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In This Issue [No.176] November 20, 2006 Supreme Court High Courts PIB RBI SEBI International Cases & News Site Links Roundup Archives Free Trial Contact us To keep you informed about the latest Legislative and Regulatory information manupatra.com publishes this e-roundup highlighting the recent changes brought about by the Notifications/Acts/Bills /Ordinances etc. About manupatra.com http://www.manupatra.com/ provides comprehensive and easy to use legal and related information over the Internet. 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Aher Vs. State of Maharashtra Appellant, a government officer, was charged with serious misconduct in his thereby resulting in huge losses to government. A departmental enquiry was conducted into the matter and appellant was found to be guilty of charges alleged. A show cause notice was then issued and Disciplinary Authority imposed a punishment of forfeiture of entire pension and gratuity permanently. An appeal was preferred by appellant before Appellate Authority which was dismissed. Thereafter, appellant filed an application before Maharashtra State Administrative Tribunal which was also dismissed by Tribunal. Thereafter a suit was filed before High Court by appellant claiming that due procedure had not been complied with by Disciplinary Authority. High Court by impugned judgement dismissed same and held that show cause notice having been served upon appellant and he having shown cause thereto, question of non- compliance of principles of natural justice did not arise. Hence, present appeal Held, submission of appellant to effect that documents had not been supplied to him does not appear to have been raised by him before High Court As no such contention had been raised, he cannot be permitted to be raised it for first time before us A finding of fact has been arrived at that all procedures laid down under Rule 27 of Rules have been complied with. Therefore, no reason to interfere therewith. Appeal is dismissed. Paramjeet Singh Patheja Vs. ICDS Ltd Appellant was a party to arbitration proceedings initiated by respondent-company to recover amounts alleged to be due and payable from another company. Appellant was sought to be sued in his purported capacity as guarantor of dues of said company. An Award was rendered therein by Arbitrator and an insolvency notice was issued under Section 9(2) of Presidency Town Insolvency Act, 1909 (PTIA) on the basis of Arbitral Award. Appellant challenged said notice in High Court, inter alia, on the ground that an Award is neither a decree nor an order for purpose of provisions of Insolvency Act and that no notice can be issued under Section 9(2) on basis of an award. Learned Single Judge referred question as to whether an insolvency notice may be issued under Section 9(2) of Insolvency Act on the basis of an Award for reconsideration by a Division Bench. The Division Bench answered the reference in affirmative and held that an award is a "decree" for purpose of Section 9 of Insolvency Act and that an insolvency notice may therefore be issued on basis of an award passed by an arbitrator. Hence, the present appeal. Held, an award rendered under provisions of Arbitration Act, 1996 cannot be construed to be a "decree" for purpose of Section 9(2) of Insolvency Act. Award which is incapable of execution cannot form basis of an insolvency notice Therefore, Insolvency Notice issued under Section 9(2) of P.T.I. Act 1909 cannot be sustained on basis of arbitral award which has been passed under Arbitration & Conciliation Act, 1996. Hence the appeal is allowed. Rajesh Kumar and Ors Vs. D.C.I.T. and Ors A raid was conducted in premises of Appellant No. 1. proprietory concern, by Respondent-Revenue and some documents including their books of accounts and computer hard disk were seized and same remained in possession of respondents. Thereafter, Deputy Commissioner mooted a proposal for special audit in terms of Section 142(2A) of Act to Commissioner of Income Tax stating that there was no link between business conducted by appellant-assessee and books of account prepared for purpose of filing return of income and that there have been numerous instances of transactions outside books and said proposal was approved. Pursuant thereto, a special auditor was appointed and thereafter appellants were informed of appointment of an auditor for special audit in terms of Section 142(2A) of Act, but appellants were not provided with an opportunity of hearing. A writ petition was filed by appellants before High Court raising inter alia a question that impugned order was vitiated in law as it was passed without giving an opportunity of hearing to appellants and that same suffers from total non-application of mind. The said writ petition was dismissed. Hence, the present appeal. Allowing the appeal it was held that only because certain consequences would ensue if principles of natural justice are required to be complied with, same by itself would not mean that court would not insist on complying with fundamental principles of law. If principles of natural justice are to be excluded, Parliament could have said so expressly.  