Supreme Court

• Criminal Laws

Bhagaloo Lodh and Anr. Vs. State of U.P., (Decided on 14.06.2011) MANU/SC/0700/2011

Conviction under Sections 302/34 of the Indian Penal Code, 1860 - Order challenged on the ground of false implication due to enmity and also that the alleged eye-witnesses were very close relatives of the deceased because of which their testimonies could not be relied upon safely

Held, the cause of death spelt out in the post-mortem report was shock and hemorrhage as a result of ante-mortem injuries. In his deposition in the Trial Court, Doctor also reiterated the said cause of death and stated that the ante-mortem injuries suffered by the deceased were attributable to a sharp edged weapon, like karauli and were sufficient in the ordinary course of nature to cause death. The prompt and early reporting of the occurrence by the informant with all its vivid details gave an assurance regarding truth of its version. Courts below had supported the prosecution case. The relevant eyewitnesses were extensively cross-examined by the defence, but nothing could be extracted there from which could impair their credibility. Courts below held that the evidence of both the eyewitnesses inspired confidence and was worth acceptance as both of them had given full version of the incident.

Evidence of a close relation can be relied upon provided it is trustworthy. Such evidence is required to be carefully scrutinised and appreciated before resting of conclusion to convict the accused in a given case. But where the Sessions Court properly appreciated evidence and meticulously analysed the same and the High Court re-appreciated the said evidence properly to reach the same conclusion, it is difficult for the superior court to take a view contrary to the same, unless there are reasons to disbelieve such witnesses.

In view of the law laid hereinabove, it was held that no fault could be found with the evidence recorded by the Courts below accepting the evidence of closely related witnesses. Appeals accordingly were held to be lacking in merits and were accordingly dismissed.

Sk. Yusuf Vs. State of West Bengal (Decided on 14.06.2011) MANU/SC/0701/2011

Conviction based on circumstantial evidence - Conviction ordered under Sections 302 and 201 of the Indian Penal Code, 1860 challenged on the ground that there was no evidence on record that the deceased was seen with the Appellant at the place of occurrence - Whether conviction as directed by the Courts below based on superfluous approach without in depth analysis of the relevant facts - Questions relating to extra judicial confession, abscondance under challenge

Held, the last seen theory comes into play where the time gap between the point of time when the accused and deceased were last seen alive and when the deceased is found dead is so small that possibility of any person other than the accused being the author of the crime becomes impossible. All the witnesses deposed that Appellant alone was seen near the place of occurrence with spade as he had gone there for catching the fish. Thus, there was no evidence to the extent that the deceased and Appellant were seen together at the place of occurrence or nearby the same in close proximity of time.

Extra-judicial confession must be established to be true and made voluntarily and in a fit state of mind. The words of the witness must be clear, unambiguous and clearly convey that accused is the perpetrator of the crime. The "extra-judicial confession can be accepted and can be the basis of a conviction if it passes the test of credibility. In the opinion of the doctor, death was due to combine effect of injuries and suffocation. The incised wound could be caused by a hit of sharp edge of the spade. The haema toma on the victim could be caused by a hit of heavy blunt weapon. This witness did not speak of any sign of sexual assault on the deceased before or after her death.

In regard to issued of abscondance, it is a settled legal proposition that in case a person is absconding after commission of offence of which he may not even be the author, such a circumstance alone may not be enough to draw an adverse inference against him as it would go against the doctrine of innocence. It is however quite possible that he may be running away merely being suspected, out of fear of police arrest and harassment. Thus, mere abscondance of the Appellant cannot be taken as a circumstance, which give rise to draw an adverse inference against him.

Conviction can be based solely on circumstantial evidence. However, the Court must bear in mind while deciding the case involving the commission of serious offence based on circumstantial evidence that the prosecution case must stand or fall on its own legs and cannot derive any strength from the weakness of the defence case.

The nature of the admissibility of the facts discovered pursuant to the statement of the accused under Section 27 of Indian Evidence Act, 1872 is very limited. If an accused deposes to the police officer the fact as a result of which the weapon with which the crime is committed is discovered, and as a result of such disclosure, recovery of the weapon is made, no inference can be drawn against the accused, if there is no evidence connecting the weapon with the crime alleged to have been committed by the accused.

