpose, if material on record indicates that such articles belong to the complainant at whose house theft, robbery or dacoity has taken

place, then seized articles be handed over to the complainant after:

(1) preparing detailed proper panchnama of such articles;

(2) taking photographs of such articles and a bond that such articles would be produced if required at the time of trial; and

(3) after taking proper security."

While dealing with the seized vehicles from time to time by the police either in commission of various offences or abandoned vehicles or vehicles which are recovered during investigation of complaint of thefts, the court observed as

under:-

"17. In our view, whatever be the situation, it is of no use to keep such seized vehicles at the police stations for a long period. It is for the Magistrate to pass appropriate orders immediately by taking appropriate bond and guarantee as well as security for return of the said vehicles, if required at any point of time. This can be done pending hearing of applications for return of such vehicles.

18. In case where the vehicle is not claimed by the accused, owner, or the insurance company or by a third person, then such vehicle may be ordered to be auctioned by the court. If the said vehicle is insured with the insurance company then the insurance company be informed by the court to take possession of the vehicle which is not claimed by the owner or a third person. If the insurance company fails to take possession, the vehicles may be sold as per the direction of the court. The court would pass such order within a period of six months from the date of production of the said vehicle before the court. In any case, before handing over possession of such vehicles, appropriate photographs of the said vehicle should be taken and detailed panchnama should be prepared."

In General Insurance Council & Ors. V. State of Andhra Pradesh & orsdecided on 19/04/2010, Considering the mandate of Section 451 read with Section 457 of the Code, the Supreme Court in addition to aforesaid directions, gave following further directions with regard to seized vehicles are required to be given.

"(A) Insurer may be permitted to move a separate application for release of the recovered vehicle as soon as it is informed of such recovery before the Jurisdictional Court. Ordinarily, release shall be made within a period of 30 days from the date of the application. The necessary photographs may be taken duly authenticated and certified, and a detailed panchnama may be prepared before such release.

(B) The photographs so taken may be used as secondary evidence during trial. Hence, physical production of the vehicle may be dispensed with.

(C) Insurer would submit an undertaking/guarantee to remit the proceeds from the sale/auction of the vehicle conducted by the Insurance Company in the event that the Magistrate finally adjudicates that the rightful ownership of the vehicle does not vest with the insurer. The undertaking/guarantee would be furnished at the time of release of the vehicle, pursuant to the application release of the recovered vehicle. Insistence on personal bonds may be

dispensed with looking to the corporate structure of the insurer."

शनिवार, 27 मार्च 2010

112. Jurisdiction of BFIR vis a vis High Court

Sick Industrial Companies (Special provisions) Act, 1984 (SICA) has overriding effect when there arises a question of jurisdiction of BFIR under SICA vis a vis the High Court under s 391 of companies Act.
In Tata Motors Ltd v. Pharmaceutical Products of India Ltd. & Anr
2008 AIR 2805, 2008(9 )SCR267 , 2008(7 )SCC619 , 2008(9 )SCALE262 , 2008(9 )JT227, the respondent being unable to pay the dues made a reference in terms of Section 15 of SICA before the Board for Industrial and Financial Reconstruction (BIFR). The BIFR passed an order recommending winding up of the respondent. An appeal was preferred there against before the Appellate Authority for Industrial and Financial Reconstruction (AAIFR).

Respondent, however, filed an application before the High Court of Judicature at Bombay purported to be in terms of Section 391 of the 1956 Act during the pendency of the said appeal. Scheme proposed by the respondent was approved by the single judge as well as in intra court appeal .

The Supreme Court held that:

‘SICA furthermore was enacted to secure the principles specified in Article 39 of the Constitution of India. It seeks to give effect to the larger public interest. It should be given primacy because of its higher public purpose. Section 26 of SICA bars the jurisdiction of the Civil Courts.

