SUPREME COURT

• ARBITRATION

Shakti Bhog Foods Limited Vs. Kola Shipping Limited (Decided On: 23.09.2008)

Arbitration agreement - Power of judicial authority to refer parties to arbitration - Whether charter party agreement entered amongst the party contained arbitration clause

As per section 7 of the Arbitration Act, the existence of an arbitration agreement can be inferred from a document signed by the parties, or an exchange of letters, telex, telegrams or other means of telecommunication providing a record of the agreement.

While contending against the filing of an application under Section 9 of the Act for interim measures by the respondent , Appellant never raised any objection as to the existence of the Charter Party Agreement between the parties. As per the provisions of the Section 45 of the Act, at the request of one of the parties or any person claiming through or under him the court shall refer the parties to arbitration unless it finds that the said agreement is null and void, inoperative or incapable of being performed. In the present case, there appears to be no such thing to say that the so called agreement entered into by the parties is in any way to be termed as null and void or inoperative or incapable of being performed. There was a charter party agreement existing between the parties and, that as per the provisions of Section 45 of the Act, High Court as well as the trial court were fully justified in allowing the application preferred by the Respondent and accordingly, the impugned order must be affirmed.

• CRIMINAL LAWS

Bihari Rai Vs. State of Bihar (Now Jharkhand) (Decided on 26.09.2008)

Plea of private defence - Appellant convicted for an offence punishable under Section 302 read with Section 34 of the Indian Penal Code, 1860 - High Court altered it to Section 304 Part I IPC - Whether the plea of private defence sustainable

The number of injuries is not always a safe criterion for determining who the aggressor was. It cannot be stated as a universal rule that whenever the injuries are on the body of the accused persons, a presumption must necessarily be raised that the accused persons had caused injuries in exercise of the right of private defence. The defence has to further establish that the injuries so caused on the accused probabilises the version of the right of private defence. Non- explanation of the injuries sustained by the accused at about the time of occurrence or in the course of altercation is a very important circumstance. But mere non-explanation of the injuries by the prosecution may not affect the prosecution case in all cases. This principle applies to cases where the injuries sustained by the accused are minor and superficial or where the evidence is so clear and cogent, so independent and disinterested, so probable, consistent and creditworthy, that it far outweighs the effect of the omission on the part of the prosecution to explain the injuries.

A plea of right of private defence cannot be based on surmises and speculation. While considering whether the right of private defence is available to an accused, it is not relevant whether he may have a chance to inflict severe and mortal injury on the aggressor. In order to find whether the right of private defence is available to an accused, the entire incident must be examined with care and viewed in its proper setting.

Merely because there was a quarrel and some of the accused persons sustained injuries, that does not confer a right of private defence extending to the extent of causing death as in this case. Though such right cannot be weighed in golden scales, it has to be established that the accused persons were under such grave apprehension about the safety of their life and property that retaliation to the extent done was absolutely necessary. No evidence much less cogent and credible was adduced in this regard. The right of private defence as claimed by the accused persons have been rightly discarded in the instant case.

Budhi Lal Vs. State of Uttarakhand (Decided on 26.09.2008)

Conviction recorded for offence punishable under Section 302 of the Indian Penal Code, 1860 under challenge - Trial Court and the High Court pointed out that the accused accepted that he was with the deceased in the night of occurrence and they were sleeping in the same room - Appellant questioned applicability of section 302 - Determination of interpretation and application thereof

In the scheme of the IPC culpable homicide is genus and `murder' its specie. All `murder' is `culpable homicide' but not vice-versa. For the purpose of fixing punishment, proportionate to the gravity of the generic offence, the IPC practically recognizes three degrees of culpable homicide. The first is, what may be called, `culpable homicide of the first degree'. This is the gravest form of culpable homicide, which is defined in Section 300 as `murder'. The second may be termed as `culpable homicide of the second degree'. This is punishable under the first part of Section 304. Then, there is `culpable homicide of the third degree'. This is the lowest type of culpable homicide and the punishment provided for it is also the lowest among the punishments provided for the three grades. Culpable homicide of this degree is punishable under the second part of Section 304.

