2016 SCC Vol. 1 January 28, 2016 Part 4

Arbitration Act, 1940 — Ss. 2(b), 14, 30 and 33 — Non-speaking award — Interference by court: In view of clause providing for payment by employer in case of increase in statutory levies and statutory increase in steel prices, disputes as to claims for statutory escalation in taxes and steel prices along with other claims referred to arbitrator, arbitrator awarded only Rs 19,55,368 with pendente lite interest @ 15% p.a. against total claim amount of Rs 97,54,144. Award challenged on ground that it was not a speaking award, dismissed by High Court, sustainable. Held, award being a non-speaking one, it is not permissible for court to probe into mental process of arbitrator especially when arbitrator rejected major portion of claim made by respondent. Hence, held, no interference is called for. [Indian Rare Earths Ltd. v. Unique Builders Ltd., (2016) 1 SCC 700]

Arbitration and Conciliation Act, 1996 — S. 11(6) — Appointment of Arbitrator: Objection to appointment of Arbitrator, on the premise that the applicant seeking appointment of arbitrator was not a party to the arbitration agreement, not tenable as the letters of intent issued in respect of the works and the correspondences exchanged by and between the parties make it clear that the applicant Taiyo Membrane Corporation Pty. Ltd. and Taiyo Membrane Corporation are one and the same entity and the works under the sub-agreements had been allotted by the respondent to the said entity. Further, under the Australian Corporations Act, 2001 (S. 57-A) a corporation includes a company and a proprietary company limited by shares is incorporated as Pty. Ltd. The alleged misdescription does not affect maintainability of application under S. 11(6). [Taiyo Membrane Corpn. Pty. Ltd. v. Shapoorji Pallonji & Co. Ltd., (2016) 1 SCC 736]

Arbitration and Conciliation Act, 1996 — Ss. 11(6) and 15(2): Appointment of new arbitrator after the initially appointed arbitrator recuses himself from the proceedings may be done by the court under S. 11(6) only once agreement procedure has been resorted to afresh and preconditions for exercise of power under S. 11(6) are satisfied thereafter. [Huawei Technologies Co. Ltd. v. Sterlite Technologies Ltd., (2016) 1 SCC 721]

Central Excise Rules, 2002 — R. 18 — Noti. Nos. 19/2004-CE(NT) dt. 6-9-2004 and 21/2004-CE(NT) dt. 6-9-2004 — Entitlement to rebate on export: (i) Manufactured product and (ii) inputs which had gone into manufacturing the product, when such manufactured product is exported, both are entitled to rebate on export. [Spentex Industries Ltd. v. CCE, (2016) 1 SCC 780]

Civil Procedure Code, 1908 — Or. 22 Rr. 10 & 11 — Right of assignor to continue proceedings even after assignment of property during pendency of proceedings: Merely due to assignment or devolution of interest in property by appellant-plaintiff during pendency of suit/appeal and failure of assignee to file application to continue proceedings, suit/appeal would not be liable to be dismissed and assignee would be bound by the decree unless decree is shown to have been obtained by fraud or collusion. [Sharadamma v. Mohd. Pyrejan, (2016) 1 SCC 730]

Civil Procedure Code, 1908 — S. 100, Or. 20 Rr. 4(2) & 5 and Or. 41 R. 31 — Second appeal — Proper mode of disposal: As substantial question of law framed but not dealt with by High Court in second appeal, order of High Court, not sustainable. [Chintaman Namdev Patil v. Sukhdev Namdev Patil, (2016) 1 SCC 681]

Companies Act, 1956 — Ss. 457(1)(c) & (2-F)(h), 448 and 451 — Auction-sale of properties of company in liquidation — Necessity for fixing reserve price for auction: Official Liquidator in selling property at a price of Rs 45.45 lakhs without proper publicity through advertisement or fixing any reserve price for assets cannot be sustained in law, particularly, when predecessor Official Liquidator reported that property put in auction was of much higher valuation. Considering illegality and irregularity committed in auction-sale of property, entire process is vitiated.  Official Liquidator directed to forthwith recover possession of properties and proceed with a fresh auction after obtaining fresh valuation report and fixing reserve bid in accordance with procedure established by law. [Tech Invest India (P) Ltd. v. Assam Power & Electricals Ltd., (2016) 1 SCC 704]

Constitution of India — Arts. 19(1)(g) & (6), Arts. 19(1)(a) & (2), 21, 14, 25 and 26 — Sale and purchase of meat and meat products and Animal slaughter: As the impugned Circular dt. 7-9-2004 of State Government of Maharashtra as enforced by Municipal Commissioner of Mumbai through its Order dated 16-8-2014 and Circular dated 8-9-2015 keeping in view the sentiments of the Jaina community in Mumbai whereby a complete ban was imposed on sale of meat and meat products on certain festive days of Jains, stayed by High Court pending adjudication of issues raised, SLP by petitioner Trust permitted to be withdrawn and expeditious disposal directed in the matter. [Shree Tapagachiya Atma Kamal Labhdisuriswarji Gyanmandir Trust v. Bombay Mutton Dealer Assn., (2016) 1 SCC 798]

