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Legislative and Regulatory Update
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[No.127]
July 10,
2005 |
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High Courts |
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Delhi
In this case, the
application for divorce by mutual consent was filed. The joint prayer was made
by the parties to waive the period of six months prescribed under Section 13B
(2) of the Hindu Marriage Act, 1956. The Additional District Judge passed an
order declining to waive the statutory period of 6 months. A petition under
Section 13B (1) of the Hindu Marriage Act, 1956 was filed challenging the order.
Delhi High Court
after considering all aspects of the matter while allowing the appeal, held
that, if after a passage of 4 years from date of marriage the parties are firm
in their decision to dissolve the marriage and there is no possibility of
reconciliation between the parties, the claim for exemption from waiting for 6
months was justified.
The assessee-company
carrying on a business of breeding and maintaining horses as well as of
agricultural activities and maintaining the single composite account for both. A
show cause notice was issued to the respondent company regarding the suppression
in valuation of horses born in the stud farm and depreciation on horses
purchased during the period in question.
The assessee had
been fully reflecting the sale price received by it after year or two of birth
of foals. The entire sale consideration without adding any amount on account of
expenditure upon them during the interregnum period, the entire income received
has been shown as taxable by the assessee.
Therefore, the court
held that the manner and methodology of accountancy adopted by the assessee
company was correct and did not violate any provisions of the Act or in any way
result in avoidance of payment of tax.
Karnataka
Criminal proceedings
initiated against the Petitioners herein, alleging abetment of suicide. Deceased
committed suicide leaving behind a note stating that he had been harassed and
was frustrated in life, hence he was committing suicide. Similar is the
statement said to have been made to the complainant when deceased was being
taken to the hospital after he set himself ablaze.
Aggrieved by the
order taking cognizance of the offence, the present petition was filed by the
accused seeking quashing of the criminal proceedings initiated against them,
primarily on the grounds that no ingredients of the offence of abetment of
suicide existed.
It was held in this case that neither the statement of deceased nor what
is stated in the death note attracts section 107 of the IPC. Also, it was held
that since the suicide note did not even remotely suggest that the petitioner
had instigated the deceased for suicide, the offence under Section 306 of the
IPC couldn not be said to have been committed. Thus order of taking cognizance and
issue of process against the petitioners was quashed.
Gujarat
In this case,
petitioners had deposited certain amounts with the respondent company, which
was, initially, a partnership firm. Subsequently on conversion into private
limited company, the company became liable to return the deposits with interest
to the petitioners. The respondent company was not in position to pay back the
amount and had shown a total lackadaisical approach towards the repayment. The
petitioners have issued statutory notices on the respondent company, but
respondent company gave totally defying and baseless reply to the notices .So
having no other alternative the petitioners have moved separate applications
before the Company Law Board
The court was of the
firm view that despite the fact that the respondents in reply to statutory
notice had clearly stated about payment of dues, award of the arbitrator and the
relationship of the petitioners with 'A' there was no whisper about all these
facts in the memo of all the petitions .The petitioners therefore had not come
with the clean hands before the court. The equitable jurisdiction of the court
cannot be invoked by suppressing the material facts. It was also admitted on the
basis of the balance sheet and financial data produced that company had been
making profits year after year.
The Gujarat High
Court dismissed the petitions. It was observed that if the dispute raised by the
respondent company is genuine and bonafide, it is not advisable nor even
desirable to pass an order of winding up. Accordingly all petitions were
dismissed, as there was no substance or merits in any of these petitions.
Uttar Pradesh
The
petitioners-workmen appointed between the years 1987-1991 retrenched from
service in the year 1994 and 1995 respectively. They claimed to have worked
continuously from the date of their appointment for more than 240 days and that
they had been wrongly and illegally retrenched from service in violation of the
provisions of Section 6-N of the U.P. Industrial Dispute Act, 1947. State
Government under Section 4-K made references in each case to the effect if the
termination was just and legal? And if not, then what was the extent of
benefit/relief that the workman was entitled to? The petitioners produced wages
slip and evidences to prove deduction of provident fund from their wages. The
workmen-petitioners filed documents in support of their cases, which included
the attendance cards for various months, with bonus slip, wage slip and
provident-fund slip etc.
The Allahabad High
Court ruled the it was a settled law that the provision of 6-N of the U.P.
