Legislative and Regulatory Update
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In This Issue [No.140] November 21, 2005
Supreme Court High Courts RBI SEBI Insurance Regulatory and Development Authority Ministry of Home Affairs Ministry of Labour And Employment International
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Uday Shankar Triyar v Ram Kalewar Prasad Singh and Anr.
In the present case, Vakalatnama in favour of the pleader was executed only by one A. N. Singh and not by DCC, the company Mr A N Singh was president of. It was therefore submitted that the appeal was filed, in effect, only by A N Singh and as his legal heirs did not come on record on his death, the appeal abated.
Thus the question under consideration was whether the appeal by DCC was defective or invalid and whether such defect could be permitted to be rectified.
It was observed that it is now well-settled that any defect in signing the memorandum of appeal or any defect in the authority of the person signing the memorandum of appeal, or the omission to file the vakalatnama executed by the appellant, along with the appeal, will not invalidate the memorandum of appeal, if such omission or defect is not deliberate and the signing of the Appeal memorandum or the presentation thereof before the appellate court was with the knowledge and authority of the appellant. Such omission or defect being one relatable to procedure, it can subsequently be corrected. It is the duty of the Office to verify whether the memorandum of appeal was signed by the appellant or his authorized agent or pleader holding appropriate vakalatnama. The requirement that the appeal should be signed by the appellant or his pleader (duly authorized by a Vakalatnama executed by the appellant) is, no doubt, mandatory. But it does not mean that non-compliance should result in automatic rejection of the appeal without an opportunity to the appellant to rectify the defect. If and when the defect is noticed or pointed out, the court should, either on an application by the appellant or suo motu, permit the appellant to rectify the defect by either signing the memorandum of appeal or by furnishing the vakalatnama. It should also be kept in view that if the pleader signing the memorandum of appeal has appeared for the party in the trial court, then he need not present a fresh Vakalatnama along with the memorandum of appeal, as the Vakalatnama in his favour filed in the trial court will be sufficient authority to sign and present the memorandum of appeal having regard to Rule 4(2) of Order 3 CPC, read with Explanation [c] thereto. In such an event, a mere memo referring to the authority given to him in the trial court may be sufficient. However, filing a fresh Vakalatnama with the memo of appeal will always be convenient to facilitate the processing of the appeal by the office.
An analogous provision is to be found in Order 6 Rule 14 CPC which requires that every pleading shall be signed by the party and his pleader, if any. Here again, it has always been recognized that if a plaint is not signed by the plaintiff or his duly authorized agent due to any bona fide error, the defect can be permitted to be rectified either by the trial court at any time before judgment, or even by the appellate court by permitting appropriate amendment, when such defect comes to its notice during hearing. Non-compliance with any procedural requirement relating to a pleading, memorandum of appeal or application or petition for relief should not entail automatic dismissal or rejection, unless the relevant statute or rule so mandates. Procedural defects and irregularities which are curable should not be allowed to defeat substantive rights or to cause injustice. Procedure, a hand-maiden to justice, should never be made a tool to deny justice or perpetuate injustice, by any oppressive or punitive use.
Rite Approach Group Ltd. v M/s Rosoboronexport
The petitioner was approached by the respondent and was appointed as agent for procuring orders in India for supply of helicopters to the Border Security Force (BSF ), Ministry of Home Affairs , Government of India. Due to petitioners effort, a written contract was entered into by and between Border Security Force and respondent, and petitioner assigned the task of organizing and concluding the contracts between the BSF and Respondent. The petitioner was to be paid a certain commission for its work which was refused by the respondent. The relevant clause in Agency Agreement provided that the dispute, if any, is to be submitted to the Arbitration Court under the Chamber of Commerce and Trade of the Russian Federation.
It was observed that the Agency Agreement contained a specific clause stating that if any dispute arises between the parties then the same shall be submitted to Arbitration Court under the Chamber of Commerce and Trade of the Russian Federation. Thus in view of the specific provision specifying the jurisdiction of the Court to decide the matter, this court cannot assume the jurisdiction. Whenever there is a specific clause conferring jurisdiction on particular Court to decide the matter, then it automatically ousts the jurisdiction of other court. Thus this court has no jurisdiction to appoint arbitrator.