The safest way of approach to the interpretation and application of these provisions seems to be to keep in focus the keywords used in the various clauses of Sections 299 and 300.

In Virsa Singh v. State of Punjab MANU/SC/0041/1958, it was observed that the prosecution must prove the following facts before it can bring a case under Section 300, "thirdly":

First, it must establish quite objectively, that a bodily injury is present;

Secondly the nature of the injury must be proved. These are purely objective investigations; and

Thirdly, it must be proved that there was an intention to inflict that particular injury, that is to say, that it was not accidental or unintentional or that some other kind of injury was intended. Once these three elements are proved to be present, the enquiry proceeds further, and fourthly it must be proved that the injury of the type just described made up of the three elements set out above was sufficient to cause death in the ordinary course of nature.

Thus, according to the rule laid down in Virsa Singh's case, even if the intention of accused was limited to the infliction of a bodily injury sufficient to cause death in the ordinary course of nature, and did not extend to the intention of causing death, the offence would be murder. Illustration (c) appended to Section 300 clearly brings out this point.

In the instant case in view of the factual scenario and the manner of assault, as alleged by the prosecution, the appropriate conviction shall be under Section 304 Part-I IPC.

Man Singh and Anr. Vs. State of M.P. (Decided on 24.09.2008)

Appeal against conviction under Narcotic Drugs and Psychotropic Substances Act, 1985 - Non appearance of lawyer appointed by the legal aid committee - Appeal dismissed - Whether order of dismissal sustainable

Since the learned Counsel appointed by the Legal Aid Committee did not appear on the date fixed, the High Court could have in such circumstances required the Legal Aid Committee to appoint another counsel

• CIVIL LAWS

Durgesh Sharma Vs. Jayshree (Decided on 26.09.2008)

Power, authority and jurisdiction to transfer suits/appeals/other proceedings by a High Court from one Court subordinate to it to another Court subordinate to another High Court

Sections 22 to 25 of the Code of Civil Procedure enact law as regards transfer and withdrawal of suits, appeals and other proceedings from one Court to another Court.

As a general rule, the plaintiff as arbiter litis or dominus litis has a right to choose his/her own forum where there is more than one Court in which such suit may be instituted. Normally, the defendant cannot insist that instead of Court A, the plaintiff should file a suit in Court B. But the right of the plaintiff to choose a forum is not arbitrary, absolute or uncontrolled and in appropriate cases, a superior Court may transfer a case pending in one Court to another Court.

As per the scheme of the Code as amended from time to time, the law relating to transfer of cases (suits, appeals and other proceedings) is well settled. It is found in Sections 22 to 25 of the Code and those provisions are exhaustive in nature. Whereas Sections 22, 24 and 25 deal with power of transfer, Section 23 merely provides forum and specifies the Court in which an application for transfer may be made. Section 23 is not a substantive provision vesting power in a particular Court to order transfer. Where several Courts having jurisdiction are subordinate to one appellate Court, an application for transfer may be made to such appellate Court and the Court may transfer a case from one Court subordinate to it to another Court subordinate to it. Likewise, where such Courts are subordinate to the same High Court, an application may be made and action may be taken by the High Court transferring a case from one Court subordinate to it to any other Court subordinate to that High Court. But where such Courts are subordinate to different High Courts, it is only the Supreme Court, which may pass an order of transfer. In other words, if two courts are subordinate to different High Courts, one High Court has no power, jurisdiction or authority to transfer a case pending in any court subordinate to that High Court to a Court subordinate to other High Court. It is only the Supreme Court, which may order the transfer.

A High Court has no power, authority or jurisdiction to transfer a case, appeal or other proceeding pending in a Court subordinate to it to any Court subordinate to another High Court in purported exercise of power under Sub-section (3) of Section 23 of the Code and it is only this Court which can exercise the said authority under Section 25 of the Code. The order passed by the High Court, therefore, deserves to be set aside and is accordingly set aside.

