Case BriefsHigh Courts

Madhya Pradesh High Court: Akhil Kumar Srivastava, J., dismissed the appeal under Section 14-A of the Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act for the release of the appellant-accused in connection with the FIR registered for offence punishable Sections 363, 366, 344, 328, 506, 376(2)(N) and 376(D) of Penal Code, 1860 and Sections 3(1)(w)(i) and 3 (2) (v) of SC/ST Act.

The instant appeal has been filed against the impugned order dated 09-06-2020 passed by the Special Judge, S.C./S.T (Prevention of Atrocities) Act, Jabalpur in B.A. No. SCATR/20260/18 whereby the court has dismissed the application filed by the appellant-accused under Section 439 of CrPC.

Counsel for the appellant, Savita Choudhary has submitted that the appellant has been falsely implicated and he has been languishing in custody since the past two years with the trial still pending. Further, it is brought to the Court’s notice that there is a delay in filing the FIR for which no reasonable explanation has been tendered from the respondent’s end. The victim is married to the appellant and to substantiate the same, an affidavit sworn by the victim has been presented.

Counsel for the respondent, Anuj Singh vehemently opposed the present appeal and prayed for its rejection on the ground that gang raPe is a crime of heinous nature and the appellant has legitimately been implicated based on the victim’s statement under Section 164 of the CrPC. which should suffice.

Upon careful perusal of the facts, circumstances and the arguments advances the Court observed that a clear case of gang rape is made out and the delay in lodging the FIR is not a sufficient ground which could compel them to discard the entire case of the prosecution. It is also not absolutely necessary that the crime be medically corroborated. The Court relied heavily on the victim’s statement recorded under Section 164 of the CrPC and other relevant materials available.

In view of the above, the appeal has been dismissed by the Court for lack of merit.[Harishchandra v. State of M.P., CRA No. 3608 of 2020, decided on 16-10-2020]


Yashvardhan Shrivastav, Editorial Assistant has put this story together

Hot Off The PressNews

Bar Council of India releases new schedule for AIBE — XV

ACTIVITY

IMPORTANT DATES

Online Registration had began from 16-05-2020
Bank Payment through challan started from 16-05-2020
Online registration extended till 03-12-2020
Last date for payment 10-12-2020
Last date for completion of online form 15-12-2020
Online release of admit cards 05-01-2021
Date of Examination 24-01-2021

Bar Council of India

Case BriefsHigh Courts

Karnataka High Court: John Michael Cunha J., while rejecting the present criminal revision petition, elaborated on scope and ambit of Section 397 Criminal Procedure Code, 1973 and further rejected the argument of the petitioner that the lower courts have erred in appreciating the evidence.

Brief Facts

The present Revision Petition is filed under Section 397 CrPC, read with Section 401 CrPC, praying to set aside the judgment/order of conviction dated 27-01-2018 passed in Criminal Case No. 52506 of 2013 and the judgment dated 12-08-2020 passed in Criminal application No. 2507 of 2018. Challenging the concurrent judgments and sentence for payment of Rs 10,00,000 rendered by the Courts below convicting the petitioner under Section 138 of the Negotiable Instruments Act, 1881, the petitioner prays for acquittal on the ground that the lower Courts have erred in appreciating the evidences placed on record in addition with according to the adequate opportunity of hearing to the petitioner/accused.

Issue

Whether the present petition under Section 397 CrPC maintainable?

Observation

The Court while redefining the scope and ambit of Section 397 noted,

“This Court in exercise of its power under Section 397CrPC cannot re-appreciate the evidence and arrive at a different conclusion, even if different view is possible from the evidence. The jurisdiction under Section 397 CrPC could be exercised only when the decision under challenge is grossly erroneous; non-compliance with the provisions of law; finding of fact affecting the decision is not based on evidence; non-consideration of the material evidence and that the lower court has exercised the discretion arbitrarily or perversely and acted in excess of its jurisdiction or abused its power resulting in failure of justice.”

The Court further said that no errors or illegality can be traced in the orders made by the lower court in the instant case. The argument made on the ground of inadequate hearing stands rejected as the records prove procedural compliance and stage of evidence.

Decision

Rejecting the present criminal revision petition at the admission stage itself, the Court found no reasons to interfere with the findings of the trial court, on both sentence and conviction.[K. Kuppuraj v. J. Thrilokamurthy,  Crl. Revision petition No. 606 of 2020, decided on 05-10-2020]


Sakshi Shukla, Editorial Assistant has put this story together

Case BriefsTribunals/Commissions/Regulatory Bodies

National Company Law Appellate Tribunal (NCLAT): A Division Bench of Justice Jarat Kumar Jain (Judicial Member) and Balvinder Singh (Technical Member) while addressing the present appeal observed that,

Scheme under Section 230 of the Companies Act, 2013 cannot be used as method of rectification of the actions already taken.

Appellant preferred the instant appeal under Section 421 of the Companies Act, 2013 challenging the impugned order passed by the National Company Law Tribunal, Mumbai.

What led to the filing of the present appeal?

Respondent 1 presented a Scheme of Arrangement under Sections 391-394 of Companies Act, 1956 (Existing Sections 230-232 of Companies Act, 2013) for sanction of the Arrangement embodied in the scheme originally filed before Bombay High Court which by virtue of MCA notification got transferred to NCLT, Mumbai.

Appellant pointed out certain irregularities and non-compliance and raised the objections that the Scheme of Arrangements is a mere rectification of action already taken by the respondent company without obtaining approval of Tribunal and other Regulatory Authorities as required under the provisions of Companies Act.

Since, NCLT, Mumbai in its order held that the scheme appeared to be fair and reasonable, the appellant being aggrieved with the same filed the present appeal.

Observations of the Tribunal

Bench noted that the in view of the records it was apparent that there were irregularities and non-compliances from a very long time due to which Stock Exchange took action against the respondent 1 company and suspended the trading of its securities in the year 2002.

No action being taken on behalf of the respondent 1 company had a serious impact on the investors who invested their hard-earned money in the company. The non-compliances and irregularities or any illegal act already committed cannot be ratified under the umbrella of “scheme” as envisaged under Section 230-232 of Companies Act, 2013.

Further, even if the objection of the Respondent 1 Company that the Appellant has no locus standi under Section 230 (4) to object the scheme is accepted but this will not affect the power of Regional Director as there is no such limitation prescribed for the Regional Director to file his objections as he is a public authority and has to look after the interest of the public/shareholders/investors at large.

Bench noted from the observations made by the Regional Director that there were irregularities and non-compliances that were present at the time of sanctioning of the scheme by the NCLT.

Company must be in compliance of the provision of law and cannot act just on the basis of a legal opinion.

The respondent 1 Company should have instantly rejected the application money for 10,375 shares as the Application applied were for less than the minimum lot size i.e. 100 shares.

Since the scheme appeared to be used as a course of action to rectify the irregularities previously done/committed by respondent 1 company, grounds raised by the regional director for dismissing the petition was just and reasonable.

Main objective behind the establishment of SEBI is to protect the interest of the investors and their hard-earned money trading in the stock exchanges, to regulate and facilitate efficient and flawless functioning of the securities market, to promote its development and to resolve the matters connected to it.

NCLT overruled the objections of the Regional Director in view of the said being procedural in nature.

Wrong Precedent

For the above aspect, Bench stated that even if the objections were procedural in nature, it is the jurisdiction of the Tribunal that such procedural aspects need to be duly complied with before sanctioning of the scheme as it would lay down a wrong precedent which would allow companies to do whatever acts without the compliance and confirmation of the Court and other sectoral and regulatory authorities and thereafter get it ratified by the Court under the Umbrella of “scheme”.

Decision

Tribunal held that before the sanctioning of Scheme under Section 230 of the Companies Act, 2013, no action should be pending against the company by the public authorities.

It is the duty of the Tribunal or any Court that their Orders should encourage compliances and not defaults.

Hence, the appeal was allowed and the impugned order set aside. [Ashish O. Lalpuria v. Kumaka Industries Ltd., Company Appeal (AT) No. 136 of 2020, decided on 20-10-2020]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC):  A Division Bench of Dr S.M. Kantikar (Presiding Member) and Dinesh Singh (Member) held that, a homebuyer cannot be made to wait indefinitely for possession.

The instant appeal was preferred by the appellant under Section 19 of the Consumer Protection Act, 1986 against the Order passed by the Maharashtra State Consumer Disputes Redressal Commission wherein OP was directed to handover the possession of the subject flat to the respondent — complainant after receiving the balance consideration amount from respondent — complainant.

