Case BriefsTribunals/Commissions/Regulatory Bodies

Income Tax Appellate Tribunal, Bangalore: Dealing with the issue of whether the CIT(A) was justified in confirming the addition of amount representing 15% of the sale proceeds deducted by the Monitory committee from e-auction sale of mineral stock belonging to the Assessee and which was contributed to SPV, as per the direction given by the Supreme Court,  the ITAT held that the amount deducted @ 15% from the sale proceeds constitute trading receipts in the hands of the Assessee, but at the same time it is allowable as deduction u/s 37(1) of the Income Tax Act, 1961.

Over rampant mining in the state Karnataka the Supreme Court in the case of Samaj Parivartana Samudaya v. State of Karnataka, (2019) 17 SCC 753 imposed a complete ban on mining in the district of Bellary. Further, after application and request the mining work was resumed after categorizing the mines in three segments ‘A’, ‘B’ and ‘C’, depending on various types of violations by Lessee and financial obligation were created on account of damages and loss caused to the forest and environment by contravention of laws

The Assessee was a partnership firm and is engaged in the business of extraction of iron ore by taking lease of lands from Government. The mines owned by the Assessee herein have been categorised as “B” category mines. Hence 15% of sale, proceeds have been deducted by Monitoring Committee during the years under consideration.

The Assessee had reduced the above-said amounts from the gross sale proceeds and accordingly declared only net sale proceeds as its income in both the years. Assessment proceedings were initiated whereby the AO held that: –

  1. Entire sale proceeds as per E-auction bit sheets/invoices has to be assessed to tax as trading receipts. Hence it constitutes income in the hands of the Assessee.
  2. The amount retained by CEC/MC, as per directions of the Supreme Court on behalf of the Assessee, which is given to the Special Purpose Vehicle (SPV) is on account of damages and loss caused to the forest and environment by contravention of laws. The said amount cannot be allowed as deduction out of sale proceeds even after the accrual of such liability which is being compensation and penal in nature for contravention of laws. The amount so retained for adjusting penalty and other liabilities is nothing but the appropriation of the profit of the Assesse
  3. SPV established for Social-economic development of the mining area is nothing but relating to Corporate Social responsibility only. Hence it is not allowable u/s 37(1), as it was not incurred by the Assessee wholly and exclusively for the purpose of business. It was retained to meet the penal and other liabilities for contravention of law and therefore, the said amount cannot be allowed as deduction in view of the specific Explanation to section 37(1) of the Act.

The CIT(A) confirmed the view taken by the AO. Being aggrieved by the said order, the Assessee preferred an Appeal before the ITAT, whereby ITAT held that:

“It cannot be said that these amounts are penal in nature. The Assessee could not have resumed the mining operations. Therefore, these expenses are incidental to carrying on the business and hence allowable u/s 37(1) of the Act.”

“In view of the foregoing discussions and also following the decision rendered by the co-ordinate benches, we hold that the amount deducted @ 15% from the sale proceeds constitute trading receipts in the hands of the Assessee, but at the same time it is allowable as deduction u/s 37(1) of the Act. Accordingly, we set aside the order passed by Ld. CIT(A) on this issue in both the years under consideration and direct the AO to delete the impugned addition in both the years.”

Thus the Appeal preferred by the Assessee was allowed and the ITAT was pleased to hold the amount deducted @ 15% from the sale proceeds constitute trading receipts in the hands of the Assessee, but at the same time it is allowable as deduction u/s 37(1) of the Act.

 [M/s. M. Hanumantha Rao Vs. A.C.I.T I.T.A. No. 3298 % 3299/Bang/2018. Decided on 25.02.2021].


† Advocate, Supreme Court of India and Delhi High Court 

Case BriefsSupreme Court

Supreme Court: The 3-Judge Bench comprising of R. Subhash Reddy, M. R. Shah* and Ashok Bhushan, JJ., set aside the order of High Court of judicature at Karnataka holding that the Court had exceeded its jurisdiction while quashing the order. The Bench expressed,

“When the mortgaged property was sold in the auction in the execution proceedings, sale was confirmed in favour of the auction purchaser after overruling the objections raised by the judgment debtors and the sale certificate was issued, the High Court was not justified in quashing and setting aside the consent decree.”

