High Court of Bombay

Ramesh D. Shah and Ors. Vs. Tushar D. Thakkar and Ors.

MANU/MH/3067/2017

30.12.2017

Arbitration

Arbitrator has power to recall his earlier order of termination of proceedings if sufficient cause is shown by claimant

By present petition, the Petitioners have prayed for condonation of delay, in filing petition and prays that, the Procedural Order Sheets passed by the learned arbitrator thereby terminating the arbitral proceedings and refusing to take statement of claim on record by condoning the delay in filing the statement of claim and for recalling of the order terminating the arbitral proceedings be set aside. The Petitioners have also prayed for an order and direction against the learned arbitrator to accept the statement of claim along with annexures filed by the Petitioners with the learned arbitrator.

Petitioners had invoked arbitration agreement, the Respondents refused to refer the dispute to arbitration. There was further correspondence exchanged between the parties insofar as invocation of arbitration agreement is concerned. The Petitioners thereafter preferred an application under Section 11(6) of the Arbitration & Conciliation Act, 1996. Accordingly, a sole arbitrator was appointed. It is submitted by the Petitioners that, learned arbitrator failed to communicate to the Petitioners that, he had intended to terminate the mandate/arbitral proceedings and also failed to consider the reasons shown by the Petitioners for extension of time in impugned order passed on the Petitioners' application. Further submission that, the learned arbitrator could have imposed adequate compensation for default in filing the statement of claim on time instead of non-suiting the Petitioners completely.

The learned arbitrator has power to recall his earlier order of termination of proceedings on the ground that, the statement of claim was not filed within the time granted by the learned arbitrator as fixed by Section 23(1) of Act, if sufficient cause is shown by the claimant even after termination of the proceedings and in that event the statement of claim can be accepted by the arbitral tribunal by accepting the show cause and such order of recall would not be beyond the jurisdiction of the arbitral tribunal on sufficient cause being shown.

Impugned orders passed by the learned arbitrator in present case indicates that, the learned arbitrator did not look into sufficient cause shown by the Petitioner in the two letters addressed by the Petitioner seeking extension of time and also in the application for condonation of delay in filing the statement of claim mentioned in the application for recall of the order passed by the learned arbitrator which came to be rejected by the learned arbitrator vide order date 16th March, 2016. Learned arbitrator ought to have considered the cause shown by the Petitioner for seeking extension of time and also for recalling of the order terminating the arbitral proceedings before rejecting the said application.

Learned arbitrator did not put the Petitioner to notice that such extension granted by the learned arbitrator was final extension and no further extension would be granted in any circumstances. Arbitrator did not render any reasons while rejecting the application for extension of time for the second time and did not render any finding as to whether the cause shown by the Petitioner for further extension of time and for condonation of delay in filing the statement of claim was sufficient cause or not. Arbitrator ought to have given an opportunity of being heard to the Petitioner before passing any drastic order of termination of proceedings thereby terminating his own mandate.

In present case, the Petitioner had sought six weeks extension of time to file statement of claim initially. Without rendering any reasons, learned arbitrator however, initially granted only three weeks extension to file statement of claim. The Petitioner gave certain reasons in the application for further extension of time and gave additional reasons in the application for seeking condonation of delay in filing the statement of claim and for recall of the order passed by the learned arbitrator.

A perusal of the statement of claim filed by the Petitioner indicates that, the Petitioner has placed reliance on the report of the Chartered Accountants. The Petitioner had conveyed that, computation of claim is complex and requires a thorough analysis by the Chartered Accountants. The Petitioner has annexed the reports submitted by the Chartered Accountants in support of its claim filed before the learned arbitrator as it is apparent from a copy of the statement of claim with annexures annexed to the arbitration petition which refers to such report. It is also not in dispute that, within nine days of the learned arbitrator terminating the proceedings, the Petitioner had filed the statement of claim along with annexures with the learned arbitrator.

It is not the case of the Respondents that, under the arbitration agreement, the Petitioner was required to submit a summary of claim including proof in support of such claim in the notice invoking arbitration agreement. The petitioner has made huge claim for damages against the Respondents and to prove such claim for damages and other claims made before the learned arbitrator, the Petitioner was placing reliance upon the report of the Chartered Accountants. Proof has to be furnished by the Petitioner only at the stage of filing of statement of claim and could not have been furnished, when the arbitration agreement was invoked by the Petitioner.