Advocates for the appellant — Siddhesh Bhole, Royden Fernandes and Deepam Rangwani.

Advocates for the respondent — Sukruta A. Chimalker and S.B. Prabhavalkar.

State Commission held that there was deficiency on the part of the OP is not handing over possession and not obtaining the necessary certificates for the subject flat.

Opposite Party was directed to handover possession of the flat within three months after receiving the remaining consideration of Rs. 5.50 lakh as well as to provide Occupancy Certificate and Building Completion Certificate to the Complainant.

Aggrieved with the State Commission’s order, OP filed an appeal before the Commission.

Bench noted that the complainant had paid Rs 11 lakhs by cheque to the OP towards consideration for the subject agreement. OP contended that the subject agreement was cancelled by the complainant.

On perusal of the cancellation letter, it was evident that for more than 2 years, there was no construction work/development at the site of the project. Complainant was also paying interest on the amount paid to the Opposite Party builder firm, therefore, the Complainant requested the Opposite Party to return the entire amount paid.

With regard to the delivery of possession, OP contended that the agreement did not mention the date of delivery of possession of the said flat to the Complainant. However, the buyer cannot be made to wait for an indefinite period.

It was OP’s duty itself to mention the date of delivery of possession in the agreement and failure to do so necessarily requires to be read against the OP. In all contigencies, the complainant could not have been made to wait indefinitely for possession.

OP argued that State Commission grossly erred in disregarding the applicability of the relevant provisions of Specific Relief Act, 1963.

In the above regard, the Court noted that the Act 1986 is for better protection of the interests of consumers, to provide speedy and simple redressal to consumer disputes.

Section 3 specifically provides that the provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.

In the year 2003, the complainant requested for refund of the entire amount paid by herbut OP did not refund the amount paid with or without interest.

Commission opined that the State Commission’s order was reasoned, hence the instant appeal being misconceived and bereft of merit was dismissed.[Adrian Pereira v. Anita Ronald Lewis, First Appeal No. 909 of 2015, decided on 16-10-2020]

Case BriefsHigh Courts

Delhi High Court: Mukta Gupta, J., allowed the injunction application filed by the TV Today Network finding they have established prima facie case in their favour.

Present suit was preferred by a media conglomerate which transmits and broadcasts news etc. through print as well as electronic media.

By the instant suit, the plaintiff sought a decree of a permanent and mandatory injunction against defendant 1 restraining him from making the systematic attack on plaintiff’s reputation by making false and baseless tweets.

Defendant 1 levelled allegations against the plaintiff and one of its main anchors of having taken a sum of Rs 8 crores to interview a personality presently in news. It was also alleged that at the time of the birth of the said anchor itself, nurse concerned made obnoxious remarks and that the said anchor is involved in making fake news. The said anchor was also compared to a person, who is facing extradition proceedings.

High Court found that the plaintiff made out a prima facie case in its favour.

Bench stated that till the next date of hearing, defendant 1 is restrained from directly or indirectly publishing, re-publishing, sending or posting any tweet or information either in the electronic form or through the internet, email, social media or any print or communication media whatsoever, the statement or post which is derogatory/defamatory in its contents to the plaintiff or its top management or its anchors or its other office-bearers.

Defendant 2 has been directed to suspend/block the Twitter handles of defendant 1 and to file the basic subscription information of the account holder of the Twitter accounts impugned i.e. ‘@theanuragkts’ and ‘@theanuragoffice’ in the Court and supply a copy thereof to the learned counsel for the plaintiff as a password-protected document before the next date of hearing. [T.V. Today Network Ltd. v. Anurag Srivastava, CS (OS) No. 278 of 2020, decided on 24-09-2020]

Case BriefsHigh Courts

Karnataka High Court: R. Devdas, J., while allowing the present Writ Petition, directed the Medical Council to issue the No Objection Certificate to the Petitioner pending departmental enquiry.

 Brief Facts

  1. That the petitioner, after completing MBBS graduation registered with respondent 5; Karnataka Medical Council and was thereby selected to the post of General Duty Medical Officer by the Karnataka Public Services Commission.
  2. That the petitioner was consequently appointed to the post of General Duty Doctor at Primary Health Centre, Alur Village, Chamarajanagar Taluk and District by way of notification dated 16-12-2015.
  3. That the petitioner thereafter appeared for the entrance examination for pursuing Post Graduation Diploma in Otolaryngology conducted by the Karnataka Examination Authority and secured admission with the Mysore Medical College for the same.
  4. That due permission was taken by the petitioner from respondent 4 with respect to the said enrolment, via communication letter dated, 26-05-2016 and before completing the admission process, charge of his position was handed over to the rightful authority.
  5. That after completion of the course, the petitioner moved a request dated 27-10-2018, for appointment at any government hospital or Primary health Centre to which, an order dated 15-12-2018 was passed recruiting the petitioner at Munduru, K.R. Nagar.
  6. That the petitioner made a representation to the Medical Council, dated 07-09-2019, so to practice as a private doctor, requesting for a NO OBJECTION CERTIFICATE (NOC).
  7. That the aforementioned representation was made contending that the petitioner has discharged his duties in rural area for more than one year as stipulated under the Medical Registration Rules.
  8. That the petitioner also made a parallel application to the Registrar of the Karnataka Medical Council for the registration of Additional Qualification as a Postgraduate diploma holder.
  9. That it is imperative to secure a NOC for the petitioner in order to apply against the recent vacancy for ENT as advertised by the Special Recruitment Committee and Chief Administrative officer, Health & Family Welfare.
  10. That the present petition is filed seeking a writ of mandamus against the respondent authorities to consider the representations made and include the PG Diploma of the Petitioner under the register of the R-5 Council.

 Issue

  • Whether the petitioner has fulfilled the statutory requirement for the issuance of No Objection Certificate by the Medical Council?

 Observation & Decision

While allowing the present Writ Petition, the Court observed,

“(…) As per the Karnataka Compulsory Service Training by Candidate (Counseling, Allotment and Certification) Rules, 2015, a person who has completed MBBS Degree or Post Graduate Degree and Diploma is required to undergo one year compulsory service training in Government Hospital or Medical College Institutions in rural areas. It is also a fact that on completion of the PG Diploma Course, when the petitioner reported back to duty, the authorities have issued a movement order asking the petitioner to take charge as a Duty Doctor, at PHC, Munduru, K.R. Nagar, which is also a rural area. The movement order was issued on 19-12-2018 and till date the petitioner has been serving at the said place. Therefore, the petitioner has completed more than one year in the rural area. The discrepancy pointed out by the respondent is required to be dealt with in the disciplinary proceedings initiated by the respondent authority.”

[Anand Kumar v. State of Karnataka, WP No. 10952 of 2020, decided on 09-10-2020]


Sakshi Shukla, Editorial Assistant has put this story together

Case BriefsForeign Courts

Supreme Court of the Democratic Socialist Republic of Sri Lanka: A Full Judge Bench of Priyantha Jayawardena, Vijith K. Malalgoda and Murdu N. B. Fernando, JJ., rejected a motion requesting the court to issue a Sinhala translation of the judgment delivered in the fundamental rights application which was filed alleging that the Proclamation issued by the former President, by Gazette No. 2096/70 as on 09-11-2018 dissolving the Parliament and calling for the election of the Members of Parliament, was contrary to Articles 10, 12(1), 12(2), 14(1)(a), 14(1)(c) and 14(1)(f) of the Constitution.

The instant application was filed against the Attorney-General in terms of Article 35 of the Constitution on the basis that the aforementioned Gazette was issued by the former President, the petitioner being Attorney-at-law had filed the application in the interest of public praying to suspend the operation of the Proclamation issued by the President dissolving the Parliament, to stay the holding of Parliamentary Elections, to declare that the respondent had violated the petitioner’s fundamental rights and to quash the said Proclamation dissolving Parliament.

The Court explained that the petition of the said fundamental rights application in which the judgment was delivered, was filed by Rajavarothiam Sampanthan citing the Attorney-General, the Chairman and the members of the Election Commission as respondents and the petitioner was neither a party nor an Attorney-at-Law who represented any of the parties in the said application. Thus, rejecting the motion the Court held that the petitioner was not entitled under Article 24(3) of the Constitution to obtain a translation of the judgment delivered in the said application.[Aruna Laksiri Unawatuna v. Maithripala Sirisena, SC (FR) Application No. 357 of 2018, decided on 14-10-2020]


Suchita Shukla, Editorial Assistant has put this story together

Case BriefsForeign Courts

Supreme Court of the United States (SCOTUS): A Full Judge Bench of Warren E. Burger, C.J. and Lewis F. Powell, Jr., Harry A. Blackmun, William J. Brennan, Jr., William O. Douglas, Thurgood Marshall, Byron R. White, Potter Stewart and William H. Rehnquist, JJ. reversed a judgment appeal of the Idaho Supreme Court.

