Here’s a run-through of all the significant decisions covered in the month of August 2021 under the Section of Tribunals/Commission/Regulatory Bodies.

Armed Forces Tribunal

Change in DoB cannot be claimed as a matter of right merely because the same had been changed in academic records

The Division Bench of Justice Umesh Chandra Srivastava and Vice Admiral Abhay Raghunath Karve, Member (A) held that a government servant cannot claim change in Date of Birth as a matter of right merely because the same had been changed in academic records.

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Central Administrative Tribunal

Premature retirement does not amount to punishment; Tribunal cannot go into adequacy where adverse facts exist against the employee

“The Tribunal can certainly interfere with the order of premature retirement in case there does not exist anything adverse to the employee in his entire career. However, if some material or facts as such exist, the Tribunal cannot go into the adequacy thereof.”

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 Customs, Excise and Services Tax Appellate Tribunal

  • Whether service tax is payable on liquidated damages and penalties recovered under the contract? Tribunal answers

The Coram of Dilip Gupta (President) and P.V. Subba Rao (Technical Member) allowed the appeals which were related to demand of service tax on liquidated damages recovered by the appellant for acts of default, like delayed or deficient supplies by various suppliers.

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  • Does Rule 4(5)(a) of Cenvat Credit Rules, 2002 cover the return of waste and scraps and is it subject to Central Excise duty? Tribunal answers

Rachna Gupta (Judicial Member) allowed an appeal which was filed aggrieved by the order-in-original asking the appellants for recovery of Central Excise Duty amounting to Rs 16,22,501 along with the appropriate interest and proportionate penalty.

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 Is Service Tax chargeable on the services rendered by the foreman in the chit fund business? Tribunal answers

 “…when there was no question of liability to Service Tax, then, any amount collected under the guise of Service Tax becomes a collection of the said amount without the authority of law and the Revenue can never, therefore, claim any right over such amount; the same will have to be refunded forthwith to the concerned person.”

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  • Is there a requirement to pay 10% of value of exempted goods in terms of Rule 6(3) of Cenvat Credit Rules, 2004? Tribunal answers

The Coram of Ramesh Nair (Judicial Member) and Raju (Technical Member) allowed the appeal in which the issue was that whether the appellant was required to pay 10% of value of exempted goods in terms of Rule 6(3) of Cenvat Credit Rules, 2004.

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  • If the ownership of gold is proved to the customs, can it still be penalized? Tribunal upholds confiscation of gold concealed inside the inner garment

S.S. Garg (Judicial Member) partly allowed an appeal which was filed aggrieved by the order passed by the Commissioner(Appeals) whereby the Commissioner(Appeals) had rejected the appeal upholding the Order-in-Original.

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  • Whether the service tax can be demanded on the construction of houses for rehabilitation of poor people under JNNURM? Tribunal answers

The Coram of Anil Choudhary (Judicial Member) and P. Anjani Kumar (Technical Member) allowed an appeal which was filed with the main issue of as to whether the service tax have been rightly demanded on the appellant who had constructed houses for rehabilitation of poor people under JNNURM.

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  • Tribunal discusses distinction between mere provision of ‘table space’ and actual rendering of service; Non discharge of tax liability as provider of “business auxiliary service” partly allowed

The Coram of CJ Mathew (Technical Member) and Ajay Sharma (Judicial Member) partly allowed an appeal which was filed with the issue of non-discharge of tax liability of Rs.17,46,066/-, as provider of ‘business auxiliary service’, for the period between April 2007 and January 2012 which was confirmed by the original authority as payable under proviso to Section 73(1) of Finance Act, 1994, along with interest thereon under section 75 of Finance Act, 1994, besides imposing penalties under Section 76, 77 and 78 of Finance Act, 1994. 

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  • Can service tax be charged on the commission which is the difference between the telephone recharge amount received from customers and amount out of the same paid to telecom companies? Tribunal answers

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  • Can input services used by the provider of taxable service for providing output service be covered by the exclusion clause? Tribunal answers

 Read more here:

Central Information Commission

Centre’s denial on information relating to committee set up to ensure adequate availability of medical oxygen during COVID-19, is justified? Succinct Report

For a CPIO to be able to ascertain the impediment to life and liberty of a person, there ought to be some consideration between the information seeker and the person whose life and liberty is at stake.

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Delhi State Consumer Disputes Redressal Commission

While seeking a refund of amount from builder, will he be liable to pay amount paid as EMIs towards loan sanctioned? Read detailed report on DSCDRC’s decision

Coram of Dr Justice Sangita Dhingra Sehgal (President) and Anil Srivastava (Member)ordered the builder to refund the money deposited by the complainant, as a consequence of not being able to deliver the possession of flat on time. However, it was held that the builder was not liable to refund the EMI amount paid by the complainant towards loan sanctioned in favour of the complainant.

