SUPREME COURT

• CRIMINAL LAWS

Rajesh Ranjan @ Pappu Yadav v. State of Bihar thru CBI, decided on 05.08.2010 (MANU/SC/0566/2010)

Review of Order setting aside Judgment granting Bail - Application for exemption from surrendering also filed alongwith review application

Court was surprised to note that despite cancellation of bail of the accused by the Apex Court, neither the accused has surrendered nor he was taken into custody. The CBI and Director General of Police, Bihar were directed to execute the order of the Court and to send a compliance report within the time stipulated.

Bhiaru Ram and Ors. v. Central Bureau of Investigation and Ors., decided On: 03.08.2010 MANU/SC/0563/2010

Transfer of Case - Transfer sought by Petitioners in a case of alleged disproportionate assets/properties on the ground of inconvenience - As stated assets/ properties situated at Rajasthan and most of the witnesses from Rajasthan, Jaipur, in particular and thus for convenience, the case pending before the Special Judge, CBI, Greater Mumbai sought to be transferred to Jaipur, Rajasthan - Whether transfer orders can be passed

Section 406 of the Code of Criminal Procedure empowers Court to transfer any case or appeal from one High Court to another High Court or from a Criminal Court subordinate to one High Court to another Criminal Court of equal or superior jurisdiction subordinate to another High Court. In the case on hand, except convenience, the petitioners have not pressed into service any other ground for transfer. The Petitioners in the present case charge sheeted for commission of offences under Section 109 read with Section 193 of the IPC read with Section 13(2) read with Section 13(1)(e) of the Prevention of Corruption Act, 1988. As per the charge sheet witnesses to be examined are not only from Jaipur, Rajasthan, but also from various other places including Mumbai. Though the petitioners may have a little inconvenience, the mere inconvenience may not be sufficient ground for the exercise of power of transfer but it must be shown that the trial in the chosen forum will result in failure of justice. Transfer petition thus dismissed.

Srinivas Gundluri and Others v. SEPCO Electric Power Construction Corporation and Others (Decided on 30.07.2010) MANU/SC/0539/2010

Application under Section 156(3) of the Code of Criminal Procedure, 1973 - Impugned order passed by the Judicial Magistrate whereby application was forwarded to the concerned SHO with direction to register FIR - Correctness thereof under challenge on the ground of non-application of mind by Magistrate while passing the impugned order

The Magistrate had only ordered investigation under Section 156 (3) of the Code. As can be seen, the Magistrate perused the complaint without examining the merits of the claim that there is sufficient ground for proceeding or not, directed the police officer concerned for investigation under Section 156 (3) of the Code. The Magistrate did not bring into motion the machinery of Chapter XV of the Code. He also did not examine the complainant or his witnesses under Section 200 of the Code, the first step in the procedure prescribed under the said Chapter. The question of taking next step of the procedure envisaged in Section 202 did not arise. Instead of taking cognizance of the offence, the learned Magistrate has merely allowed the application filed under Section 156(3) of the Code and sent the same along with its annexure for investigation by the police officer concerned under Section 156 (3) of the Code. Instead of taking cognizance of the offence, the learned Magistrate has merely allowed the application under Section 156(3) of the Code. To proceed under Section 156 (3) of the Code, what is required is a bare reading of the complaint and if it discloses a cognizable offence, then the Magistrate instead of applying his mind to the complaint for deciding whether or not there is sufficient ground for proceeding, may direct the police for investigation. In the case on hand, the learned single Judge and Division Bench of the High Court rightly pointed out that the Magistrate did not apply his mind to the complaint for deciding whether or not there is sufficient ground for proceeding and, therefore has not committed any illegality in directing the police for investigation.

The State of Maharashtra v. Farook Mohammed Kasim Mapkar & Ors. (Decided on 30.07.2010) MANU/SC/0531/2010

Investigation of Cognizable offence - Communal riots after demolition of Babri Masjid - Open fire by Police on mob - Whether CBI could investigate a cognizable offence by the order of Court within the territory of a State without the consent of the State?

Article 21 of the Constitution of India, in Order to protect civil liberties, fundamental rights and more particularly, Court can very well exercise the power, no doubt, must be sparingly, cautiously and in exceptional situations. So in the light of the fact of the incident related to Communal riots of 1993 and also of the fact that the CBI has already examined several persons, Court directed the CBI to continue and complete the investigation into the incident and file a final report to the Court concerned within a period of six months. Hence appeal dismissed.

