SUPREME COURT

• EDUCATION LAWS

Karnavati School of Dentistry Vs. Gujarat University, (Decided on 27.05.2011) MANU/SC/0686/2011

Admission Process - Restrain order sought against the Gujarat University - SLPs filed subsequently sought to be withdrawn alongwith permission to challenge constitutional validity of Gujarat Professional Medical Educational Colleges or Institutions (Regulation of Admission and Fixation of Fees) Act, 2007

Held, permission as sought granted with liberty to file fresh petitions before the High Court in regard to admission process for the next academic session and also to challenge the constitutional validity of the 2007 Gujarat Act

• SERVICE LAWS

Yashpal and Ors. Vs. Chandigarh Administration and Ors., (Decided on 30.05.2011) MANU/SC/0685/2011

Recruitment - Examination for the post of Assistant Sub-Inspectors of Police - Cancellation thereof - Result cancelled on the ground that question paper of the written test was leaked by some individuals - Central Administrative Tribunal directed selection to be reviewed to find out whether it was possible to segregate tainted and untainted candidates - Whether finding sustainable

Held, High Court in appeal against order of CAT rightly reversed the finding by holding that in a case of such nature, it is not possible to segregate tainted and clean candidates because in an objective multiple choice question papers there is no distinguishing mark on the answer sheet. It was held to be rightly concluded that the sanctity of the whole examination, which was taken in one go, stood vitiated on account of serious segregation of leakage of question paper and it was impossible to segregate those who had indulged in malpractices and those who did not. Appeal accordingly dismissed

• COMMERCIAL LAWS

Nagar Palika Parishad Nainital Vs. Nav Bhar Ali and Ors., (Decided on 01.06.2011) MANU/SC/0688/2011

Tender - Forfeiture of security deposit - Default allegedly committed in form of non-compliance with the terms of tender notice - Impugned finding held direction of forfeiture as untenable since conditions of bidding were not informed earlier

Held, the Division Bench of the High Court rightly concluded that forfeiture of the security deposit was legally untenable and unjustified the concerned Respondent was not informed about the requirement of depositing 50% of the bid amount by the particular date. Further direction of registering case with CBI fully justified because of contract being awarded at a price less than the reserve price prima facie. Appeal was accordingly dismissed.

HIGH COURTS

• SERVICE LAWS

PUNJAB AND HARYANA HIGH COURT

Iqbal Singh and Anr. Vs. State of Punjab and Ors. (Decided on 27.05.2011) MANU/PH/1587/2011

Deemed confirmation - Probation - Punjab Police Services Rules, 1959 - Requirement of passing specific order of confirmation or to the effect of having satisfactorily completed the probation

Held, Rule 10 of the Punjab Police service Rules, 1959 contemplates that the seniority has to be assigned by the date of confirmation (and not from the date of confirmation) and hence there was no requirement to reflect the date of confirmation in the seniority list.

In the case Paramjit Singh and ors v. Ram Rakha and Ors., MANU/SC/0469/1979, the Apex Court while interpreting the same Rules held as under :

9. It was contended on behalf of the direct recruits that once a specific period of probation is fixed and a fetter is put on the power of the Government to extend probation only by a specific period at the end of such extended period either the service of the direct recruit is to be dispensed with on the ground that he was unfit for appointment of if he is continued thereafter he must be deemed to have been confirmed and the date next after the date of his confirmation. This Court has consistently held that when a first appointment or promotion is made on probation for a specific period and the employee is allowed to continue in the post after the expiry of the period without any specific order of confirmation he should be deemed to continue in his post as a probationer only in the absence of any communication to the contrary in the original order of appointment or promotion or the Service Rules. In such a case an express order of confirmation is necessary to give the employee a substantive right to the post and from the mere fact that he is allowed to continue in the post after the expiry of the specific period of probation it is not possible to hold that he should be deemed to have been confirmed.

