Bail Application
Case BriefsHigh Courts

Himachal Pradesh High Court: Tarlok Singh Chauhan, J. partly allowed the appeal of filed by an employer challenging the compensation granted to a deceased employee’s wife under the Employees Compensation Act, 1923 on the ground that before passing a penalty order against the employer, a reasonable opportunity must have been given to him to justify himself.

Appellant herein was the employer of the respondent’s husband (deceased employee) who was employed as a driver by the appellant and died in an accident. Respondent’s wife filed a petition against the appellant seeking payment of compensation along with interest and penalty against the appellant and other respondents towards their joint and severe liability under the Employees Compensation Act, 1923. The appellant in his reply denied the salary as claimed and requested the recovery of the insurance amount. However, the Employee’s Compensation Commissioner-II awarded the respondent with compensation and interest along with a penalty. Aggrieved by this award, the appellant filed the present appeal.

Navlesh Verma learned counsel for the appellant, contended that there was no employer-employee relationship between the appellant and the deceased employee; and secondly that no show-cause notice was issued on the appellant-employer before passing an adverse award against him.

The Court held that the records proved that there was a relationship of employer and employee between the appellant and the deceased.

With respect to the second contention, it was held that as per the judgment in Ved Prakash Garg v. Premi Devi, (1997) 8 SCC 1 penalty under Section 4-A(3)(b) of the Act can only be imposed when the employer is given a prior notice and an opportunity to defend himself against the same which was certainly not given to the appellant herein.

Hence, the court allowed the appeal and set aside the penalty imposed on the appellant. [Amandeep Singh v. Shaheena Parveen, 2019 SCC OnLine HP 1416, decided on 30-08-2019]

Case BriefsHigh Courts

Allahabad High Court: Siddhartha Varma, J., set aside the impugned order as the charge enumerated in the show cause notice was rightly replied to by the petitioner and there was no illegality to that effect.

In the pertinent case, the petitioner moved to this Court against the impugned order which cancellation the license of the petitioner to run the Fair Price Shop. The factual matrix of the case was that upon a complaint being made by one Sunil Kumar Maurya on the telephone that the petitioner, who was a Fair Price Shop dealer, had in the month of May 2018 not distributed the essential commodities but had sold them out in the open market, an inspection was made by the Supply Inspector on 26-5-2018. Thereafter on 29-5-2018, the petitioner was served with a show-cause notice and a suspension order. The petitioner replied to the show-cause notice on 11-6-2018. However, when the Sub-Divisional Officer, on 18-8-2018 cancelled the licence of the petitioner to run the Fair Price Shop which was affirmed by the Appellate Authority by its order dated 12-12-2018.

The counsel for the petitioner contended that the show-cause notice which was served on the petitioner along with the suspension order did not contain any specific charge. The only charge appeared in the show cause notice was just with regard to the 81 missing bags of wheat, therefore, no further charge should have been dealt with while passing the impugned order.

High Court was of the view that the charges should be very clear and if the charges are vague then the inquiry itself becomes vitiated. The Court further allowed the writ petition as the charge in the show cause notice was just one in number and that had been replied to by the petitioner and the other charges should not have been taken into account for terminating the licence of the petitioner.

Further, the Court gave directions to the State Government that “they should advise their officers that when they issue show-cause notices then they should enumerate the charges properly. They should not be merged with the details of the complaints and the inspection report”. [Manoj Kumar Yadav v. State of U.P., 2019 SCC OnLine All 3476, decided on 19-09-2019]

Case BriefsHigh Courts

Bombay High Court: A Full Court Bench of Pradeep Nandrajog, CJ and Revati Mohite Were and Bharati H. Dangre, JJ. returned a reference unanswered in light for the reason that the law is well settled and there was no contradiction in the judgments delivered by different Benches.

The questions were referred to be answered by a Full Bench relating to the procedure to be followed by the Magistrate while issuing a Show Cause Notice under Section 107 CrPC (security for keeping the peace in other cases, i.e. other than the case of security for keeping the peace on conviction under Section 106). The Division Bench, in the present case, noted that as many as eight judgments passed by different Benches had held that before proceeding to issue a Show Cause Notice envisaged under Section 107, the opinion contemplated by Section 111 CrPC (order to be made) had to be separately authored. It was also noted that another Division Bench in Suleman Adam v. Emperor, 1909 SCC Online Bom 102, had taken a contra view. Therefore, the instant reference was made to the Full Bench.

The High Court perused all the decisions mentioned in the reference order and noted that the procedure followed in Suleman Adam’s case was in the peculiar facts of that particular case. It was observed: “To put simply, the requirement of law is that the Magistrate has to form an opinion in writing contemplated by Section 111 CrPC and thereafter proceed to issue a show cause notice as contemplated by Section 107 and along with the show cause notice annex the opinion. But, in a given case, it may happen that the language in which the order/opinion contemplated under Section 111 is not comprehensible to the noticee, then the may integrate the order/opinion and convey to the noticee in the language which the noticee comprehends.”

