[No.190]

Supreme Court

• Peekay Re-rolling Mills (P) Ltd. Vs. The Assistant Commissioner and Anr.

The Appellant-company purchased raw material from manufacturing units which were exempt from payment of sales tax on sale of such raw materials by virtue of an exemption notification and submitted a return declaring taxable turnover as nil. The Respondent-Assessing officer however, sent show cause notice stating that since said goods were not subjected to payment of sales tax, appellants were liable to pay purchase tax. Appellant filed writ petitions challenging same, but same was dismissed. On appeal filed against dismissal of petitions, Division Bench held that the expression "levy" includes collection of tax as well and not mere imposition. It was held that in the absence of collection of tax, there is no levy and since, the goods were exempted from payment of Sales Tax, the goods could be subjected to levy of purchase tax under Section 5A of the State Act. Hence, the present appeal. The impact of exemption granted by State Notification to ascertain whether levy of tax under Section 5 A of the State Act violates Section 15 of the Central Act. It was observed that it is evident that the collection and levy are distinct and that the collection is not an essential facet of levy. It is true that collection of a tax may some times be indicative of a lawful levy of tax, but it does not logically follow that absence of collection means an absence of liability. Thus, liability to tax or taxability under Section 5 of State Act remains unaffected by an exemption under Section 10 of State Act. Consequently, the respondent cannot validly shift burden of tax to purchaser under Section 5A of State Act for the same would violate the condition of single-stage tax under Section 15 of Central Act. Therefore, the appeal is allowed.

• Commissioner of Central Excise, Madras Vs. Home Ashok Leyland Ltd.

The respondent- assessee claimed MODVAT credit on differential duty paid in respect of the inputs utilized between the period 16.8.1987 and 30.12.1987. Accordingly, Rule 57E of Central Excise Rules, 1944 in respect of which MODVAT credit was claimed underwent an amendment with effect from 15.4.1987. Therefore, appellant – department claimed that the assessee was not entitled to avail MODVAT credit. The lower Courts held that the respondent-assessee was entitled to credit on ground that Rule 57E was procedural, clarificatory and therefore would not affect the substantive rights of the manufacture of the specified final product to claim MODVAT credit. Hence, the present appeal. The issue determinable in the present case was that whether the  assessee was entitled to avail MODVAT credit on differential duty in respect of inputs received. It was held that the right to claim MODVAT credit is under Rule 57A. Rule 57A recognizes right of manufacturer to claim credit. Rule 57E recognizes not only right of manufacturer to claim credit but also extent to which credit could be claimed for duty paid on inputs. Therefore, Rule 57A is a substantive provision. However, the procedure of adjustment finds place in Rule 57E. Rule 57E is procedural provision. It deals with adjustments in duty credit. Therefore, Rule 57A recognizes right of manufacturer to take credit for specified duty paid on inputs, whereas Rule 57E deals with adjustment in duty credit. Therefore, the courts below were right in holding that the Rule 57E was procedural, clarificatory and therefore would not affect the substantive rights of manufacture of specified final product to claim MODVAT credit for duty paid on inputs subsequent to date of receipt of those inputs. Consequently, the respondent-manufacturer in present case was entitled to take credit between the period 16.8.1987 to 30.12.1987. Therefore the appeal was dismissed.

• Ramkripal S/o Shyamlal Charmakar Vs. State of Madhya Pradesh

The appellant-accused was found guilty of offences under Section 376 of IPC and sentenced to undergo RI for seven years by Trial Court. On appeal, High Court affirmed findings of trial court. Hence, the present appeal. The question to be resolved was that whether there is actual commission of offence punishable under Section 376 of IPC. It was held that sine qua non of offence of rape is penetration and not ejaculation. Ejaculation without penetration constitutes an attempt to commit rape and not actual rape. Definition of "rape" as contained in Section 375 IPC refers to "sexual intercourse" and Explanation appended to section provides that penetration is sufficient to constitute sexual intercourse necessary to offence of rape. Intercourse means sexual connection. In instant case that connection has been clearly established. Therefore, courts below were perfectly justified in their view. When evidence of prosecutrix is considered in proper perspective, it is clear that commission of actual rape has been established. Therefore the appeal is dismissed.