What scheme should be prepared by the operating agency for revival and rehabilitation of the sick industrial company is within the domain of BIFR. Section 26 not only covers orders passed under SICA but also any matter which BIFR is empowered to determine.
The jurisdiction of civil court is, thus, barred in respect of any matter for which the appellate authority or the Board is empowered. The High Court may not be a civil court but its jurisdiction in a case of this nature is limited. Section 15 of SICA provides for making reference by the Board of Directors of the Company on becoming an industrial company, a sick industrial company, to the Board for determination of the measures to be adopted with respect to the company. Section 16 provides for making inquiry into the working of sick industrial company by the Board after receiving reference.

Section 17 of SICA provides for powers of Board to make suitable order on the completion of inquiry. Section 18 thereof provides for preparation and sanction of Scheme. Section 19 provides for rehabilitation by giving financial
assistance. According to sub section (1), Where the scheme relates to preventive, ameliorative, remedial and other measures with respect to any sick industrial
company, the scheme may provide for financial assistance by way of loans, advances or guarantees or reliefs or concessions or sacrifices from the Central Government, a State Government, any scheduled bank or other bank, a public financia institution or State level institution or any institution or other authority (any Government, bank, institution or other authority required by a scheme to provide for such financial assistance being hereafter in this section referred to as the person required by the scheme to provide financial assistance) to the sick industrial company.

The supreme court held that :
“The provisions of a special Act will override the provisions of a general Act. A later of it will override an earlier Act. 1956 Act is a general Act. It consolidates and restates the law relating to companies and certain other associations. It is prior in point of time to SICA.
……… Wherever any inconstancy is seen in the provisions of the two Acts, SICA would prevail. SICA furthermore is a complete code. It contains a non-obstante clause in Section 32.
……..SICA is a special statute. It is a self contained Code. The jurisdiction of the Company Judge in a case where reference had been made to BIFR would be subject to the provisions of SICA.”


In NGEF Ltd. vs. Chandra Developers (P) Ltd. : (2005) 8 SCC 219 (see also, Morgan Securities and Credit Pvt. Ltd. v. Modi Rubber Ltd. [AIR 2007 SC 683), in regard to the jurisdiction of the Company Court it was held :-
"39. The provisions of SICA contain non obstante clauses. It is a special statute. It is a complete code in itself. The jurisdiction of the Company Court in such matters would arise only when BIFR or AAAIFR, as the case may be, has exercised its jurisdiction under Section 20 of SICA recommending winding up of the Company upon arriving at a finding that there does not exist any chance of revival of the Company."

It was further held:
The satisfaction arrived at by BIFR that the Company is not likely to become viable in future and it is just and equitable that the Company should be wound up must be based on objective criteria. The High Court indisputably on receipt of such recommendation of BIFR would initiate a proceeding for winding up in terms of
Section 433 of the Companies Act. Sub-section (2) of Section 536 ipso facto does not confer any jurisdiction upon the Company Court to direct sale of the assets of the sick company. It has to exercise its power thereunder subject to the provisions of the special statute governing the field. Despite the fact that the procedures laid down under the Companies Act would be applicable therefore but they must be read with sub-section (4) of Section 20 of SICA which contains a non obstante clause and in
terms thereof, BIFR is authorised to sell the assets of the sick industrial company in such a manner as it may dee fit. By reason of the said provision, BIFR is also empowered to forward the sale proceeds to the High Court for orders for distribution in accordance with Section 529-A and other provisions of the Companies Act which in no uncertain terms would mean that the distribution of the sale proceeds would be for the purpose of meeting the claims of the creditors in the manner laid down therein. The intention of Parliament in enacting the said provision becomes clear as in terms of Section 22-A of SICA, BIFR is empowered to issue any direction in the interest of the sick industrial company or its creditors or shareholders and direct the sick industrial company not to dispose of its assets except with its assent. Section 32, contains a non obstante clause. The scheme suggests that BIFR retains control over the assets of the Company and in terms of the aforementioned provisions may either sick industrial company. Such a power in BIFR remains till a winding-up order is passed by the High Court and a stage arrives for the High Court for issuing orders for
distribution of the sale proceeds.
………SICA was furthermore enacted subsequent to the provisions of the Companies Act. It is not, thus, possible to accept the submission that the High Court exercises a concurrent jurisdiction."