If the Petitioner has satisfied the test laid down under Section 14(2) of the Arbitration Act and if the Court is satisfied that, the learned arbitrator could not have terminated the proceedings judiciously which resulted in termination of mandate, such orders can be set aside under Section 14(2) of the Arbitration Act and can be substituted by another order. Learned arbitrator could have imposed a reasonable cost upon the Petitioner and ought to have accepted the statement of claim along with the documents on record instead of terminating the proceedings. Impugned orders are set aside. The arbitral proceedings are restored to file before the learned arbitrator.

Tags : Arbitral proceedings Termination Validity

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High Court of Gujarat

Bhavanbhai Premjibhai Vaghela and Ors. Vs. State of Gujarat

MANU/GJ/1951/2017

30.11.2017

Criminal

For an FIR lodged by a deceased person to be treated as substantial, its contents must be proved

By present application under Article 227 of the Constitution of India, the Applicants - original accused persons call in question the legality and validity of the order passed by the trial Court. The applicants are put on trial on the charge of murder. First Information Report was for the offence punishable under Sections 302, 147, 148, 149, 452, 504, 506(2) and 120B read with 34 of the Indian Penal Code, 1860 (IPC). Present application is preferred by Accused No. 1 to 4 for raising objection against narrating the facts of complaint/FIR by PW-31 in his deposition and further not to admit the original complaint in the record by exhibiting the same.

Trial Court ought to have upheld the objection and should not have permitted the Investigating Officer to prove the contents of the First Information Report in the absence of the original first informant. Learned counsel submitted that, the contents of the First Information Report would be admissible in evidence only if Section 32 of the Evidence Act,1872 is applicable. According to the learned counsel, the statement in the F.I.R. does not relate to the cause of death of the first informant. Further, it was pointed out that indisputably, the first informant passed away on account of natural death.

The term 'First Information Report' has been explained in the Code of Criminal Procedure, 1973 by virtue of Section 154, which lays down that: "every information relating to the commission of a cognizable offence, if given orally to an officer in charge of a police station, shall be reduced to writing by him or under his direction, and be read over to the informant; and every such information, whether given in writing or reduced to writing as aforesaid, shall be signed by the person giving it, and the substance thereof shall be entered in a book to be kept by such officer in such form as the State Government may prescribe in this behalf".

F.I.Rs. can be registered by a victim, a witness or someone else with the knowledge of the crime. The police can record three different kinds of statements. The first kind of statement is one which can be recorded as an F.I.R., the second kind of statement is one which can be recorded by the police during the investigation, and the third kind of statement is any kind of statement which would not fall under any of the two categories mentioned above. Evidence is the matter of testimony manifesting the fact on a particular precision or circumstances. The First Information Report is not by itself a substantial piece of evidence and the statement made therein cannot be considered as evidence unless it falls within the purview of Section 32 of the Evidence Act.

In certain cases, the First Information Report can be used under Section 32(1) of the Evidence Act, 1872 or under Section 8 of the Evidence Act as to the cause of informant's death or as a part of the informant's conduct. If the informant dies, the First Information Report can be, unquestionably, used as a substantive evidence. A prerequisite condition must be fulfilled before the F.I.R. is taken as a substantive piece of evidence i.e. the death of the informant must have nexus with the F.I.R. filed or somehow having some link with any evidence regarding the F.I.R. This is what has been explained by the Supreme Court in the case of Damodar Prasad vs. State of U.P.

There are plethora of decisions taking the view that, an F.I.R. can be a dying declaration if the informant dies of his injuries after lodging the same. For an F.I.R. lodged by a deceased person to be treated as substantial, its contents must be proved. It has to be corroborated and proved for there to be any value of the same in the case. The F.I.R. can be used by the defence to impeach the credit of the person who lodged the F.I.R. under Section 154(3) of the Evidence Act. In case the death of the informant has no nexus with the complaint lodged i.e. he died a natural death and did not succumb to the injuries inflicted on him in relation to a matter, the contents of the F.I.R. would not be admissible in evidence. In such circumstances, the contents cannot be proved through the Investigating Officer. The Investigating Officer, in the course of his deposition, should not be permitted to depose the exact contents of the F.I.R. so as to make them admissible in evidence. All that is permissible in law is that the Investigating Officer can, in his deposition, identify the signature of the first informant and that of his own on the First Information Report and he can depose about the factum of the F.I.R. being registered by him on a particular date on a particular police station.