• LABOUR AND INDUSTRIAL LAWS

U.P. State Electricity Board Vs. Laxmi Kant Gupta (Decided on 26.09.2008)

Delay of 10 years in challenging termination of service - Appeal against the impugned High Court's judgment in a writ petition filed against the award of the Labour Court regarding termination of the service of Respondent from the service of the Appellant - Respondent claimed to be appointed as Coolie on 16.1.1984 and worked till 15.2.1986, and that his service was then terminated without complying with the provisions of Section 6N of the U.P. Industrial Disputes Act. Appellant, on the other hand, alleged that the Respondent was never given a regular appointment - Impugned judgment of the High Court and award of the Labour Court granting re-instatement in question

As held in U.P. State Brassware Corporation Ltd. and Anr. v. Uday Narain Pandey MANU/SC/2321/2005, the apex Court referred to such earlier decisions on the question of granting relief to the workman when his termination of service was found to be illegal. It was noted that while the earlier view of the Court was that if an order of termination was found to be illegal, normally the relief to be granted should be re-instatement with full back wages. However, with the passage of time it came to be realized that an industry should not be compelled to pay to the workman for the period during which he apparently contributed little or nothing at all. In the said case after due reference to earlier decisions it was held that the relief to be granted is discretionary and not automatic. Hence now there is no such principle that for an illegal termination of service the normal rule is re- instatement with back wages, and instead the Labour Court can award compensation.

In the present case, the respondent has already received more than Rs. 7 lakhs. This has happened because although the Labour Court in its award dated 14.11.1996 only granted re-instatement without back wages, subsequently, as a result of the interim order of the High Court in the writ petition filed before it, the workman was granted his salary instead of re-instatement as an interim measure. Consequently, as a result of that interim order he has received more than Rs. 7 lakhs. Coupled with the facts that the respondent worked for only 2 years (1984-86) as a purely temporary employee and the fact that he raised the industrial dispute before the Conciliation Officer only after 10 years of his termination of service, the Respondent has already got more than sufficient compensation.

HIGH COURT

• TENANCY

DELHI HIGH COURT 

Sardar Surjit Singh Arora Vs. Sh. Ramesh Chopra (Decided on 05.09.2008) MANU/DE/1259/2008

Whether it is bonafide requirement for the landlord to sought eviction of the tenant under section Section 25B of Delhi Rent Control Act on the ground that his daughters needed a place to stay.

The contention of the tenant was that the married daughters of the landlord could not form part of his family and the requirement of daughters cannot be considered as the requirement of the landlord. However the court held that no distinction can be made between requirement of a son and that of a daughter. Both stand on equal footing. Both enjoy equal rights on the property of parents. Both have equal responsibility towards the parents and both are equal family member of their parents. A son and a daughter both can be dependent on the parents for residence.

BOMBAY HIGH COURT 

Shaikh Abdul Aziz Yasin (Since deceased through his LRs. Rehanutullah S/o. Abdul Aziz, Shahanawaz S/o. Abdul Aziz, Aslam S/o. Abdul Aziz and Bilal S/o. Abdul Aziz) Vs.Shaikh Abdul Hamid Yasin and Ors. (Decided on 12.09.2008) MANU/MH/0849/2008

The conclusion of the Tribunal that there cannot be different findings regarding tenancy, wherein the original suit was for partition and separate possession of the suit property. Can the petitioner claim to be a tenant before the High Court under the Provisions of the Bombay Tenancy and Agricultural Lands Act, 1948.

The view of the Tribunal is reiterated by the High Court, that there cannot be different findings regarding tenancy, wherein the original suit was for partition and separate possession of the suit property since both the petitioners and respondents are were L.R.s or heirs of deceased Yasin. Under the provisions of section 4(1)(a) of the Bombay Tenancy and Agricultural Lands Act, 1948, they can be considered as members of family. Also there was no documentary evidence regarding tenancy. Merely payment of land revenue or delivery of levy by one of the co-owners cannot be considered as evidence of tenancy.