Richard Lynn Reed, a minor, had died intestate in Ada County, Idaho, on March 29, 1967. His adoptive parents, who had separated sometime prior to his death, were the parties to this appeal. Approximately seven months after his death, his mother, appellant Sally Reed, had filed a petition in the Probate Court of Ada County, seeking appointment as administratrix of her son’s estate. Prior to the date set for a hearing on the mother’s petition, appellee Cecil Reed, the father of the decedent, filed a competing petition seeking to have himself appointed administrator of the son’s estate. The probate court held a joint hearing and treated §§ 15–312 and 15–314 of the Idaho Code as the controlling statutes and read those sections as compelling a preference for Cecil Reed because he was a male.

Section 15–312 designated the persons who were entitled to administer the estate of one who dies intestate, Section listed 11 classes of persons who were so entitled and provided that one of the 11 classes so enumerated was ‘the father or mother’ of the person dying intestate. Under this section then appellant and appellee, being members of the same entitlement class, would seem to have been equally entitled to administer their son’s estate, Section 15–314, however, provided, that

‘of several persons claiming and equally entitled (under § 15–312) to administer, males must be preferred to females, and relatives of the whole to those of the helf blood.’

In issuing its order, the probate court implicitly recognized the equality of entitlement of the two applicants under § 15–312 and noted that neither of the applicants were under any legal disability; the court ruled, however, that appellee, being a male, was to be preferred to the female appellant ‘by reason of Section 15–314 of the Idaho Code.’ Aggrieved by which Sally Reed appealed and her appeal was treated by the District Court of the Fourth Judicial District of Idaho as a constitutional attack on § 15–314. In dealing with the attack, that court held that the challenged section violated the Equal Protection Clause of the Fourteenth Amendment and was, therefore, void; the matter was ordered ‘returned to the Probate Court for its determination of which of the two parties’ was better qualified to administer the estate. This order was never carried out, however, Cecil Reed took a further appeal to the Idaho Supreme Court, which reversed the District Court and reinstated the original order naming the father administrator of the estate. Subsequently, Sally Reed thereupon appealed for review by this Court pursuant to 28 U.S.C. § 1257(2).

The Court concluded that the arbitrary preference established in favor of males by § 15–314 of the Idaho Code cannot stand in the face of the Fourteenth Amendment’s command that no State deny the equal protection of the laws to any person within its jurisdiction.

The Court further stated that Section 15–314 is restricted in its operation to those situations where competing applications for letters of administration have been filed by both male and female members of the same entitlement class established by § 15–312. In such situations, § 15–314 provides that different treatment be accorded to the applicants on the basis of their sex; it thus establishes a classification subject to scrutiny under the Equal Protection Clause and applying this clause Court has consistently recognized that the Fourteenth Amendment does not deny to States the power to treat different classes of persons in different ways. The Court quoted from the judgment of Royster Guano Co. v. Virginia, 253 U.S. 412, 415, 40 S.Ct. 560, 561, 64 L.Ed. 989 (1920),

 ‘A classification ‘must be reasonable, not arbitrary, and must rest upon some ground of difference having a fair and substantial relation to the object of the legislation, so that all persons similarly circumstanced shall be treated alike.’

While answering the question in the present case of whether a difference in the sex of competing applicants for letters of administration bears a rational relationship to a state objective that is sought to be advanced by the operation of §§ 15–312 and 15–314, the Idaho Supreme Court concluded that its objective was to eliminate one area of controversy when two or more persons, equally entitled under § 15 312, seek letters of administration and thereby present the probate court ‘with the issue of which one should be named.’ The court also concluded that where such persons are not of the same sex, the elimination of females from consideration ‘is neither an illogical nor arbitrary method devised by the legislature to resolve an issue that would otherwise require a hearing as to the relative merits * * * of the two or more petitioning relatives * * *.’ 93 Idaho, at 514, 465 P.2d, at 638. The Court held that “To give a mandatory preference to members of either sex over members of the other, merely to accomplish the elimination of hearings on the merits, is to make the very kind of arbitrary legislative choice forbidden by the Equal Protection Clause of the Fourteenth Amendment; and whatever may be said as to the positive values of avoiding intrafamily controversy, the choice in this context may not lawfully be mandated solely on the basis of sex.” Providing dissimilar treatment for men and women who are thus similarly situated, the challenged section violates the Equal Protection Clause.[Sally M. REED v. Cecil R. REED, 1971 SCC OnLine US SC 174, decided on 22-11-1971]


Suchita Shukla, Editorial Assistant has put this story together

Case BriefsTribunals/Commissions/Regulatory Bodies

Central Information Commission (CIC): Y.K. Sinha (Information Commissioner), reiterated the Commission’s position that, offices of President, Vice President, Prime Minister, Governors, Lt. Governors and Chief Ministers are not legally obliged under RTI Act to entertain RTI applications seeking information unrelated to it, or not held or controlled by these high offices.

Classical status to the Marathi Language

Appellant filed the instant RTI application seeking information on the following three points regarding granting classical status to the Marathi Language:

  1. Reasons behind such a speedy policy or quick administrative decisions, for granting classical status to Kannada, Telugu, Malayalam and Oriya languages, within a span of one or two years.
  2. Reasons behind the policies or administrative decisions, for the delay or denial to bestow the classical language status on the Marathi language, pending since from 2013, with the government.
  3. Reasons behind the discrimination, indignity and injustice inflicted by the government, on the Marathi speaking citizens in comparison to Kannada, Telugu, Malayalam and Oriya speaking citizens w.r.t. bestowing classical language status policy or decisions.

For the above-sought information, CPIO, PMO directed the appellant concerned to directly file his RTI with Public Authority concerned.

Dissatisfied with the CPIO’s response, appellant had filed the First Appeal and further on being dissatisfied with FA’s response, appellant approached the Commission with instant Second Appeal.

Analysis & Decision

Bench stated that appellant instead of filing the RTI application with the PMO should have filed it with the Public Authority concerned being the custodian of information.

With a view to addressing such a situation, at the very formative stage of the RTI Act, the entire scope of Section 6 of the RTI Act had been discussed and interpreted threadbare by a Full Bench of this Commission in Ketan Kantilal Modi v. Central Board of Excise and Customs, CIC/AT/A/2008/01280 and based on this decision, Commission’s Full Bench had decided in R.S Gupta v. L.G office, held that,

“…..The offices of President, Vice President, Prime Minister, Governors, Lt. Governors and Chief Ministers are not legally obliged under RTI Act to entertain RTI applications seeking information unrelated to it, or not held or controlled by these high offices….”

(Emphasis supplied)

Queries raised by the Appellant in points 2 and 3 of the RTI application are interrogatory/ clarificatory/ hypothetical in nature seeking the opinion of the Public Authority official which is clearly beyond the scope of the duties/ responsibilities of a CPIO under the Act.

Hence, in view of the above discussion, the instant second appeal was dismissed and the appellant advised to refrain in future from seeking information under the RTI Act by filing such applications before public authorities who are not the custodians of information.[S.V. Deshpande v. PIO, PMO; CIC/PMOIN/A/2019/657279, decided on 09-10-2020]

Case BriefsHigh Courts

Himachal Pradesh High Court: Jyotsna Rewal Dua J., disposed off the petition without any interference with impugned orders.

The facts of the case are such that the petitioner is the legally wedded wife of defendant having solemnized a marriage with him in the year 1994 and has a son out of the wedlock. Due to marital discord, plaintiff started residing with her father since the year 1998 along with the son.  An application for grant of maintenance under Section 12 of the Protection of Women from Domestic Violence Act, 2005 was filed by petitioner before the Court of learned Judicial Magistrate 1st Class, Manali. Apprehending defeat of her maintenance claim by the defendant by selling the suit land an application under Order 39, Rules 1 and 2 of the Code of Civil Procedure (CPC) was filed for restraining the defendant from alienating, transferring and for creating charge over the suit land which stands dismissed by the trial Court. The order was later upheld by the Appellate Court. Aggrieved by the same, instant petition was filed under Article 227 of the Constitution of India.