It was further stated: “The purpose of the law is that the noticee is to be made known the factual matrix comprising either the complaint or the information received by the Magistrate and the reasons for the opinion formed by the Magistrate.”

The High Court did not find any contra opinion in Suleman Adam’s case vis-a-vis the opinion given in the other eight judgments mentioned in the reference order. Resultantly, the Full Bench returned the reference unanswered for the reason that the law is well settled as captured in the said eight judgments.[Farhan Nasir Khan v. State of Maharashtra, 2019 SCC OnLine Bom 1777, decided on 03-09-2019]

Case BriefsHigh Courts

Bombay High Court: A Division Bench of Akil Kureshi and S.J. Kathawalla, JJ. addressed the petition filed by NDTV challenging orders passed by Securities Exchange Board of India (SEBI). Orders passed by SEBI pertained to the rejection of applications filed by NDTV for condonation of delay in filing settlement applications.

Facts pertaining to the present case

SEBI had initiated adjudication proceedings against the petitioner. The ‘first show-cause notice’ dated 12-02-2015 alleged violation of Clause 36 of Listing Agreement on the ground that there was non-disclosure of a tax demand of Rs 450 Crores which was raised under an assessment order against the Company for the assessment year 2009-2010.

04-03-2015 – Petitioner filed reply contending that he was under legal advice and bonafide belief that the tax demand was not required to be reported under Clause 36 of the Listing Agreement.

04-06-2015 – SEBI passed order holding the petitioner liable for the violation of Clause 36 of Listing Agreement and imposed a penalty of Rs 25 lakhs under Section 23-A of the Securities Contracts (Regulation) Act, 1956.

23-07-2015 – Petitioner filed an appeal against the above-stated order of SEBI before SAT, Mumbai.

28-08-2015 – SEBI issued ‘second show-cause notice’ against the company and its directors and key managerial personnel in which the allegations included non-disclosure of tax demand of Rs 450 Crores, delayed disclosure of certain sale of shares by KVL Narayan Rao, Group CEO and Executive Vice-Chairman and delayed disclosure by the petitioner under the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992.

08-06-2016 – SEBI issued the ‘third show cause notice’ alleging the petitioner for violation of certain provisions of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.


Petitioner stated that there was no contravention of non-disclosure of tax demand which was the main subject matter of the first and second show-cause notices. In regard to the allegations in the third show cause notice, the petitioner stated that it could trace the proof of some of the disclosures but could not trace the proof of the rest. Under the circumstances, without conceding to the correctness of the allegations made, the petitioner took a decision to seek settlement of all three cases.

21-03-2017 – Petitioner filed settlement application with respect to the first and second show-cause notices.

24-07-2017 – In respect to the third show-cause notice, the settlement application was filed.

15-05-2017 – Petitioner filed an application for condonation of delay in filing settlement application dated 21-03-2017. Further, it was stated that the settlement application was re-presented on 26-09-2017 confined to the second show-cause notice.

Additionally to the above contentions, counsel for the petitioner stated that:

  • No personal hearing was granted.
  • Impugned orders are non-reasoned orders, due to no reasons being cited for rejection of delay of condonation
  • Petitioner made out sufficient grounds for condoning the delay.
  • Delay in view of the statutory provisions should be construed liberally. SEBI committed a serious error in not entertaining settlement applications on merits simply rejecting on the ground of delay.

Counsel for SEBI opposed the petition contending that the delay in both the cases was substantial which was not satisfactorily explained. SEBI considered the applications on merits and recorded that for want of satisfactory reasons, delay cannot be condoned. Orders, therefore cannot be termed as unreasoned orders.


The High Court perused relevant statutory provisions, i.e. Securities and Exchange Board of India Act, 1992 and SEBI (Settlement of Administrative and Civil Proceedings) Regulations 2014.

With the stated statutory framework in mind, Court perused the relevant documents on record. Further perusal of both the impugned orders suggested that the Board had not cited any reasons for rejecting the respective obligations of the petitioner for condonation of the delay. “Mere statement that the panel of whole-time members did not find the reason given as sufficient would not constitute proper reasons for dealing with the applications.”

“Facts and grounds stated in both the delay condonation applications were different. However, both the applications met with the same response from the Board. Citing identical one line consideration both applications were rejected. It ought to have been appreciated that the result of the rejection of delay condonation applications would be to terminate respective settlement applications without consideration on merits.”

Court stated that the Board committed a serious error in rejecting both the applications for condonation of delay.

Court further added that, “In the present case, we are not inclined to express any conclusive opinion with respect to the right of an applicant of settlement application to be heard in person at the stage where application for condonation is being decided by the Board.”