There was no medical evidence or suggestion by any person as to the sexual assault on the deceased. Therefore, it merely remained the guesswork of the people at large. Mere imagination that such thing might have happened is not enough to record conviction.

The circumstances concerned "must or should" and "not and may be" established. In the instant case, the circumstances were not established. Appeal accordingly allowed.

State of U.P. Vs. Mohd Iqram and Anr., (Decided on 13.06.2011) MANU/SC/0699/2011

Order of acquittal under challenge - High Court reversed order of the Trial Court directing conviction under Sections 302 read with 34 of the Indian Penal Code, 1860 - Order impugned challenged on the ground that it was passed without due appreciation of facts of the case

Held, it is a settled legal proposition that in exceptional cases where there are compelling circumstances, and the judgment under appeal is found to be perverse i.e. the conclusions of the Courts below are contrary to the evidence on record or its entire approach in dealing with the evidence is patently illegal, leading to miscarriage of justice or its judgment is unreasonable based on erroneous law and facts on the record of the case, the Appellate Court should interfere with the order of acquittal. While doing so, the Appellate Court should bear in mind the presumption of innocence of the accused and further that the acquittal by the courts below bolsters the presumption of his innocence. Interference in a routine manner where the other view is possible should be avoided, unless there are good reasons for interference.

In the instant case, the circumstantial evidence was so strong that it pointed unmistakably to the guilt of the culprits and was incapable of explanation of any other hypothesis that of their guilt. Therefore, findings of fact recorded by the High Court perverse, being based on irrelevant considerations and inadmissible material. Appeals accordingly allowed.

• Contempt of Court

Vishram Singh Raghubanshi Vs. State of U.P., (Decided on 15.06.2011) MANU/SC/0702/2011

Appeal under Section 19 of the Contempt of Courts Act, 1971 - Appellant, an advocate produced an accused for the purpose of surrender, impersonating him as 'X' who was wanted in a criminal case - There was some controversy regarding the genuineness of the person who came to surrender and the Presiding Officer of the Court accordingly raised certain issues - Appellant allegedly misbehaved with the said officer in the court and used abusive language - Pursuant to show cause notice, Appellant though denied allegations tendered apology by way of an affidavit - High Court however held the Appellant guilty of committing the contempt and sentenced him to undergo three months simple imprisonment with alongwith fine - Hence the present proceedings

Held, being an officer of the court, if any issue had been raised in this regard either by the Court or opposite counsel, it was the duty of the Appellant to satisfy the Court and establish the identity of the person concerned. The conduct of the Appellant was in complete violation and in contravention of the "standard of professional conduct and etiquette" laid in Section 1 of Chapter 2 (Part-VI) of the Bar Council of India Rules, which provides that an advocate shall maintain towards the court a respectful attitude and protect the dignity of the judicial office. He shall use his best efforts to restrain and prevent his client from resorting to unfair practices etc. The advocate would conduct himself with dignity and self respect in the court etc. etc.

There may be a case, where a person is really aggrieved of misbehaviour/conduct or bias of a judicial officer. He definitely has a right to raise his grievance, but it should be before the appropriate forum and by resorting to the procedure prescribed for it. Under no circumstances, such a person can be permitted to become the law unto himself and proceed in a manner he wishes, for the reason that it would render the very existence of the system of administration of justice at a stake.

The Appellant instead of choosing to defend himself on merit before the High Court, merely tendered apology thrice. The principle as well settled states that it is the seriousness of the irresponsible acts of the contemnor and degree of harm caused to the administration of justice, which would decisively determine whether the matter should be tried as a criminal contempt or not.

A lawyer cannot be a mere mouthpiece of his client and cannot associate himself with his client maligning the reputation of judicial officers merely because his client failed to secure the desired order from the said officer. An apology cannot be a defence, a justification, or an appropriate punishment for an act, which is in contempt of court.

In the instant case, the apology was tendered after the Appellant received show cause notice.