High Courts

Delhi

• Manjeet Kaur Vs. Tej Pratap Singh

The execution petition was filed by petitioner-wife against respondent-husband claiming arrears of maintenance awarded to her in lieu of a complaint filed under Section 125 CrPC. Respondent-husband then went absconding and therefore notice of attachment could not be served for a long time on respondent-husband. Later when respondent-husband was traced, he was served with warrant of attachment. Thereafter, petitioner filed fresh execution petition claiming arrears of maintenance with reference to previous execution petition and same was granted by trial court. Respondent-husband filed revision petition against same and Learned ASJ reduced amount of arrears holding that this was the only amount payable, which was covered within the period of limitation and execution for the rest of the amount had become time-barred. Hence, present petition. Whether petitioner-wife is entitled to entire arrears of maintenance when respondent-husband could not be served with warrants of attachment within prescribed time period. It was held that the perusal of Order of learned ASJ would show that he has referred to Section 125(3) of Cr.PC as per which application for recovery of amount under Section 125 is to be filed within a period of one year from date on which it became due. The aforesaid approach of learned ASJ was held to be clearly erroneous. Execution petition was filed in year 1991, which was well within period of limitation. Petitioner was diligently pursuing this petition. It was only because respondent remained untraced and could not be served with warrants of attachment, though repeated attempts were made through SHO, that petitioner could not recover amount in this execution petition for substantial period. Petitioner had been moving applications for enforcing payments becoming due. Learned ASJ has held that these applications cannot be treated as execution proceedings. This is to narrow pedantic approach adopted by learned ASJ without going into spirit and purpose of Section 125 Cr.PC, which is a measure of social legislation and, therefore, has to be construed liberally for welfare and benefit of wife and children. Approach of learned ASJ is in direct conflict with judgment of Supreme Court in case of Shantha @ Ushadevi v. B.G. Shivananjappa, 2005 (2) LRC 188 (SC). In almost similar circumstances where main petition filed was pending and kept alive and subsequent interim applications were filed to specify exact amount which accrued due up to that date, Supreme Court held, that those were to be treated as execution proceedings and bar under Section 125 Cr.PC would not be applicable. Thus, the impugned Order is accordingly set aside.

• State Vs. Sushil Sharma [Vice-versa]

The accused with the help of other co-accused was alleged to have committed murder of deceased and then burnt body of deceased in a tandoor oven at a restaurant owned by accused. Additional Sessions Judge found accused guilty of offence alleged and awarded him death sentence. Hence, present appeal. Whether offence committed by accused falls under category of “rarest of rare cases” to warrant death sentence. Held, it is found that appellant had a very strong motive to get rid off deceased. So, appellant must have been waiting for some good opportunity to get rid of deceased and, therefore, it cannot even be said that incident was not pre-planned and was a result of sudden reaction, as had been claimed on behalf of appellant. Appellant not only pumped bullets in the head of deceased but also chopped off her limbs and then heroically took the body to his restaurant in the heart of the city and placed it on the tandoor and burnt it. This reflects not only the extreme depravity of appellant’s mind but also his preparedness for that brutal act. All that could not have been done by a person under influence of liquor. Act of appellant is so abhorrent and dastardly that in case death penalty is not awarded to him it would be a mockery of justice and conscience of society at large would be shocked. Therefore, this is surely a case which falls within category of “rarest of rare cases” in which no other punishment except death penalty would be justified. Appeal is dismissed.