• FAMILY LAWS

Bhabani Prasad Jena v. Convenor Secretary, Orissa State Commission for Women & Anr. (Decided on 03.08.2010) MANU/SC/0555/2010

DNA test of child - Determination of extent of power of the State Commission for Women constituted under Section 3 of the Orissa State Commission for Women Act, 1993 and sustainability of High Court's direction issued for deoxyribonucleic acid test (DNA)

The State Commission for Women Act, 1993 has no authority, competence or power to order DNA. The High Court exceeded its jurisdiction in passing the impugned order as Courts in India cannot order blood test as a matter of course and such prayers cannot be granted to have roving inquiry; there must be strong prima facie case and court must carefully examine as to what would be the consequence of ordering the blood test. In the case of Sharda2 while concluding that a matrimonial court has power to order a person to undergo a medical test, it was reiterated that the court should exercise such a power if the applicant has a strong prima facie case and there is sufficient material before the court. Obviously, therefore, any order for DNA can be given by the court only if a strong prima facie case is made out for such a course.

• CONSUMER LAWS

State of NCT of Delhi v. Rajiv Khurana (Decided on 30.07.2010) MANU/SC/0533/2010

Quality of the product - Not conformed to the prescribed ISI specification - Whether the Respondent was compelled to face the rigmarole of a criminal trial?

Unless clear averments were specifically incorporated in the complaint, the Respondent cannot be compelled to face the rigmarole of a criminal trial and the Court further observed that the trauma, harassment and hardship of the criminal proceedings in such cases may be more serious than the ultimate punishment, and it is not proper to subject all and sundry to be impleaded as accused in a complaint against a company, even when the requirements of section 138 read with section 141 of the Insecticides Act are not fulfilled.

• BANKING LAWS

Zonal Manager, Central Bank of India v. M/s Devi Ispat Ltd. & Ors. (Decided on 30.07.2010) MANU/SC/0542/2010

Settlement of Dues - Contract settlement of money through Nationalized Bank - Title deeds of Company deposited by the Respondent as a security by the Bank - Whether writ petition maintainable even in the contractual matters?

Writ petition maintainable even in contractual matters. In the contract if there is a clause for arbitration, normally, writ Court should not invoke its jurisdiction; (b) the existence of effective alternative remedy provided in the contract itself is a good ground to decline to exercise its extraordinary jurisdiction under Article 226 of the Constitution of India and (c) if the instrumentality of the State Acts contrary to the public good, public interest, unfairly, unjustly, unreasonably discriminatory and violative of Article 14 of the Constitution of India in its contractual or statutory obligation. Hence, writ petition maintainable.

However, a legal right must exist and corresponding legal duty on the part of the State and if any action on the partof the State is wholly unfair or arbitrary, writ Courts can exercise their power and in the case on hand, it is not in dispute that the appellant- Bank, being a public sector Bank, discharging public functions is "State" under Article 12 of the Constitution of India. In view of the settlement of the dues on the date of filing of the writ petition by arrangement made through another Nationalized Bank, Court hold that the High Court was fully justified in issuing a writ of mandamus for return of its title deeds.

• CUSTOMS LAW

Pernod Ricard India (P.) Ltd. v. Commissioner of Customs, ICD Tughlakabad (Decided on 26.07.2010) MANU/SC/0517/2010

Doctrine of Merger - Rule 6 of Customs Valuation (Determination of Prices of Imported Goods) Rules, 1988 - Order of Tribunal remanding matter to the Adjudicating Authority for a fresh consideration on the question of applicability of Rule 6 under challenge

In the instant case Doctrine of Merger would be attracted and the Appellant is estopped from raising the issue of applicability of Rule 6 of Customs Valuation Rules, 1988. Further, the logic underlying the Doctrine of Merger is that there cannot be more than one decree or operative Orders governing the same Subject matter at a given point of time. Further, the issue with regard to the applicability of Rule 6 of Customs Valuation Rules, 1988 had attained finality. Therefore, the Tribunal erred in re-opening and examining afresh the question as to applicability of Rule 6 of Customs Valuation Rules, 1988.

• EXCISE LAWS

Commissioner of Central Excise, Chennai-II Commissionerate v. M/s. Tarpaulin International (Decided on 04.08.2010) MANU/SC/0551/2010

Manufacture - Under Section 2(f) of the Central Excise Act, 1944 - Whether tarpaulin made-ups which were prepared after cutting and stitching the tarpaulin fabric and fixing the eye-lets would involve the process of manufacture and, hence, exigible to Central Excise duty?