• ARBITRATION

DELHI HIGH COURT 

International Breweries Pvt. Ltd. Vs.Mohan Meakins Ltd. and Anr. (Decided on 04.09.2008) MANU/DE/1255/2008

THE dispute over the non-obstante clause under the provisions of section 42 of the ARBITRATION AND CONCILIATION ACT, 1996 "where with respect to an arbitration agreement any application under this Part has been made in a Court, that Court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that Court and in no other Court" bars the jurisdiction of other courts.

The Apex Court in Iridium India Telecom Ltd v. Motorola Inc MANU/SC/0007/2005 has reiterated that such a non obstante clause is appended to a section with a view to give the enacting part of the section in the case of a conflict an overriding effect. It is equivalent to saying that in spite of law in force being to the contrary, the provision beginning with the non obstante clause will have full operation and the law in force will not be an impediment to the operation of the enactment.

• DIRECT TAXATION

BOMBAY HIGH COURT 

Shri Mahendra D. Jain Vs.The Income Tax Officer, Commissioner of Income Tax and Union of India (UOI) through Ministry of Finance (Decided on 08.09.2008) MANU/MH/0826/2008

Whether the loss of Rs. 65,500/- arising from the confiscation of the currency notes by the Collector of Central Excise and Land Customs was an allowable deduction under Section 10(1) of the Indian Income Tax Act, 1922

Applying the principle laid down by the Hon'ble Supreme Court in Badridas Daga v. CIT MANU/SC/0081/1958, the Hon'ble Supreme Court held that confiscation of currency notes is loss which springs directly from the carrying on of the business and is incidental to it. The Hon'ble Supreme Court was of the opinion that carriage of currency notes across the border forms an essential part of the smuggling operation. If the activity of smuggling is regarded as a business, those who are carrying on that business must be deemed to be aware that a necessary incident involved in the business is detection by the Customs Authorities and consequent confiscation of the currency notes. It is an incident predictable in the course of carrying on the activity as any other feature of it. The confiscation of currency notes is loss occasioned in pursuing the business; it is a loss in much the way as if the currency notes have been stolen or dropped on the way while carrying on the business.

BOMBAY HIGH COURT 

Prakash S/o Timaji Dhanjode Vs. Income Tax Officer (Decided on 12.09.2008) MANU/MH/0825/2008

Whether the sale proceeds of agricultural land which were invested in purchasing plot and constructing residential house, in the name of appellant does qualify for exemption under Section 54-F of the Income Tax Act,when the deceased who has invested in the name of appellant was in fact in the law the real owner of the property and appellant (adopted son)was holding the same in trust for and on behalf of the deceased

The appellant does not qualify for the exemption under Section 54F of the Income Tax Act. Section 54F clearly show that it is the assessee who has to invest the capital gain in the new construction of a residential house in his name. Sub-section (1) together with the proviso clearly show that the investment in the new asset by the assessee has to be in his own name and not in the name of any other person. The legal consequences of purchase of the new asset by assessee in the name of his son is to constitute his son as the beneficial owner of the new asset. The assessee has, therefore, not made the investment in this name. Therefore, he is liable to pay tax on capital gains arising out of the transfer of a capital asset.

Whether for qualifying exemption under Section 54 of the I.T. Act is it necessary and obligatory to have investment made in residential house in the name of assessee only or investment in residential house is enough to qualify and claim the said exemption.

For qualifying the exemption it is necessary to have the investments made in residential house in the name of the assessee only. The expression 'assessee' occurring in Section 54 of the Act, intends that in order to claim the exemption, the person who sold the house must be the same as the person who purchased the house, that is, the assessee must be one and the same person. The identity must be the same.