The High Court considered the case elaborately examining every issue microscopically and held that there was no reason to disbelieve the facts stated by the judicial officer against the contemnor/Appellant, the facts were acceptable, and it was clearly proved that the contemnor was guilty of gross criminal contempt. The charges levelled against the Appellant stood proved. A Judge has to discharge his duty and passes order in the manner as he thinks fit to the best of his capability under the facts and circumstances of the case before him. No litigant, far less an advocate, has any right to take the law in his own hands. The contemnor abused the Judge in most filthy words unworthy of mouthing by an ordinary person and that is true without any justification for him ascending the dais during the course of the proceedings and then abusing the judicial officer in the words "Maaderchod, Bahanchod, High Court Ko Contempt Refer Kar". The courts certainly cannot be intimidated to seek the favourable orders. The Appellant intimidated the presiding officer of the court hurling filthiest abuses and lowered the authority of the Court, which is tantamount to interfere with the due course of judicial proceedings. The charge, which stood proved against the Appellant, could not be taken lightly and in such a fact-situation the apology tendered by him, being not bona fide, was not acceptable.

The Appellant instead of yielding to the court honestly and unconditionally advanced a well-guarded defence by referring to all the facts that led to the incident. Apology tendered by the Appellant gives an impression that the same was in the alternative and not a complete surrender before the law. Such attitude has a direct impact on the court's independence, dignity and decorum. In order to protect the administration of public justice, we must take action as his conduct and utterances cannot be ignored or pardoned. The Appellant had no business to overawe the court. Thus, the apology tendered by the Appellant was neither sincere nor bona fide and thus, not worth acceptance. The appeal held to be lacking in merit and was accordingly, dismissed.

High Courts

• Direct Taxation

Delhi High Court

Geofin Investment (P) Ltd. Vs. Commissioner of Income Tax and Ors., (Decided on 27.05.2011)

Mistake apparent from record - Whether reliance and reference to any other case by Tribunal while adjudicating any case before it can be termed as mistake apparent from the record and a subject matter of challenge under Section 254(2) of the Income Tax Act, 1961

Held, under Section 254(2), a mistake apparent from the record can be rectified. The power is circumscribed and limited. There should be mistake, which is apparent before the power can be exercised and this is a mandatory pre-condition. The Tribunal in its relevant order referred to the controversy in question relating to disallowance made on account of short term capital loss and long term capital loss. The entire issue was examined on merits including the judgments relied upon by the Petitioner-Assessee. After examining the matter in detail, the tribunal allowed the appeal filed by the revenue. While allowing the appeal, the tribunal also referred to another decision of ITAT, Mumbai and reliance and reference to reasons stated in the said case cannot be regarded as a mistake apparent from the record.

It is not unusual or abnormal for Judges or adjudicators to refer and rely upon judgments/decisions after making their own research.

Accordingly, the petition was dismissed for being devoid of merit.

• CRIMINAL LAWS

BOMBAY HIGH COURT

Ramchandra Son of Chunnilal Borekar, Sau Reva wife of Ramchandra Borekar and Sau Maya wife of Mitesh Pallhewar Vs. The State of Maharashtra and Sau Payal Borekar (Decided on 14.06.2011) MANU/MH/0723/2011

Jurisdiction of Police - Application to quash and set aside prosecution initiated by by Tumsar Police Station for crime under Section 498A of Indian Penal Code, 1860 (I.P.C.) and Sections 3 and 4 of Dowry Prohibition Act read with Section 34 of I.P.C. - Whether Tumsar Police Station had jurisdiction to take cognizance of the complaint

Held, marriage was solemnized at Tumsar. There was no legal bar to continue complaint proceedings initiated by Respondent at Tumsar. Further, place of trial cases where apart from cruelty punishable under Section 498A IPC, offences under the Dowry prohibition Act are also alleged, shall be the place where aggrieved person is residing with her child. In present case, In the interest of justice Respondent is neither expected to suffer hardship of frequent travel nor shall be required to tread and toil in to territories of her in-laws along with her minor child for to get redressal of her grievances. Contention of Applicants that the Tumsar Police could not entertain the complaint was devoid of merits. Petition dismissed.

Baburao @ Babulal Raibhan Patole (Jadhav) Vs. The Government of Maharashtra (Decided on 13.06.2011) MANU/MH/0719/2011

Dying Declaration - Offence under Section 302 of the Indian Penal Code, 1860 (I.P.C.) -Appeal against conviction - Whether conviction of Accused based on reliance on dying declaration was valid or not

Held, it is well settled that conviction can be based on sole testimony of dying declaration even without corroboration, provided same is truthful, reliable, trustworthy and inspires confidence. However, rule of prudence is to seek corroboration. In present case, medical evidence corroborated dying declaration and conduct of Appellant was consistent with guilt. Commission of offence by Accused was proved beyond reasonable doubt. Appeal dismissed.