Counsel for the petitioner relied on the judgment titled  V. Tulasamma v. Sesha Reddy, (1997) 3 SCC 99 and submitted that both the Courts have misdirected themselves in treating the civil suit as one filed by a coparcener i.e the wife to restrain and injunct Karta i.e. the husband from alienating the suit land, whereas the civil suit was a case instituted by the wife for creation of charge over the property of her husband in lieu of maintenance and, therefore, permanent prohibitory injunction for restraining the defendant was sought for.

Counsel for the respondent relied on a judgment titled Sunil Kumar v. Ram Prakash (1998) 2 SCC 77 and submitted that a coparcener has no right to get an injunction against Karta. He further submitted that respondent being Karta has legal right to alienate ancestral property in case of legal necessity and the petitioner has no right to pray for injunction restraining the defendant from alienating the suit land.

Courts observation on maintenance claim of wife vis-à-vis creation of charge over husband’s property

The Court relied on a judgment titled Kannan v. Maragathammal, 2012 SCC Online Mad 2285 and observed

“The Hindu Law Texts and the important commentaries impose a legal personal obligation on a husband to maintain his wife irrespective of his possession of any property, whether joint or self-acquired. They recognise the subordinate interest of the wife in her husband’s property arising out of her married status. They also prohibit the alienation of properties by the husband which has the effect of depriving her and other dependants of their maintenance…”

“…..The decisions of the various High Courts tow the same line, recognise her subordinate interest in her husband’s property and enforce his personal obligation by creating a charge on his properties either self-acquired or ancestral. A wife, therefore is entitled to be maintained out of the profits of her husband’s property and, if so, under the express terms of S.39 she can enforce her right against the properties in the hands of the alienee with notice of her claim. Though the right of the wife to separate maintenance does not form a charge upon her husband’s property, ancestral or self-acquired, yet, when it becomes necessary to enforce or preserve such a right effectively, it can be made a specific charge on a reasonable portion of the property. If the right of maintenance is imperiled or jeopardised by the conduct and dealings of the husband or father with reference to his properties, the Court can create a charge on a suitable portion thereof, securing the payment of maintenance to the wife or children. Such a charge can be created not only over the properties in the hands of the husband or father but also over properties transferred by him either gratuitously or to persons having notice of the right to maintenance.”

 In view of the observations above, the Court held that in the instant case only relief under Order 39, Rules 1 & 2, Code of Civil Procedure is sought and claim for maintenance has been submitted without presenting any Court order for the same. In light of the submission made by the petitioner herself that respondent has right to alienate property only in case of legal necessity, the Court further held that property being an ancestral property petitioner’s ‘son’ has not been made a party. In the said course of things a charge has not been created over the suit land towards maintenance of the plaintiff but the plaintiff i.e. the petitioner has right to take legal recourse in case of alienation of property.

In view of the above, the instant petition is disposed off without any interference in impugned orders.[Kubja Devi v. Chhape Ram, CMPMO No.542 of 2018, decided on 05-10-2020]


Arunima Bose, Editorial Assistant has put this story together

Case BriefsHigh Courts

Uttaranchal High Court: A Division Judge Bench of K.M. Joseph and Sharad Kumar Sharma, JJ., had allowed a revision which was filed aggrieved by the order of the Trade Tax Tribunal.

The assessment was done under the U.P. Trade Tax Act, 1948 and the respondent was assessed to tax in respect of sale of imported cement, imported sheet tiles & steel and self-manufactured tiles. The Assessing Officer had also assessed respondent in regard to the sale of steel scrap, sale of discarded items and tender forms. In Appeal, the Appellate Authority had dismissed the Appeal. Thereafter, the respondent preferred Second Appeal No. 117 of 1999 before the Trade Tax Tribunal, which partly allowed the appeal filed by the respondent and had sustained the tax assessed in respect of steel scrap, old discarded items and tender forms. The assessment order in so far it relates to the tax levied in respect of the imported cement, sale of imported sheet tiles & steel and self-manufactured tiles was interfered with. Thus the instant revision was filed.

The issue to be dealt was whether the Commercial Tax Tribunal has erred in law in holding that supply of cement, steel and bricks etc. to the contractors by the Government Department, for which cost is deducted from the bills of the contractors, does not amount to sale? And was it not liable to tax?

The Court relied on the Supreme Court judgment in N.M. Goel & Co. v. Sales Tax Officer, (1989) 1 SCC 335, wherein the Court noted that the appellant was a building contractor and registered dealer under the Madhya Pradesh General Sales Tax Act. The C.P.W.D. invited tenders for construction of foodgrain godown. In the tender submitted by the appellant the prices of the material to be used for construction cost of iron, steel and cement were included. The P.W.D. agreed to supply from its stores iron, steel and cement for the construction work and to deduct the price of material so supplied and consumed from the construction from the final bill of the appellant. It was found that all materials supplied to the contractors under the clause remain absolute property of the Government and could not be removed on any account from the site of the work and was at all times open to inspection by the Engineer-in-charge. The clause in fact inter alia provided that the contractor was bound to procure and to supply the material from stores as from time to time required for use of work for the purpose of contract only, and value of the full quantity of the materials and stores so supplied was specified at a rate and got set off or deducted from any sum due or that became due thereafter to the contractor.

The Court keeping in view these observations held that Tribunal was in error in taking the view that no tax to be paid on the sale of imported cement, sheet piles & steel and sale of self-manufactured tiles. The Court also noticed that definition of sale under the U.P. Trade Tax Act under Section 2-h includes transfer of property in goods involved in the execution of a works contract. The Court allowed the revision restoring the order of the Assessing Officer.[Commr., Commercial Tax v. Executive Engineer, Commercial Tax Revision No. 15 of 2009, decided on 21-02-2018]


Suchita Shukla, Editorial Assistant has put this story together

Case BriefsHigh Courts

Karnataka High Court: S.R. Krishna Kumar, J., allowing the present petition for the appointment of a sole arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996, held that, the decision made is restricted to the peculiar facts of the instant case and shall not be treated as a precedent whatsoever.

Brief Facts

The present petition is instituted under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Act’), praying to appoint a sole arbitrator in terms of the Arbitration clause contained in clause 6 of the Agreement dated 13-06-2014, and in compliance with Section 11(6) of the Act, to enter into adjudication of disputes between the parties at the Arbitration and Conciliation Centre, Bengaluru.

Contentions

The Counsel for the respondents argued that the sale agreement, dated 13-06-2014, which contains the Arbitration clause, is insufficiently stamped and as such, the same cannot be acted upon for any purpose whatsoever including seeking appointment of an Arbitrator. In support of the argument, reliance was placed on the decision of Supreme Court in SMS Tea Estates (P) Ltd. v. Chand Mari Tea Co. (P) Ltd., 2011 (14) SCC 66 which was further followed in the case of Garvare Wall Ropes Ltd. v. Coastal Marine Constructions, 2019 (9) SCC 209.

The Counsel for the petitioners submitted that the responsibility of paying the deficit stamp duty and penalty on the said sale agreement, on or before the first date of hearing before the Arbitral Tribunal is hereby undertaken by them and that they have no objection with respect to the same.

Issue

  1. Whether an insufficiently stamped sale agreement, containing arbitration clause for the appointment of sole arbitrator enforceable under Section 11(6) of the Act? 

Decision

While considering the peculiar facts and circumstances of the present case, in addition to the position clarified in SMS Tea Estate and Garvare Wall Ropes, the Court appointed a sole arbitrator imposing necessary conditions with regard to payment of stamp duty and penalty on the sale agreement. It was further said that the procedure adopted in the present case is restricted and limited to the instant case as it is rendered with the consent of both the parties and without prejudice to any of their rights.[Malchira C. Nanaiah, Civil Misc. Petition (CMP) No. 113 of 2019, decided on 5-10-2020]


Sakshi Shukla, Editorial Assistant has put this story together

Case BriefsHigh Courts

Gujarat High Court: A.G. Uraizee, J., dismissed a petition which was filed aggrieved by the dismissal of Revision Application by the Secretary, Forest and Environment Department which had upheld the order of the Deputy Collector.