As held by the apex court in CIT v. Podar Cement Pvt. Ltd the purpose is to give this benefit on the ownership of one residential house only by the assessee and to encourage to have one residential house of the assessee. Therefore, right from the sale of original asset till the purchase and/or construction of the residential house i.e. the 'new asset', the ownership and domain over the new asset is a must. The new property must be owned by the assessee and/or having legal title over the same. The others may use and occupy the same along with the assessee but the ownership should be of the assessee of the residential house so purchased from the net consideration/sale proceeds of the sale of original asset by the assessee.

The intention of the deceased assessee was very clear from the day one to transfer the property even before the construction of residential house to the adopted son. He transferred the property before the prescribed period, as per the scheme of Section, and the son becomes the owner of the property for all the purposes. Thus the deceased/assessee had no domain and/or right on the said property. This fact itself, therefore, disentitled him to claim any exemption as there were various non compliances of the conditions as per the scheme of Section 54 and 54F of the IT Act as mentioned above.

Shri Mahendra D. Jain Vs. The Income Tax Officer, Commissioner of Income Tax and Union of India (UOI) through Ministry of Finance (Decided on 08.09.2008) MANU/MH/0826/2008

Whether the deemed income under Section 69A of the Income Tax Act can be set off against the loss due to the confiscation of the very same foreign marked gold bars on the basis of which addition is made

The assessee is in the business of manufacturing/making ornaments from the gold given to him by his clients and his business income constituted making charges that he receives from his client .But the possession of unauthorizes gold by him constitutes smuggling gold into country. It is an infraction of law and certainly cannot form the stock in trade of the assessee. The loss caused to the assessee due to confiscation of that gold is not a loss which springs directly from the carrying on of his business or is incidental to it. The assessee is not entitled to any deduction for loss of gold on the grounds that he was carrying on a lawful business in gold

As held by the apex court in Chuharmal v. Commissioner of Income Tax, M.P., The expression "income" as used in Section 69A of the Act has wide meaning which means anything which came in or resulted in gain and not only as business income. Thus the deemed income of the assessee under Section 69A of the Act cannot be set off against loss due to confiscation of the foreign marked gold bars on the basis of which addition is made in the assessee's assessment order.

• MOTOR VEHICLES

GUJARAT HIGH COURT 

Ahmedabad Municipal Corpo. thro' Transport Manager Vs.Narendrabhai Lalbhai Shah and 2 Ors. (Decided on 29.08.2008) MANU/GJ/0593/2008

The contention of the Ahmedabad Municipal Corporation that the Tribunal has committed gross error in not considering the contributory negligence on the part of the scooterist who has no licence and three persons riding on the scooter is entertainable before the High court.

Against the contention raised by the municipal Corporation, the High Court held that the deceased and other two persons were sitting on a scooter at the time of accident, that itself does not fasten them with the responsibility of negligent driving and the fact that he had no licence if at all believed to be proved cannot brand him as negligent. In Lalchand v. Kanta MANU/MP/0108/1991, it is held that the insurance company had taken a defence that the driver of the vehicle in question had no licence but had failed to produce evidence in establishing that the driver had no licence. Despite the direction from the Court, the driver did not produce licence. In such a case adverse inference cannot be drawn against the driver and the insurance company is not exempted from the liability.

• SERVICE

BOMBAY HIGH COURT 

Waheed Akhtar Ansari Vs.The President, Khairul Islam Higher Education Society's Maharashtra College of Arts and Commerce and Ors. (Decided on 16.09.2008) MANU/MH/0863/2008

Whether the Grievance Committee set up in pursuance of a Government Resolution can rely upon the disciplinary enquiry conducted by the management.

The Grievance Committee set up in pursuance of a Government Resolution dated 13th October, 2000 issued by the State Government to regulate the terms of appointment and conditions of service of Shikshan Sevak is an independent body. The Division Bench allowed the petition filed by the Petitioner only on the ground that the allegation of misconduct could have been enquired into by the Grievance committee alone. An order of remand was necessitated on that count. The infirmity which has been found in the order of the Grievance committee in the present proceedings is that the committee has not independently considered whether there was any substance in the complaint of sexual harassment made against the Petitioner. The committee was not entitled to rely upon the report of the enquiry conducted by the management, once the Division Bench had held that the issue of misconduct was one which could only be considered by the committee has not independently considered whether there was any substance in the complaint of sexual harassment made against the Petitioner. Hence any enquiry on disciplinary misconduct has to be done independently by the Grievance Committee only.

