2016 SCC Vol. 4 April 21, 2016 Part 1

Arbitration and Conciliation Act, 1996 — Pt. I — Foreign seated arbitration: Terms of contract will have to be understood in the way parties wanted and intended them to be, particularly in agreements of arbitration, where party autonomy is supreme. In instant case, first part of Art. 22 of said agreement deals with law governing the contract and second part lays down the law applicable to arbitration agreement viz. proper law of agreement of arbitration. Therefore, parties have agreed in expressed terms that law of arbitration would be English Arbitration Law. Further, for resolution of disputes through arbitration, parties had invoked provisions of English law. Thus, intention of parties was to apply English law to arbitration agreement also and not limit it only to conduct of arbitration. Hence, agreement as a whole would be governed by Indian law, and in case of arbitration, English law will apply. Therefore, law applicable to arbitration agreement in present case is English law. Once law governing arbitration agreement is found to be English law, Pt. I stands impliedly excluded. [Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., (2016) 4 SCC 126]

Constitution of India — Arts. 226, 136 and 32 — Transfer of investigation: Commencement of trial and examination of some witnesses, cannot be an absolute impediment for exercising power of constitutional courts to direct further investigation or de novo or fresh investigation or reinvestigation by some other investigating agency. Such power is meant to ensure fair and just investigation. [Dharam Pal v. State of Haryana, (2016) 4 SCC 160]

Contract and Specific Relief — Remedies/Relief — Restitutionary Remedies — Recompense for benefit conferred: Though Clause 11 in agreement provided that contractor is not authorised to do any extra work or make any alteration without previous consent in writing of respondent, absence of revised agreement as to extra work, does not bar claim of applicant contractor when admittedly extra work got done by contractor due to changed nature of work and accepted by promisee employer. [Venkatesh Construction Co. v. Karnataka Vidyuth Karkhane Ltd., (2016) 4 SCC  119]

Criminal Procedure Code, 1973 — S. 482 — Quashment of proceedings — Proper mode of disposal/exercise of power under: In this case where 184 gold biscuits of ten tolas each, valued at Rs 1,09,84,652 concealed in meal trolleys of respondents were seized, since exoneration of respondent in related customs adjudication proceedings was not on merits, impugned judgment quashing criminal proceedings unsustainable. [Air Customs Officer v. Pramod Kumar Dhamija, (2016) 4 SCC 153]

Criminal Procedure Code, 1973 — Ss. 156, 157, 36 and 173(8): State Police Chief/Director General of Police is  empowered to appoint superior police officer to investigate a crime case registered outside territorial jurisdiction of such officer. S. 36 CrPC does not fetter jurisdiction of State Police Chief to pass such order based on his satisfaction. S. 18(1) of Kerala Police Act, 2011 (8 of 2011) does not confer power on State Police Chief/Director General of Police to appoint superior police officer to investigate a crime case registered outside territorial jurisdiction of such officer. It merely recognises State Police Chief as head of police force in the State. [State of Kerala v. P.B. Sourabhan, (2016) 4 SCC 102]

Criminal Trial — Sentence: Undue leniency in awarding sentence should be avoided as it does not have necessary effect of being a deterrent for accused and does not reassure society that offender was properly dealt with. It is court’s duty to ensure justice to both parties. [State of M.P. v. Udaibhan, (2016) 4 SCC 116]

Environment Law — Development vis-à-vis Ecology: National, Urban and Rural Development — Eco-Sensitive Zones: PIL was filed contending that bus depot on area shown as “river flood plain” in Master Plan 2021 for Delhi would damage ecology and environment and in PIL, High Court directed amendment of Master Plan 2021 or relocation of bus depot but extension of time was sought by State again and again, hence, High Court rejected prayer for extension of time and directed demolition of depot. As High Court directed amendment of Master Plan keeping in view of contentions of appellants that construction of bus depot was of public importance and would not harm environment and ecology and recent orders passed by National Green Tribunal have made certain developments in assessing environmental viability of bus depot but it will take some more time. Therefore, demolition of bus depot at this juncture is not appropriate. Decision regarding demolition can be taken after considering report of identification of flood plain. Hence, one year’s time granted to Delhi Transport Corporation for getting Master Plan amended. If Master Plan not amended, then bus depot needed to be relocated. Also clarified that no further extension of time would be granted on any ground whatsoever. [Govt. (NCT of Delhi) v. Anand Arya, (2016) 4 SCC 105]