The fixing the eye-lets does not change basic characteristic of the raw material and the end product and does not bring into existence a new and distinct product with total transformation in the original commodity. Merely because Tarpaulin made-ups were covered under Sub-Heading 63.01 CETA Schedule, it would not be dutiable under the Excise Law, if it was not known as `Goods' to the market. Hence, the process of stitching and fixing eyelets would not amount to manufacture since tarpaulin, after stitching and eyeleting, continues to be only cotton fabrics, not exigible to Central Excise duty. Appeal dismissed.

• SERVICE LAWS

State of Karnataka & Ors. v. M L Kesari & Ors. (Decided on 03.08.2010) MANU/SC/0557/2010

Appointment on daily wage basis for more than 15 years - Regularisation sought - Directions passed to this effect - Correctness thereof under challenge

Court upheld the decision of the Division Bench of the High Court and said that it is needless to say that if the Respondents does not fulfill the requirements of decision of the Case of Umadevi, their services need not be regularised. If the employees who have completed ten years service does not possess educational qualifications prescribed for the post, at the time of their appointment, they may be considered for regularization in suitable lower posts. Appeal diposed of accordingly.

• CIVIL LAWS

Budh Ram and Ors. v. Bansi and Ors. (Decided on 05.08.2010) MANU/SC/0565/2010

Substitution of Legal Representatives - Delay in filing application related thereto - Application for condonation of delay was rejected

Abatement takes place automatically by application of law without any order of the court. Setting aside of abatement can be sought once the suit stands abated. Abatement in fact results in denial to hearing of the case on merits. Order XXII Rule 1 CPC deals with the question of abatement on the death of the plaintiff or of the defendant in a Civil Suit. OrderXXII Rule 2 relates to procedure where one of the several plaintiffs or the defendants die and the right to sue survives. Order XXII Rule 3 CPC deals with procedure in case of death of one of the several plaintiffs or of the sole plaintiff. Order XXII Rule 4 CPC, however, deals with procedure in case of death of one of the several defendants or of the sole defendants. Sub-clause (3) of Rule 4 makes it crystal clear that where within the time limited by law, no application is made under Sub-rule 1, the suit shall abate as against the deceased defendant.

The law on the issue stands crystallised to the effect that as to whether non-substitution of LRs of the defendants/respondents would abate the appeal in toto or only qua the deceased defendants/respondents, depend upon the facts and circumstances of an individual case. Where each one of the parties has an independent and distinct right of his own, not inter-dependent upon one or the other, nor the parties have conflicting interests inter se, the appeal may abate only qua the deceased respondent. However, in case, there is a possibility that the Court may pass a decree contradictory to the decree in favour of the deceased party, the appeal would abate in toto for the simple reason that the appeal is a continuity of suit and the law does not permit two contradictory decrees on the same subject matter in the same suit. Thus, whether the judgment/decree passed in the proceedings vis-à-vis remaining parties would suffer the vice of being a contradictory or inconsistent decree is the relevant test.

In the instant case, the first Appellate Court rejected the application for condonation of delay as well as the substitution of LRs. The only question to be answered was whether the appeal stands abated in toto or only in respect of the share of person specified. The High Court held to be right in reaching the conclusion that there was a possibility for the Appellate Court to reverse the Judgment of the Trial Court and in such an eventuality; there could have been two contradictory decrees. Appeal dismissed.

HIGH COURT

• SERVICE LAWS

PUNJAB HIGH COURT

Dr. Ravinder Verma v. State of Punjab & Others (Decided on 30.07.2010)

Transfer - Absent from duty during emergency - No change in service condition - Whether the Authorities can do interference in the transfer Orders?

Held, an order of transfer was in the view of administrative exigency and executive is the best authority to consider administrative exigency as it has the relevant information, inputs and data to consider whether administratively it would be appropriate to transfer a person or not. Prima facie, arbitrary exercise of power or malafide exercise of power is not made out. Admittedly, there has been no change in service conditions of the petitioner as the petitioner is serving on a transferable post. No ground for interference in order of transfer is made out.

• CRIMINAL LAWS

BOMBAY HIGH COURT

Shri Nasir Maqbul Shaikh v. Commissioner of Police, Solapur (Decided on 03.08.2010)

Order of detention challenged - Under the Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act, 1980 - Whether the purpose of detention was wrongly mentioned in the order?

Held, the impugned order of detention in its English version states that the detention was with a view to prevent detenu from acting in any manner prejudicial to the maintenance of supply of essential commodities to the community, whereas, its Marathi translation shows that, with a view to prevent him acting in any manner prejudicial to public order. Thus, the very purpose for which the impugned order of detention has been passed defers substantially in the impugned order in its English translation and in the Marathi translation and hence, relied on the case Vijay Kumar Dharna where Court set aside the detention order on the ground that such variance defeat the right of the petitioner to make effective representation before the concerned authorities. It is necessary for proper representation and/or for effective representation that the grounds/the reasoning in the order of detention should be clear and should not be in variance.