M/s Amar Alcoholi Ltd. v SICOM Ltd. and Anr.
The appellant obtained a loan of Rs 90 lakhs from respondent for setting up a unit to manufacture grain based alcohol. On its failure to pay the same despite several opportunities, the first respondent took over the possession of the assets mortgaged with it invoking its powers under Section 29 of the State Financial Corporation Act, 1951 (for short "the Act") . These properties kept as mortgage were eventually auctioned and sold. Aggrieved by the order of auctioning, the appellant filed writ petition in the High Court seeking, inter alia, stay of the auction proceedings for sale of the unit by the first respondent. The appellants main contention was that the provisions of Section 29 of the Act were not applicable to the first respondent as it ceases to be a financial corporation after the reduction of shares of the Govt. of Maharashtra to 49% only.
It was observed that the first respondent was established by the State Government with the object of developing the industries and financing industrial concerns in the State. It is also not in dispute that the Central Government had extended the provisions of Section 29 of the Act to the first respondent. Thus, the first respondent would be covered by the expression "an institution established by a State Government" offering range of services including the object of financing industrial concerns in the State of Maharashtra. It would thus be a financial corporation covered under the Act. Section 46 of the Act confers the power on the Central Government to extend the provisions of the Act "to any institution established by a State Government". In the year 1986 a request was made to the Central Government by the Government of Maharashtra to extend the provisions of Sections 27, 29, 30, 31, 32A to 32F, 41, 41A, 42 and 44 of the Act to the first respondent. The Central Government accepted the request of the Government of Maharashtra and the provisions of the afore- mentioned sections were extended to the first respondent vide notification No. F. No. 5(9)/86-IF-II dated 11th December, 1986.
The argument that consequent to the reduction of stakes of the Govt. of Maharashtra in the first respondent and consequent to the change in its nomenclature, the first respondent had ceased to have the status of a State Financial Corporation under the Act, was not accepted by the Court. It was observed that the first respondent was originally established as, and even as of date continues to be, a company established by the Government of Maharashtra. It was further observed that the State of Maharashtra being the single largest shareholder has retained the overall control over the management of the first respondent by retaining the right to nominate its Directors by virtue of the Amended Article 18(a) of the Articles of Association of the Companies. The first respondent is a finance corporation covered by the Act and reduction in the shareholdings of the State of Maharashtra below 50 per cent shall not make any difference to the status of the first respondent, i.e, being a financial corporation.
Rajasthan High Court
Praveen Chotya v State
In the instant case, the petitioner filed an application for recalling and re-examining a person as witness during pendency of trial under section 311 of the Cr.P.C.
While interpreting Section 311 of the Cr.P.C. it was held that the said section clearly mentions usage of the words ‘any Court, ‘at any stage’ or any enquiry, trial or other proceedings, any person and any such person. This clearly spells out that this section is expressed in the widest possible extent and does not limit the discretion of the Court in any way. Therefore, under section 311 of the Cr.P.C, the Court has inherent powers at any stage, so long as the Court retains seisin of criminal proceedings without qualifying any limitation or prohibition. The Court has power to invoke the said provision till its final judgement/order.
Andhra Pradesh High Court
Penumastha Ramachandra Raju V. Gaddam Raja Sekhar Reddy
The revision petitioner filed an I.A. on the file of Senior Civil Judge to send the suit promissory note to the Government Laboratory, Hyderabad for the purpose of ascertaining the age of the signature with the other handwriting of the suit promissory note. The application was dismissed on the ground that there is no possibility of comparison of age of the ink in view of using ball point pen ink in drafting the pronote and hence no purpose would be served by sending the suit pronote to handwriting expert for comparison with regard to the age of the ink. The learned judge observed that the application is not maintainable.
The court considered the opinion that the purpose for which the revision petitioner intends to send the pronote to an expert in the light of the defence taken by him in the written statement cannot be said to be foreign. The court is of the opinion that the learned judge had not exercised the discretion properly, observing that no purpose would be served by sending the suit document, the pronote in question to handwriting expert for comparison and also further observing that the application is not maintainable.