Industrial Dispute Act, 1947 applied to the workman who have worked more than
240 days in a calendar year preceding to their termination cannot be restricted
to work immediately preceding the date of termination and would be deemed to be
in continuous service. Relying upon the judgment in U.P. Drugs &
Pharmaceuticals Company, Ltd. v. Ramanuj Yadav and Ors., a writ of certiorari
was directed to be issued to quash the respective impugned awards. The
respondent No. 2 was directed to reinstate the workmen-petitioners with
continuity in service and the petitioners to be paid their half back wages w.e.f.
1995, the dates of their illegal retrenchment.
Maharashtra
The petition arose
out of an order passed by the Labour Court in a reference to adjudication by
which the enquiry in a disciplinary proceeding was held to be fair and proper,
but the finding was declared to be perverse. Charge-sheets were issued to few
workmen on allegations of willful disobedience of a lawful and reasonable order
of a superior, abetting, inciting, instigating an illegal strike or action in
furtherance thereof, theft, fraud and dishonesty in connection with the business
of the employer or his property and drunkenness, riotous, disorderly or indecent
behaviour on the premises of the establishment. Based on the evidence of four
employees, the Enquiry Officer held that all charges were proved apart from the
charge of theft, fraud and dishonesty. A reference to adjudication was made
under section 10 of the Industrial Disputes Act, 1947.
It was held by the
Bombay High Court that enquiries were not governed by strict rules of evidence
contained in the Evidence Act. The jurisdiction of the Labour Court under
section 11-A does not confer any arbitrary power on the Labour Court. Such
jurisdiction is supervisory in nature and ought to be exercised only where the
finding in a disciplinary enquiry is based on no evidence. The Court said the in
relying upon minor inconsistencies, the Labour Court lost sight of the
fundamental nature of its jurisdiction which was to determine if there was
material on record to sustain the charge of misconduct.
West Bengal
Criminal proceedings
initiated against the present petitioners alleging trespass into the house of
the complainant and thereafter assault. The court framed the charge against the
accused persons. An application for setting aside the order framing charge
against the accused was moved by the petitioners.
The question that
came up for consideration was where an order had been barred by the code, and
cannot be subject matter of review, whether the High Court could resort to its
inherent powers to entertain the same.
The Calcutta High
Court opined that quashing of proceeding to prevent any abuse of the process of
the court to secure the ends of justice could only be done where it appeared
that there was a legal bar against the institution or continuation of criminal
proceeding in respect of the offence alleged, or where either there is no legal
evidence adduced in support of the case or the evidence adduced clearly or
manifestly fails to prove the charge and where the allegations in the FIR or the
complaint do not constitute the offence alleged even if they are taken at their
face value of accepted in entirety. Since such power is to be exercised
sparingly and the court could not inquire about reliability of the allegations
at that stage of the case, there was no scope for quashing the impugned order.
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Telecom
Regulatory Authority of India (TRAI)
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Circular No.
305-8/2004-QoS Dated 29.06.2005: The Telecom Regulatory Authority of India vide
the above circular has issued a significant directive to all Cellular Mobile
Service Providers and Unified Access Service Providers. It directs all the
Cellular Mobile Service Providers and Unified Access Service Providers that they
are to inform the customer in writing, within a week of activation of service,
the complete details of the tariff plan. Also, as and when there are any changes
in any aspect/item of tariff in the chosen package, the operator shall intimate,
in writing, such changes to those subscribers whose tariff packages undergo a
change. This directive is aimed at protecting the interests of the consumers in
view of the complaints received by the TRAI from the consumers. The consumers
had complained that while taking new connections through franchisees/agents of
service providers, they were promised certain tariffs for calls and certain
facilities/services like CLIP, roaming fee etc., free of charge. However, when
they received the bill they noticed that the charges were not as promised by the
franchisee/agent or that charges were levied for some service/facility, which
was not mentioned or shown to the customer while taking new connection.
Press Release No.
58/2005 Dated 01.07.2005: The Telecom Regulatory Authority of India in July
2000, had issued a Regulation which defined the quality of service parameters
and benchmarks for Basic and Cellular Mobile services. The benchmarks were
defined to be achieved in the short term, medium term and long term
corresponding to periods 12, 24 and 48 months for Basic Services and 12, 24 and
36 months for Cellular Mobile Services from the date of issue of Regulation. The
review carried out by TRAI on the status of quality of service of the networks
of all operators showed poor performance on the part of basic service networks,
especially the ones that were predominantly wire line networks. In the view of
the same, the authority has issued a revised Regulation on Quality of Service
Parameters of Basic and Cellular Mobile Telephone Services by which it has
attempted to cover all relevant parameters and had laid down fresh benchmarks.