Corporate Laws — Company Law — Winding up and Liquidation: Order directing respondent Company to pay debt in instalments cannot be modified, on premise that a junior and inexperienced counsel had made the statement offering to pay the specified amount in Instalments, as the said junior advocate of respondent had, in fact, displayed legal sagacity in getting winding up of Company postponed and avoided publication of the winding-up petition by praying for and obtaining leave to pay the debt in instalments. Had he not done so, respondent would have had to pay the entire debt at once or face certain commercial death as a consequence publication/citation of winding-up petition. Leniency results in proliferation and prolongation of litigation. Respondent directed to pay the dues together with interest and costs of these proceedings within 45 days. [Stantech Project Engg. (P) Ltd. v. Nicco Corpn. Ltd., (2016) 1 SCC 739]

Education and Universities — Professional Colleges/Education — Medical and Dental Colleges — Admission: In this case, the names of two candidates appeared in merit list, but allegedly, authorities denied them admission. For fault of authorities, public law damages granted instead of relief of admission by the High Court. Hence, order of Single Judge of High Court directing compensation of Rs 3 lakhs each to two petitioners instead of relief of admission, affirmed. Also, Division Bench judgment denying such compensation, reversed. [S. Nihaal Ahamed v. Velammal Medical College Hospital & Research Institute, (2016) 1 SCC 662]

Education and Universities — Professional Colleges/Education — Medical and Dental Colleges — Admission: As entrance examination was conducted by respondent Association of Unaided Private Medical Colleges but there was violation of rules of merit while admitting students. Committee appointed by State Government and Monitoring Committee appointed vide Islamic Academy, (2003) 6 SCC 697 reported violation of rule of merit but State Government did not take any action. High Court also refused to give any relief due to long lapse of time. State Government directed to pay public law damages of Rs 20 lakhs each to all petitioner students. State Government also directed to identify officers responsible for inaction. Said amount directed to be recovered from such erring officers. [Krina Ajay Shah v. Assn. of Management of Unaided Private Medical & Dental Colleges, (2016) 1 SCC 666]

Evidence Act, 1872 — Ss. 5, 3 and 64 — Objection to relevance/admissibility of documents — Stage at which to be decided: Order passed by High Court an interlocutory stage, during pendency of suit on question of admissibility of two documents, not proper. High Court should not have interfered at stage when trial was still in progress, without going into merits of case. Admissibility, reliability and registrability of documents to be considered independently only at time of trial and not prior thereto. [K. Mallesh v. K. Narender, (2016) 1 SCC 670]

Excise — Valuation — Freight and insurance charges: Ownership of goods no longer vested with appellant assessee once sale was entered into. Freight and insurance charges not includible for sales effected at depot of appellant assessee. Hence, penalty and duty cannot be imposed for such transactions, whereas, freight and insurance charges are includible for transit up to depot of appellant assessee. [Prabhat Zarda Factory Ltd. v. CCE, (2016) 1 SCC 652]

Government Contracts/Tenders — Auction/Bidding/Tender Process/Rejection of Bid/Tender: Cartelisation and pooling cannot be the basis for rejection of a bid, when no such reason was recorded while ordering re-auction. Reserve price merely limits the power of the auctioneer by preventing a bid below this price from being accepted. Sale is still open to challenge for not fetching proper price. [State of Punjab v. Bandeep Singh, (2016) 1 SCC 724]

Indian Medical Council Act, 1956 — S. 10-A — Application for establishment of new medical college (Academic Year 2015-2016): As (a) Even after 2 inspections by MCI, petitioner college failed to remove deficiencies. (b) Faculty members present during second inspection belonged to different college. (c) No time for full-fledged inspection in present year (d) Petitioner College complained of faulty inspection, full-fledged inspection is desirable. Central Government disapproval for application for establishing new medical college, upheld by High Court, not interfered with. However, liberty given to petitioner institution to remove deficiencies and thereafter approach MCI and on such approach, MCI directed to make full-fledged inspection for purpose of grant of approval for new medical college for next academic year (that is, for 2016-2017). [Kanachur Islamic Education Trust (R) v. Union of India, (2016) 1 SCC 691]

Karnataka Scheduled Castes and Scheduled Tribes (Prohibition of Transfer of Certain Lands) Act, 1978 (2 of 1979) — Ss. 4 and 5: Transfers in violation of terms and conditions of grant are null and void. Subsequent purchasers therefore acquired no rights, even if subsequent transfers were engineered by first reselling the land back to the original grantee each time, and then selling it to a new transferee, since first sale itself was void. [M. Yashwanth Shenoy v. Muniyappa, (2016) 1 SCC 657]