The instant appeal was filed by the mortgagee and the auction purchaser who purchased the mortgaged property. The defendant had borrowed a sum of Rs.1,00,000 from the father of the appellant in the year 1990 by way of a simple mortgage deed and then further Rs.50,000 by way of a promissory note in the year 1992. The mortgage deed was executed between the original defendants as Mortgager and one partnership firm namely C.H. Shantilal & Co. as Mortgagee. Subsequently, the mortgager borrowed a loan of Rs.1,00,000 from mortgagee in order to clear their earlier debt in lieu of mortgage of property which made the total amount Rs. 2,5,000. When the defendant defaulted in making payment, the appellant initiated a suit for recovery of the said amount, wherein a compromise had been made and the defendant agreed to pay the sum of Rs.2,50,000 in monthly instalments of Rs.5,000 within three years. The said compromise was affirmed by the Court.

Proceedings at the Courts Below

Pursuant to the aforementioned compromise the appellant filed an execution petition before the Court of City Civil Judge, on 28-02-1996. The respondent contended that the compromise was obtained by fraud. By order dated 03-03-1998, the Executing Court overruled the objections of the judgment debtor-respondent and issued sale proclamation of the mortgaged property on 21-11-1998. The appellant, was declared the highest bidder at Rs. 4,50,000. He deposited 25% of the bid amount on the day on which the sale was conducted.

On 19-02-1999 in the Execution Petition, the judgment debtor filed an application to stay further proceedings with regard to sale of the subject mortgaged property and set aside the auction/sale dated 30-10-1999. The Court dismissed the application and Sale certificate was issued in favour of the auction purchaser and the sale was registered.

The High Court vide its order dated 06-01-2000 dismissed Revision Application filed on behalf of the judgment debtor. Consequently, another compromise was arrived at between the parties wherein the judgment debtor agreed to pay Rs.6,96,062 in full and final settlement of the decree passed by the Trial Court. The judgment debtors again withdrew from the compromise agreed by them and filed an appeal in the High Court. The High Court had quashed and set aside the consent decree passed by the Trial Court while relying upon the report submitted by the Principal City Civil Judge and having opined that the decree in O.S. No. 3376 of 1995 was obtained by fraud.

Observations and Decision

The Bench observed that the High Court has allowed the first appeal preferred by the original defendants and has quashed and set aside the consent decree passed by the Trial Court in O.S. No. 3376 of 1995 dated 01-06-1995, much after the mortgaged property came to be sold in the execution proceedings and much after the sale in favour of the auction purchaser was confirmed and the sale certificate was also issued, which said the Bench, could not be approved. By the impugned judgment and order, the High Court had also set aside the order dated 30-10-1999 passed by the Executing Court by which the Executing Court had dismissed the application preferred by the judgment debtors praying for setting aside the auction sale. Similarly, the High Court had also allowed the Revision Application had also quashed and set aside the order dated 03-03-1998 wherein the Court had overruled the objections raised by the judgment debtor that the consent decree was obtained by fraud.

Noticing that the judgment debtor was aware of the consent decree yet instead of challenging it on the ground that it was obtained by fraud, the judgment debtors filed their objections in the execution petition. Overruling of the objections filed by the judgment debtors had attained the finality as the same had not been assailed before any appellate forum. Hence, the Bench stated that,

“Order XXI Rule 92 of CPC read with Order XXI Rule 94, once the sale was confirmed and the sale certificate had been issued in favour of the purchaser, the same should become final.”

Therefore, unless and until the order dated 03-03-1998 was set aside, neither the High Court was justified in calling for the report from the learned Principal City Civil Judge nor even the learned Principal City Civil Judge was justified in permitting the judgment debtors to lead the evidence on the allegation that the decree was obtained by fraud, mis-representation, specially when the judgment debtors had failed to lead any evidence earlier before the Executing Court when such objections were raised.

“It is crystal clear that all through-out there was a delay and negligence on the part of the judgment debtors in not initiating the appropriate proceedings at appropriate stage.”

In the light of above mention considerations, the impugned order was quashed and set aside.

[H.S. Goutham v.  Rama Murthy, 2021 SCC OnLine SC 87, decided on 12-02-2021]


Kamini Sharma, Editorial Assistant has put this report together

*Judgment by: Justice M. R. Shah

Appearance before the Court by:

Counsel for the appellant: Advocate Rahul Arya,

Counsel for the respondent: Advocate P.R. Ramasesh

Case BriefsSupreme Court

Supreme Court: The 3-judge bench of Sanjay Kishan Kaul, Dinesh Maheshwari and Hrishikesh Roy, JJ., has set aside the order of High Court of Judicature for Andhra Pradesh at Hyderabad and, thereby restored the findings of Trial Court.