High Courts Karnataka Stovekraft Private Limited Vs. The Joint Director Directorate of Revenue Intelligence & Ors Respondent officers seized certain documents, files, hard discs, pen-drives containing data etc., and took samples of stainless steel sheets from petitioner’s premises on basis of information about diversion of duty free goods by petitioner. After a lapse of six months, petitioner filed present writ petition to direct respondents to return all goods seized by respondent officers on ground that seized goods shall have to be returned back immediately after lapse of six months in absence of initiation of any proceedings under Section 124 of Customs Act, 1962 or any extension of time is taken by Investigating Officer for further detention of seized materials beyond stipulated period of six months. Respondents challenged same on ground that seized materials do not fall within the meaning of “goods” and therefore seizure does not fall under Sub-sections (1) & (2) of Section 110 of Act and hence, there is no need for permission for retention of seized material beyond stipulated time of six months. Hence, present petition. Held, in this case, for purpose of Section 110 of the Act, the Floppies, CDs., Hard Disc, Pen-drives etc., belonging to petitioner, in which relevant information which is useful for the purpose of investigation is stored, are electronic documents, inasmuch as, instead of storing data on paper, petitioner has chosen to store data or information by using electronic method. As, very minute portion of large chunk of steel rolls is taken possession of for purpose of analysis and testing, same shall be treated as things as stated in Section 105 r/w. Section 110(3) of Act. Drawing up of samples is very much necessary for the purpose of investigation in this case. In view of the above, the materials seized by the department cannot be terms as "goods" and consequently, provisions of Sub-sections (1) & (2) of Section 110 of Act are not applicable to the facts of the present case. Therefore, goods seized viz., representative samples also will fall under Section 110(3) & (4) of Act. Holding so the petition was dismissed. Abhimanyu Vs. Sri Ram Investment Ltd Though Its Branch Manager Petitioner-plaintiff borrowed loan from respondent-defendant by hypothecating his lorry. Thereafter, petitioner-plaintiff filed a suit for perpetual injunction before civil court in Gulbarga claiming that respondent-defendant had illegally seized his vehicle and that respondent-defendant is likely to dispose of his vehicle. Respondent-defendant challenged same on ground that as per Hire Purchase Cum Guarantee Agreement entered into between parties, it was agreed that only Civil Courts at Bangalore shall have exclusive jurisdiction in respect of any matter, claim or dispute between parties arising out of said agreement and therefore suit filed by petitioner-plaintiff is not maintainable. Trial Court after considering relevant material available and following law laid by Supreme Court held that it is open for parties to choose any one of two competent Courts to decide their disputes but once parties bound themselves, it is not open for them to choose a different jurisdiction. Trial Court therefore dismissed suit and returned the plaint with a direction to file same in competent court. Said order of Trial Court Judge was challenged by petitioner before the Lower Appellate Court, which also dismissed appeal filed by petitioner and confirmed order of Trial Court Judge. Hence, present revision petition. The Apex Court dismissing the revision petition held that in view of well considered order passed by courts below after assigning cogent reasons and recording specific finding to effect that objections raised by respondent/defendant is misdeed compliance of terms and conditions of Hire Purchase agreement cum Guarantee Agreement regarding jurisdiction, interference by this Court exercised under Section 115 of Civil Procedure code is not justifiable nor had petitioners made out any grounds to interfere in this revision petition.  Bombay St. Francis Industrial Training Institute & Ors. Vs. P. J. Jose & Ors First Respondent, holding post of an instructor, with petitioner institute was terminated from service on ground of loss of confidence after a valid enquiry was instituted. First respondent filed an appeal before School Tribunal against order of termination. Petitioner challenged said appeal on ground that Tribunal had no jurisdiction to deal with appeal as petitioner industrial training institute was not a private school within meaning of Section 2(20) of Act, since it was not recognized either by Director, Divisional Board or State Board as required by Section 2(21) of Act. Tribunal however, proceeded to issue orders directing petitioners to pay backwages together with compensation of 12 months to first respondent. Tribunal held that relations between parties being strained, an order of reinstatement would not facilitate cause of education in institution. Hence, present petition. First respondent challenged said petition on ground that enquiry against first respondent was initiated under provisions of M.E.P.S. Act, 1977 and rules framed thereunder and therefore petitioners must be estopped from denying application of the Act. Held, there can neither be an estoppel against statute nor can jurisdiction upon Tribunal be confirmed by consent. Statute applies to private schools and unless institution fulfills definition of expression private school, Act does not apply. Petition is allowed. Press Information Bureau Amendment to Judges (Inquiry) Act, 1968 - Setting up of National Judicial Council Approved PIB dated 09.11.2006: The Union Cabinet gave its approval for introduction of the Judges (Inquiry) Bill, 2006 in Parliament for giving effect to some recommendations of the Law Commission contained in its 195th Report. As per the bill, the National Judicial Council shall consist of the Chief Justice of India, two senior most Judges of the Supreme Court to be nominated by the Chief Justice of India, two Chief Justices of the High Courts to be nominated by the Chief Justice of India irrespective of their seniority. However, in case of a complaint / reference against a Judge of the Supreme Court, the Council shall consist of the Chief Justice of India and the four senior-most Judges of the