Thus, the Court set aside both the impugned orders and the applications for condonation of delay stood allowed. [NDTV v. SEBI, 2019 SCC OnLine Bom 1772, decided on 04-09-2019]

Case BriefsTribunals/Commissions/Regulatory Bodies

Securities Appellate Tribunal (SAT): Coram of Justice Tarun Agarwala (Presiding Officer), Dr C.K.G. Nair (Member), and Justice M.T. Joshi (Judicial Member) set aside the impugned order in this case. The appellant challenged an ex-parte order passed against him alleging that he was not served properly and therefore the impugned order was against the principles of natural justice as under Article 14 of the Constitution. The appellant, being the Managing Director of Sigrun Holdings Ltd. (SHL) sold 45,000 shares of the company on 24-05-2010, while having knowledge/possession of the adverse quarterly result of SHL based on sensitive information which had not yet been made public, without the authorization of the board.  The adjudicating officer imposed heavy penalties on the appellant in an order citing the various SEBI regulations which had been violated.

The appellant, being aggrieved by the said order, filed an appeal on the ground that the impugned order is an ex-parte order and that he had no knowledge of the proceedings initiated by the Adjudicating Officer. The Appellant has alleged that he did not receive the show cause notice for the proceedings by the Adjudicating Officer and the proper procedure for service of the same has not been followed as under Rule 7 of the Securities and Exchange Board of India (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995.

The Court held that the respondent was in violation of Rule 7 as stated above as they had not tried to personally serve the appellant at the place where he carried on business or had worked for gain and had instead directly moved on to affixation which does not comply with the procedure laid down in Rule 7. The Court further said that “mode of service prescribed under Rule 7 is not exhaustive and other modes of service was always available in addition to the modes of service prescribed under Rule 7 i.e. for example publication of the notice in an appropriate newspaper or service through email.”

Thus, the Court set aside the impugned order in the interest of natural justice and in violation of the principles of natural justice as embodied under Article 14 of the Constitution of India and ordered the Adjudicating Officer to comply with the proper procedure.[C.R. Rajesh Nair v. Securities & Exchange Board of India, 2019 SCC OnLine SAT 71, decided on 18-07-2019]

Case BriefsTribunals/Commissions/Regulatory Bodies

Appellate Tribunal for SAFEMA, FEMA, PMLA, NDPS & PBPT Act: Justice Manmohan Singh (Chairman), dismissed an appeal filed by a company challenging a show-cause notice for retention of its property, on the ground that no hardship was caused to the appellant-company by the impugned notice.

In the present case, FIR was registered by CBI against Videocon International Electronics Limited under Sections 120-B and 420 of Penal Code, 1860 and Sections 7 and 13(2) of Prevention of Corruption Act, 1988. It is pertinent to note that appellant’s name was not mentioned in the said FIR. An Enforcement Case Information Report (ECIR) was recorded, but appellant was not even supplied a copy of that report. Search was conducted by Enforcement Directorate (ED) at the appellant’s offices and various documents were seized without even mentioning what those files pertained to. An application was filed by the ED under Section 17(4) of the Prevention of Money Laundering Act, 2002 seeking retention of the seized property. The said application was allowed by the Adjudicating Authority, and appellant was served a show-cause notice under Section 8(1) PMLA seeking his reply as to sources of procurement of property seized. Aggrieved by the said order, the instant appeal was filed.

Learned counsels Vinit Virmani and  R.K. Gosain appearing on behalf of the appellant, submitted that the impugned notice was issued on the basis of reason to believe and there was non-application of mind because the Authority did not even peruse the report of records seized. Further, the details of seizure documents were not in the manner prescribed. Since a proper list of documents had not been supplied to the appellant, it was not even aware of the contents of seized documents. It was further contended that the name of the appellant was not even mentioned in the FIR. Lastly, the seizure memo prepared was contrary to Rule 3(3)(A) of PMLA (Restoration of Property) Rules read with Rule 5 of PMLA (Forms, Search & Seizure, Etc.) Rules, 2005.

Counsels for the respondent, Nitesh Rana and A.R. Aditya, submitted that the appeal filed was not maintainable. They argued that before issuing the notice, if there are certain mistakes and defects or omissions, the notice already issued cannot be declared invalid at this stage, under Section 68 of PMLA. It was contended that the Adjudicating Authority did not pass an order, but had merely issued a show-cause notice. An appeal can be filed under Section 26(1) PMLA before this Tribunal only against an order of the Adjudicating Authority which has been passed under Section 8(4) of PMLA. Further, if an appeal is allowed against every procedural act of the Adjudicating Authority, as is the case of appellant, it would lead to multiplicity of proceedings. Respondent’s counsels admitted that a thirty-day notice, as mandated under Section 8 PMLA, was not given prior to issuance of show-cause notice. But he submitted that it was a curable defect under Section 68 PMLA, and that appellant could still be given 30 days to file a reply to the notice.