Background

 In the instant case, a claim for partition and division was made by the appellant in four equal shares amongst herself and her three siblings, who were arrayed as defendants 1, 2 and 3. The property was left by deceased step-mother of the appellant. Defendant 4, brother of step-mother of the appellant, alleged that his sister had sold Item 1 of Schedule A of the plaint to Defendant 15 under an agreement for sale dated 05-11-1976; and that she had also executed a Will dated 15-06-1978 in favour of her mother and an attendant, defendants 14 and 13 respectively. The appellant denied and disputed the alleged agreement for sale as also the alleged Will.

Findings of the Courts below

 The Trial Court held that both the documents, of the alleged agreement for sale and of the alleged Will, were false and fabricated. The Court observed that the deceased, who was only 45 years of age at the time of her death, would never choose to bequeath the major part of property to her mother, who was about 80 years of age. It was observed that suggestions about the deceased being in her high level of indebtedness were not correct as the defendant could not point out the names of creditors and could not say as to how much was discharged. On contrary, the High Court had affirmed the findings of the Trial Court in relation to Will in question and has held that the Will was not valid. However, it had reversed the findings of the Trial Court in relation to alleged agreement for sale and held that the same was binding on the appellant. It was also ordered that the property forming the subject matter of the said agreement would not be available for partition.

 Observations and Considerations

 In the backdrop of the aforementioned facts, the Court formed three points for determination in the instant appeal:

Whether suit for partition filed was not maintainable for want of relief of declaration against the agreement for sale deed?

The Court clarified that the expression “declaration”, for the purpose of a suit for partition, refers to the declaration of the plaintiff’s share in the suit properties. It was observed that the appellant had not shown awareness about any agreement for sale initially, and later on, the appellant did raise a claim for sale deed being frivolous.

It was also observed that, as per Section 54 of the Transfer of Property Act, 1882, an agreement for sale of immoveable property does not, of itself, create any interest in or charge on such property. A person having an agreement for sale in his favour did not get any right in the property, except the right of obtaining sale deed on that basis and the alleged agreement for sale did not invest the vendee with any such right that the appellant could not have maintained her claim for partition in respect of the properties left by her deceased mother without seeking declaration against the agreement.

What is the effect and consequence of not bringing the legal representatives of defendant who expired during the pendency of appeal in the High Court on record?

Order XXII, Rule 1 of CPC lays down that the death of an appellant or respondent shall not cause the appeal to abate if the right to sue survives. The Court clarified that the same procedure would apply in appeal where one of the several appellants or respondents dies and right to sue survives to the surviving parties alone. Reliance was placed on State of Punjab v. Nathu Ram,(1962) 2 SCR 636, wherein it was held that,  “if the court can deal with the matter in controversy so far as regards the rights and interests of the appellant and the respondents other than the deceased respondent, it has to proceed with the appeal and decide it. It is only when it is not possible for the court to deal with such matters, that it will have to refuse to proceed further with the appeal and therefore dismiss it.” The Court held that, the instant case could definitely proceed even in the absence of the legal representatives of defendant 2 because in case of success of this appeal, there would be no likelihood of any inconsistent decree vis-à-vis defendant 2 coming into existence. The decree of the Trial Court had been in favour of the plaintiff and defendants 1 to 3 and the result of success of this appeal would only be of restoration of the decree of the Trial Court, which would be of no adverse effect on the estate of the deceased defendant 2.

Whether the High Court was justified in reversing the findings of the Trial Court in relation to the said agreement for sale?

The Court noticed that the two documents were intrinsically intertwined, particularly

because it was suggested by the contesting defendants that in the Will, apart from making bequest, the deceased also directed her mother (legatee) to execute a registered sale deed in favour of defendant 15 after receiving the balance sale consideration from him as per the agreement executed in his favour; and that the deceased also directed her mother to discharge the debts. This unmistakable inter-mixing of the two documents had been the primary reason that the Trial Court examined the matters related with them together, while indicating that to give a colour of reality to the Will and to show that the deceased was highly indebted to others which compelled her to sell the property, the suggestions were made about sale to the husband of the deceased’s sister. The High Court had missed out this fundamental feature of the case that two documents, Will and agreement for sale, as put forward by the contesting defendants could not be analysed independent of each other.