Madras

• Mrs. S. Bagavathy Vs. State of Tamil Nadu, rep. By its Secretary, Law Department and The Competent Authority, District Revenue Officer

The Tamil Nadu legislature enacted the Tamil Nadu Protection of Interests of Depositors (in Financial Establishments) Act, 1997 to curb mushroom growth of financial establishments which were grabbing money received as deposits from public on false promises for exorbitant and unprecedented high rate of interest without any obligation to refund deposits to investors on maturity. The Act is also intended to provide a legal mechanism and judicious machinery to attach properties of such financial establishments and that of mala fide transferees, bring them for auction sale, realize amount and to distribute same to depositors. Petitioners-financial establishments challenged said Act on ground that said Act is excessively harsh and more severe than existing provisions in different enactments, such as Companies Act, 1956, Reserve Bank of India Act, 1934, Banking Regulation Act and that same was passed in haste, lacks legislative competency and is liable to be struck down for unreasonableness of various provisions as well as for violation of principles of natural justice and for violation of Articles 14, 19(1)(g) and 21 of Constitution of India. Hence, present petition. Whether aforesaid Act violates principles of natural justice by not providing opportunity of being heard to petitioners before their attaching properties. Held, complaint of lack of reasonable opportunity to financial establishments in courtesy to principles of natural justice, before attaching property by itself could not be termed as fatal to principles of natural justice, as what is sought under such attachment is not to deprive any rights of financial establishments or directors, but to prevent any further unjust diversification of funds of depositors. Further, Act, under Section 7, provides a notice being given to financial establishments or any other person whose property is attached under Section 3, and hence, satisfies principles of natural justice by giving post-decision opportunity to financial establishments or any person whose property is attached as per Section 3 of Act. Dispensation of pre-decision opportunity while passing ad interim order of attachment under Section 3 of Act is inevitable, as very object of enactment is to control, regulate and curb the activities of malicious transfer of funds by financial establishments and to realise amount from financial establishments and distribute same to depositors equitably and thus, protect interest of innocent depositors. Therefore, there is no justification in complaint of not affording a reasonable opportunity before attaching property, as there cannot be any justified reason to fleece funds that actually belongs to depositors. Petition is dismissed.

Press Information Bureau

• Minimum Wages for Unskilled Workers

PIB dated 29.03.2007: Under the Minimum Wages Act, 1948, the rates of Minimum Wages fixed for various scheduled employments by Central and State Governments in their respective jurisdictions are equally applicable to all workers in the organized as well as unorganized sector. The Act is applicable only for those employments, which are notified and included in the schedule of the Act by the appropriate governments. The fixation of minimum wage depends upon various factors like socio-economic and agro-climatic conditions, prices of essential commodities, paying capacity and the local factors influencing the wage rate. It is for this reason that the minimum wages vary across the country. In the absence of a uniform national wage, national floor level wage was introduced in 1996 based on the recommendations of the National Commission of Rural Labour. It has been revised from time to time in view of increase in price level. National floor level wage at present is Rs. 66/- and vide the present press release, the Central Government has urged the States to have minimum wages not lower than the national floor level wage.

• Freeze On SEZs Lifted, With Tighter Rules

PIB dated 05.04.2007: Vide the present press release it is notified that the Empowered Group of Ministers (EGOM) on Special Economic Zones (SEZs) has decided to lift the current freeze on SEZs, with tighter rules and prescribed a ceiling on the size of SEZs. Accordingly, it has now been fixed at an upper limit of 5000 hectares. A comprehensive rehabilitation policy is also being finalised and it would include employment to at least 1 person from each displaced family whose land has been acquired for the said purpose.

RBI

DBOD

• Nomination Facility in Single Deposit Accounts

Circular No. DBOD.No.Leg BC. 75 /09.07.005/2006-07 Dated 05.04.2007: As per Circular DBOD. No. BC.95/09.07.005/2004-05 dated June 9, 2005 regarding nomination facility on Single Deposit Accounts banks were advised to give wide publicity and provide guidance to deposit account holders on benefits of nomination facility and survivorship clause. Despite the same, banks are still opening single deposit accounts without nomination. The Allahabad High Court had recently observed that "it will be most appropriate that the Reserve Bank of India issues guidelines to the effect that no Savings Account or Fixed Deposit in single name be accepted unless name of the nominee is given by the depositors. It will go a long way to serve the purpose of the innocent widows and children, who are dragged on long drawn proceedings in the Court for claiming the amount, which lawfully belongs to them". Accordingly, vide the present circular it is notified that banks should insist that the person opening a deposit account makes a nomination. In case the person opening an account declines to fill in nomination, the bank should explain the advantages of nomination facility. If the person opening the account still does not want to nominate, the bank should ask him to give a specific letter to the effect that he does not want to make a nomination. In case the person opening the account declines to give such a letter, the bank should record the fact on the account opening form and proceed with opening of the account if otherwise found eligible. Under no circumstances, a bank should refuse to open an account solely on the ground that the person opening the account refused to nominate.