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National Consumer Disputes Redressal Commission

  • Whether NOIDA being a public authority could have adopted a different policy for extending construction period between same category of persons? Read on

NOIDA being a public authority should have adopted uniform policy for extending period of construction between the same category of persons.

 Read more here:

  • Opening Pandora’s Box | Whether valuation of lost gold can be determined as on date when reimbursement is made by insurer? NCDRC determines

 If the valuation of the lost gold is determined as on the date when reimbursement is made by insurer, it would open Pandora’s box where the beneficiaries of such Policies may seek undue benefit by deliberately delaying reimbursements.

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National Company Law Appellate Tribunal

  •  ‘Acknowledgment’ is based on neighboring circumstances and has nothing to do with the form-Rejects Appeal

“…this Tribunal an irresistible, inevitable and inescapable conclusion that in respect of the loan account of the ‘Corporate Debtor’, there was an ‘Acknowledgement of Debt’ as per Section 18 and 19 of the Limitation Act, 1963”.

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  •  Matter getting protracted, defeating the purpose of IBC; Orders NCLT to pass orders ‘one way or the other’

The Coram of Judicial A.I.S. Cheema (The officiating Chairperson) and Dr Alok Srivastava (Technical Member) while disposing of an appeal, directed NCLT to decide the matter ‘one way or the other’, hoping that it would take up the application with ‘all sincerity’.

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National Company Law Tribunal

  • NCLT Decodes | Whether working capital provided by an investor to run a restaurant would come under the ambit of Financial Debt?

“…it was not a loan and till the achievement of the ‘break even’ the investor was to provide the Working Capital.”

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  •  NCLT rejects withdrawal application under S. 12-A IBC where corporate debtor entered into settlement only with a fraction of creditors: CIRP against Rolta India Ltd. will continue

 “…Corporate Debtor is willing to pay the major part of the dues to the employees only subsequent to withdrawal of petition through the settlement jointly and/or severally with the employees. The Bench feels that this provides an escape route to both the promoter as well as to the Corporate Debtor Company to conveniently wriggle out of the partial mini settlement at any point of time.”

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  • Malice Intention to start something ‘other than insolvency’ nipped- Releases the Corporate Debtor from ‘rigors of CIRP and moratorium’

 …IRP for dissolution of the Corporate Debtor ‘cannot be accepted since the Liquidation is a pre-requisite to the Dissolution’

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  •  With no prospects, substance and bleak chances of recovery, Resolution Professional seeks liquidation — With its acceptance, Nirav Modi’s Firestar dooms

 The Coram of H.V. Subba Rao (Judicial Member) and Chandra Bhan Singh (Technical Member) while allowing the application for the liquidation of the Corporate Debtor by the CoC, appointed Mr Santanu T Ray as the Liquidator as provided under Section 34(1) of the Insolvency and Bankruptcy Code, 2016.

 Read more here:

  • ‘The moment a pre-existing dispute is established, IBC disenthralls itself’– Dismisses Application

The Coram of Abni Ranjan Kumar Sinha, (Judicial Member) and L.N. Gupta (Technical Member) dismissed an application considering the pre-existing dispute and on failure to prove that the operational debt was undisputed.

 Read more here:

  •  Evaluation of CoC wisdom, beyond the purview of NCLT-Is, expected ‘just’ to initiate liquidation process rather

The Coram of Madan B Gosavi (Judicial Member) and Veera Brahma Rao Arekapudi (Technical Member) was of the view that the pertinent case was a fit case to pass liquidation order in consonance with the commercial wisdom in terms of Section 33(1) of the Insolvency and Bankruptcy Code, 2016 (Code). 

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  •  Bulldozed ‘Building Restructure Plan’: Orders insolvency instead

 The Coram of Justice R. Sucharitha (Judicial Member) and Anil Kumar B (Technical Member) was of the opinion that the proposed settlement plan resembled more to a ‘Business Restructuring Plan”, and thus based on ambiguity, dismissed the application. The application had originally sought for liquidation of the Corporate Debtor in case of any default in the proposed Settlement Plan.

 Read more here:

Securities Appellate Tribunal

  • The word ‘liquid instrument’ wide enough to include ICDs while ‘Corporate’ substantiates the Prospectus: States assumption ‘stretched a bit too far’

 The word ‘including’ is a term of extension. It imports addition and is generally used to enlarge the meaning of the preceding words. Therefore, it could include any other debt instrument such as ICDs. “Liquid instrument” means an instrument which is easily tradable, ie, an instrument which is available at the drop of a hat. An instrument which can be securely, and quickly exchanged for legal tender or which can be converted to hard cash or which can be readily converted to cash. The mere fact that the word “ICDs” was not indicated specifically in the interim use of funds in the prospectus does not mean that the interim use of funds cannot be deployed in the ICDs and can only be deployed to such instruments which were indicated in the prospectus”.