The Authority has confirmed that it had considered the comments received from
stakeholders while finalizing the Regulation.
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RBI |
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DBS
Circular No:
DBS.CO.PP.BC21/11.01.005/2004-05 Dated 29.06.2005: The Reserve Bank of India had
reviewed the position relating to risk management, reporting requirements and
balance sheet disclosures in respect of real estate exposure of banks. Vide the
above circular, it has issued certain guidelines to be followed by the member banks
on the same. On the matter of risk management system, the RBI states that
i. Banks should have
a Board mandated policy in respect of their real estate exposure.
ii. The policy may
include exposure limits, collaterals to be considered, margins to be kept,
sanctioning authority / level, sector to be financed, etc., though the actual
limits / margins may vary from bank to bank depending upon the individual bank’s
portfolio size, risk appetite and risk containing abilities, etc.
iii. Banks should
have risk management system in place for containing risks involved in this
sector, including price risk, etc.
iv. Banks should
have a monitoring mechanism to ensure that the policy stipulations are being
followed by field level functionaries and that their exposure to this sensitive
sector is within the stipulated limits.
With regard to
Reporting to RBI and Balance Sheet Disclosure, it has issued the following
guidelines,
Banks should report
to RBI their real estate exposure under the following heads -
a) Direct exposure:
Includes Residential Mortgages, Commercial Real Estate and Investments in
Mortgage Backed Securities (MBS) and other securitised exposures.
b) Indirect
Exposure: Includes Fund based and non-fund based exposures on National Housing
Bank (NHB) and Housing Finance Companies (HFCs).
The banks are also
requested to disclose their gross exposure to real estate sector as well as the
details of the break-up in the annual report.
RPCD
Circular No.
RPCD.PLFS.BC.No.8/05.05.09(PAIS)/2005-06 Dated: 05.07.2005: The above circular
of the Reserve Bank of India is aimed at safeguarding the interests of Kisan
Credit Card holders by providing personal accident insurance coverage at
competitive rates. Vide the circular, RBI states that the banks are allowed
the discretion to approach either any GIPSA member, (General Insurers' (Public
Sector) Association of India) general insurance company or any private sector
general insurance company, to take advantage of the competitive offers. However,
the banks while negotiating with the insurers should keep in mind the guiding
principles of PAIS, especially the premium sharing formula, coverage etc.
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| Ministry of Commerce and Industry |
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DGFT
Policy Circular No.
14(RE-2005)/2004-2009 Dated: 04.07.2005: The above policy circular issued by the
Directorate General of Foreign Trade states that in accordance with Foreign
Trade policy provisions, the Gem & Jewellery Units in EOU/SEZ may source
gold/silver/platinum from the nominated agencies on loan basis and units
obtaining such precious metals from the nominated agencies should export such
gold/silver/platinum jewellery within 90 days from the date of release. The
circular lays down that the above provision shall not apply in case of outright
purchase of precious metals from the nominated agencies. It is however clarified
that conversion of loan of precious metals taken from nominated agencies to
outright purchase is allowed within the original stipulated export period.
This
will, however, be subject to payment of interest till such conversion and after
such conversion, it would be subject to normal policy of EOU/SEZ in so far as
utilization of precious metals and export of jewellery is concerned, unless
otherwise specified.
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| Ministry of Finance |
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CBDT
Circular No. 4/2005 Dated
27.06.2005: Vide the above circular, the Central Board of Direct Taxes has
issued fresh guidelines on filing of returns relating to tax deduction at source
and tax collection at source on computer media. As such, all the previous
guidelines issued by the Board relating to the same stands modified to the
extent mentioned in the new guidelines. The circular states that the provisions
of sub-sections (5B) and (5C) of section 206C of the Income Tax Act, which
provides for furnishing of returns of tax collected at source on computer media
have been amended in accordance with a scheme to be notified by the Board by
notification in the Official Gazette. The filing of such returns has been made
mandatory in the case of companies, the Central Government and State
Governments. The "Electronic Filing of Returns of Tax Collected at Source
Scheme, 2005" has been notified vide S. O. No. 453 (E) dated 30th
March, 2005.