Kerala High Court
Thomas v. Kunjamma
The revision filed by the Plaintiff, the suit was for injunction. The application for amendment of plaint was filed as well as decree in the trial court after decree of trial court was confirmed by appellate court and second appellate court. The plaintiff filed this revision before the court challenging the order of the trial court, when the matter came before the learned single judge reliance was placed on the decision in Vasudevan V. Lakshmi holding that the trial court has such jurisdiction to allow such amendments. When the decree of the trial court is taken up in appeal and has merged in the appellate decree, the appellate decree alone subsists for all purposes.
In this case an application was also made to amend the plaint this power can also be exercised by the second appellate court as the second appeal was disposed of on merit, the petition was dismissed without prejudice to the right of the plaintiff/ revision petitioner to move such petition in the second appellate court which confirmed the decree of the trial court.
Union Territory Consumer Dispute Redressal Commission, Chandigarh
Anoop Agarwal@Anoop Padia & Anr. V. Daljit Singh
The Appeal was filed against the Judgement and order of District Consumer Disputes Redressal Forum-II, U.T., Chandigarh , the two fold submissions made by the counsel for the appellants was that the appellants were not duly served with the notice of the complaint case and in any case they did not receive the copy of the complaint. The appellant was in Jail custody and did not receive the notice issued to him. Advocate appearing for the respondent contented that in case an opportunity is allowed to the complainant to contest the complainant case, the respondent/ complainant should be adequately compensated in terms of costs for the lapse on the part of the appellants in not putting appearance before the forum. The appellants’ advocate has no objection to this preposition of the complainant case being decided within a time frame.
The forum allowed the appeal and the order passed by the District forum were set aside and the complainant case was remanded to the District Forum II, U.T., Chandigarh subject to payment of cost.
State Sales Tax (Appellate) Tribunal, Srinagar
Azad Hardware Store V. Assessing Authority, ST Circle D, Srinagar and Dy. Commr. ST (Appeals)
Appellant filed the appeal before the Tribunal against the order of Dy. Sales Tax Commissioner, (appeals) Srinagar, where under the assessment order was set aside and case remanded back to the Assessing Authority for de novo assessment. The main plea taken up by the appellant was that appellant firm has ceased to exist since 1978 as after the dissolution of firm the business was discontinued. The appellant surrendered the registration certificate and also applied for the cancellation of registration, it was further contended that fraud has been committed by misuse of GST and CST of the appellant firm in the year 1996-97, when the same stood surrendered before the assessing authority. Tribunal after going through the record allowed the appeal and set aside the order being infirm and bad in law.
The Tribunal held that the appellate authority had committed an error in remanding the case for de novo assessment. It further held that order made against non-existing firm being void ab-initio is also unsustainable in law and no tax liability can be fastened against the appellant on its basis.
The Company Law Board
Chennai
N. Venkataswamy Naidu v Sri Suryateja Constructions P.Ltd and Others
An application was filed seeking directions against the respondent Company not to dismantle the existing structures of the scheduled properties. The Board ordered maintenance of status quo with regard to the existence of the structures in the subject property. However, the respondents disregarded the order of the board and continued the demolition work. The petitioner filed an application to punish the respondent for willfully disobeying the order.
It was held that under regulation 47 of the Company Law Board Regulations, 1991, any bench of the Company Law Board is deemed to be a Court. And under section 10 of the Contempt of Courts Act, the High Court can exercise powers of dealing with contempt of subordinate Courts in the same manner as it can deal with contempt of the High Court. Therefore, the petitioner has the liberty to approach the High Court for prosecuting the respondents for willful disobedience of Board’s order.
FEMA
Foreign Exchange Management (Deposit) (Second Amendment) Regulations, 2005
Notification No. FEMA-140/2005-RB dated 31.10.2005: The Reserve Bank of India vide this notification, has made the Foreign Exchange Management (Deposit) (Second Amendment) Regulations, 2005. The same shall come into effect from July 26, 2005. The amendments were made in the Foreign Exchange Management (Deposit) Regulations, 2000, in Schedule 2 Para 2 and Para 3. The regulation focuses on Deposit of Funds in the accounts that may be accepted in permissible currencies as designated by the Reserve Bank & the type of account to be opened in the form of term deposit with maturity period as may be specified by the Reserve Bank from time to time.
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