12. The recruitment to Punjab Police Service is from two sources. Recruits from both the sources have to be on probation. Adopting the construction as canvassed for and on behalf of direct recruits that the proviso to Rule 8(b) permitting a maximum period of probation of three years at the end of which the direct recruit would automatically be confirmed unless his services are dispensed with simultaneously enjoying seniority from the date of such automatic confirmation without applying quota rule at the time of confirmation, would put the promote to an unintended disadvantage who may be continued in an officiating capacity without confirming him and consequently denying or relegating him down in seniority for years as has happened in the case of Respondents 1 and 2. Appellants who were recruited to the Service after Respondents 1 and 2, came to be confirmed at the end of two years' period of probation while Respondents 1 and 2 were not confirmed after more than 11 years of officiating service and there is not the slightest suggestion that the services of Respondents 1 and 2 were not satisfactory and that the confirmation was denied on any such ground thereby directly affecting their place in the seniority list. Such an approach would be wholly unreasonable.

Accordingly, the Apex Court has negated the concept of deemed confirmation. The Home Secretary, Punjab, directed to appear in person to show cause as to why contempt proceedings be not initiated for violation of the orders passed.

ALLAHABAD HIGH COURT

Rahdey Shyam Shukla and Ors. Vs. State of U.P. and Ors. (Decided on 27.05.2011) MANU/UP/1077/2011

Promotion accorded from class IV to class III employees on basis of written examination-Challenge against order thereto - U.P. Government Servants Criterion For Recruitment by Promotion Rules, 1994 and Uttar Pradesh Government Servants Seniority Rules, 1991, Subordinate Civil Courts Ministerial Establishment Rules, 1947 - Whether for determination of seniority of ministerial staffs of subordinate courts, 1947 Rules were still applicable and whether 1991Rules were not applicable- Whether the promotion based on merit was in contravention of 1994 Rules and was hence invalid.

Held, the 1991 Rules were applicable with regard to determination of seniority of ministerial staffs of the subordinate courts and from the enforcement of 1991 rules, the Rule 19 of 1947 Rules were no longer in operation having been impliedly overruled by 1991 Rules. The 1994 Rules have been framed by Governor of U.P. in exercise of authority vested under the proviso to Article 309 of the Constitution of India. The circular issued by High Court providing that determination of seniority be made in accordance with 1947 ignores the 1994 Rules and could not be upheld nor could the said circular override the 1991 Rules. No regard or respect was shown to the seniority, and promotional exercise had been undertaken merely based on merit status of the candidates, secured by him in written examination, whereas as per 1994 Rules as amended in the year 1996, the criteria to be adhered was seniority subject to rejection of unfit. It is well settled that the principle of seniority-cum-merit, for promotion, is different from the principle of `seniority' and principle of `merit-cum-seniority'. Criteria adhered to in the matter of promotion was purely merit based and was in ignorance of the criteria provided under 1994 Rules. As such promotional exercise undertaken de-hors the Rules, it could not be approved of. Promotion quashed and set aside.

• LABOUR AND INDUSTRIAL LAWS

PUNJAB AND HARYANA HIGH COURT

Punjab Agriculture University and Anr. Vs. Presiding Officer, Labour Court and Anr., (Decided on 26.05.2011) MANU/PH/1514/2011

Daily wage workers - Services alleged to be terminated illegally - No show cause notice issued, no inquiry conducted and also no payment towards retrenchment compensation made - Management contended that appointment was not against any regular post and jobs were abandoned on own hence there arises no question of reinstatement

Held, the workmen were terminated without any notice, charge-sheet, enquiry or compensation and hence order of termination forming subject matter of references under adjudication cannot be said to be either justified or in order and hence this issue in all the references were decided against the management.

The term "workman" as defined in Section 2(s) mean any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute. A conjoint reading of this provision would reveal that even if a person is engaged on daily wages and has completed the continuous service as defined under Section 25B, then, his services cannot be terminated without following the statutory provisions of Section 25F of the Act, irrespective of the fact that he was not appointed against a regular post as alleged on behalf of the management. Therefore, the contentions as raised by Management held to be as not sustainable.