• CRIMINAL

BOMBAY HIGH COURT 

Rajaram Kashinath Charoskar Vs. The State of Maharashtra (Decided on 12.09.2008) MANU/MH/0850/2008

Scope of Set off under Section 428 r/w 433A of the Code of Criminal Procedure - Whether the petitioner is entitled to claim set off under Section 428 r/w 433A of the CrPc in the writ petition, against the specific direction of not to grant set off by the sessions Judge and the HC bench

The petitioner is definitely entitled to the benevolent provision contained in Section 428 of the Code and cannot be deprived of such a statutory compulsory benefit to be awarded to a convict, without an exception and/or discretion of the Court under Section 428 r/w Section 433-A of the Code. Neither the judgment delivered by the Sessions Judge nor the one delivered by the High Court in the appeal, can be read to mean that the petitioner cannot be granted set off to which he may otherwise be entitled to under Crpc. As held by apex court in Ashok Kumar v. Union of India, The law governing suspension, remission and commutation of sentence is both statutory and constitutional. The stage for the exercise of this power generally speaking is post-judicial, i.e., after the judicial process has come to an end.

The power to commute a sentence or set off under Section 428 and 433- A under Chapter XXXII of the Crpc vests exclusively with the Executive Government and not with the Judiciary. It is not open for the judiciary to either grant or not to grant the set off as also either to commute or not to commute a sentence.

• ELECTRICITY

JHARKHAND HIGH COURT

New Engineering Works and ASL Motors Pvt. Ltd. Vs. The State of Jharkhand and Ors. (Decided on 23.07.2008) MANU/JH/0600/2008

Validity of High Tension agreement framed under Electricity Act, , 2003 - Whether Clauses 8 and 9 read with Clause 4 of the Standard Form or High Tension agreement (H.T. agreement) entered into by and between the petitioners and the respondent - Board are unconstitutional and unsustainable under Section 23 of the Indian Contract Act on the ground that the said clauses are unjust, unfair, unreasonable and against the public policy

The petitioners with full knowledge and consciousness entered into the H.T. Agreement with the respondent Board for supply of electricity and put their signature in the standard form of agreement which has existed for several decades after the enactment of the Electricity (Supply) Act, 1948 and the Electricity Rules, 1946. As per Clause 8 of the H.T. agreement and also Clause 7.5 of the Electricity Supply Code Regulation, 2005 framed under the Electricity Act, 2003, a consumer can terminate agreement only after expiry of the initial period of agreement by giving 30 days notice to the distribution licensee and in the event agreement is terminated before the expiry of the initials period of agreement, the consumer shall be liable to pay charges as per tariff for the balance period of initial period of agreement. The Regulation having been framed under the power conferred to it by the Electricity Act, is statutory in nature and thus both the licensee and the consumer are bound by the same.

The validity of the standard form of agreement is upheld in the case of Bihar State Electricity Board, Patna and Ors. v. Green Rubber Industries and Ors wherein court reiterated that the Agreement is in a standard form of contract whose clauses aimed at facilitating the electric energy supply. The supply agreement is contractual in nature whereas the basis of supply is statuatory in nature. In cases where such agreements are made the terms are supposed to have been negotiated between the consumer and the Board, and unless specifically assigned, the agreement normally would haw affected the consumer with whom it is made

Evidence shows that there has been constant supply of electricity for more than 20 hours every day and it cannot be held that the Board has failed to supply electricity as per the contract demand. Thus the Clauses 8 and 9 of the H.T. Agreement entered into by and between the petitioners and the respondent-Board are perfectly constitutional and fair ,just and reasonable.