Respondent 7 was the Sarpanch of Jetpur Gram Panchayat, according to the petitioner, by misusing the position of Sarpanch, around more than 150 trees standing on Gauchar land of village Jetpur, were cut in violation of law and sold for the monetary benefits. The petitioner had therefore filed an application before the District Development Officer for removal of respondent 7 from the post of Sarpanch. As a result, respondent was removed from the post of Sarpanch under Section 57(1) of the Gujarat Panchayat Act. The respondent challenged her removal by filing Appeal before the Deputy Collector who had partly allowed the Appeal and set aside the order of removal and remanded the case to the Mamlatdar, Bayad, for fresh consideration. Consequently, District Development Officer reinstated the respondent 7 on the post of Sarpanch. Aggrieved by which the petitioner had filed Revision Application before the Secretary, Forest and Environment Department which was dismissed. The present petition was filed aggrieved by the dismissal.

The Court observed that petition made it abundantly clear that the procedure under Section 57 of the Panchayat Act were initiated against the petitioner on the basis of the complaint/application filed by the petitioner with Mamlatdar, Bayad on account of felling of 153 trees and that the Mamlatdar, Bayad, after receipt of complaint about felling of the trees did not conduct the proper inquiry and Panchnama of place of incident was not prepared in presence of Range Forest Officer. They also found that the Mamlatdar had imposed punishment of fine on the basis of a presumption that 150 trees felled and there was no solid proof that the respondent, who had herself felled the trees. The Court while dismissing the petition mentioned that the matter is remanded for fresh consideration in light of observation made in the order and all concerns will get an opportunity of hearing. Thus, the lower Authorities have given sound reasons for setting aside the removal of respondent 7 from the post of Sarpanch and remanded the matter for fresh consideration.[Patel Ramanbhai Hargovanbhai v. State of Gujarat, R/Special Civil Application No. 21581 of 2019, decided on 21-01-2020]


Suchita Shukla, Editorial Assistant has put this story together

Case BriefsHigh Courts

Chhattisgarh High Court: Sanjay K. Agrawal, J., discusses the decision of trial Court and first Appellate Court with regard to alienation of the property of a deceased by his alleged wife.

Facts of the instant case relate to the dispute in property left by Sukhdev. Both Sukhdev and his wife died issue-less.

Plaintiff claimed that he is the brother of Sukhdev and after the death of Sukhdev, he inherited the property left by Sukhdev and Shanti Bai, whereas defendant 1 alternatively claimed that she had married Sukhdev Sukhdev in Chudi form and became his wife thereafter, got her name mutated in the revenue record.

Plaintiff submitted that defendant 1 has no relationship with the family of Sukhdev and has illegally got her name mutated.

Trial Court

Trial Court decreed the suit holding that the suit property was the joint family property of Sukhdev and Anirudh Prasad Kamal Sen — plaintiff and defendant 1 is not the wife of Sukhdev and therefore the alienation made by defendant 1 — Dashmat bai in favour of defendant 1 is null void.

First Appeal | Second Appeal

On appeal being preferred before the first appellate Court by defendants 1 & 2 being dissatisfied with the judgment & decree of the Trial Court, the first appellate Court allowed the appeal and set aside the judgment & decree of the Trial Court and eventually dismissed the suit feeling aggrieved against which this second appeal has been preferred by the plaintiff under Section 100 of the CPC in which substantial questions of law.

Analysis & Decision

CUSTOM

Section 5 of the Hindu Marriage Act, 1955 lays down conditions for a Hindu marriage and Section 7 lays down ceremonies for a Hindu marriage by providing that a Hindu marriage may be solemnized in accordance with the customary rites and ceremonies of either party thereto.

Section 29 of the Act of 1955 saves the rights recognised by custom or conferred by special enactment to obtain the dissolution of marriage, whether solemnised before or after the commencement of the Act.

Section 3(a) of the Hindu Marriage Act, 1955 defines the expressions “custom” and “usage”.

Bench stated that Custom must have been observed for a long time and must be ancient.

Customs will have to be always strictly proved and in relation to matrimonial matters particularly to the existence of customs.

The Supreme Court in the matter of Yamanaji H. Jadhav v. Nirmala, (2002) 2 SCC 637 has held that custom being an exception, the general rule of divorce ought to have been specifically pleaded and established by leading cogent evidence by the person propounding such custom.

Principle of law laid down in Yamanaji H. Jadhav v. Nirmala, (2002) 2 SCC 637,  was followed with approval by the Supreme Court in the matter of Subramani v. M. Chandralekha, (2005) 9 SCC 407, by holding that as per Hindu law, divorce was not recognised as a means to put an end to marriage which was always considered to be a sacrament, only exception being where it was recognised by custom.

Now, coming back to the instant case, the dispute was with regard to the property left by Sukhdev who is the brother of the plaintiff. Whereas, defendant 1 claiming to be the wife of Sukhdev in Chudi form, alienated the suit property to defendant 2 which has been questioned in the suit.

It has also been alleged that Dashmat bai had married two other people prior to her alleged marriage with Sukhdev, though there was no evidence on record in regard to her divorce with the other two people.

Father of Dashmat bai, Jaitram (DW-1) categorically stated that he was not present at the time when Dashmat bai allegedly entered into marriage in Chudi Form with Sukhdev, which is quite unnatural that father was not present at the time of such important ceremony.

Similarly, Dashmat Bai herself could have entered into the witness-box and offered herself for cross-examination in absence of which adverse inference could be drawn against her.

As there was no iota of evidence of marriage having been taken place between Dashmat Bai and Sukhdev in view of the testimony of her father Jaitram (DW-1) and another witness DW-2, as they were not present in the said alleged marriage and in view of the fact that defendant 1 Dashmat Bai did not offer herself for cross-examination, adverse inference against her has to be drawn.

Hence, in view of the discussion, it can be said that no relationship of husband and wife existed between the defendant 1 and Sukhdev.

The question that needs to be answered is whether, by the alienation made by defendant 1, title was conveyed to defendant 2?

Supreme Court in its decision of Prahlad Pradhan v. Sonu Kumhar, (2019) 10 SCC 259, dealt with the question of competency of a person to transfer property and transfer of property by a person without rights, wherein the following was held:

“7. Since Mangal Kumhar did not have an exclusive right, title or interest in the suit property, his widow Etwari Kumharin was not legally competent to sell the suit property to the appellants, purporting to be the sole owner of the property. Reliance is placed on Eureka Builders v. Gulabchand, (2018) 8 SCC 67 wherein this Court held: (SCC pp. 75-76, paras 35-36)

“35. It is a settled principle of law that a person can only transfer to other person a right, title or interest in any tangible property which he is possessed of to transfer it for consideration or otherwise. In other words, whatever interest a person is possessed of in any tangible property, he can transfer only that interest to the other person and no other interest, which he himself does not possess in the tangible property.

36. So, once it is proved that on the date of transfer of any tangible property, the seller of the property did not have any subsisting right, title or interest over it, then a buyer of such property would not get any right, title and interest in the property purchased by him for consideration or otherwise. Such transfer would be an illegal and void transfer.”

(emphasis supplied)

Court held that the alienation made by defendant 1 in favour of defendant 2 holding her to be the wife of Sukhdev as the property was originally owned by Sukhdev, is clearly void.

In view of the above discussion, decree be drawn up accordingly. [Anirudh Prasad Kamal Sen v. Dashmat Bai Suryavanshi, Second Appeal No. 93 of 2009, decided on 28-08-2020]

Case BriefsHigh Courts

Delhi High Court: A Division Bench of Vipin Sanghi and Rajnish Bhatnagar, JJ., in regard to Triple Talaq observed that,

Prima facie it appears that the object of Section 4 of the Muslim Women (Protection of Rights on Marriage) Act, 2019 is to discourage the age-old and traditional practice of pronouncement of talaq by a Muslim husband upon his wife by resort to talaq-e-biddat.

Issues in the instant petition have been pending for consideration before the Supreme Court in WP (C) No. 994 of 2019.

In view of the above, Bench stated that since the matter is pending before the Supreme Court, hence it would wait for the judgment of the Supreme Court.

Petitioners Counsel, Tarun Chandiok and Naseem Ahmed had moved the present application with the prayer that pending the consideration of the petition, all FIRs registered under Section 4 of the Muslim Women (Protection of Rights on Marriage) Act, 2019 be stayed.

Substantial Question of Law

Further, it added to its submissions that the minimum number of Judges who should sit for the purpose of deciding any case involving substantial question of law as to the interpretation of the constitution, or for the purpose of hearing any reference under Article 143 should be five.

Bench rejected the above-stated submission stating that there is no provision either in the Constitution or in any other law which required this Court to place the matter before a Larger Bench at this stage.