The Tribunal placed reliance on Farida Begum Biswas v. UOI, 2015 SCC OnLine Del 11834 where it was held that “Any person aggrieved by an order made by the Adjudicating Authority under Section 8 of PMLA can avail the remedy of appeal under Section 26 of PMLA to the Appellate Tribunal” It was opined that an appeal under Section 26 PMLA may or may not be maintainable. An appeal before PMLA may be maintainable in exceptional circumstances such as great hardship being caused to a party, abuse of the law, injustice, irreparable loss and great prejudice to party concerned. Thus, maintainability as an issue could only be decided on the facts and circumstances of each case.

It was noted that in the present case, the respondent had merely seized two files containing papers, and the appellants were entitled to receive copies of the same under Section 21(2) PMLA at the appropriate time. Therefore, no hardship was being caused to the appellant if the objections raised by it would be decided by the Adjudicating Authority within a time-bound manner. Moreover, appellant always had the remedy to challenge the Authority’s order in appeal after the retention order under Section 17(4) PMLA is passed.

In view of the above, the present appeal was dismissed.[Pacific Capital Services (P) Ltd v. Deputy Director, Directorate of Enforcement, Mumbai, 2019 SCC OnLine ATPMLA 26, decided on 30-05-2019]

Case BriefsHigh Courts

Madhya Pradesh High Court: A Bench of Vandana Kasrekar, J. allowed a writ petition and set aside an order passed by Director, Employment and Training, MP Civil Centre, in the appeal against the impugned order, removing the petitioner from his services by the Joint Director of the aforementioned Training Centre.

The petitioner was appointed as Class-III employee in the aforementioned Centre on a compassionate basis. The petitioner contended that, Joint Director issued a show cause notice which stated the non fulfillment of the conditions of employment i.e. passing of Hindi typing examination by the petitioner, further as per the terms and conditions of the appointment order he has availed 466 days of leave without pay and was continuously absent for a period of 3 months, for which he was terminated from his services as a way of punishment, allegations were found to be true in internal enquiry. The petitioner was aggrieved by such report and was not given an opportunity of being heard by the Joint Director.  He was equally aggrieved by the order of Director, terminating his services and agreeing with the order of Joint Director, therefore, dismissing his appeal.

Learned Counsel for petitioner, M.I. Khan, argued that order impugned is arbitrary and illegal, it is also violative of the principles of natural justice i.e. ‘Audi Alteram Partem’. According to his submissions, the order of the Director was contrary to the provision of Civil Services Rule, 1966. No proper procedure was followed while adjudicating the matter of the petitioner. The enquiring officer has filed the report on the basis of the fact that the petitioner has admitted the charges and no statements of witness were recorded by the enquiring officer. He further submitted that the order of removal is not passed by the competent authority. Joint Director was in no position to terminate the petitioner as he was appointed by the Director and no person subordinate to him had such powers.

Learned Counsel for the respondent, Vikas Yadav, replied that the petitioner has not cleared the essential requirement of qualification for the respective post i.e. Hindi typing exam. The non-performance of the petitioner was also highlighted by his continuous unauthorized absence from work for a period of almost 3 months and his non-attendance for a total of 466 days.  Respondent contended that though, the petitioner replied to the show cause notice, the same was not satisfactory. After issuance of the charge sheet, the petitioner himself admitted the charges levelled against him before the enquiring officer. Therefore, the impugned order of removal was passed. Thus, no illegality was caused in removing the petitioner from his services.

The Court observed that, before the show cause notice was issued no enquiry was initiated against the petitioner by the respondents and the said show cause notice was issued for termination of services of the petitioner. “It shows that the authorities have make up their mind for terminating the services of the petitioner before initiating any departmental enquiry.” Court was of the view that petitioner stated the medical reasons in reply to the show cause notice, but he also admitted not clearing the exam and taking unauthorized leaves for such a long tenure.

Court held, that no alleged enquiry was conducted by the respective respondents, which was arbitrary and they served a copy of the report without filing any charge sheet. The Court stated the provisions of CCA Rules, which provide for the opportunity of hearing to the accused even if the charges in written statements are admitted. The enquiring officer must always ask the accused whether he pleads guilty or not in a proper recorded manner. It was found by the Court that there was a breach in proper proceedings in recording the statements of the petitioner and the proceedings were not in conformity with the law. The Court directed the respondents to reinstate the petitioner in service without any back wages.[Ajay Kadam v. State of M.P., 2019 SCC OnLine MP 769, Order dated 07-05-2019]

Case BriefsHigh Courts

Jharkhand High Court: The Bench of Ananda Sen, J. set aside a punishment order issued against a police constable in departmental proceedings, for being in violation of principles of natural justice.