Government Grants, Largesse, Public Property and Premises — Concession — Withdrawal of: Recipient of a concession has no legally enforceable right against Government to grant or continue to grant a concession except to enjoy benefits of concession during period of its grant. This right to enjoy is a defeasible one in the sense that it may be taken away in exercise of the very power under which the exemption was granted. [Kothari Industrial Corpn. Ltd. v. T.N. Electricity Board, (2016) 4 SCC 134]

Hindu Succession Act, 1956 — Ss. 6 proviso (as it stood prior to amendment in 2005), 8, 4, 19 and 30 — Succession to joint family property prior to 2005 amendment: When male Hindu, having interest in Mitakshara coparcenary property, died intestate after commencement of HSA, leaving behind a Class I female heir (his widow in present case) and sons, then by operation of proviso to S. 6 deceased’s interest in coparcenary property would devolve by intestate succession under S. 8 and not by survivorship under S. 6. After devolution of joint family property as per S. 8 HSA upon death of male Hindu intestate, property would cease to be joint family property and said female heir and other coparceners succeeding to the same would hold their respective share in property as tenants-in-common and not as joint tenants. Therefore, grandson born after death of the male Hindu cannot maintain suit for partition claiming his share by division of alleged joint family property. [Uttam v. Saubhag Singh, (2016) 4 SCC 68]

Karnataka Village Offices Abolition Act, 1961 (14 of 1961) (as amended by Act 13 of 1978) — Ss. 2(a), 4, 5(4), 6 and 7 — Rights of an alienee of inam land before its regrant under S. 5 or S. 6 in favour of holder of service inam (alienor), where alienation occurred between 1-2-1963 (appointed date) and 7-8-1978 (date when Amendment Act was enforced): Upon regrant of land in favour of holder of service inam, regrant enures to benefit of such alienee as upon such regrant, title of holder of service inam land relates back to date of enforcement of 1961 Act. In instant case,  alienation was effected on 13-5-1971 and land in question was regranted to the original inam holder/transferor on 31-3-1982. Granting benefit of doctrine of feeding the grant by estoppel to alienee, alienee would get good title to such land on regrant. In such circumstances, Tahsildar was not competent to initiate proceedings for eviction under S. 7 against alienee i.e. predecessorin-interest of appellant. [N. Venkateshappa v. Munemma, (2016) 4 SCC 147]

Motor Vehicles Act, 1988 — Ss. 173, 140 and 166 — First appellate powers of High Court under S. 173: As High Court upheld compensation awarded by Tribunal, without adverting to all factual details and grounds raised in appeal, in a cryptic manner and impugned judgment also does not satisfy requirements of Or. 20 R. 4(2) r/w Or. 41 R. 31 CPC, which requires that judgment shall contain a concise statement of case, points for determination, decisions thereon and the reasons, matter remanded to High Court for decision afresh in accordance with law. [U.P. SRTC v. Mamta, (2016) 4 SCC 172]

Penal Code, 1860 — Ss. 302/149 and 148 — Murder trial — Appreciation of evidence: Conviction for murder, reversed as statements of eyewitnesses were recorded after 3 days of incident and no explanation regarding the same was given, hence, delay in recording statements casting a serious doubt about they being eyewitnesses to occurrence. Evidence of witnesses, became unreliable when there was no corroboration of their evidence either. Also there was no information available as to how police came to know that witnesses saw occurrence and case against accused persons was not proved beyond reasonable doubt. [Shahid Khan v. State of Rajasthan, (2016) 4 SCC 96]

Penal Code, 1860 — Ss. 376, 417 and 506 — Rape, cheating and criminal intimidation: Appellant acquitted of all charges for rape on the pretext of marriage and threatening as prosecutrix was an adult and mature lady of around 40 years at the time of incident. The evidence as a whole, including the FIR, testimony of prosecutrix and MLC report prepared by medical practitioner, clearly indicated that the story of prosecutrix regarding sexual intercourse on false pretext of marrying her is concocted and not believable. It was also admitted by prosecutrix in her testimony that she was in a relationship with appellant for last two years prior to incident and appellant used to stay overnight at her residence. [Tilak Raj v. State of H.P., (2016) 4 SCC 140]