It was ruled that the Company Court and the BIFR do not exercise concurrent jurisdiction. It was held that: It may be true that the High Court's jurisdiction is that of the Appellate Authority but keeping in view the terminology contained in sub- section (4) of Section 20 read with Section 32 of the Act, it leaves no manner of doubt that the provisions of SICA shall prevail over the provisions of the Companies Act. For the aforementioned purpose, it was not necessary for Parliament to mention specifically the provisions of sub-section (4) of Section 20 that the same shall prevail over Section 536 of the Companies Act…..”

“BIFR admittedly had the power to sell the assets of the Company but the High Court until a winding-up order is issued does not have the same.”

In Bombay Dyeing & Manufacturing Co. Ltd. vs. Bombay Environmental Action
Group : (2006) 3 SCC 434 It was held that:
“13. The 1993 Act was enacted to provide for and regulate the payment of interest on delayed payments to small-scale and ancillary industrial undertakings and for matters connected therewith.
14. The provisions of the 1993 Act, therefore, do not envisage a situation where an industrial company becomes sick and requires framing of a scheme for its revival.
15. It is no doubt true that an award in relation to a claim of a small-scale industry if made by the Council would be governed by the provisions of the Arbitration and Conciliation Act, 1996 .”

In Damji Valli Shah v. Life Insurance Corporation of India, [(1965) 2 SCR 665 ], the question which arose for consideration was as to whether a similar provision made in the Life Insurance Corporation Act, 1956 shall bar the jurisdiction of the Company Court in terms of Section 446 (1) of the Companies Act. Referring to Section 41 of the Life Insurance Corporation Act, 1956 it was stated that the Tribunal constituted under the LIC Act will have exclusive jurisdiction.

शनिवार, 6 मार्च 2010

111. Cancellation of petrol pump dealership- prier notice of test is mandatory

Case - M/s Hindustan Petroleum Corpn. Ltd. & Ors v. M/s Super Highway Services & Anr. decided on 19/02/2010


An inspection of petrol pump was made and dealership was cancelled on the ground that high speed diesel was found contaminated. The High allowed the writ petition of the on the ground that notice of the Laboratory Test to be conducted at the Barauni Terminal had not been served upon thepetitioner, which has caused severe prejudice to him since its dealership agreement was terminated on the basis of the findings of such Test. Admittedly the dealership agreement was terminated on the ground that the product supplied by the petitioner corporation was contaminated by the respondent. Such contamination was sought to be proved by testing the T.T. retention sample in the laboratory at Barauni Terminal.

Dismissing the SLP of the Corporation the Supreme Court held that : “The Guidelines being followed by the Corporation require that the dealer should be given prior notice regarding the test so that he or his representative also can be present when the test is conducted. The said requirement is in accordance with the principles of natural justice and the need for fairness in the matter of terminating the dealership agreement and it cannot be made an empty formality. Notice should be served on the dealer sufficiently early so as to give him adequate time and opportunity to arrange for his presence during the test and there should be admissible evidence for such service of notice on the dealer. Strict adherence to the above requirement is essential, in view of the possibility of manipulation in the conduct of the test, if it is conducted behind the back of the dealer. In the present case, there is no admissible evidence to prove service of notice on the respondent or refusal of notice by the respondent. Further, the notice dated 28.05.2008 which was allegedly refused by respondent, did not give him adequate time to arrange for the presence of himself or his representative during the test to be conducted at 3.00 PM on 29.05.2008. It is also to be noted that the endorsement regarding the alleged refusal is dated 29.05.2008 itself. Thus, the termination of the dealership agreement of the respondent was arbitrary, illegal and in violation of the principles of natural justice.”

शनिवार, 13 फ़रवरी 2010

110. Principle of negative equality

A Division Bench of the Allahabad High Court in Shripal Vaish v. U.P. Power Corpn. Ltd. (2009) 4 UPLBEC 3267 held that if a person is not entitled to payment in view of a particular provision, he can not claim parity that under similar circumstances payment is being made to others. The court relied on decision of the apex court in State of Bihar v Kameshwar Prasad Singh AIR 2000 SC 2306 . In Kameshwar Prasad’s case it was held that:

“ The concept of equality as envisaged under Article 14 of the Constitution is a positive concept which cannot be enforced in a negative manner. When any authority is shown to have committed any illegality or irregularity in favour of any individual or group of individuals other cannot claim the same illegality or irregularity on ground of denial thereof to them. Similarly wrong judgment passed in favour of one individual does not entitle others to claim similar benefits.”