DELHI HIGH COURT

Criminal Justice Society v. Union of India and Others (Decided on 02.08.2010)

Compensation for accidental death - Seminal and centroidal issues - Public Interest Litigation - Under Article 226 of the Constitution of India - Whether the wife of a septuagenarian was entitled to compensation for his accidental death caused due to the fall in a pit on the divider which was required to be covered by a barricade with warning signs meant for pedestrians by the contractor; Whether pits can be allowed to remain in such a stage to become hazards and death traps for the citizens and what remedial measures are required to be taken without any pretence?

As the wife has become a loner and loneliness is the breeding place for melancholia. Court has determined the compensation at Rs.5 lacs to be initially paid by the MCD to the wife of the deceased and thereafter proceeds to enquire about the responsibility of any officer involved in the work and take appropriate action against the respondent within the realm of privity of contract between them. The amount shall be paid by way of a bank draft drawn on a nationalised bank within a period of four weeks. The other issue that also has been raised deserves to be dealt with. The MCD cannot afford to enter into contract of this nature and leave the citizens to their fate. It has the statutory obligation and, therefore, a sacred duty to see that such kinds of accidents are not caused due to negligence of a contractor. Hence, Court direct the Commissioner of MCD to constitute a task force which would be responsible to see that the contractors carry out the safety measures to the optimum level, so that no hazard is caused to any person and it would be easy on the part of the MCD to fix the responsibility on its task force rather than entering into an unnecessary labyrinth

Syed Nusrat Ali v. State & Anr. (Decided on 02.08.2010)

Contempt of Court - Proceedings initiated by lower court - Whether Court subordinate to High Court has powers to initiate proceedings under Contempt of Courts Act 1971?

Held, it is a settled law that High Court can suo moto exercise powers under Article 227 of the Constitution of India to keep the subordinate courts within the four walls of law. As per Section 10, Contempt of Courts Act 1971, High Court alone can take cognizance of alleged contempt having been committed in respect of subordinate Courts. A perusal of provisions of Contempt of Courts Act 1971 would show that a Court subordinate to High Court has no powers to initiate proceedings under Contempt of Courts Act 1971. In order to bring the conduct to the notice of High Court, a subordinate court is supposed to send a reference of the matter to the High Court. A subordinate court cannot itself assume jurisdiction under Contempt of Courts Act 1971 and issue show cause notice as to why contempt proceedings should not be initiated. The provisions of Contempt of Courts Act 1971 cannot be resorted to by subordinate court even as a threatening provision.

• BANKING LAWS

DELHI HIGH COURT

M/s. Kalucha Paper House & Anr v. M/s. Mahavir Papers & Anr. (Decided on 02.08.2010)

Dishonour of Cheque - Summary trial challenged - Under the Negotiable Instruments Act - Whether the procedure being followed by Court in this case was not a correct procedure?

Held, relied on the Rajesh Aggarwal's case the Court said that the trial under Section 138 of Negotiable Instruments Act is mandatorily to be proceeded in a summary manner and it is the accused who has to disclose his defence and make an application before the trial court as to why he wants to recall the complainant or other witnesses for cross-examination. The evidence adduced before summoning has to be considered sufficient during trial and unless an application is made under Section 145 (2) of the Negotiable Instruments Act, there is no provision for re-examining complainant witnesses. Hence, petition dismissed

TRIBUNAL

• DIRECT TAXATION

ITAT MUMBAI

Kansai Nerolac Paints v. ADIT (Decided on 02.08.2010)

Assessee requested the Assessing Officer to issue certificate determining the sum chargeable to tax - tax to be deducted at source under the provisions of section 195 of the Income-tax Act, 1961 in respect of fee for computer software of US$ 43,000 to the non-resident M/s. IXOS Software Asia Pvt. Ltd., Singapore. - Whether the amount paid by the assessee towards purchase of the software can be treated as payment of "royalty"?

Relied on the cases Tata Consultancy Services v. State of AP and Samsung Electronics Co, Motorola Inc & Dassault Systems the Court considered that a computer software when put into a media and sold, it becomes goods like any other audio cassette or painting on canvass or book. In view of the decisions cited above, we are of the considered opinion that the amount paid by the assessee towards the purchase of IXOS-eCON for R/3 50 users cannot be treated as payment of royalty taxable in India under Article 12 of DTAA between India and Singapore. Therefore, the assessee, in Court's opinion, was not liable to deduct tax at source.Hence, the grounds raised by the assessee allowed.