 Read more here:

Securities Exchange Board of India

  • Titan on Insider Trading-Violations by 6 employees of TCL attracts Penalty | Holds-contravention disregards both honest and dishonest ignorance

As postulated by legal maxim ‘ignorantia juris non excusat’, ignorance of law is no excuse and everyone is presumed to know the law of the land. A person cannot defend his illegal actions by stating that he was not aware his actions were illegal, even if he honestly believed that they were not breaking the law”.

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  •  On not finding any justifiable reason to revoke interim ex-parte order, continues to stand–Protects the interests of investors

Madhabi Puri Bach, Whole Time Member, on not finding any justifiable reason to revoke or modify the directions issued against the Noticee concluded that the findings in the interim order continue to stand at prima facie level, was of the opinion that the Noticee was prima facie, in contravention of various provisions of the IA Regulations and the PFUTP Regulations, as outlined in the Interim Order.

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  • Carrying out mutual funds with DGP scheme and an Investment Adviser but with no registration | Orders to pay the amount along with several other restrictions

G Mahalingam, Whole Time Member, considering the factual chain and evidence directed the Noticees to cease and desist from sponsoring and/ or carrying out activities of a mutual fund and as investment advisers, including the activity of representing through any media (physical or digital) schemes for collection of funds, directly or indirectly along with the liability to pay jointly or severally the due amount of Rs. 87,33,17,200 to the investors along with certain other restrictions.

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  • Deliberate act of creating fictitious volumes distorting market equilibrium suffers a monetary penalty even in the absence of disproportionate gains

Maninder Cheema, Adjudicating Officer, while affirming the violations under Regulation 3 (a), (b), (c), (d) and 4 (1) and 4(2)(a) of PFUTP Regulations, imposed a monetary penalty of  Rupees Five Lakh, under Section 15-I of SEBI Act.

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  •  Specious Portfolio, Spurious Manager -Deceptive Portfolio Manager with a real-looking-fake website caught and handled suitably

 S.K. Mohanty, Whole Time Member while exercising the powers under Sections 11, 11(4),11B (1) and 11D, read with of Section 19 of the SEBI Act, 1992 and regulation 11 of the PFUTP Regulations, 2003, while disposing of the allegations levelled in the interim order held, the Noticees shall within a period of three months, refund the money received from the clients/investors/complainant, as fees or consideration or in any other form, in respect of their unregistered investment advisory activities and portfolio management services, with certain other restrictions and compliances.

 Read more here:

  •  Jammu & Kashmir government exempted from Takeover regulations for the proposed acquisition of equity shares of Jammu and Kashmir Bank

S.K. Mohanty, Whole Time Member, exempted the Government of Jammu and Kashmir, from complying with the requirements of Regulation 3(2) of the Takeover Regulations with respect to the Proposed Acquisition of 6.06% equity shares in the Target Company viz., Jammu and Kashmir Bank Limited during the Financial Year 2021-22, through the proposed preferential allotment as mentioned in the Application

 Read more here:

  •  To bring the proceedings initiated to a logical conclusion-Certificate of registration fails to survive

 G Mahalingam, Whole Time Member while exercising the powers conferred under Section 19 of the Securities and Exchange Board of India Act, 1992 read with Regulation 27 of the SEBI (Intermediaries) Regulations, 2008 cancelled the certificate of registration granted Sai Soft Securities Private Limited.

 Read more here:

  •  To insulate the interest of the investors from impostures — Issues order for debarment

 Section 11 of SEBI Act casts a duty on the Board to protect the interests of investors in securities and to promote the development of and to regulate the securities market”.

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  •  Failure to furnish the mandate results in restriction from the market which became a mandate thereafter

 “ …penalty under Sections 15A(a) and 15HB of the SEBI Act, 1992, only, is attracted and not the penalties under Section 15HA of SEBI Act, 1992 and Sections 23E and 23H of 78 SCRA, 1956”.

 Read more here:

  •  ZEE insider trading: Interim ex-parte order bars 15 entities

 “The insider trading activity not only causes notional monetary loss to investors but also has the effect of interfering with the development of securities market, as investor tend to lose faith in the securities market. The same is detrimental to the development of the securities market and qualifies as an “irreparable injury. The objective of SEBI as enshrined in the SEBI Act is not only the protection of investors but also orderly development of securities market”.

 Read more here:

  •  Unambiguous Supreme Court, Univocal SEBI | Believes and balked, mens rea to shudder provisions of Chapter VI A- If imputes would impede

 “…mens rea is not an essential element for imposing penalty under Chapter VI A of the SEBI Act. The Supreme Court has unambiguously stated that imputing mens rea into the provisions of Chapter VIA is against the plain language of the Statute and frustrates entire purpose and object of introducing Chapter VIA to give teeth to the SEBI to secure strict compliance of the Act and the Regulations”.

Read more here:

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