• CIVIL LAWS

BOMBAY HIGH COURT

Mafatlal Engineering Industries Employees Union Vs.Mumbai Mazdoor (Decided on 13.06.2011) MANU/MH/0721/2011

(a) Abatement of Suit - Death of Defendant - Section 121 of Limitation Act - Present Revision Application against Court order whereby Court permitted plaintiff to carry out the amendment in the suit- Whether the impugned order was valid in light of the fact that suit was already dismissed as abated by an earlier order

Held, It is settled principle of law that if heirs of a deceased defendant are not brought on record within the statutory period of 90 days from the date of death, suit abates automatically and no order of the Court is necessary. Court may pass a formal order noting abatement on the death but that is in law not necessary and the suit abates automatically on expiry of statutory period of limitation. In present case, suit automatically abated on completion of the period of 90 days of the death. Earlier Order passed by Court was only a formal order recording the fact that the suit had abated. Original Plaintiff could have made an application for setting aside of the abatement within 60 days as provided under Article 121 of the Limitation Act. Therefore, Court could not have passed the order for setting aside the abatement without any application for condonation of delay.

(b) Amendment in suit to add party - Notice to party added - Whether impugned order was valid in absence of any notice given to present Revision Applicant

Held, Court could not have passed the order restoring the suit to file without notice to present Revision Applicant who was joined as a party under the order of amendment because order affected Revision Applicant who claimed to be in possession of the suit property. Revision application allowed and impugned order set aside.

• SERVICE LAWS

GAUHATI HIGH COURT

Tadar Appa, Assistant Director (Officiating), Directorate of Sports and Youth Affairs, Chimpu, Itanagar, Arunachal Pradesh and Another Vs. State of Arunachal Pradesh, Represented by Secretary, Sports and Youth Affairs, Itanagar, and Another and State of Arunachal Pradesh, Represented by Secretary, Sports and Youth Affairs, Government of Arunachal Pradesh, Itanagar and Ors. Vs. Gumnya Karbak and Ors. (Decided on 14.06.2011)

Order in Seniority List - Challenge against order whereby it was held that name of Petitioner should have appeared above Respondents - What would be the order of seniority in present case

Held, applying the rule of length of continuous service in the grade or equivalent post, in the absence of any other rule Petitioner would rank senior to Respondents. Since Petitioner joined almost two months before the private respondents he will rank senior to them. Appeal dismissed.

Tribunals and Commissions

• Direct Taxation

ITAT, Mumbai

Grameen Initiative for Women Vs. DIT (E), (Decided on 03.05.2011) (ITAT, Mumbai)

Registration of Trusts - Section 12A of the Income Tax Act, 1961 - Whether or not the Director of Income Tax (Exemption) was justified in declining the registration under section 12A of the Income tax Act, 1961 to the Assessee

Held, as observed by the Hon'ble Bombay High Court in CIT vs. Agriculture Produce and Market Committee and Ors (MANU/MH/0401/2007), having noted that the assesses in the said case were Companies incorporated under Section 25 of the Companies Act, that there is no requirement under the act that the institution constituted for advancement of charity, must be registered as a trust. Incorporation under section 25 of the Companies Act does not bar an Assessee from being granted registration as a charitable institution. In terms of requirements of form No.10-A, filed by the Assessee under Rule 17A of the Income Tax Rules read with Section 12A of the Income Tax Act, the Assessee has already filed instrument under which the institution was established i.e. Memorandum of Association and Articles of Association under which the Assessee Company was formed. There was nothing to doubt that the objective of the Assessee Company set up as a non-profit making Company under section 25, was not charitable in nature, not bonafide, or not genuine. The only reason for which the registration was declined was on the ground that the Assessee could not produce the certificate from the Charity Commissioner and that reason cited was not legally sustainable. Appeal accordingly allowed with direction to grant registration as sought.