Sales Tax and VAT — Sale of a new motor vehicle by a dealer — Determination of situs of: Considering that provisions of Motor Vehicles Act, 1988 and Central Motor Vehicles Rules, 1989 prohibit the use and enjoyment of possession of a new vehicle by its owner until the vehicle is duly registered, the transfer of possession of such vehicle with right to use the same passes or can pass legally to owner only when the vehicle reaches the office of registering authority. As such, the sale of a new vehicle is complete when dealer hands over possession of vehicle to purchaser at the place of registration of vehicle in a deliverable and registrable state and not at the place where sale invoice with particulars is issued by dealer. Thus, technically though registration of a new motor vehicle is a post-sale event, the event of its sale is closely linked in time with the event of its registration. In normal circumstances and as the law stands, it is coterminous with registration of vehicle. Further, as per S. 4(2) of Central Sales Tax Act, in case of unascertained or future goods, sale or purchase must be deemed to have taken place in a State where goods happened to be at the time of their appropriation by seller or buyer. Vehicle purchased remains in category of unascertained goods till dealer hands over possession of vehicle to purchaser at registration office in a deliverable and registrable state. Vehicle stands appropriated to contract of sale only at such place. This view also gets strengthened by provisions under S. 4(4) of Sale of Goods Act, 1930. Further held, by virtue of S. 21 of Sale of Goods Act, position remains unchanged (i.e. sale of vehicle takes place at the place of its registration) even if motor vehicles are to be treated as specific and ascertained goods at the time when sale invoice with all specific particulars is issued in respect thereof. [CCT v. K.T.C. Automobiles, (2016) 4 SCC 82]

Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 — Ss. 13, 35, 37 and 41: 2002 Act prevails over Sick Industrial Companies (Special Provisions) Act, 1985 to the extent of inconsistency therewith. Hence, where a secured creditor seeks to recover its debt under S. 13(2) of 2002 Act, such secured creditor may realise such secured debt under S. 13(4) of 2002 Act notwithstanding provisions of S. 22 of 1985 Act. In a situation where there are more than one secured creditors of a sick industrial company or it has been jointly financed by secured creditors, and at least 60% of such secured creditors in value of the amount outstanding as on a record date do not agree upon exercise of the right to realise their security under SARFAESI Act, 2002, S. 22 of SICA will continue to have full play. However, if such secured creditors do wish to exercise their rights to enforce their security under SARFAESI Act, 2002, S. 22 of SICA being inconsistent with the exercise of such rights, will have no play. Where secured creditors representing not less than 75% in value of amount outstanding against financial assistance decide to enforce their security under 2002 Act, any reference pending under 1985 Act cannot be proceeded with further and proceedings under 1985 Act will abate. Insofar as unsecured creditors seeking to recover their debts from a sick industrial company are concerned, S. 22 of 1985 Act will continue to apply since 1985 Act overrides provisions of Recovery of Debts Due to Banks and Financial Institutions Act, 1993. [Madras Petrochem Ltd. v. BIFR, (2016) 4 SCC 1] 

Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 — Ss. 13, 9 and 17: A reading of Ss. 9 and 13 of the SARFAESI Act leaves no manner of doubt that for enforcement of its security interest, a secured creditor has been not only vested with powers to do so without the intervention of the court or tribunal but detailed procedure has also been prescribed to take care of various eventualities such as when the borrower company is under liquidation. Further, there is no lacuna or ambiguity in the SARFAESI Act to warrant reading something more into it. Thus, there is no plausible reason to take recourse to any provisions of the Companies Act and permit interference in proceedings under SARFAESI Act either by Company Judge or liquidator. S. 13(9) of SARFAESI Act fully protects workmen’s interests by incorporating scheme of Ss. 529 and 529-A of Companies Act, 1956. [Pegasus Assets Reconstruction (P) Ltd. v. Haryana Concast Ltd., (2016) 4 SCC 47]

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