• ENVIRONMENTAL LAWS

UTTARANCHAL HIGH COURT

Matri Sadan Vs. Himalaya Stone Crusher Pvt. Ltd. and Ors., (Decided on 26.05.2011) MANU/UC/0443/2011

Environmental Pollution - Activities of crushing stone boulders and mining from the nearby flowing stream of Ganga in the outskirts of town Haridwar - Right to business as constitutional rights - Exercise thereof

The Constitution does not recognize franchise of rights to business, which are dependent on grants by the State or business affected by public interest. In a galaxy of the cases, Hon'ble Supreme Court has held that these restrictions can be stretched up to prohibition of trade or industry, if its affects are deleterious and dangerous to the society at large. It has almost now been settled that no inflexible answer can be offered as to what industry should be brought to the total prohibition and what not. There are no abstract or fixed principles, which laid the universal application in all cases where the closure of the trade and industry deserve to be enjoined. Each case is to be judged to its on merits. The Court must determine the reasonableness of restriction to be imposed for the closure of the trade or industry by objective standards and not by subjective ones.

A number of deleterious affects which the stone crusher, as in the instant case, is causing to the entire of its surrounding to the extent of being fatal for the poor villagers besides creating an incorrigible hazard affects to the ecology of the region hence in these circumstances, the preservation of the interest of the society at large should take priority as against the profit hunting motives of any individual.

If the Government of Uttarakhand, in exercise of the powers vested under Mela Act, has made the order to extend the Kumbh Mela Area and for closure of activity of mining and running by this crusher including hording of the boulders in large quantity then there is nothing wrong in order of the Government taking note of the changed circumstances and heavy protest from all the corners of the society against the creation of hazard by the crusher. It was held that the stone crusher can not be allowed to run as such because it's very existence in the area is against what has been held by the Hon'ble Apex Court in the case of M.C. Mehta with the result that the order of the Government to close down this crusher at the present location, held to be as sustained.

• LAND ACQUISITION LAWS

GAUHATI HIGH COURT

Subansiri Koiborta Meen Palan Self Help Group Vs. The Commissioner and Secretary to the Govt. of Assam, Forest Department and Ors., (Decided on 27.05.2011) MANU/GH/0267/2011

Re-sale notice and the order of settlement - Assam Fishery Rules, 1953 and Assam Sale of Forest Produce Coupes and Mahal Rules, 1977 - Settlement of fishery under challenge

Held, the settlement made in favour of the concerned came under challenge through the writ petition filed after six months thereafter during which the fishery settled was operated by the Forest Department. The two settlements done were through two different processes initiated and completed by two different departments of the Government of Assam i.e. Fishery Department and Forest Department. Both the departments claimed their respective rights over the fisheries. While the Fishery Department has claimed its right over the fishery in question, the Forest Department has claimed its right by virtue of the aforesaid regulation including the provisions of the Forest Act.

Accordingly it was held that in view of the conflicting claims, the matter needs to be resolved by the Government of Assam upon hearing both the departments and other authorities of the related department (s), whose views might be required to be taken to resolve the issue. The matter accordingly was sent to the Chief Secretary, Government of Assam for passing a speaking order as expeditiously as possible, preferably within 4 months.

In the interim the one on whose favour settlement was done allowed to run the fishery as per settlement made in his favour till his term expires.

• DIRECT TAXATION

DELHI HIGH COURT

Shanti Bhushan Vs. Commissioner of Income Tax, (Decided on 31.05.2011) MANU/DE/2104/2011

Claim of deduction - Whether the expenses incurred by the Assessee, a law professional, on coronary by-pass operation should have been allowed as an allowable deduction either under Section 31 or Section 37 of the Income Tax Act, 1961 (IT Act)

Held, deduction under section 31 of the IT Act would not be available for two reasons: firstly, if the heart of a human being, as in the case of the assessee, were to be considered a plant, it would necessarily mean that it is an asset which should have found a mention in the assessee's balance sheet of the previous year in issue, as also, in the earlier years. Apart from the fact that this is admittedly not so, the difficulty that the assessee would face in showing the same in his books of accounts would be of arriving at the cost of acquisition of such an asset. Therefore, before expenses on repair of plant are admitted as a deduction, the plant would necessarily have to be reflected as an asset in the books of accounts. The second ground on which assessee's claim could not be accepted is that, even if one were to give the widest meaning to the word "plant" in section 31 of the IT Act, it would still not fall within the definition of the word plant.