ITAT, Mumbai

Hathway Cable and Datacom P. Ltd. Vs. The ACIT, (Decided on 10.06.2011) MANU/IU/0508/2011

Disallowance - Late payment of ESI and PF contribution but within the grace period - Deduction as claimed disallowed - Order under challenge

Held, it was held that the order of the CIT under section 263 deserved to be quashed for the following reasons :

In exercise of powers conferred under Employees PF Act, 1952 a circular viz., Circular No.E-128(1)60/ III dated 19/3/1964 as modified by Circular No.E/II/128 (Section 14/B Amendment)/73, dated 24/10/73 has been passed whereby a period of 5 days of grace is allowed for making payment of PF contribution by an employer. Admittedly in this case the contributions was paid by the Assessee (employees contribution) with a delay of just one day in the month of May and Oct. 2004. In the tax audit report in form No.3CD it was further clarified that the delay of one day has occurred because the last day of the due date (without considering the grace period) was a Sunday. Hence, the disallowance sought to be made under section 36(1)(va) not be sustainable. The payment which is allowed by the relevant Act, rule, order or notification issued thereunder has to be considered as payment within the due date.

Delhi High Court in CIT vs. AIMIL Limited (MANU/DE/3558/2009) while dealing with a case of disallowance u/s 36(1)(va) of the Act, discussed the provisions of S. 2 (24)(x) which provides that amounts received by an assessee from employees towards PF contributions etc shall be "income" and S. 36 (1) (va) which provides that if such sums are contributed to the employees account in the relevant fund on or before the due date specified in the PF etc legislation, the assessee shall be entitled to a deduction. It was held in the said case that: (i) Though the revenue has argued that a distinction is to be made between "employers' contribution" and "employees' contribution" and that employees' contribution being in the nature of trust money in the hands of the assessee cannot be allowed as a deduction if not paid on or before the due date specified in the PF etc law, the scheme of the Act is that employees' contribution is treated as income u/s 2 (24) (x) on receipt by the assessee and allowed as a deduction u/s 36 (1) (va) on making deposit with the concerned authorities. S. 43B (b) stipulates that such deduction would be permissible only on actual payment; (ii) The question as to when actual payment should be made is answered by Vinay Cements (MANU/SC/8128/2007) where the deletion of the second Proviso to s. 43B w.e.f 1.4.2004 was held applicable to earlier years as well. As the deletion of the 2nd Proviso is retrospective, the case has to be governed by the first Proviso. The decision in the case of Dharmendra Sharma (MANU/DE/8709/2007) and P.M. Electronics (MANU/DE/1545/2008) were followed; (iii) If the employees' contribution is not deposited by the due date prescribed under the relevant Acts and is deposited late, the employer not only pays interest on delayed payment but can incur penalties also, for which specific provisions are made in the Provident Fund Act as well as the ESI Act.

Therefore, the Act permits the employer to make the deposit with some delays, subject to the aforesaid consequences. Insofar as the Income-tax Act is concerned, the assessee can get the benefit if the actual payment is made before the return is filed, as per the principle laid down in Vinay Cement.

ITAT Kolkata

Samrendra Tibarewalla Vs. Deputy Commissioner of Income-tax (Decided on 06.06.2011) (MANU/IK/0178/2011)

Capital Gains -(i) Whether AO rightly applied provisions of 50C pf the Act on the same of property question? (ii) Whether CIT(A) rightly confirmed the disallowance of interest paid on borrowed capital? (iii) Whether CIT(A) rightly confirmed the disallowance of demat charges against short term capital gain? (iv) Whether CIT(A) rightly confirmed the disallowance towards bank interestagainst the income from interest on fixed deposit under the head income from other sources.?

Held, (i) The Assessee did not argue that he requested either the AO or the CIT(A) that the market value of the property sold was less than the value adopted by Stamp Valuation Authority and for this he required that the property be referred to valuation cell for valuing the exact market price of the property. In the absence of the same, AO as well as CIT(A) rightly applied the provisions of section 50C of the Act on sale of the property by the Assessee, determining the market value of property as determined by the Stamp Valuation Authority at Rs.18,21,530/-. Appeal of the Assessee accordingly was dismissed.

(ii) The assessee fairly conceded that he had not disclosed any rental income i.e. Income from House Property in his computation. Since there was no income from house property, the orders of the lower authorities were confirmed and the issue of the Assessee's appeal was dismissed.