In this regard the Supreme Court in Gursharan Singh & Ors. v. NDMC & Ors. [1996 (2) SCC 459] held that citizens have assumed wrong notions regarding the scope of Article 14 of the Constitution which guarantees equality before law to all citizens. Benefits extended to some persons in an irregular or illegal manner cannot be claimed by a citizen on the plea of equality as enshrined in Article 14 of the Constitution by way of writ petition filed in the High Court. The Court observed:

"Neither Article 14 of the Constitution conceives within the equality clause this concept nor Article 226 empowers the High Court to enforce such claim of equality before law. If such claims are enforced, it shall amount to directing to continue and perpetuate an illegal procedure or an illegal order for extending similar benefits to others. Before a claim based on equality clause is upheld, it must be established by the petitioner that his claim being just and legal, has been denied to him, while it has been extended to others and in this process there has been a discrimination."

Again in Secretary, Jaipur Development Authority, Jaipur v. Daulat Mal Jain & Ors. [1997 (1) SCC 35] this Court considered the scope of Article 14 of the Constitution and reiterated its earlier position regarding the concept of equality holding:

"Suffice it to hold that the illegal allotment founded upon ultra vires and illegal policy of allotment made to some other persons wrongly, would not form a legal premise to ensure it to the respondent or to repeat or perpetuate such illegal order, nor could it be legalised. In other words, judicial process cannot be abused to perpetuate the illegalities. Thus considered, we hold that the High Court was clearly in error in directing the appellants to allot

the land to the respondents."

In State of Haryana & Ors v. Ram Kumar Mann[1997 (3) SCC 321] this Court observed:

"The doctrine of discrimination is founded upon existence of an enforceable right. He was discriminated and denied equality as some similarly situated persons had been given the same relief. Article 14 would apply only when invidious discrimination is meted out to equals and similarly circumstanced without any rational basis or relationship in that behalf. The respondent has no right, whatsoever and cannot be given the relief wrongly given to them, i.e., benefit of withdrawal of resignation. The High Court was wholly wrong in reaching the conclusion that there was invidious discrimination. If we cannot allow a wrong to perpetrate, an employee, after committing mis-appropriation of money, is dismissed from service and subsequently that order is withdrawn and he is reinstated into the service. Can a similarly circumstanced person claim equality under Section 14 for reinstatement? The answer is obviously "No". In a converse case, in the first instance, one may be wrong but the wrong order cannot be the foundation for claiming equality for enforcement of the same order. As stated earlier, his right must be founded upon enforceable right to entitle him to the equality treatment for enforcement thereof. A wrong decision by the Government does not give a right to enforce the wrong order and claim parity or equality. Two wrongs can never make a right."

शनिवार, 16 जनवरी 2010

109. NI Act - Limitation starts from first notice

Whether after the notice issued under clause (b) of Section 138 of the Negotiable Instruments Act,1881 is received by the drawer of the cheque, the payee or holder of the cheque, who does not take any action on the basis of such notice within the period prescribed under Section 138 of the Act, is entitled to send a fresh notice in respect of the same cheque and, thereafter, proceed to file a complaint under Section 138 of the Act?