The test of functionality laid down by the Gujarat High Court in Elecon Engineering Co. Ltd., (MANU/GJ/0008/1974) affirmed by the Supreme Court in its judgment rendered in Scientific Engineering (MANU/SC/0158/1985) is not fulfilled in the present case. It cannot be said that the assessee who is a lawyer would have used his heart as a tool for his professional activity. The fact that a healthy and a functional human heart is necessary for a human being irrespective of his vocation or social strata is stating the obvious. But this would not necessarily lead to the conclusion that the heart is used by, a human being, as a tool of his trade or professional activity. General well being of the heart and its functionality cannot be equated with using the heart as a tool for engaging in trade or professional activity. Atleast the facts in this case did not demonstrated the same. Hence, the claim for allowing deduction of the expenses incurred by assessee on his coronary surgery under section 31 of the IT Act liable to be rejected.

On the issue of alternate claim made by the assessee under section 37 of the IT Act, it is trite law that the claim for deduction under section 37 of the IT Act should satisfy three conditions: firstly, it should be an expense which is incurred wholly and exclusively for the purpose of the assessee's business or profession; secondly, it should not be an expense incurred to bring into existence a capital asset; and lastly, it should not be an expense of a personal nature. The assessee's claim under section 37 of the IT Act does not fulfill the first condition which is that the expense in issue have been incurred wholly and exclusively for the purposes of the assessee's profession.

An impaired heart would handicap functionality of a human being irrespective of his position, status or vocation in life. Expenses incurred to repair an impaired heart would thus add perhaps to the longevity and efficiency of a human being per se. The improvement in the efficiency of the human being would be in every activity undertaken by a person. Thus there was no direct or immediate nexus between the expenses incurred by the assessee on the coronary surgery and his efficiency in the professional field per se and the claim as sought was rejected.

• CIVIL LAWS

DELHI HIGH COURT

CHL Ltd. Vs. M/s ALITALIA AIRLINES and Ors. (Decided on 02.06.2011) MANU/DE/2181/2011

Recovery suit - Agreement was executed between the parties for providing accommodation along with other services - Agreement extended by Integration of Agreement wherein new rates were agreed - Agreement terminated by Defendant - Hence this Petition for payment of unpaid amount.

Held, there was no evidence of Plaintiff having agreed to charge less than the agreed tariff. Since Defendant-company availed the rooms provided by Plaintiff for stay of its employees, it was bound to pay the said tariff decided in the invoice. Decree of Recovery passed in favour of the Plaintiff.

• CRIMINAL LAWS

GUJARAT HIGH COURT

Teesta Atul Setalvad Vs. State of Gujarat and Anr. (Decided on 27.05.2011) MANU/GJ/0646/2011

Quashing of FIR and summons-Section 482 of Criminal Procedure Code, 1973 -Summons issued asking Petitioner to remain present in Sub Divisional Police Office, on 25.3.2011 - Petitioner received the same only on 25.3.2011 itself - Petitioner was shown as absconder despite the fact that the Petitioner was granted Anticipatory Bail - Hence this petition - Whether the conduct of the I.O. reflects mala fide and vindictive action by issuing different types of summons and by declaring the Petitioner as absconder.

Held, Respondents miserably failed in showing a single instance from which it could be said that Petitioner had not cooperated with the Investigating Agency. Powers under Section 482 of Cr.P.C. could not be liberally exercised. In the instant case, Investigating Officer committed a glaring mistake in showing name of the Petitioner as absconder in the charge sheet. Though the Petitioner had drawn attention of the Investigating Officer regarding the same, Investigating Officer remained silent. Impugned summon quashed.

• LAW OF MEDICINE

BOMBAY HIGH COURT

Dr. (Mrs.) Suhasini Umesh Karanjkar Vs. Kolhapur Municipal Corporation through its Health Officer and Appropriate Authorities, Having Office at Municipal Corporation and the District Collector (Decided on 06.06.2011) MANU/MH/0694/2011

Seizing and sealing the ultrasound machine by the Appropriate Authority-Challenge thereto-Section 30 of the Preconception and pre-natal Diagnostic Techniques (Prohibition of Sex Selection) Act, 1994 - Whether the Appropriate Authority has power to seize or seal an ultrasound sonography machine used in criminal acts of sex determination for sex selection in contravention of the Act.

