Case BriefsTribunals/Commissions/Regulatory Bodies

Telecom Disputes Settlement and Appellate Tribunal (TDSAT): A.K. Bhargava (Member) disposed of this broadcasting petition while proposing to the petitioner for payment in parts. 

The petitioner was a Cable and Broadband Services Provider Company aggrieved with the disconnection notice served to it for non-payment of nearly Rs 1.6 crores.

Counsel for the petitioner, Vineet Bhagat submitted that the petitioner agrees to pay but wants reconciliation towards TDS deduction and receivable against the incentive of three months. 

Counsel for the respondent, Kunal Tandon submitted that the respondent will be considerate towards the incentive made to the petitioner but wants the payment to be done without any delay. 

In the reply, the petitioner submitted that payment of such a gigantic number could not possibly be given immediately, but agreed to pay it by the end of July 2019.

The Court ordered that the petitioner pay a certain amount immediately to show its bonafide and the remaining in two more installments. But, in case of default, the respondent will be at liberty to disconnect.[Meghbela Cable & Broadband Services (P) Ltd. v. Zee Entertainment Enterprise Ltd., 2019 SCC OnLine TDSAT 78, decided on 18-06-2019]

Case BriefsHigh Courts

Kerala High Court: Shaji P. Chaly, J. dismissed a petition challenging initiation of recovery proceedings against the share of the defaulter in a co-owned property.

Petitioner and her husband were in joint possession of a property in Unnikkulam village. Petitioner’s husband had a payment of around Rs 44 lakhs due to the 4th respondent – Bharat Sanchar Nigam Ltd. (BSNL). The telecom company initiated revenue recovery proceedings against him. Case of the petitioner was that BSNL was proceeding against their co-owned property; but since there was no liability upon the petitioner, therefore, attachment of the property held by the petitioner in co-ownership with her husband could not be made by BSNL.

BSNL filed a counter affidavit stating that it was proceeding against the share of the property of the petitioner’s husband and that it had no intention to proceed against the share of property held by petitioner.

The Court opined that as per Section 47 of the Transfer of Property Act, 1882 proceedings can be initiated against the share of the property of defaulter since the respective sharers are entitled to transfer their shares without specifying that the transfer is to take effect on any particular share of the transferer. Therefore the contention advanced by the petitioner that a co-ownership property cannot be sold without effecting partition could not be sustained under law.

In view of the above, the petition was disposed of directing the respondents not to proceed against the share of property held by the petitioner in co-ownership with her husband if she has no liability against the proceedings initiated by 4th respondent. The property in co-ownership held by the husband was allowed to be proceeded with by the respondents.[Shakeela C.K. v. Tahsildar, Thamarassery Taluk Office, 2019 SCC OnLine Ker 1145, decided on 25-03-2019]

Case BriefsHigh Courts

High Court of Bombay: In a case where the petitioners were charged against unanticipated dues on a property by the Sales Tax authorities long after they had purchased the property, the division bench of B. P. Colabawalla and S.C. Dharmadhikari, JJ., held that even though the property was bought on an “as is where is basis” by the petitioners, they, having no knowledge (either actual or constructive) of the dues of the sales tax authorities before they purchased the said property, the sale tax authorities cannot recover their dues from the petitioners by enforcing their charge against the said property.

The petitioners purchased the said property pursuant to a sale conducted by the Nationalized Banks under the provisions of the SARFAESI Act, 2002. Petitioners contented that the Sales Tax Authorities cannot enforce their alleged charge on the said property purchased by the Petitioners as the alleged Sales Tax dues of the Defaulter Company were never disclosed to the Petitioners, and if at all the Sales Tax have any charge, it would have to be recovered from the sale proceeds which lie in the hands of the secured creditors i.e. the banks who had sold the mortgaged property. The Respondents submitted that once the sales tax dues were in arrears and they were always payable, then it is a charge on the properties of the dealer or any other person within the meaning of Section 38C of Bombay Sales Tax Act, 1969. This would enable the Sales Tax Department to go after the properties of the Defaulter Company and recover the sales tax dues. It was submitted that the sale being on ‘as is where is basis’ position, the Petitioners ought to have made their own inquiry to ascertain whether there were any encumbrances on the said property. Not having done so, the petitioners cannot contend that the claim of the Sales Tax Authorities cannot be enforced against the said property. Relying upon the Section 100 of the Transfer of Property Act,1882, which states that a ‘charge’ may not be enforced against a transferee if she/he has had no notice of the same, unless by law, the requirement of such notice has been waived, the Court rejected the aforesaid contention of the Respondents.

The Court noticed that the petitioner had merely purchased the said property which originally belonging to the Defaulter Company and which was mortgaged with the Respondents. Since, the Defaulter Company did not pay its dues to the Respondents, they, exercising their rights under the provisions of the SARFAESI Act, sought to enforce their security interest and sell the secured asset (the said property) to the Petitioners. Hence, the Court observed that the Petitioners can by no stretch of the imagination be termed as a successor of the business of the Defaulter Company to enable the Sales Tax Authorities to recover their dues from the Petitioners by enforcing their alleged charge against the said property purchased by the Petitioners under the provisions of the SARFAESI Act. However, it was clarified that its order and direction does not mean that the Sales Tax Authorities cannot proceed against the Defaulter Company.  [Sonoma Management Partners Pvt. Ltd. v. Bank of Maharashtra, 2016 SCC OnLine Bom 9649, decided on 22.11.2016 ]