Above question has been answered in negative by the Supreme Court in CRIMINAL APPEAL NO.46 OF 2010 (@ SPECIAL LEAVE PETITION (CRL) NO.6676 OF 2008), Tameeshwar Vaishnav Vs. Ramvishal Gupta (Decided on 8/1/10) wherein relying on two earlier decisions it has been held that under s 138 , NI Act, the cause of action arises only once. In this case first notice was issued on 22th march 2006 but complaint was not filed within 30 days and subsequently the cheque was again presented and dishonored and fresh notice was issued on 14th June 2006 and on that basis a complint was filed on 10th July 2006.
The Supreme Court accepted the argument that when the complainant did not take any action on the basis of the first notice a second notice in regard to the self-same cheque was barred under the proviso to Section 138 of the Act. In Sadanandan Bhadran vs. Madhavan Sunil Kumar [(1998) 6 SCC 514], it was held that the cause of action to file complaint on non-payment despite issue of notice, arises but once. Another cause of action would not arise on repeated dishonour on re-presentation. It was also held that while the payee was free to present the cheque repeatedly within its validity period, once notice had been issued and payments not received within 15 days of the receipt of the notice, the payee has to avail the very cause of action arising thereupon and file the complaint. Dishonour of the cheque on each re-presentation does not give rise to a fresh cause of action. This view was reiterated in Prem Chand Vijay Kumar vs. Yashpal Singh & Anr. [(2005) 4 SCC 417].


Following above decisions in Tameeshwar case (supra) the Supreme Court held that:

“The provisions of Section 138 and clauses (a), (b) and (c) to the proviso thereof indicate that a cheque has to be presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier. Clause (b) indicates that the payee or the holder in due course of the cheque, has to make demand for the payment of the said amount of money by giving a notice in writing to the drawer of the cheque within 30 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid and clause (c) provides that if the drawer of the cheque fails to make the payment of the said amount of money to the payee or to the holder in due course of the cheque within 15 days of receipt of the said notice, the payee or the holder of the cheque may file a complaint under Section 142 of the Act in the manner prescribed.”

The Supreme Court hald that : “In the instant case, it is clear that the fresh (sic) notices were received by the Appellant on 14th June, 2006, whereas the complaints were filed on 10th July, 2006. It must, therefore, be held that the complaints were filed beyond the period of limitation and the learned Magistrate erred in taking cognizance on the complaints filed on the basis of the second notices issued on 7th June, 2006. Similarly, the High Court was also wrong in affirming the order of the learned Magistrate.”

सोमवार, 4 जनवरी 2010

List of legal articles by Dr. V.N. Tripathi

115. Compounding of offences u/s 138, NI Act

114. Restoration of criminal complaints on the line of civil suit

113. Disposal of seazed vehicles

112. Jurisdiction of BFIR vis a vis High Court

111. Cancellation of petrol pump dealership- prier notice of test is mandatory

110. Principle of negative equality

109. NI Act - Limitation starts from first notice

108. LIST / INDEX

107. Special Appeal in Allahabad High Court - when not maintainable

106. Penal provisions relating to road accidents
105. First Law maker of the world
104. The Court can not dismiss the suit when plaintiff fails to pay the costs
103. Shifted to other subject
102. --- do -----
101. --- do -----
100. --- do -----
99. Divorce in U.K. – Basic rules (2)
98. Divorce in United Kingdom - Basic rules (1)
97. Jurisdiction of Civil Court in labor matters - when not barred.
96. Insurer is not liable if DL expired
95. Writ of mandamus - some guide lines
94. Dissolution of unregistered firm
93. Right to water
92. Age in view of amendments in Juvenile Justice Act
91. s. 138,N.I.Act - when drower says cheque was lost
90. 'Post' and 'vacancy'
89. Sentencing - Provocation, a relevant consideration
88. Family law self help center
87. Precedents- some guidelines
86. Important points regarding s.138, NI Act
85. Remand of accused on change of investigating agency
84. Conditional legislation and delegated legislation
83. Blood test in paternity dispute
82. Fraud/cheating - simultanious civil and criminal case
81. 304 B, IPC - cruelty soon before death
80. MV Act- Compensation amount on death of children
79. Transplantation of human organs
78. Investigation by unauthorised officer
76. Supreme court's jurisdiction - general information
75. Final report and charge sheet
74. High Courts in India
73. Protest petition - a practice, not statutory rule
71. A concubine,whether can be prosicuted for u/s 498-A, IPC ?
70. Ad-hoc period - whether to be included in length of service
69. Applicability of limitation Act in Excise matters
68. Different standard of evidence at different stages of trial
67. Art. 161 c.f. Art. 72 in cases of death sentence
66. Transparency and accountability in a statute
65 Argument beyond pleadings
64 State Judicial Service - who is empowered to frame rules?
63 Welfare statutes
62 Will - Disinheritance of heirs of equal degree
61 Option between Ss. 163 – A and 166 of M.V. Act
60 Criminal prosecution of Company - Changing judicial views.
59 Evidence of defense at the stage of charge
58 Difference between inquiry officer and disciplinary authority
57 Interest under Land Acquisition Act
56 Territorial jurisdiction of High Court
56 Limitation Act – Art.58 v. Art. 113
54 Evidentiary value of certified copy of sale deed
53 quashing of FIR because of cross cases
52 Judicial interference in police investigation
51 Standard of proof at the stage of summoning order
50 Quashing of FIR when dispute is of civil nature
49 Inquest report - Object and scope
48. s. 156 (3) CrPC- Prospective accused has no standing