Petitioner, a constable in the police department, was served with a departmental charge sheet alleging misconduct. In the departmental inquiry was held. In the inquiry, charges against him were held not to be proved. The disciplinary authority, disagreeing with the findings given of inquiry report, punished him with two black marks and withheld his salary on the basis of no work no pay.  The said order was challenged by the petitioner in departmental appeal, which was also dismissed by the appellate authority. Aggrieved thereby, the instant writ application was filed praying for quashing of the said order.

Petitioner’s only submission was that it is well within the jurisdiction and domain of disciplinary authority to differ with the findings of Inquiry Officer, but if the disciplinary authority wants to punish the delinquent, a second show cause notice has to be served and reasons for his differing from findings of the inquiry report must be mentioned in the show cause notice. This process had not been followed before passing the impugned order, and only on this ground, the impugned order could be set aside.

The Court noted that the respondent had not issued second show cause notice to the petitioner, but punished him after differing with the findings of the inquiry report. It was opined that this procedure was in utter violation of the principles of natural justice, as the petitioner ought to have been issued a second show cause notice indicating the ground of disagreement, before punishing him. Thus, the punishment order was set aside for being unsustainable in the eyes of law.[Lalit Oraon v. State of Jharkhand, 2019 SCC OnLine Jhar 279, Order dated 13-03-2019]

Case BriefsHigh Courts

Kerala High Court: The Bench of Devan Ramachandran, J. disposed of a petition cautioning Passport Authority of not taking any action against the petitioner without properly notifying him as any action taken against him without his knowledge, might be detrimental to his employment in the USA.

Petitioner herein had applied for renewal of his passport; but when the Consulate subsequently received information of a criminal case pending against him, he was issued a notice by the Vice-Consul (Passports) asking him to show cause why his passport should not be revoked under Section 10(1)(b) and 10(1)(e) of the Passport Act, 1967. Aggrieved thereby, the instant petition was filed.

Petitioner’s submission was that when he applied for renewal of his passport, he was not aware of any crime pending against him since he had not received any notice or summons from Court with respect to this case.

The Court noted that it was virtually admitted that there was a criminal case pending against the petitioner at the time of submitting an application for renewal. It may be true that the petitioner was not aware of pendency of the criminal case, because he had not received any notice/summons from Court. However, these are issues that the petitioner ought to have brought to notice of Consulate General of India.

It was opined that since the impugned notice was only a show cause notice, there was no need for petitioner to approach this Court by filing this writ petition since these issues could certainly have been considered by the appropriate authority in terms of Passport Act. In view thereof, petitioner was directed to answer the show cause, detailing all his defences and the Passport Authority was directed to consider the same, after affording the petitioner an opportunity of hearing.[Arun Harshan v. Union of India, 2019 SCC OnLine Ker 776, Order dated 01-03-2019]

Case BriefsTribunals/Commissions/Regulatory Bodies

Central Information Commission (CIC): Sudhir Bhargava, Chief Information Commissioner, directed the Registry of the Bench to issue a Show Cause Notice to the respondent to explain as to why action under Section 20(1) of the RTI Act should not be initiated against him.

The facts of the case are that the Commission directed DPS NALCO to provide a copy of the Record Retention Schedule as well as the order of the Competent Authority for the destruction of the attendance register for the year 1989-90, to the appellant within a period of four weeks from the date of the order, and grant one more opportunity to the appellant to inspect all the relevant records pertaining to the information sought in her RTI application on a mutually decided date and time as per the provisions of the RTI Act. The appellant again submitted an application alleging non-compliance of the directions of the Commission by the respondent. The respondents denied the same.

The Commission held that in the view of such evident contradiction in the submissions of the respondent, leading to non compliance of specific directions of the Commission and deliberate obstruction to the flow of information, a show cause notice is to be issued to the respondent for explaining as to why action under Section 20(1) of the RTI Act should not be initiated against him. [Puspalata Rout v. CPIO, 2019 SCC OnLine CIC 1, Order dated 07-02-2019]

Case BriefsHigh Courts

Allahabad High Court: This petition was filed before a Single Judge Bench of Ajit Kumar, J. where petitioner was alleged of fraud and forgery.

Petitioner is an assistant teacher working in a junior primary school. Petitioner submitted that he had obtained B. Ed. degree from Dr Bhim Rao Ambedkar University, Agra. After this, he completed the special BTC training course and was appointed by the District Basic Education Officer. It was in 2015 that he was promoted as headmaster in junior basic school. There was some investigation done by Special Investigating Team and report filed perusing to which show cause notices were issued to some teachers who received their degree from the Ambedkar University. The show cause notice is impugned in this writ. Petitioner alleges that a prima facie opinion of fraud and forgery was formed by the District Basic Education without giving prior opportunity to explain. Argument advanced by petitioner was that if any illegality has been found in the appointment after confirmation of the person in the service the respondent were bound to proceed by instituting departmental proceedings in accordance with the service rules i.e. U.P. Government Servant (Discipline and Appeal) Rules, 1999 but the said procedure has not been followed prior to issuing the impugned notice.