(iii) The issue was held to be squarely covered by the decision of coordinate bench in the case of ACIT Vs. Raghupati Singhania & Ors. vide ITA Nos.1761 to 1763/K/2010 and Raghupati Singhania & Ors. Vs ACIT vide CO Nos. 165 to 167/K/2010 dated 27th May, 2011, wherein in the said COs it was held by the Tribunal that the obtaining of the NOC from the Housing Cooperative Society was necessary for the purpose of sale of the flat. Therefore, it was an allowable deduction under Section 48 of the Act in computing capital gain. What can be deducted under section 48(1)(a)(i) and (ii) is expenditure incurred wholly and exclusively in connection with the transfer contemplated by section 45. In computing capital gains, expenditure incurred wholly and exclusively in connection with the transfer of a capital asset has to be deducted under section 48(1)(a)(i)&(ii). The words "in connection with such transfer" occurring in that section mean intrinsically related to the transfer. There is no warrant for importing a restriction that, to qualify for deduction, the expenditure must necessarily have been incurred prior to the passing of title. It is immaterial whether the eligible expenditure was incurred prior or subsequent to the passing of title.

However, in the present case, the expenditure in the nature of management fee and other expenses paid to PMFs and custody fee paid for maintaining demat were not in relation to transfer of share rather it is paid for preservation of assets i.e. the shares and securities. Maintaining demat account is statutorily compulsory but custody fee paid are for taking care of the port folio by the company for maintaining demat account. Similarly, the management fee and other expenses paid to PMFs are also in the nature of advisory expenses and cannot be deducted from the capital gains under section 48 of the Act. Accordingly, the order of CIT(A) was confirmed.

This issue of Assessee's appeal was also dimissed.

(iv) Since the assessee could not bring anything on record to prove that the Assessee's claim was bona fide, this issue of Assessee's appeal was dismissed.

ITAT Hyderabad

ITO Vs. South Central Railway Employees Credit Cooperative Society Ltd. (Decided on 10.06.2011) (MANU/IH/0110/2011)

Claim of Deduction - Assessee a cooperative society - Whether income derived from letting can be considered as business income of the Assessee and to would be assessed under the head 'income from house property'

Held, The Assessee a Cooperative Society was constituted with the object of extending credit facilities to its members. The objects of the Assessee thus not that of letting out shops owned by the Assessee. Therefore, the income derived from such letting cannot be considered as business income of the Assessee. The income derived by the Assessee from letting of properties was to be assessed under the head 'income from house property'. In the present case, Assessee exploited the property as owner by letting the same and realising the income by way of rent. Principle now well settled is that every asset, which is once used as business asset or which is capable of being so used, cannot be regarded as a commercial asset. In order that asset may be regarded as a commercial asset, it must be the asset of a running business. In the instant case the property in question was exploited as a house property by letting out to tenant. Therefore the Assessee did not ever carry on any business in the property let out by it. In such a situation, it cannot be held that property was held by the Assessee as a commercial asset. Therefore, the CIT(A) was not justified in holding that the Assessee let out its property to earn business income and as such, the income cannot be assessed as business income and it is to be assessed as income from house property only.

In regard to issue of assessment in previous years, there was no discussion whatsoever regarding the rental income in the assessment orders of relevant assessment years. The Assessing Officer has just accepted the return filed by the Assessee and completed the assessments. A decision is confined to the fact of that case and may not be treated as an authority on aspects, which have been decided for general application. Hence, the plea raised by Assessee not sustainable.

Hence, in regard to miscellaneous income, its nature has to be examined by the Assessing Officer and accordingly to be decided upon afresh in accordance with law. Appeal of the Revenue was partly allowed for statistical purpose.

• Consumer Laws

National Consumer Disputes Redressal Commission

Anil Pahwa Vs. Shri Baldip Singh, Amarjeet Singh Assistant Manager State Bank of India and Sarb Bank Employees and OUSET and C. Society Ltd., (Decided on 31.05.2011) MANU/CF/0174/2011

Territorial jurisdiction - Consumer Forum vis-à-vis Punjab Cooperative Societies Act, 1961

Held, it has been the consistent view that irrespective of the provision under the Cooperative Societies Act, the consumer fora would have jurisdiction to entertain complaints, particularly in view of Section 3 of the Consumer Protection Act, 1986.

There was no illegality, material irregularity or jurisdictional error in the impugned orders so passed and accordingly the instant revision petitions were dismissed.