Supreme Court to be nominated by the Chief Justice of India. The introduction of the Bill is aimed to bring transparency in the functioning of the judiciary and also enhance its prestige. Wild Life (Protection) Amendment Bill, 2005 Approved PIB dated 16.11.2006: The Union Cabinet gave its ex-post-facto approval to the amendments carried out in the Wild Life (Protection) Amendment Bill, 2005, which were moved and passed by Parliament. The new amended bill would facilitate implementation of the urgent recommendations of the Tiger Task Force appointed by the Prime Minister. It would strengthen conservation of tigers and other endangered species of wild animals through effective combating of wildlife crimes by constituting the Tiger and Other Endangered Species crime Control Bureau (Wild Life Crime Control Bureau). It would reinforce the ongoing initiatives to conserve tiger and other endangered species of wild animals in the wake of present threats and need for viable habitat and would address the growing concern of public in saving the tiger. RBI DBOD Clarification Regarding Issue of Duplicate Demand Draft Circular No. DBOD.No.Leg.BC.42/09.07.005/2006-07 Dated 10.11.2006: As per RBI’s circular, DBOD.No.BC.147/09.07.007/99-2000 dated March 9, 2000, banks were advised to issue duplicate Demand Draft to the customer within a fortnight from the receipt of such request. Further, for the delay beyond the stipulated period, banks were advised to pay interest at the rate applicable for fixed deposit of corresponding maturity in order to compensate the customer for such delay. Subsequently, RBI vide the above circular clarifies that the period of fortnight prescribed in Circular dated March 9, 2000 for issue of duplicate Demand Draft would be applicable only in cases where the request for duplicate demand draft is made by the purchaser or the beneficiary and would not be applicable in the case of third party endorsements. SEBI Press Release SEBI Notifies Securities Contracts (Regulation) (Manner of Increasing and Maintaining Public Shareholding in Recognised Stock Exchanges) Regulations, 2006 Press Release No. PR-257/2006 Dated 16.11.2006: Vide the above circular, SEBI notifies the Securities Contracts (Regulation) (Manner of Increasing and Maintaining Public Shareholding in Recognised Stock Exchanges) Regulations, 2006. The Regulations are notified under section 4B (8) of the Securities Contracts (Regulation) Act, 1956 and shall be applicable to all recognised stock exchanges in respect of which the scheme for corporatisation and / or demutualisation has been approved by SEBI. These Regulations specify that the public shareholding in recognised stock exchanges may be increased by (a) offer for sale, by issue of prospectus, of shares held by shareholders having trading rights therein; or (b) placement of shares held by shareholders having trading rights to such persons or institutions as may be shortlisted by the recognised stock exchange with the approval of SEBI; or (c) issue of equity shares on private placement basis by the recognised stock exchange to any person or group of persons not being shareholders having trading rights or their associates subject to the approval of SEBI; or (d) any combination of the above. The above are in addition to the mode permitted by Securities Contracts (Regulation) Act itself, i.e. by fresh issue of equity shares to the public. The Regulations further specify that no person shall, directly or indirectly, acquire or hold more than five per cent in the paid up equity capital of a recognised stock exchange. Further, no person shall, either individually or together with persons acting in concert with him, acquire and/or hold more than one per cent of the paid up equity capital of a recognised stock exchange, unless he is a fit and proper person and has taken prior approval of SEBI for doing so. International Legal Cases and News Cases Bobby Glenn Barrow Vs. The State of Texas The appellant was charged with two counts of sexual assault of a child. The jury assessed punishment at fifteen years' imprisonment for count one and twenty years imprisonment for count two. The trial court ordered the sentences to run consecutively. On appeal to the Tenth Court of Appeals, the appellant claimed that, because he elected to have the jury assess punishment, the trial judge's decision to cumulate his punishment was a violation of his constitutional right to a jury trial and his constitutional right to due process. Court of Appeals held that Texas Penal Code Section 3.03 provides that when an accused is found guilty of more than one offense arising from the same criminal incident, and the offenses are violations of Section 22.011 of the Penal Code, committed against a victim younger than 17 years old, the sentences may run either consecutively or concurrently and summarily overruled the appellant's claims. Hence, present appeal. Held, decision whether to cumulate or not does not turn on any discrete or particular findings of fact on the judge's part. Instead, cumulating is purely a normative decision, much like the decision of what particular sentence to impose within the range of punishment authorized by the jury's verdict. As such, it does not infringe upon the Sixth Amendment guarantee of a jury trial. Therefore, court of appeals decision is affirmed. Curtis Wayne Pope, Jr Vs. The State of Texas Appellant was convicted of murder upon his DNA being found at the crime scene. After the State's DNA experts were cross-examined about the accuracy of their DNA testing techniques and results, the State, on re-direct, questioned them about the identity and "eminent" qualifications of another expert, Robert Benjamin, whom the appellant had designated had designated as a possible testifying