High Court found substance in the arguments of petitioner and that this matter required to be considered. Until further order, a stay was put on impugned order. [Rohitashwa Kumar v. State of U.P., 2018 SCC OnLine All 3232, order dated 11-12-2018]

Case BriefsTribunals/Commissions/Regulatory Bodies

“Why is RBI fighting tooth and nail to defend defaulters?”

Central Information Commission (CIC): A Bench comprising of Prof. M. Sridhar Acharyulu issued a show-cause notice to Reserve Bank of India (RBI) Governor Urjit Patel holding him as deemed Public Information Officer (PIO) responsible for non-disclosure of a list of wilful defaulters of big bad loans worth crores of rupees.

A Jaipur-based RTI activist sought information from respondent about wilful defaulters of bank loans of Rs 50 crores and above, names of guarantors, details of sanction of loans, default and details of NPA accounts, and cost and investment of the projects for employment generating schemes initiated by the Central Government between 2005 and 2018 along with the list of failed projects. The CPIO dismissed the request stating that the information was not maintained in the form sought. Aggrieved by the said order, a first appeal was preferred wherein the reply of CPIO was upheld. The said circumstances necessitated the instant second appeal.

The Commission observed that RBI is a statutory regulatory authority whose function is to oversee the functioning of banks and the country’s banking sector. It is supposed to uphold public interest and not the interest of individual banks. Thus, RBI ought to act with transparency and not hide information that might embarrass individual banks. Financial institutions are obliged to provide all information to RBI and such information cannot be considered to be shared in the capacity of a fiduciary relationship. RBI was held to be duty bound to comply with provisions of RTI Act and disclose the information sought by the appellant.

Commission issued a show-cause notice to RBI Governor asking him to explain as to why maximum penalty of Rs 25,000 should not be imposed on him for wilful defiance of RTI provisions. It also directed RBI to disclose bad debt details of defaulters worth more than Rs 1000 crore at the beginning, Rs 500 crore or less at a later stage within five days and collect such information from the banks in due course to update their voluntary disclosures from time to time as a practice under Section 4(1)(b) of RTI Act. [Sandeep Singh Jadoun v. PIO, DGEAT, CIC/DGEAT/A/2018/117567, decided on 02-11-2018]



Case BriefsTribunals/Commissions/Regulatory Bodies

Central Information Commission (CIC): A Single-Judge Bench comprising of Central Information Commissioner Prof. M. Sridhar Acharyulu issued a show-cause notice to Hockey India for not disclosing the information sought by the appellant.

BJP leader Kirti Azad filed an RTI application in the year 2015 seeking details of Hockey India League’s (HIL) registration certificate, details of expenditure, sponsorship, commission paid for getting sponsorships, and expenditure incurred in availing legal services along with the names of lawyers engaged by Hockey India (HI) and HIL in the last 2 years. Respondent responded stating that HIL is organized under the aegis of the Hockey India and the websites of HI and HIL contain the information sought. Dissatisfied with the response, appellant filed a first appeal which was responded by the first appellate authority stating that the information pertaining to sponsorships, fee paid to lawyers, etc fell within the domain of confidential information and hence due it could not be disclosed. Thereafter, the appellant moved to CIC which directed respondent to disclose the desired information. But the respondent moved to Delhi High Court challenging the said order, which remanded the matter back to CIC for fresh consideration. Hence, the present appeal.

Respondent contended that the RTI application was vitiated by private motives aimed at targeting a cabinet minister. However, this submission was dismissed holding that motives behind filing an RTI are irrelevant and the burden lies on the public authority to prove the invocation of an exception for denial of information.

Further, respondent averred that since the information pertaining to sponsors, commission, legal expenses, and lawyers engaged, etc. was confidential in nature; they could submit the same in sealed cover. Further, throughout the proceedings, respondent maintained the position that HIL is not connected to HI and thus it cannot be obliged to disclose information about HIL.

After hearing arguments on behalf of both the parties, the Commission made the following observations:

  • Financial details in the copy of sponsorship agreements submitted in sealed cover had been redacted as HI did not want the Bench to peruse the original agreements.
  • It dismissed HI’s argument that since the commission paid for securing sponsorship was not paid out of public money, such information need not be disclosed. CIC held the classification between expenditure by public money and non-public money, as illogical.
  • On the issue of names of lawyers engaged and fee paid to them, the Bench remarked that non-disclosure of the said information might be due to fear of being exposed to some serious scandal as HI might have paid huge amounts to non-eligible persons. This clearly fell within the scope of the public’s interest.
  • HI could not invoke Section 8(1)(d) of the RTI Act to exempt itself from disclosing information including commercial confidence, trade secrets or intellectual property. Assuming that the sponsorship fee is in the nature of commercial confidence, HI had to prove whether there is any competition and by disclosing the information sought, what kind of harm would be caused.
  • Hockey India is not a sovereign entity and sport of hockey cannot be used for profit generation activities.