Section 4 of the Muslim Women (Protection of Rights on Marriage) Act, 2019

Bench noted that the present petition is not in the nature of a Public Interest Litigation. Hence Court denied invoking Section 4 of the Muslim Women (Protection of Rights on Marriage) Act, 2019.

Section 3 of the Muslim Women (Protection of Rights on Marriage) Act, 2019

Petitioner also submitted that Section 3 of the Muslim Women (Protection of Rights on Marriage) Act, 2019 declares the practice of triple talaq as popularly known, to be void and illegal.

What does the said provision state:

“any pronouncement of talaq by a Muslim husband upon his wife, by words, either spoken or written or in electronic form or in any other manner whatsoever, shall be void and illegal”. Section 2(c) defines talaq to mean “talaq-e-biddat or any other similar form of talaq having the effect of instantaneous and irrevocable divorce pronounced by a Muslim husband”.

Triple Talaq

Petitioner’s Counsel also added to its submissions that once triple talaq has been rendered void and illegal, there is no justification for criminalizing pronouncement of triple talaq, since such triple talaq would have no legal effect on the status of the Muslim Marriage.

Since it is of no consequence and does not end the marital status of the wife – who may be subjected to triple talaq, there is no purpose of penalising the said Act. Section 4 of the said Act provides “any Muslim husband who pronounces talaq referred to in Section 3 upon his wife shall be punished with imprisonment for a term which may extend to 3 years and shall also be liable to fine.”

Counsel relied on the decisions of the Supreme Court in Shayara Bano v. Union of India, (2017) 9 SCC 1 and Behram Khurshid Pesikaka v. State of Bombay, (1955) 1 SCR 613.

Bench held that,

“Legislation is presumed to be valid, unless it is declared to be invalid, or unconstitutional by a Competent Court, and is struck down.”

Court observed that the prima facie it appears that the object of Section 4 of the Muslim Women (Protection of Rights on Marriage) Act, 2019 is to discourage the age-old and traditional practice of pronouncement of talaq by a Muslim husband upon his wife by resort to talaq-e-biddat i.e. triple talaq.

Purpose of Section 4 appears to provide a deterrent against such practice.

Merely because triple talaq has been declared to be void and illegal, it does not mean that the legislature could not have made the continuation of such practice an offence.

High Court in view of the above discussion, did not grant any interim relief. [Nadeem Khan v. Union of India, WP (Crl) No. 1541 of 2020, decided on 13-10-2020]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): The Coram of Justice R.K. Agrawal (President) and Dr S.M. Kantikar (Member), upheld the State Commission’s Majority Order with regard to alleged medical negligence.

The instant revision petition was filed against the Order by the U.P. State Consumer Disputes Redressal Commission, Lucknow.

Complainant had visited the SS Hospital, Varanasi (OP 1) for pain in his left knee. OP 2 examined the patient and suggested Arthroscopic removal of the loose bodies. Complainant alleged that instead of Arthroscopy, OP 2 performed an open operation. Another X-Ray was taken, wherein it was found that the loose bodies were still present.

Later, the complainant underwent the Arthroscopy procedure at Mumbai by the hands of Dr Anant Joshi and gradually his left knee started functioning normally.

What was the complainant aggrieved of?

Aggrieved by the careless and negligent treatment of the OPs, the complainant filed the consumer complaint before the District Forum.

The District Forum allowed the complaint and ordered OPs to pay compensation of Rs 2,30,000 jointly and severally to the complainant.

Further, on an appeal being filed before the State Commission, OP’s were ordered to pay compensation of Rs 4,37,965 by the minority order but the majority order allowed the appeal and set aside the District Forum’s Order.

Again on being aggrieved by the State Commission’s Order, the instant revision petition was filed.

Analysis & Decision

Bench stated that it is an admitted fact that Dr S.C. Goel preferred open operation during the time of procedure instead of Arthroscopy.

As per the operative notes, it was the case of degenerative changes in the left knee joint and the four loose bodies were seen during Arthroscopy and their sizes were 1.5, 1.25, 1 & 1 cm. A large body of more than 5 mm size is difficult to be removed by Arthroscopy. Therefore, the Opposite Party No. 2 preferred open surgery. Moreover, admittedly, the patient before the operation was informed that if the Arthroscopy was not successful, open surgery would be done.

Hence, in view of the above, nothing amounts to negligence in the present matter.

The commission relied on the Supreme Court’s decision in Jacob Mathew, (2005) 6 SCC 1 wherein it was held that,

“When a patient dies or suffers some mishap, there is a tendency to blame the doctor for this. Things have gone wrong and, therefore, somebody must be punished for it. However, it is well known that even the best professionals, what to say of the average professional, sometimes have failures. A lawyer cannot win every case in his professional career but surely he cannot be penalized for losing a case provided he appeared in it and made his submissions.”

Coram held that Just because a person suffers a bad outcome from medical treatment, does not mean that they have an automatic right to sue for compensation.

A medical error is only considered “negligent” if the healthcare practitioner has failed to take “reasonable care”.

It was noted in the present case through the medical records of the patient that it was the patient’s misconception that despite the advice of Arthroscopy,  OP 2 performed open surgery.

Hence, the State Commission’s Order had no jurisdictional error, or a legal principle ignored or miscarriage of justice. [Anil Kumar Gupta v. Banaras Hindu University, Revision Petition No. 5028 of 2008, decided on 05-10-2020]

Case BriefsCOVID 19High Courts

Calcutta High Court: A Division Bench of Sanjib Banerjee and Moushumi Bhattacharya, JJ., while addressing the issues raised in the present petition observed that,

“From bringing to life the act-of-God clause that was mostly regarded as a redundant appendage in contracts to redefining the rules of human engagement, the pandemic has almost been all-pervasive.”

The present lis is born in its wake: upon a unique situation arising where students have been kept away from academic institutions for months together, prompting their parents or guardians to question why regular fees ought to be paid in such a scenario.

PRIVATE UNAIDED SCHOOLS | Concession in Fees

The point of public interest canvassed in the petitions is that private unaided schools should allow the substantial concession in fees as the physical conduct of classes has not been possible for more than 6 months and normal functioning may not resume in a full-fledged manner for several months more.

Profiteering by Schools

The parents or guardians complain of profiteering by the schools by unjustly enriching themselves even as several of the schools have terminated the services of several of the usual employees or have not paid the teachers in full and not incurred the normal expenses needed to physically operate such schools.

School’s Contention 

Almost all the schools represented contended that they have not removed any regular employee from the payrolls, and some even claim that the contractual staff have also been retained and paid during the lockdown.

Institutions controlled by the Church

The institutions controlled by the Church of North India and another which claims to be a linguistic minority educational institution, have objected to the Court seeking to interfere into their affairs.

They suggest that not only do they enjoy a special status accorded by Article 30(1) of the Constitution but they are also protected under Article 19 of the suprema lex.

No drastic measure

By and large, the schools indicate that they have not taken the ultimate drastic measure of excluding students from the limited online classes now conducted, though no fees may have been tendered on behalf of several students for the period beginning April, 2020.

The general refrain is that schools do not look at making any profit and, to the extent, their financial positions may allow, they are ready to accord concessions to parents or guardians of students in financial distress, but a general reduction of fees across the board should not be permitted.

Analysis and Decision

“…courts must exercise extreme self-restraint and not use the extensive amplitude as a springboard for judicial anarchy.”

In a breakdown scenario as a result of any natural calamity or an act of God or when the subordinate judiciary is not available or a litigant has no access to any other court in an extreme case, the High Court must not forget the width of the authority available to it and its constitutional obligation to discharge its duties governed by the overarching established principles designed by what may be loosely said to be the rule of law.

Two other broadheads of objection have been taken by some of the schools as noticed above: under Article 30(1) of the Constitution and under Article 19 thereof read with the right of privacy as espoused.

Court while analysing the set of contentions with regard t minority institutions stated that,

“…even minority educational institutions need to adhere to certain fundamental norms, the most basic of them being that they cannot be run for the purpose of making profit”.

Bench added that the basic requirement is that the fees charged must have some correlation with the facilities provided.

If the facilities provided over a long stretch of time, as for the best part of a year and probably more, cost less because physical classes have not been held, a substantial part of the money saved has to be returned without, for the moment, going to the question as to whether it should be returned pro rata or on a need-based basis.

Assessment of fees

Hence, Court stated that an assessment of the fees demanded or obtained during the lockdown period and in the absence of physical classes in the schools, may not amount to the breach of any right conferred by Article 30(1) of the Constitution in respect of a school run by a religious or a linguistic minority.