expert. The State's experts also testified that they had forwarded their reports to Dr. Benjamin and that he did not request further DNA testing. Both at trial and on appeal appellant claimed that Dr. Benjamin's failure to request additional testing violated the attorney work-product doctrine and this was a constitutional error as it impinged upon his Sixth Amendment right to counsel. The court of appeals found that neither Dr. Benjamin's identity nor his qualifications were protected, but that testimony regarding Dr. Benjamin's failure to request additional testing "indirectly" violated appellant's work-product "privilege." The court of appeals concluded, however, that the error was non-constitutional and harmless. Hence, present appeal. Held that none of the testimony was protected by the work-product doctrine, and thus there was no error that affected appellant's Sixth Amendment right to counsel. Court of appeals judgment is thereby affirmed. The State of Texas Vs. Ben Daly Cowsert Appellant  was charged with driving while intoxicated. Appellant then filed a pretrial motion to suppress breath test results. The trial court granted the motion to suppress, relying on the Fourth Court of Appeals' opinion in Stewart v. State. The State did not immediately appeal the trial court's order granting the motion to suppress. Seven months later, the State filed a Motion for Admission of Breath Test Evidence requesting that the trial court reconsider its suppression ruling in light of Higher Appellate Court's decision to overturn the Fourth Court of Appeals opinion in Stewar v. State. In response, Appellant filed a motion in limine to prevent the State from offering the breath test. After a hearing on both motions, the trial court denied the State's motion, affirming its earlier suppression of the breath test. The trial court stated that it would apply the case law that was in effect on the day of appellee’s arrest, the Fourth Court of Appeals' opinion in Stewart, despite subsequent decision of Higher Appellate Court overturning decision in Stewart v. State, under which appellee’s breath test results would be admissible. Hence, present appeal. Held, regardless of the merits of the trial court's decision, the State had no right to appeal the trial court's order on the motion for reconsideration. Because the State had no right to appeal, the decision of the court of appeals is reversed. This case is remanded to the trial court for further proceedings not inconsistent with this opinion. News US visitor fingerprinting bill passed by Iranian Parliament The Iranian Parliament passed a bill instituting mandatory fingerprinting of all visiting US citizens. The predominantly conservative Majlis passed the bill by a margin of 135 to 26, and will hand it to the Guardian Council for review before it is written into law. The legislation won approval despite the efforts of Iranian President who spoke out against the bill, emphasizing that Iran only opposes US policy, not US citizens and therefore US citizens are welcome in Iran. The bill was proposed as a reaction to US regulations, implemented in 2002, requiring every Iranian to be fingerprinted upon arrival in the US. Domestic surveillance lawsuit allowed to proceed An US District Judge of the Northern District of California ruled that he will allow a class action lawsuit filed against the Bush administration's domestic surveillance program to go forward while a prior motion to dismiss the case is on appeal. The Electronic Frontier Foundation (EFF) brought the class action wiretapping lawsuit against AT&T, alleging that the company had unlawfully provided the National Security Agency (NSA) with access to its facilities and resources to unconstitutionally spy on "millions of ordinary Americans." The US Department of Justice had earlier moved to dismiss the case, citing "state secrets" among other concerns. Amendment of criticized constitution called for by Egyptian President Egyptian President called for the country's parliament to amend Article 76 of the Egyptian constitution amid criticism from the opposition that the article effectively protects the ruling party from genuine competition in the 2011 presidential elections. The current version of Article 76, amended in 2005 after a May referendum, prevents political parties with less than five percent representation in the Egyptian parliament from submitting a presidential candidate. US trade agreement brings Russia closer to WTO membership The United States and Russia signed a landmark trade agreement bringing Russia one step closer in its 13-year drive for membership in the World Trade Organization (WTO). Under the agreement, Russia will lower import tariffs on American goods while the US pledged to improve its trade relations with Russian companies. The agreement signals an improvement in the recently rocky relations between the US and Russia but the countries still have a way to go before normal trade relations are established between Washington and Moscow. Before the WTO will vote on Russia's membership, Russia must complete bilateral trade negotiations with Costa Rica, Moldavia, and Georgia. Russia is the largest economy currently outside of the 149 member WTO. Disclaimer (1) While all reasonable care has been taken to ensure that the information provided in the "round up" and on the website is fair and accurate the company and its promoters and employees shall not in any way be responsible for the consequences of any action taken on the basis of reliance upon the contents of this "round up". (2) This is not a Spam mail. You have received this mail because you have either requested for it or someone must have suggested your name under our various referral programs. 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