With the aforesaid observations, the Commission issued show cause notice to HI’s former president and present secretary-general Rajinder Singh asking him why maximum penalty should not be imposed against him, HI’s CPIO and the first appellate authority for not disclosing the information sought. [Kirti Azad v. CPIO, M/o Youth Affairs & Sports,2018 SCC OnLine CIC 1543, decided on 22-10-2018]

Case BriefsTribunals/Commissions/Regulatory Bodies

Central Information Commission (CIC): A Single-Member Bench comprising of Sudhir Bhargava, Information Commissioner while disposing of a complaint concerning furnishing of incorrect reply to the complainant regarding his ACRs not being traceable, stated that the CPIO, National Thermal Power Corporation Ltd., should be issued a show cause notice for explaining as to why action under Section 20(1) of the RTI Act should not be initiated against him.

The background of the facts of the present matter is as follows, the complainant had filed an application under the RTI Act, 2005 seeking information on following points:

  • Certified copies of his Annual Appraisal Reports (AARs)/ ACRs for the years 1993 to 2003;
  • Certified copy of the proceedings of the Regional Promotion Committee recommendations for the years 1998, 2002 and 2003.

The contentions placed by the complainant were that the CPIO provided the information by falsely stating that the information/documents sought were 15 years old and not traceable. He further stated that the respondent had produced the relevant records before the High Court and had deliberately furnished incorrect information.

Further, the commission on due consideration of the contentions of the parties observed that the respondent had stated that documents being sought are 15 years old and are not traceable. However, respondent informed the Commission that the ACRs of the complainant out after the final judgment of the court as mentioned above. Show cause notice was issued to the respondent due to the incorrect reply furnished to the complainant. [Manohar Singh v. CPIO, NTPC,2018 SCC OnLine CIC 1419, Order dated 21-08-2018]

Case BriefsHigh Courts

Uttaranchal High Court: A Single Judge Bench comprising of Manoj K. Tiwari, J., dismissed a writ petition as premature holding that there was no scope for interference in the issuance of show cause notice against the petitioner.

It was alleged that the petitioner was an unauthorised occupant over the property in question. A show cause notice was issued against him under Section 4 of U.P. Public Premises (Eviction of Unauthorised Occupants) Act 1972. The petitioner was asked to show cause as to why eviction order not be passed against him. The said show cause notice and the proceedings initiated pursuant thereto were put to challenge in the instant petition.

The High Court, on consideration of the record observed it to be a settled position of law that ordinarily a show cause notice cannot be challenged in a writ petition as it does not give rise to a cause of action. It does not amount to an adverse order which affects the right of any party unless the same has been issued by a person having no jurisdiction/competence to do so. In the instant case, it was not disputed that the Prescribed Authority was competent to issue show cause notice under the Act. Therefore, the Court found no scope of interference with the show cause notice, and the writ petition was consequently dismissed. [Neeraj Bansal v. Prescribed Authority, 2018 SCC OnLine Utt 608, dated 25-6-2018]

Case BriefsHigh Courts

Gauhati High Court: The order of the Superintendent of Taxes (Respondent 2) charging 12.5% VAT on coal tar in provincial assessment was set aside by a Division Bench comprising of Ajit Singh, CJ and Prasanta Kumar Deka, J.

The petitioners were dealers of coal tar. They filed tax returns wherein they assessed coal tar for 4% tax. The said return was accepted by the respondents. However, later, Respondent 2 passed an order of provincial assessment under Section 34 of the Assam Value Added Tax Act, 2003 whereby the return filed by the petitioners was re-assessed and the coal tar was charged at 12.5% tax on grounds that earlier a wrong classification was done as far as coal tar was concerned. Aggrieved by the same, the petitioners filed the instant petition.

The High Court considered the record and found that the impugned order was passed under Section 34 of the Act which mandates that before passing any order of provincial assessment, the assessee is to be given a right of hearing via giving him a show-cause notice. In the case, the Court found that no show-cause notice was given to the petitioner, thus, violating the mandate of Section 34. Also, it was a clear case of violation of principles of natural justice as no right of hearing was given to the petitioner before passing orders prejudicial to him. Thus, the petition was allowed and the impugned order was set aside. [Kamakhya Coal Tar Industries v. State of Assam, 2018 SCC OnLine Gau 350, order dated 07-05-2018]

Case BriefsHigh Courts

High Court of Karanataka: While deciding a writ petition filed under Article 226 of the Constitution of India, a Single Judge Bench comprising of Raghvendra S. Chauhan, J., inter alia, held that a show-cause notice does not infringe rights of a person, unless it is issued by an authority not competent to do so.