When the Will was found surrounded by suspicious circumstances, the agreement must also be rejected as a necessary corollary.

While examining preponderance of probabilities about the existence of such an agreement for sale, the overall relationship of the parties, the beneficiaries of the alleged agreement and their conduct could not be kept at bay. The Court stated, “If the story of indebtedness of the deceased goes in doubt, the suspicions surround not only the Will but agreement too.” Trial Court was right in questioning that if at all any such agreement was executed on 05-11-1976, there was no reason that the vendee did not get the sale document registered for a long length of time because the deceased expired 1½ years later.

Decision

It was held that the Trial Court had examined the matter in its correct perspective and had rightly come to the conclusion that the agreement for sale was as invalid and untrustworthy as was the Will. The findings of Trial Court, based on proper analysis and sound reasoning, called for no interference. On the other hand, the High Court had been clearly in error in interfering with the findings of the Trial Court in relation to the agreement in. Therefore, the Court restored the decree of the Trial Court with further directions that the appellant should be entitled to the costs of the litigation in the High Court and in this Court from the contesting respondents. [Venigalla Koteswaramma v. Malampati Suryamba, 2021 SCC OnLine SC 26, decided on 19-01-2021]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): The Bench of Dinesh Singh (Presiding Member) observed that:

“Consumer has the right to know, before he exercises his choice to patronize a particular retail outlet, and before he makes his selection of goods for purchase, that additional cost will be charged for carry bags, and also the right to know the salient specifications and price of the carry bags.”

In the present matter, petitioner, Big Bazaar (Future Retail Ltd.) was the Opposite Party before the District Forum.

Condonation of Delay

The petition was filed with self-admitted delay of 60 days and the reasons laid down for condonation of delay were with regard to the managerial inefficiency and perfunctory and casual attitude to the law of limitation.

Though the above-stated reasons were illogical and unpersuasive, yet in the interest of justice, delay was condoned in light of providing fair opportunity.

Issue

Charging additional cost (Rs 18 in this case) for ‘carry bags’ to carry the goods purchased by the complainant was concluded as an unfair trade practice on the part of OP by the two Fora below.

hence, OP Co. was directed to refund the cost of ‘carry bags’ and pay compensation of Rs 100 along with the cost of litigation which was Rs 1100 and Rs 5000 to be deposited in the Consumer Legal Aid Account.

Revision Petition

The instant revision petition was filed by the OP Co. under Section 58(1)(b) of the Consumer Protection Act, 2019 before this Commission.

[The jurisdiction of this Commission under both sections i.e. Section 21(b) of the Act 1986 and Section 58(1)(b) of the Act 2019 is the same (the articulation in both is identical)]

Bench noted the fact that earlier OP was providing ‘carry bags’ made of polythene without charging additional costs and later when it started providing cloth carry bags it started charging additional cost.

In light of the above, the Commission expressed that:

Prominent prior notice / signs / announcement / advertisement / warning to the consumers, before the consumers exercised their choice to make their purchases from the outlets of the Opposite Party Co., that additional cost will be charged for carry bags, was not there.

In the present case, the consumers were not allowed/were not in a position to/did not have prior notice or information to take their own ‘carry bags’. In fact, after the purchase was completed and at the time of making the payment, they were being charged additionally for the cost of ‘carry bags’.

Fora Below

The Forums below appraised the case and returned with concurrent findings of deficiency and unfair trade practice.

Notice issued by Co-Ordinate Benches

The argument made by Senior Counsel, in the hearing on admission on 01-12-2020, that in “similar” cases of other traders notice has been issued by co-ordinate benches of this Commission, is not tenable.

Mere issuance of notice by a co-ordinate bench in “similar” cases of other traders is not a binding precedent.

Cloth Carry Bags

Carry bags of undisclosed specifications were forced on the consumers at the price as fixed by the Opposite Party Co., the consumers were forced to accept the carry bags, of undisclosed specifications, at the price fixed.

Adding to the above, Bench stated that a mere notice at the payment counter or consumer being informed at the payment counter that additional cost will be charged for ‘carry bags’ after the purchase from the store concerned has been made, should not be the case.

“It also cannot be that carry bags of (undisclosed) specifications and of price as fixed by the Opposite Party Co. are so forced on the consumer.