Kerala Foreign Liquor Rules — R. 14 — Payment of proportionate annual rental instead of full annual fee: R. 14 provided that if any of the licences referred to in R. 13 is granted in the course of a financial year, the full annual fee shall be paid and the licence shall expire at the end of the financial year. Although the appellant had applied for an FL 3 licence which would ordinarily run the course of one financial year, due to interim orders passed by court, appellant could only utilise it for a fraction of that period. Held, R. 14 would not impede or inhibit the charging of annual proportionate fee so long as failure is not attributable to licensee nor is blameworthy itself. A party is entitled to seek a remission in the payment of licence fee if it is precluded from transacting business on the strength of that licence because of factors and reasons extraneous to it and/or if it is granted the licence on direction of a court for only a portion of financial year. Appellant thereby entitled to pay proportionate annual rental for the year 1999-2000, instead of full annual fee. [Chitra v. State of Kerala, (2016) 1 SCC 685]

Penal Code, 1860 — S. 302 r/w S. 34 — Murder: In this case of marital dispute, where accused and his brother allegedly committed murder of the father-in-law of accused, as eyewitness testimony was cogent and trustworthy and recovery of weapon of murder was recovered, also FIR was not delayed, hence, conviction confirmed. [Gurmit Singh v. State of Punjab, (2016) 1 SCC 676]

Penal Code, 1860 — S. 375 Sixthly — Rape — Evidence establishing sexual intercourse to be consensual: As age of prosecutrix, not proved beyond reasonable doubt to be less than 16 yrs of age at the time of incident, therefore, High Court was right in holding that prosecutrix was more than 16 yrs of age and was competent to give her consent. Hence, held, question of rape does not arise, as consensual intercourse was proved. Therefore, acquittal of respondent-accused under S. 376 by High Court, stands confirmed. [State of M.P. v. Munna, (2016) 1 SCC 696]

Prevention of Corruption Act, 1988 — Ss. 7 and 13(1)(d) r/w S. 13(2) and S. 20 — Illegal gratification: As demand and acceptance of illegal gratification, completely established and evidence of complainant, corroborated by statements of panch witnesses, also presumption invocable under S. 20, stood unrebutted, conviction confirmed. [Indra Vijay Alok v. State of M.P., (2016) 1 SCC 709]

Prevention of Corruption Act, 1988 — Ss. 7 and 13(1)(d) r/w S. 13(2) — Illegal gratification: It is only on proof of acceptance of illegal gratification that presumption can be drawn under S. 20 of the Act that such gratification was received for doing or forbearing to do any official act. Unless there is proof of demand of illegal gratification, proof of acceptance will not follow. [N. Sunkanna v. State of A.P., (2016) 1 SCC 713]

Service Law — Departmental Enquiry — Criminal proceedings — Acquittal — Effect: In terms of R. 16.3 of 1934 Rules, following judicial acquittal, requirement of not punishing officer departmentally is not absolute and is subject to the stipulated five conditions, one of them being where PWs are won over. In instant case, acquittal order makes it evident that PWs had turned hostile and appeared to have been won over. Hence, no interference with impugned judgment declining to interfere with dismissal order passed in departmental proceedings called for. [Baljinder Pal Kaur v. State of Punjab, (2016) 1 SCC 671]

Service Law — Reinstatement/Back Wages/Arrears — Back wages — Invalid/Illegal appointments: Award of 50% back wages without indicating any reasons in support thereof, unsustainable. [Gwalior Development Authority v. Sandeep Tiwari, (2016) 1 SCC 797]

Specific Relief Act, 1963 — Ss. 20(2)(a) and 10 — Decree for specific performance: Relief is in discretion of court guided by sound judicial principles. Where conditions or circumstances of contract give unfair advantage to plaintiff, decree for specific performance cannot be granted and under such conditions compensation as equitable relief in lieu of decree for specific relief may be granted. In present case trial court found that agreement in question was in substance an agreement of security for repayment of loan. Moreover, plaintiff could not establish that it was ready and willing to perform precondition of contract i.e. to redeem a prior mortgage on suit property, hence, trial court had correctly denied it relief of specific performance. [Ramesh Chand v. Asruddin, (2016) 1 SCC 653]

Specific Relief Act, 1963 — Ss. 9 and 10 — Existence of a concluded contract essential precondition for seeking relief of specific performance thereof: Although even oral contract is also enforceable, but heavy burden lies on plaintiff to prove existence of consensus ad idem between parties for concluded and binding agreement. [K. Nanjappa v. R.A. Hameed, (2016) 1 SCC 762]

Transfer of Property Act, 1882 — Ss. 108(n) & (c) — Protection of interests of lessor and lessee during subsistence of lease: There is independent right of lessor to maintain proceedings in respect of protection of his interests during subsistence of lease regardless of result obtained in proceedings initiated by lessee, particularly when proceedings initiated by lessee stand thwarted due to technicalities. [W.B. Housing Board v. Pramila Sanfui, (2016) 1 SCC 743]

Wildlife (Protection) Act, 1972 — Ss. 2(5), 40 and 42: To curb the cruelties meted out to captive elephants in State of Kerala, necessary directions issued for compliance with PCA Act, 1960 and 2012 Rules. [Wildlife Rescue & Rehabilitation Centre v. Union of India, (2016) 1 SCC 716]

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