• Guidelines Regarding Tenor of the Gold (Metal) Loans

Circular No. DBOD.No.IBD.BC.71/23.67.001/2006-2007 Dated 03.04.2007: As per RBI circular DBOD.No.IBD.BC.33/23.67.001/2005-06 dated September 5, 2005 it was advised that banks nominated to import gold as per extant instructions may extend Gold (Metal) Loans to domestic jewellery manufacturers, who are not exporters of jewellery, subject to conditions specified therein. One of the conditions was that the tenor of the gold loan for the domestic jewellery manufacturers should not exceed 90 days. It was also stipulated that banks should ensure end-use of gold loans to jewellery manufacturers and adhere to KYC guidelines. Vide the present circular, RBI notifies that it has been receiving representations to the effect that the above mentioned tenor of the gold loan may be extended so as to meet the changed requirements of the domestic jewellery manufacturers. Accordingly, it has been decided to allow the nominated banks themselves to decide the tenor of the Gold (Metal) Loans, which they are permitted to extend to domestic jewellery manufacturers, who are not exporters of jewellery, provided the tenor does not exceed 180 days and the bank's policy with regard to the tenor and monitoring of end use of gold loans is documented in the bank's loan policy and strictly adhered to.

Cases

• Limtiaco, Attorney General of Guam Vs. Camacho, Governor of Guam

The Guam Legislature authorized petitioner-Governor to issue bonds to fund the Territory's continuing obligations, but Guam's attorney general, the respondent, refused to sign the necessary contracts, contending that issuance of said bonds would violate the debt-limitation provision of Guam's Organic Act, which limits the Territory's public indebtedness to 10% of the "aggregate tax valuation of the property in Guam," as per 48 U. S. C. §1423a. The Governor then sought a declaration from the Guam Supreme Court that such issuance of bonds would not violate the provision, calculating the debt limitation based on the appraised value of property in Guam. The Supreme Court of Guam rejected the respondent-attorney general's argument to base the limitation on assessed value and ruled in favour of petitioner-governor. On appeal, Ninth Circuit Court granted the attorney general's certiorari petition, but while the appeal was pending, Congress removed Ninth Circuit Court's jurisdiction over appeals from Guam and since it was stripped of its jurisdiction by Congress, Ninth Circuit Court had to dismiss the appeal. The attorney general then filed a petition for certiorari in the Supreme Court, even though it was more than 90 days after the Guam Supreme Court's judgment. Held, The Guam Supreme Court's judgment had not become final, for purposes of this Court's review, until the Ninth Circuit issued its order dismissing the appeal. Certiorari petitions must be filed "within 90 days as per 28 U. S. C. §2101(c) i.e. after a lower court's "genuinely final judgment". By granting the petition for certiorari, the Ninth Circuit Court suspended the finality of the Guam Supreme Court's judgment. Until the Circuit issued its order dismissing the case, the appeal remained pending, and the finality of the judgment remained suspended. Therefore, contrary to the Governor's arguments, the judgment was not made final. Therefore judgement of lower court is reversed and matter is remanded.

• Marrama Vs. Citizens Bank of Massachusetts et al.