The same rule as above should apply to all private unaided schools since they are governed by private contracts between private individuals.

Bench in view of the unprecedented situation and as a one time measure issued the following directions:

  • No increase in fees during FY 2020-2021.
  • From the month beginning April, 2020 till the month following the one in which the schools reopen in the physical mode will offer a minimum of 20% reduction of fees across the board. Non-essential charges for use of facilities not availed of will not be permissible.
  • Session fees traditionally charged periodically will be permissible, but again, subject to a maximum of 80 per cent of the quantum charged for the corresponding period in the financial year 2019-20.
  • The minimum figure of 20 per cent reduction in the monthly tuition fees will be on the basis of the tuition fees charged for the corresponding month in the previous financial year.
  • For F.Y. 2020-21, a maximum of 5% excess of revenue over expenditure will be permissible. The balance excess should be passed on by way of general concession or special concession in cases of extreme distress.
  • No amount towards the arrears on account of revision of pay to teachers or other employees can be passed on in the fees for the financial year 2020-21. The amount on account of arrears may be recovered in 2021-22 and 2022-23, if normal physical functioning resumes by March 31, 2021.
  • There will be no increase in salaries of teachers or of other employees during the financial year 2020-21. In case any school has given effect to a higher pay scale, the difference must not be realised out of the school fees.
  • Parents and guardians of students are requested not to avail of the reduction in schools fees, if their financial situation does not merit the reduction.
  • In addition to the across-the-board reduction, every school will entertain applications from parents or guardians for further reduction or waiver or exemption or delayed or installment payments, as the case may be. Said applications must be supported with financial statements.
  • Such applications have to be filed before the respective schools by November 15, 2020, and every application should be dealt with on an individual basis and a decision communicated to the applicant by December 31, 2020.
  • When an application for further reduction or waiver or exemption or delayed payment of fees has been disposed of by the relevant school but the parents or guardians are aggrieved by the decision, an application may be filed, upon deposit of Rs 1000, to a committee for further adjudication of the request and to assess the decision communicated by the relevant school. Such application has to be filed within 10 days of the rejection.
  • The committee referred to in the immediate preceding clause will be headed by Mr Tilok Bose, Senior Advocate as its chairperson and will be assisted by the Headmistress or Principal of Heritage School and Ms Priyanka Agarwal, Advocate for the parents in WPA 5890 of 2020.
  • The deposit obtained by the committee will be retained by the committee and Rs 800 therefrom disbursed to the auditor or firm of chartered accountants for the first time the accounts of a particular school need to be assessed by the auditor or firm of chartered accountants. For every repeat exercise, meaning studying the accounts of the same school from the second time onwards, Rs 500 per case will be paid to the auditors. The balance amount in the hands of the committee will be used for the purpose of secretarial and managerial services the committee may be required to obtain.
  • By November 30, 2020, the committee should indicate a dedicated e-mail account whereat the appeals against the decisions of the schools may be filed.
  • By November 30, 2020, the committee should indicate a dedicated e-mail account whereat the appeals against the decisions of the schools may be filed.
  • Every application made before the committee must clearly indicate the name and other particulars of the student involved and furnish the e-mail ID of the school and its Principal or the like for the committee to communicate with the school.
  • The committee must endeavour to dispose of every application within 45 days of the receipt thereof and the decision of the committee will be binding, subject to the relevant schools having a right to apply to this court in the present proceedings for the reconsideration thereof.
  • The quantum of fees to be charged for every month will be indicated by the individual schools on any website and the notice-boards of the schools and informed to Advocate for the petitioner in WPA 5890 of 2020.
  • By November 30, 2020, the fees payable in terms of this order for the period up to November 30, 2020, should be tendered on behalf of all students.
  • With effect from December 8, 2020 all schools will be entitled to disallow students whose fees have not been paid in full in terms of this order and those who have not applied for reduction or waiver or the like. However, schools should ensure that this extreme step is taken only after exercising due care and caution.
  • No student will be entitled to apply for a transfer certificate without the full quantum of fees in terms of this order being first discharged.
  • Fees payable by students to boards for examinations or otherwise shall have to be paid in addition to the monthly fees and other charges in terms of this order and no waiver or reduction of the fees or charges payable to the boards may be sought or granted.
  • There will be no refund of the fees already paid.
  • The expenses incurred for developing the infrastructure of the schools should not be passed on to the students during the current financial year, though it will be open to recover the same from the students from financial year 2021-22 onwards, if the physical functioning resumes by March 31, 2021.
  • The cap of five per cent of the revenue over expenditure for the year 2020-21 will be subject to the exception that it may exceed the five per cent only if the general reduction afforded to the parents is not availed of by any of the parents and no student in financial distress has been denied additional concession despite being worthy.
  • No unusual expense should be incurred during financial year 2020-21 and no development or infrastructure expense should be incurred unless absolutely unavoidable.
  • Above directions for any form of concession will not apply to any of the 145 schools where the average monthly fee (calculated on an annual basis over the year from April, 2020 to March, 2021) is less than Rs 800. However, such schools may voluntarily take such measures as deemed fit.
  • The other private unaided schools in the State should also abide by the directions mutatis mutandis, particularly since the matter has been heard extensively and as public interest litigation.

Court made it clear that the present order may not be used as a precedent for the regulation of fees in the schools in future.

The instant petitions will appear next on 07-12-2020 to monitor the progress in the implementation of directions issued.

Moushumi Bhattacharya, J. supported the reasons laid down by Sanjib Banerjee, J., leading to the conclusions.

Bhattacharya, J.,  proposed to supplement three issues: Articles 226, 30(1) and 14 of the Constitution of India together with the right to privacy in the foreground of the arguments made.

The endeavour of the Court is that students must not be caught in the crossfire between their parents and the school authorities.

Under Article 226, the power of the High Courts is

“……..to issue to any person or authority, including in appropriate cases, any Government, within those territories directions, orders or writs, including writs in the nature of…….”

The order in which the words have been positioned indicate that the writ courts not only have the power to issue the five writs but also to issue orders and directions having the force and effect of the five writs, separately or together, for enforcing the rights guaranteed under Part III of the Constitution. The wide berth contemplated was recognised in Dwarka Nath v. Income Tax Officer, AIR 1966 SC 81 as an enabler for tailoring the reliefs to fit the shape and peculiarities of the case and stretching the parameters of the power “to reach injustice wherever it is found”.

But does that mean that a court’s authority to issue writs under Article 226 is unfettered?

The court draws its own boundaries within which it decides the lis on a number of factors; including but not limited to whether there is an efficacious remedy or alternative forum which the petitioner should have first exhausted, whether the right can be reasonably restricted, where there is stark absence of a public law element in the discharge of duties of the concerned entity or even where the conduct of the petitioner does not call for the court’s intervention on the facts of the case.

The privacy argument of the CNI and the linguistic minority schools is another aspect which should be briefly dwelt on. K.S. Puttaswamy (Privacy-9 J.) v. Union of India (2017) 10 SCC 1 has been placed to elevate the right to privacy as a ‘travelling right’.

It is a right aimed at preserving the spatial and intellectual integrity of an individual in matters of choice and acts as a springboard for the connected freedoms which are guaranteed under the Constitution.

As noticed in several decisions impacting minority institutions, Article 30(1) was contemplated by the framers to serve as a shield and not as a sword. After all, can these schools bypass the statutory requirement of filing their periodic audited financial numbers to the concerned authorities?

Schools cannot be simplistically categorised according to the financial profile of the guardians and whether as such they need a fee-reduction for their wards.

“…a benefit, like a right, cannot be denied to a greater number merely on the ground that it may be misused by a few.”

Adding to the above, Bench also stated that the teachers who need the schools to remain financially solvent for their job-security may also be parents mired in debts/loss of service who would benefit from a fee-reduction. The mechanism proposed had to as inclusive as possible representing the concerns of guardians across the board, irrespective of privilege and financial bracket.

“We have designed a 2-tier mechanism not only to provide guardians with a window for further concessions but also to make the process as free of coercion/ compulsion and as much transparent as is practicably possible under the circumstances.”

[Biplab Kumar Chowdhury v. Union of India, WPA 5530 of 2020, decided on 13-08-2020]


Counsels

For the State: Kishore Datta, A-G, Senior Advocate & Sayan Sinha, Advocate

For Union of India: Y.J. Dastoor, ASG, Senior Advocate & Siddhartha Lahiri, Advocate.