Notification No. :
180/2005 Dated: 30.06.2005: The Central Board of Direct Taxes vide the above
notification notifies the Scheme for Furnishing of Paper Returns of Tax
Collected at Source, 2005. It shall be applicable to all persons who are
required to furnish returns of tax collected at source under sub-section (5A) of
section 206C of the Income Tax Act. It shall come into force on the date of its
publication in the official gazette. The notification lays down the guidelines
relating to the preparation and furnishing of TCS Return as well as the
procedure to be followed by the agency in regard to the same. With regard to
preparation of the TCS Return, the notification notifies that the collector
shall quote his permanent account number and tax deduction and collection
account number as also the permanent account number of all persons from whom tax
has been collected by him.
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| International Legal
Cases and News |
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CASES
Constitution
The United States
7th Circuit Court of Appeals in the above case affirmed the decision of the
lower court in
dismissing the plaintiff's complaint, the plaintiff had alleged fraud and breach
of contract relating to the cost of long-distance telephone services provided by
defendant, the claims of the plaintiff were preempted by federal law.
In the said case, on
appeal to the United States 7th Circuit Court of Appeals, the court upheld the
dismissal of plaintiff's suit by the trial court. The claim of the plaintiff was
that the defendant-employer deprived him of a constitutionally protected
property interest without due process of law as the defendant employer had
refused to reinstate him from medical leave status to active duty.
Criminal Law &
Procedure
The Supreme Court of
Delaware upheld the Defendant's felony murder conviction by the trial court over his claim that the trial committed reversible error by admitting
into evidence alleged threats made by his co-defendant in violation of his
confrontation rights.
Insurance Law
In the above case,
the Supreme Court of Delaware held that where a defendant-insurance company
fails to make an offer of coverage to an uninsured and underinsured motorist in
a meaningful way as required by law, the plaintiff is entitled to reform his
automobile insurance policy.
Arbitration
The Supreme Court of
Delaware in the above appeal case held that there is no violation of the United
States Arbitration Act where, under an arbitration clause requiring the
application of California law, the arbitrator allows the trial court to decide
the issue of illegality.
Family Law
In a dissolution of
marriage proceeding, on appeal to the California Appellate District Court, the
court held that settlement proceeds from a legal malpractice lawsuit are the
respondent's separate property provided that the cause of action for the lawsuit
arose after separation of the parties.
Copyright And Patent
In the above case of
copyright infringement concerning clothing designs, the US 5th Circuit Court of
Appeals affirmed the summary judgment in favor of the defendant by the lower
court as the plaintiff did not own a valid copyright in the designs.
Environment
In the above case,
the district court dismissed the of plaintiff's suit asserting violations of the
Administrative Procedure Act and the Endangered Species Act for lack of
jurisdiction. On appeal, the decision of the District Court was upheld by the
U.S. District of Columbia Circuit Court of Appeals.
NEWS
Upholding the
decision of the high court, Nebraska Supreme court held that state’s
department of Natural Resources couldn’t regulate ground water unless
legislature confers such authority. Groundwater irrigators,
which are controlled by area natural resources districts, and surface water
irrigators, which are controlled by the state, are treated differently in
Nebraska and according to the court, the department has no common-law duty to
regulate the use of groundwater in order to protect the surface water
appropriations.
While upholding the
Nebraska federal district court ruling in Carhart v. Gonzalez, the US eighth
circuit court of appeals held that the Partial-birth Abortion Ban Act is
unconstitutional as it lacks an exception for the health of the mother. The act
banned a procedure, which was similar to a rarely used procedure called dilation
and extraction, or D&X. D&X entails delivery of the fetal body outside
the mother and then puncturing or collapsing its head.
The largest US
accounting firm, Deloitte and Touche LLP is under investigation by federal
regulators for a 2003 audit of Navistar International corporation as the firm
may have failed to comply with atleast five accounting standards. Deloitte has
already paid $50 million in April to settle U.S. Securities and Exchange
Commission (SEC) allegations that its audits should have detected a fraud at
Cable-television Company Adelphia Communications Corp which is one of the
largest penalty the SEC has levied against any accounting firm and puts a cloud
over the auditing firm’s reputation and credibility.
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