Such notice or information at the time of making payment not only causes embarrassment and harassment to the consumer and burdens him with additional cost but also affects his unfettered right to make an informed choice of patronizing or not patronizing a particular outlet at the initial stage itself and before making his selection of goods for purchase.”

Therefore, the Commission found such practice of disclosing the price of carry bags at the payment counter to be unquestionably ‘unfair trade practice’ under Section 2(1)(r) of the Act 1986 [corresponding Section 2(47) of the Act 2019].

Right to Know

As a matter of Consumer rights, the consumer has the right to know that there will be an additional cost for ‘carry bags’ and also to know the salient specifications and price of the carry bags, before he exercises his choice of patronizing a particular retail outlet and before he makes his selection of goods for purchase from the said retail outlet.

Commission in very clear words expressed that:

“…arbitrarily and highhandedly deviating from its past practice, deviating from the normal, not giving adequate prominent prior notice or information to the consumer before he makes his choice of patronizing the retail outlet, and before he makes his selection for purchase, imposing the additional cost of ‘carry bags’ at the time of making payment, after the selection has been made, forcing carry bags without disclosing their salient specifications at price as fixed by the Opposite Party Co., putting the consumer to embarrassment and harassment, burdening the consumer with additional cost, in such way and manner, is decidedly unfair and deceptive.”

Hence, the Commission directed OP to discontinue its unfair trade practice of arbitrarily and highhandedly imposing an additional cost of carry bags on the consumer at the time of making payment, without prominent prior notice and information before the consumer makes his choice of patronizing its retail outlets and before the consumer makes his selection of goods for purchase, as also without disclosing the salient specifications and price of ‘carry bags’.

The above order is made under Section 39(1)(g) of the 2019 Act.  However, the Commission made it explicitly clear that:
“It is made explicit that the critique apropos the Opposite Party Co. and the order under Section 39(1)(g) of the Act 2019 to the Opposite Party Co. have been made inter alia considering that it is a company with the wherewithal and inter alia considering the way and manner in which it conducts its business of retail. As such, nothing in the critique and in the order made under Section 39(1)(g) of the Act 2019 can be (mis) construed to be made applicable to differently / lesser placed traders, the applicability can only be made on similarly / better-placed traders, similarly / better situate, having similar way and manner of conducting their business.” [Big Bazaar (Future Retail Ltd.) v. Ashok Kumar, 2020 SCC OnLine NCDRC 495, decided on 22-12-2020]


Advocates who appeared before the Commission:

For the Petitioner: Sudhir K. Makkar, Senior Advocate along with Saumya Gupta, Advocate and Yogita Rathore, Advocate.

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,  2018 SCC OnLine Utt 193, decided on 21-02-2018]


Suchita Shukla, Editorial Assistant has put this story together

Case BriefsHigh Courts

Kerala High Court: The Bench of Alexander Thomas, J. hearing a civil writ petition, considered the legal validity of unilateral cancellation of deeds and held that a vendee cannot be divested of his title by unilateral cancellation of sale deed by the vendor.

Petitioner (widow of one James), since her husband’s death, was in ownership and enjoyment of property settled by James’ mother Kunjamma in his favour. Her request to settle the said property in favour of their daughter, was refused by the District Registrar on the ground that the settlement deed executed by Kunjamma in favour of James had been unilaterally cancelled by her by executing and registering a cancellation deed. Aggrieved, the petitioner filed the instant petition for praying for a direction to the District Registrar to execute and register settlement deed executed by her in favour of her daughter.

The Court took note of its decisions in Pavakkal Noble John v. State of Kerala, 2010 SCC OnLine Ker 2561 and P.A. Hamsa v. District Registrar General, Kozhikode, 2011 SCC OnLine Ker 1882 where it was held that a registration officer is legally obliged to reject and refuse to register cancellation of sale deed which has been unilaterally executed without the knowledge and consent of parties to the sale deed.

It was noted that Kunjamma’s cancellation deed had been executed after James’ death and hence there was no question of any bilateral execution or registration of cancellation deed with his consent. Therefore, the said cancellation deed was null and void and not binding on James’ legal heirs, i.e., the petitioner and her daughter.