Held, there was no manner of doubt in holding that the power under Section 30 to seize and seal "any material object" included power to seize and seal ultrasound machines and other machines and equipments, capable of selection of sex or capable of performing any procedure, technique or test for pre natal detection of sex of foetus. On an analysis of the provisions of the Act, if any ultrasound machine is used for conducting sonography on a pregnant woman for a sex determination test or sex selection procedure in contravention of the provisions of the Act, power to seize and seal any other material object, besides the record and documents, would include the power to seize and seal ultrasound machines and other machinery and equipment. Petition accordingly dismissed.

• EDUCATION LAWS

BOMBAY HIGH COURT

Sanjiv Gajanan Punalekar Vs. Union of India, Ministry of Minority Affairs, through Department of Law, State of Maharastra through Government Pleader and Union of India, Ministry of Human Resources Department (Decided on 06.06.2011) MANU/MH/0695/2011

Discrimination - Challenging "Merit-cum-Means Scholarship Scheme for Students of Minority Communities" on the ground that the schemes discriminate against the students belonging to the majority community - Articles 14 and 15(1) of the Constitution of India, 1950 - Whether the schemes discriminated against the students belonging to the majority community only on the ground of religion and are, therefore, violative of Articles 14 and 15(1) of the Constitution.

Held, Central Government had relied on the Sachar Committee Report. Petitioners did not file any affidavit-in-rejoinder controverting the averments made and so could not be later permitted to challenge the findings of Sachar Committee. In absence of any material placed by Petitioners, presumption made in favour of the impugned Schemes that they were constitutionally valid .The findings given in Sachar Committee Report fully justified the impugned affirmative action taken by the Government of India. Students of majority community were getting benefit of highly subsidized school education as well as higher education and the total amount spent on both the impugned schemes in the year 2010-2011 was less than 1.4%. It could hardly be said that students of the majority community were being discriminated against. Making law or amendment to a law is a slow process and the legislature attempts to remedy where the need is felt most acute. It was inexpedient and incorrect to think that all laws have to be made uniformly applicable to all people in one go. Petition dismissed.

TRIBUNALS AND COMMISSIONS

• SECURITY LAWS

SECURITY APPELLATE TRIBUNAL

Manmohan Shetty Vs. The Securities and Exchange Board of India, (Decided on 27.05.2011) MANU/SB/0026/2011

Insider Trading - Company's Code of Conduct for Prevention of Insider Trading - Whether violation of this to be treated as part of regulations framed by SEBI under the SEBI Act

Held, he code of conduct prescribed by the Company for prevention of insider trading as mandated by the Regulations for all practical purposes is to be treated as a part of the Regulations and any violation of the code of conduct can be dealt with by the Board as violation of the Regulations framed by it. Each Company may like to add certain activities regulation of which may be necessary for preservation of price sensitive information. The Board cannot foresee all such contingencies and, therefore, it has laid down model code of conduct prescribing bare minimum conduct expected from the directors/designated employees of the companies.

The framing of code of conduct as near to the model code of conduct specified in the Schedule to the Regulations is mandatory for each Company. The use of the word "shall" makes it abundantly clear that this is a bare minimum conduct expected from the employees of the Company. Paragraph 6 of the model code of conduct also makes it clear that the action by the Company shall not preclude the Board from taking any action in case of violation of the Regulations.

The provisions of the Regulations have to be interpreted keeping in view the aims and objectives of the Act. The main object of the Act is to protect the interest of investors in securities and to promote the development of and to regulate the securities market. The purpose of the insider trading regulations is to prohibit trading by which an insider gains advantages by virtue of his access to price sensitive information. The violation of the code of conduct, as framed by the Company in accordance with the mandates prescribed in the Regulations, is nothing but part of the Regulations and any violation thereof is punishable by the Board also as violation of the Regulations in addition to such action that may be taken by the Company. Any other view taken in the facts and circumstances of the case will defeat the very purpose of the Regulations in question.

The second issue was of penalty imposed on the Appellant by the Board. The charge was not of violation of insider trading regulations but only of violation of the code of conduct by selling shares during the period when trading window was closed and after the decision of the Board was communicated to the stock exchanges and disseminated on their websites. The Company has also settled the dispute with the Board on payment of settlement amount and accordingly the amount of penalty under Section 15HB of the SEBI Act was reduced.

Accordingly the findings of the adjudicating officer was upheld that the Appellant had violated the provisions of the code of conduct framed under the Regulations and was liable to penalty under Section 15HB of the SEBI Act.