It is incorrect on part of the trial Court to say that, in the absence of the first informant, the police officer can prove the contents of the F.I.R. as per Section 67 of the Evidence Act. Present application is allowed and the impugned order passed by the trial Court below is quashed. The trial Court shall proceed further with the recording of the evidence of the Investigating Officer keeping in mind the principles of law explained in present judgment.

Relevant

Damodar Prasad vs. State of U.P. [AIR 1975 SC 757]

Tags : FIR Contents Proof

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High Court of Kerala

Dharman Vs. State of Kerala

MANU/KE/1710/2017

28.11.2017

Criminal

When there is an eye witness to occurrence corroborated by other evidence, non-establishment of motive behind the crime is not fatal to prosecution

Appeal is against the judgment of conviction and order of sentence passed under Section 302 of Indian Penal Code, 1860 (IPC) against the Accused/Appellant. The prosecution case is that, the accused intentionally hacked his wife, with a chopper. The main challenge raised by the Appellant regarding recovery of MO3 weapon, the chopper used for the commission of offence, is that the alleged recovery cannot be brought under the purview of Section 27 of the Evidence Act in view of oral testimony made by PW 1 regarding the place wherein the accused kept the chopper after the commission of the offence.

The place wherein the chopper was kept by the accused after the commission of the offence was spoken by PW 1 stating that, it was kept in the road side and abandoned there by the accused. A material object or an incriminating factor which could be brought under Section 27 of the Evidence Act,1872 should be the one not within the knowledge of investigation. If the place wherein the alleged material object was concealed is known to the prosecution witnesses and not within the exclusive knowledge of the accused/accused persons, the detection and recovery of the same in furtherance of the disclosure statement alleged to have been made by the accused while in police custody cannot be brought under Section 27 of the Evidence Act.

In the instant case, the place wherein MO3 chopper was kept by the accused is known to PW 1 and some other persons who came and assembled there. So, it cannot be brought under the purview of Section 27 of the Evidence Act. But, the fact as spoken by PW 1 that the accused was found with the chopper (MO3) which was found to be stained by human blood of 'A' group on chemical analysis, would give sufficient corroboration to the oral testimony given by the three ocular witnesses, PW 1 to PW 3. The material objects which were sent for chemical examination also support the oral testimony of PW 1 to PW 3 and give sufficient corroboration. The chopper (MO3) and shirt and double mundu (dhothi) were found to be stained with 'A' group of human blood besides the dress worn by the victim. No explanation was forwarded by the accused during his examination under Section 313 of Code of Criminal Procedure, 1973 (Cr.P.C.) with respect to the presence of human blood of 'A' group in his shirt, double mundu and MO3 chopper.

According to the Appellant, the prosecution has failed to establish the actual motive behind the crime. It is settled that when there is an eye witness to the occurrence corroborated by other evidence, the non establishment of motive behind the crime is not fatal to the prosecution. Motive intrinsically connected with the guilty consciousness - mens rea and it may not be possible for the prosecution to trace out the real motive behind the crime invariably in all cases. Sometimes it may be known to the accused alone. When there is an eye witness to the alleged occurrence supported by other evidence and when it is found to be convincing and inspires confidence, non establishment of the motive is not fatal. Frequent quarrel and strained relationship between the accused and the victim were deposed by their son, PW 4, and nothing was brought out to discredit his evidence. It was the usual practice of the accused to pick up quarrel with his wife and to unleash attack on her after consuming alcohol. Hence, when there is a strained relationship or frequent quarrel between the husband and wife, it would satisfy the motive for the commission of offence.

The medical evidence adduced regarding the number of injuries, user of a sharp-edged weapon like MO3 and the place wherein the injuries were inflicted on the body of victim would sufficiently bring the matter within the sweep of first and second limbs of Section 300 IPC, an intentional homicide with full knowledge. Hence, there is no satisfactory reason for any interference to the finding of guilt of accused under Section 302 of IPC and the conviction thereunder. The sentence awarded, being the lesser one, does not call for any interference by present Court.