Accordingly, settlement deed executed by petitioner in favour of her daughter was directed to be registered. The Court also directed Inspector General of Registration to issue necessary norms and guidelines in this regard, by way of circular, to the registration officers.[Lali Yohannan v. State of Kerala, 2018 SCC OnLine Ker 8056, Order dated 29-11-2018]

Case BriefsHigh Courts

Madras High Court: Petitioner had approached this Court before a Single Judge Bench of Pushpa Sathyanarayana, J., with a prayer to block the link of all websites involved in online sale of Schedules H, H1 and Schedule X medicines which is in violation of Rules 65 and 97 of the Drugs and Cosmetics Rules, 1945 until they receive requisite license.

Respondent contended that petitioner had already filed a writ petition with the same prayer thus this petition not only is a multiplicity of proceedings but also petitioner is guilty of suppressio veri and suggestio falsi. This petition was filed without a new cause of action. Petitioner defended by stating that there is no res judicata and constructive res judicata, as there was no order of the Court which finalized the issue raised before it. Therefore, there was no res judicata. Sections 12 and 33 of the Act empowered the Central Government to make rules with respect to the import of drugs, cosmetics, and its manufacture, sale, and distribution of drugs and cosmetics. It is to be noted that draft rules though published in the Gazette, are not yet notified. Without these rules, it would become difficult to curb the sale of medicines online.

It may be noted that earlier on 31-10-2018, the Court had granted an interim injunction against the online sale of medicines without license after taking note of the seriousness of the issue and public cause.

High Court viewed that though the online sale has many benefits but it has many flaws too and there is a need to curb the online sale of medicines. Court directed respondents to notify the proposed Drugs and Cosmetics Amendment Rules, 2018 and ordered that unless the aforementioned rules are notified, the online traders should stall their online business in drugs and cosmetics.

However, by a subsequent order the Division Bench comprising of M. Sathyanarayanan and P. Rajamanickam, JJ. have suspended the operation of the earlier stay order in following terms:

“It is brought to the notice of the Court that the learned Judge has suspended Paragraph No. 38 of the impugned order passed in the writ petition till 10.30 a.m. and since the Court has already entertained the writ appeals and on hearing the rival submissions, has reversed orders in the miscellaneous petitions for interim order, till it pronounces orders in the miscellaneous petitions, the order of suspension shall be continued. It is made clear that the continuance of the order, shall not create any equitable rights in favour of the appellants and it is subject to the result of the orders to be passed in the miscellaneous petitions for interim orders.”[Practo Technologies (P) Ltd. v. Tamil Nadu Chemists and Druggists Assn., 2018 SCC OnLine Mad 3577, Order dated 20-12-2018]

Case BriefsHigh Courts

Calcutta High Court: A Single Judge Bench comprising of Asha Arora, J. dismissed a revisional application filed by the petitioner assailing the order of the learned Additional District Judge who reversed the order of the learned Civil Judge granting a decree of pre-emption in favour of the petitioner.

The petitioner filed a case under Section 8 of West Bengal Land Reforms Act 1995, for pre-emption in respect of land which was transferred in favour of the opposite party (OP) by the predecessor-in-interest under a registered sale deed. Petitioner sought pre-emption of the land in question on the ground of adjoining ownership. The application for pre-emption was contested by the OP contending that the petitioner had waived his right, if any, by becoming an attesting witness to the above-mentioned registered sale deed. The application for pre-emption was allowed by the trial court. However, the Additional District Judge reversed the order of the trial court. Aggrieved thus, the petitioner was before the High Court in revision.

The High Court perused the record and found that the petitioner was indeed the attesting witness in the registered deed of sale of the land in question in favour of the OP. The Court relied on the decision of the Supreme Court in Jagad Bandhu Chatterjee v. Nilima Rani, (1969) 3 SCC 445, wherein it was held, under the Indian law neither consideration nor an agreement would be necessary to constitute waiver. A waiver amounts nothing more than an intention not to insist upon the right. The acquiescence in the sale by any positive act amounting to relinquishment of pre-emptive right have the effect of forfeiture of such a right. The High Court was of the opinion that by being an attesting witness to the sale deed, the petitioner by his act and conduct acquiesced to the sale of land sought to be pre-empted. Such an act impliedly amounted to relinquishment of pre-emptive rights and thus the petitioner had waived his right. In such circumstances, the High Court found no irregularity with the order impugned. Therefore, the revision was dismissed. [Tusar Kanti Basu Chowdhury v. Nil Kamal Basu Chowdhury,2018 SCC OnLine Cal 3433, decided on 08-06-2018]