The petitioner challenged the charge-sheet-cum-suspension order whereby the respondent-company suspended the petitioner from the post of Junior Section Officer. The petitioner, Working President of the Trade Union, was alleged to have forged three letters filed in the Court records. The respondent alleged that such act by the petitioner fell within ‘misconduct’ as contained in the Standing Orders of the respondent-Company. And considering the gravity and seriousness of the misconduct, the petitioner was suspended. Learned counsel for the petitioner put up a stern defence for the petitioner and vehemently argued against the impugned order.

The High Court perused the material available on record, contentions and submissions by the parties as well as the impugned order. It found that the impugned order not only states the reasons for initiating a departmental enquiry against the petitioner, but also gives time to the petitioner to show cause as to why disciplinary action should not be taken against him. Thus, the impugned communication was merely a ‘show-cause notice’; the charges were yet to be framed.

The Court relied on the Apex Court decision in (2012) 11 SCC 565 to hold that a show-cause notice does not infringe civil or fundamental rights of a person, unless such notice has been issued by an authority not competent to do so or is beyond the jurisdiction of the authority.

In the instant case, the petitioner did not challenge the competence of the respondent to pass the impugned order. Accordingly, the Court was of the view that no cause of action arise and the petition was devoid of merits. The petition was dismissed. [Krishnappa v. Bharat Electronics Ltd., WP No. 49304 of 2017 (S-DE), order dated 20.11.2017]

Case BriefsHigh Courts

Punjab and Haryana High Court: The Court recently dealt with a petition under Section 482 CrPC praying for quashing of complaint against petitioner under Sections 195 and 211 IPC that is, for fabricating false evidence and false charge of offence with an intent to injure, respectively.

In a case titled State v. Sanjay, relating to FIR No. 432 dated 14.06.2010 under Sections 376(2)(g), 366, 120-B and 506 IPC, a show-cause notice was issued by the court to the petitioner for prosecuting her for the commission of the offence under the abovementioned provisions in January, 2015 ordering the complaint to be filed against her in the Court of CJM, Rohtak. However, this order was set aside on appeal with an observation as well as an instruction that the petitioner be allowed to file the reply to show-cause notice.

Petitioner filed reply praying that she may be forgiven by having pity on her, so that her future career is not spoiled and notice in hand may kindly be withdrawn. Not convinced with this reply, the Court passed the order in September, 2015 for filing the complaint. So, a complaint was filed by the court praying for the quashing of which the present petition has been filed.

Considering the chain of facts and highlighting the reply filed by the petitioner to the notice under S. 340, the Court clarified that there was nothing illegal in it and did  not amount to miscarriage of justice at all, for the opportunity of being heard was given to the petitioner as she was allowed to file reply to the show-cause notice. It is the non-acceptance of the forgiveness sought that has led to the filing of complaint in the Court. Inderjit Singh, J accordingly held that there is no merit in the case and accordingly, dismissed the petition. [Meenakshi v. State of Haryana, 2017 SCC OnLine P&H 1643,  decided on 04.05.2017]

Case BriefsHigh Courts

Delhi High Court: A Bench comprising of S. Muralidhar and Anil Kumar Chawla, JJ. has directed the respondent to provide to the petitioners copies of the documents referred in the Show-Cause Notice (SCN), which was issued by respondent to the petitioners.

SCNs were issued by the respondent, to the petitioners, proposing their prosecution. Petitioners made representations to the respondent, seeking copies of the documents and their statements referred to in the SCN, but the respondent refused their request by stating that the said documents have been shown to them. The respondent relied upon Article 26(2) of the OECD Model Convention, to contend that there is a restriction on the authorities in India sharing information that may have been obtained from foreign countries. Since the documents relied upon in the SCN include statement of bank accounts maintained with foreign banks, the above prohibition comes in the way of furnishing copies of the documents to the petitioners.

The Court observed Article 26(2) of the OECD Model Convention, and held that it is inconceivable that the person against whom the prosecution is proposed can be denied the material relied upon to prosecute him. The basic principle of natural justice requires that the person being proceeded against has to be furnished with copies of the material gathered against him. To say that the person being prosecuted can only be ‘shown’ such documents, but not provided copies thereof, was held as untenable by the Court, on a plain reading of Article 26(2). For an effective response, the petitioners would be required not merely to be ‘shown’ the material relied upon in the SCN but with copies thereof. Accordingly, the Court directed the respondent to provide to each of the petitioners copies of the documents referred to and relied upon in the SCN issued to the petitioners. [Poonam Jain v. Union of India, 2017 SCC OnLine Del 8872, decided on 08.05.2017]