In present case, petitioner filed for proceedings under Chapter 7 of Bankruptcy Code by misrepresenting value of his property and thereafter sought to convert proceedings to Chapter 13 of Bankruptcy code to obtain relief. Said conversion of proceedings was objected to by respondent Bank, principal debtor, contending that request to convert was made in bad faith and therefore, would constitute an abuse of the bankruptcy process. Bankruptcy Judge denied petitioner's request, finding bad faith. Affirming, the First Circuit's Bankruptcy Appellate Panel rejected petitioner's argument and held that a bankruptcy court has the authority to dismiss a Chapter 13 petition based on a debtor's bad faith, and that a first-time motion to convert a Chapter 7 case to Chapter 13 should not be treated differently from the filing of a Chapter 13 petition in the first instance. Hence, present petition. Held, petitioner forfeited his right to proceed under Chapter 13. The broad description of the right to convert as "absolute" in Senate and House Committee Reports fails to give full effect to the express limitation of §706(d), which provides that "a case may not be converted to a case under another chapter of this title unless the debtor may be a debtor under such chapter." That text expressly conditioned petitioner’s right to convert on his ability to qualify as a Chapter 13 "debtor." Petitioner does not qualify as such a debtor under §1307(c), which provides that a Chapter 13 proceeding may be either dismissed or converted to a Chapter 7 proceeding "for cause." Bankruptcy courts routinely treat dismissal for prepetition bad-faith conduct as implicitly authorized by the words "for cause," and a ruling that an individual's Chapter 13 case should be dismissed or converted to Chapter 7 because of bad faith is tantamount to a ruling that the individual does not qualify as a Chapter 13 debtor. Therefore, judgement of lower court is affirmed.

News

• Thousands march in LA against new White House immigration proposal

Thousands marched through Los Angeles protesting President Bush's latest proposal to grant citizenship to more than 12 million illegal immigrants in US. The proposal floated last month would allow illegal immigrants to apply for work visas, but at the expiration of the visa immigrants would be required to return to their home countries to actually apply for citizenship and to pay a $10,000 fine. The plan has been criticized as creating a temporary class of immigrants who will never have the opportunity to assimilate into American society. The proposal has also drawn fire for prohibiting workers from bringing their families into the United States during their temporary visa period, even if they renew their visas past the initial two year period.

Immigrant rights advocates have condemned the proposal as unrealistic because the imposed fine is considerably more than most illegal human smugglers charge for entry into the United States. The plan would effectively tighten the requirements of the immigration bill passed by the Senate.

• AFP news aggregation lawsuit settled by Google with licensing agreement

Agence France-Presse (AFP) and Google settled a landmark copyright infringement lawsuit which the French news agency filed two years ago against the internet giant for automatically pulling and displaying photos, headlines and leads of news stories from the websites of AFP subscribers. The agreement will allow Google to post AFP content on its popular news service. Last year, Google signed a licensing agreement with American news agency Associated Press in which Google agreed to pay for AP content.

• Vonage injunction blocking new customers stayed by Appeals Court

The US Court of Appeals for the Federal Circuit issued an emergency stay of a federal injunction on Friday, hours after an US District Judge of the Eastern District of Virgina issued a partial order prohibiting leading Internet phone service Vonage from subscribing new customers. A federal jury had found Vonage guilty of infringing three voice over IP patents held by Verizon Communications, Inc. awarding Verizon $58 million dollars in compensation plus future royalties amounting to 5.5% of Vonage's revenues if Vonage continues to use the patented technology. The Judge issued the partial injunction early Friday, saying it was appropriate to prevent Vonage from using the patented technology to attract more customers away from Verizon. The Judge, stating that he did not wish to irreparably harm Vonage's business, issued the partial injunction as a less severe punishment than one he initially proposed, which would would have disrupted phone service for Vonage's 2.2 million existing customers. Verizon has a week to respond to the emergency stay, and the appellate court will decide whether to allow Vonage to continue subscribing new customers.

• New Mexico, first state in US, to grant legal immunity for drug overdose reporting

New Mexico Governor has signed a groundbreaking bill designed to promote drug overdose reporting by granting limited immunity from drug possession charges for those drug users, family members and acquaintances who make the 911 call. The measure is the first such legislation to be adopted by any US state. This is the second drug-related bill signed into law in New Mexico this week. The Governor had earlier signed the Compassionate Use Medical Marijuana Act, which legalized the use of medical marijuana for treatment of certain conditions and symptoms.