107. Special Appeal in Allahabad High Court - when not maintainable

In SPECIAL APPEAL No.1942 of 2008 Sheet Gupta v. State Of U.P. & Others decided on 11/12/2009, the Full Bench of Allahabad High Court resolved the controversy regarding maintainability of Special Appeal (Letters Patent Appeal or Intra-Court Appeal ) against a judgment of single judge of the High Court. The question was referred to Full Bench as there were two contradictory decisions of coordinate two judge benches. The referred question was as under:


"Whether a special appeal under the provisions of Rule 5 of Chapter VIII of the Rules of the Court lies in a case where the judgment has been given by a learned single Judge in a writ petition directed against an order passed in an appeal under paragraph 28 of the U.P. Scheduled Commodities Distribution Order, 2004?"


Laying down general rules regarding maintainability of Special Appeal the Full Bench held that :

“from the perusal of Chapter VIII Rule 5 of the Rules of Allahabad High Court, a special appeal shall lie before this Court from the judgment passed by one Judge of the Court. However, such special appeal will not lie in the following circumstances:
1.The judgment passed by one Judge in the exercise of appellate jurisdiction, in respect of a decree or order made by a Court subject to the Superintendence of the Court;
2.the order made by one Judge in the exercise of revisional jurisdiction;
3.the order made by one Judge in the exercise of the power of Superintendence of the High Court;
4.the order made by one Judge in the exercise of criminal jurisdiction;
5.the order made by one Judge in the exercise of jurisdiction conferred by Article 226 or Article 227 of the Constitution of India in respect of any judgment, order or award by
(i) the tribunal,
(ii) Court or
(iii) statutory arbitrator
made or purported to be made in the exercise or purported exercise of jurisdiction under any Uttar Pradesh Act or under any Central Act, with respect to any of the matters enumerated in the State List or the Concurrent List in the Seventh Schedule to the Constitution of India;
6.the order made by one Judge in the exercise of jurisdiction conferred by Article 226 or 227 of the Constitution of India in respect of any judgment, order or award of
(i) the Government or
(ii) any officer or
(iii) authority,
made or purported to be made in the exercise or purported exercise of appellate or revisional jurisdiction under any such Act, i.e. under any Uttar Pradesh Act or under any Central Act, with respect to any of the matters enumerated in the State List or the Concurrent List in the Seventh Schedule to the Constitution of India."

Answering the referred question the Full Bench held that: “---- the Essential Commodities Act, 1955 is a Central Act referable to Entry 33 of the Concurrent List in the Seventh Schedule to the Constitution of India. ---In the present case, we find that the Commissioner had exercised powers conferred under Clause 28 of the Distribution Order, 2004, which order has been passed under the provisions of the Act, therefore, the appellate power has been exercised under the Act and, thus, no special appeal would lie. It may be mentioned here that right of an appeal is a statutory right and not a vested right and can be hedged by conditions as held by the Apex Court in the cases of Smt. Ganga Bai[1]and Vijay Prakash & Jawahar. [2]"





[1] Smt. Ganga Bai vs. Vijay Kumar and others, AIR 1974 SC 1126.

[2] Vijay Prakash D. Mehta and Jawahar D. Mehta vs. Collector of Customs (Preventive), Bombay, AIR 1988 SC 2010