For the petitioner
In WPA 5890 of 2020: Advocates, Sai Deepak, Rishav Kumar Singh, Anurag Mitra, Priyanka Agarwal and Avinash Kumar Sharma.

For the petitioner (in person) In WPA 5378 of 2020: Advocate Partyush Patwari

Case BriefsTribunals/Commissions/Regulatory Bodies

National Company Law Appellate Tribunal (NCLAT): A Coram of Venugopal M. (Judicial Member) and Shreesha Merla (Technical Member), while addressing the present company appeal observed that,

“…subject lease rentals arising out of use and occupation of a cold storage unit which is for Commercial Purpose is an ‘Operational Debt’ as envisaged under Section 5 (21) of the I&B Code.”

National Company Law Tribunal, Mumbai’s Order has been challenged in the present appeal.

Leave & License Agreement

National Agriculture Co-operative Marketing Federation of India Ltd./Operational Creditor and the Corporate Debtor entered into a Leave and License Agreement for the usage of cold storage facilities for a period of 3 years.

As per Clause 1.14 of the said Agreement, in case of default in payment of any monthly licence fee, the Corporate Debtor would be liable to pay an interest @ 21% p.a. for the delayed period.

Default in Payment

The first respondent stated that the Corporate Debtor defaulted in the payment of monthly rentals. Further, the first respondent stated that the Corporate Debtor acknowledged and confirmed the ‘outstanding debt’ but despite a number of reminders and eviction notice, the debt was not paid.

In view of the above, a demand notice under in Form 3 under Section 8 of I&B Code, 2016 was issued.

Corporate Debtor denied all the above-stated claims and sought the renewal of Leave and License Agreement.

Counsel for the Appellant vehemently argued that the ‘Adjudicating Authority’ had passed an ‘Ex-Parte Order’ without giving it a sufficient opportunity to be heard.

Tribunal | Decision Analysis

Opportunity of being heard

Tribunal found force in appellant counsel’s submission that the appellant was in custody during the period and hence the minimal delay of 9 days ought to be condoned.

Tribunal noted that letters dated 15-07-2019 and 18-09-2019 were received by the Advocate for the Corporate Debtor which establish that the Corporate Debtor was aware of the proceedings.

Additionally, the Corporate Debtor is a Private Limited Company and it cannot be stated that it could not have been represented by any other person merely because the Director of the Corporate Debtor Company, was in custody.

Hence in view of the above-stated reasons, tribunal opined that sufficient opportunity was given.

  • Whether due, if any, arising from the ‘Leave and license Agreement’ is construed as an ‘Operational Debt’?
  •  Whether there is any ‘Pre-Existing Dispute’ prior to the issuance of the Demand Notice?

Criteria to prove a ‘Debt’ as an ‘Operational Debt’

(a) Claim in respect of provisions for goods and services
(b) Employment or debt in respect of dues and
(c) Such repayment of dues which should arise under any law in force at that time.

Whether the First Respondent by providing ‘Lease’ would be treated as an ‘Operational Creditor’, it is necessary to ascertain whether the First Respondent is providing services to the Corporate Debtor and whether the alleged dues fall within the meaning of Section 5 (21) of the Code?

Appellant’s Counsel relied on the Tribunal’s decision in M. Ravindranath Reddy v. G. Kishan,2020 SCC OnLine NCLAT 84 wherein it was observed that the appellant being a tenant, having not made any claim in respect of the provisions of the goods or services and debt in respect of repayment of dues does not arise under any law for the time being in force payable to the Central Government or State Government.

Tribunal stated that since the law has not gone into defining goods or services– hence, one has to rely on general usage of the terms so used in the law, with due regard to the context in which the same has been used.

Bankruptcy Law Reforms Committee (BLRC), in its report dated November 2015 recommends the treatment of lessors/landlords as Operational Creditors. However, in the definition adopted by the Legislature only claims relating to ‘Goods and Services’ were included within the definition and purview of ‘Operational Debt’.

In view of the terms and conditions of the Leave and License Agreement, appellants have leased out the premises for ‘Commercial Purpose’ which comes under the meaning of ‘Service’ for the purpose of Section 5(21) of the I&B Code, 2016.

Therefore, as the premises in the case on hand is leased out for ‘Commercial Purpose’, the cold storage owner/NAFED on collection is required to pay ‘service tax’ which is reflected in the tax invoices and ‘Ledger Accounts’ which is part of the record filed.

Further, with regard to issue number second, it was noted that though the Agreement was terminated, yet the Corporate Debtor continued to be in possession of the said storage facility and even sought an extension for a further period of 2 years.

Hence, Tribunal stated that ‘Debt’ was ‘ due and payable’.

Test of ‘existence of a dispute’ | Pre-Existing Dispute

It is evident on applying the test of ‘existence of dispute’ that without going into merits of the disputes, the argument raised by the Appellant cannot be construed as a plausible contention requiring further investigation or an assertion of facts supported by evidence.

A dispute does not truly exist in fact between the Parties and, therefore, this Tribunal held that the communication on record specifically the letter dated 19-09-2018, addressed by the Appellant themselves prior to the issuance of the Demand Notice clearly established that there is a ‘Debt due and payable’ and there is no ‘Pre-Existing Dispute’.

Tribunal also relied on the Supreme Court decision in Mobilox Innovations (P) Ltd. v. Kirusa Software (P) Ltd., (2018) 1 SCC 353.

In view of the above, the present appeal failed. [Anup Sushil Dubey v. National Agriculture Co-operative Marketing Federation of India Ltd., Company Appeal (AT) (Insolvency) No. 229 of 2020, decided on 07-10-2020]

Case BriefsSupreme Court

Supreme Court: The 3-Judge Bench of Arun Mishra, B.R. Gavai and Krishna Murari, JJ., set aside the NCLAT’s Order with regard to the appointment of Resolution Professional.

Question for Consideration

Whether an ex-employee of the ‘Financial Creditor’ having rendered services in the past, should not be permitted to act as ‘Interim Resolution Professional’ at the instance of such ‘Financial Creditor’, regard being had to the nature of duties to be performed by the ‘Interim Resolution Professional’ and the ‘Resolution Professional’?

NCLT’s position

State Bank of India (Financial Creditor) had filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 with regard to initiation of Corporate Insolvency Resolution Process before the National Company Law Tribunal, Delhi.

NCLT on noting the objection regarding the proposed ‘Interim Resolution Professional’ — Shailesh Verma directed the Financial Creditor to perform it’s statutorily mandatory obligation by substituting the name of the ‘Resolution Professional’ to act as an ‘Interim Resolution Professional’ in place of Shailesh Verma as it was of the view that Shailesh Verma having worked with the State Bank of India for 39 years before his retirement in 2016, there was an apprehension of bias and was unlikely to act fairly and could not be expected to act as an Independent Umpire.

NCLAT’s position

Aggrieved with the above position, Financial Creditor preferred the appeal before NCLAT on the ground that the proposed ‘Interim Resolution Professional’ Shailesh Verma fulfils the requirement for appointment as ‘Interim Resolution Professional’/ ‘Resolution Professional’ under the ‘I&B Code’ and admittedly bears no disqualification.

NCLAT opined that the apprehension of bias expressed by the ‘Corporate Debtor’ qua the appointment of Shailesh Verma as proposed ‘Interim Resolution Professional’ at the instance of the Appellant — ‘Financial Creditor’ cannot be dismissed offhand and the Adjudicating Authority was perfectly justified in seeking his substitution.

——————————————————————————-

Supreme Court’s position

In the above background, Bench observed at the outset that, NCLAT’s approach was not correct that merely Resolution Professional who remained in the service of SBI and is getting pension was disentitled to be Resolution Professional.

Solicitor General, Tushar Mehta as well as Senior Counsel, Krishnan Venugopal agreed for the appointment of new Resolution Professional by NCLT.

Hence, the Bench held that new Resolution Professional be appointed by the NCLT in accordance with the provisions of the Insolvency and Bankruptcy Code, 2016.

While concluding the order, Court stated that the change of Resolution Professional shall not reflect adversely upon the integrity of Resolution Professional concerned, who has been replaced.

Since the impugned order does not reflect the correct approach, the same shall not be treated as a precedent.[State Bank of India v. Metenere,  2020 SCC OnLine SC 837, decided on 19-08-2020]


Also Read:

[SC ALERT] NCLAT’s decoder on appointment of a person as Resolution Professional: Will an ex-employee of Financial Creditor be eligible for appointment? Read on