Tags : Conviction Legality Evidence Corroboration

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Supreme Court

B. Sunitha Vs. The State of Telengana and Ors.

MANU/SC/1527/2017

05.12.2017

Criminal

Advocate shall not stipulate for a fee contingent on results of litigation or agree to share the proceeds thereof

Instant appeal has been preferred against order of High Court thereby, High Court declined to quash the proceedings initiated against the Appellant under Section 138 of the Negotiable Instruments Act, 1881. The proceedings were initiated by the Respondent who is an advocate in whose favour the Appellant executed a cheque allegedly towards his fee. The same was dishonoured. The stand of the Appellant is that Section 138 of the Act is not attracted as there was no legally enforceable debt. The Appellant having already paid a sum of Rs. 10 lakhs towards fee, the cheque was taken from the Appellant by way of abuse of position and the transaction was void under Section 23 of the Indian Contract Act, 1872. Claim for fee based on percentage of the decretal amount was unethical.

The Appellant's husband died in a motor accident on 30th July, 1998. She along with her children and parents of the deceased filed a claim before the Motor Accident Claims Tribunal (MACT) through the Respondent as an advocate. The MACT awarded compensation. The Appellant paid a sum of Rs. 10 lakhs towards fee on various dates. However, the Respondent forced the Appellant to sign another cheque of Rs. 3 lakh on 25th October, 2014 despite her stating that she was unable to pay more fee as she had no funds in her account. The Respondent sent e-mail dated 2nd November, 2014 claiming his fee to be 16% of the amount received by the Appellant.

Madras High Court in C. Manohar v. B.R. Poornima held that, no presumption could arise merely by issuance of a cheque that amount stipulated in the cheque was payable towards fee. In absence of independent proof, issuance of cheque could not furnish cause of action under Section 138 of the Act in the context of an advocate or client. Under Section 139 N.I. Act, there is a presumption that, unless the contrary is proved, the holder of the cheque received the cheque for the discharge in whole or in part of any debt or other liability. But even in Section 139 N.I. Act, the legal presumption is created only for the cheque so received for the discharge in whole or in part of any debt or other liability. In the case on hand, the complainant being a practising advocate, has not proved the debt amount payable towards him by the Accused, who has engaged him as his lawyer to conduct the case. The finding of the trial Court that there is no debt or legally enforceable liability' does not suffer from any infirmity warranting interference.

Rule 20 of Part VI, Chapter II, Section II of the Standard of Professional Conduct and Etiquette provides that, an advocate shall not stipulate for a fee contingent on the results of litigation or agree to share the proceeds thereof. Thus, mere issuance of cheque by the client may not debar him from contesting the liability. If liability is disputed, the advocate has to independently prove the contract. Claim based on percentage of subject matter in litigation cannot be the basis of a complaint under Section 138 of the Act. The claim of the Respondent advocate being against public policy and being an act of professional misconduct, proceedings in the complaint filed by him have to be held to be abuse of process of law and have to be quashed.

Respondent No.2 committed a serious professional misconduct, he could not be allowed to avoid the adverse consequences which he may suffer for his professional misconduct. The issue of professional misconduct may be dealt with at appropriate forum. Thus, while proceedings against the Appellant will stand quashed, the issue of professional misconduct is left to be dealt with at the appropriate forum. Concerned authorities in Government will take cognizance of the issue of introducing requisite legislative changes for an effective regulatory mechanism to check violation of professional ethics and also to ensure access to legal services which is major component of access to justice mandated Under Article 39A of the Constitution. Appeal disposed off.

Tags : Advocate’s fee Contingency Litigation Misconduct

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Supreme Court

C. Venkata Swamy Vs. H.N. Shivanna (D) by L.R. and Ors.

MANU/SC/1518/2017

04.12.2017

Civil

It is the duty of First Appellate Court to appreciate entire evidence and arrive at its own independent conclusion

The Appellant filed a suit in the Court of City Civil Judge, against the Respondents for a declaration and permanent injunction in relation to the land ("suit land") whereas original Respondent No. 1 also filed a cross suit against the Appellant in relation to the suit land. The Trial Court, by common judgment/decree dismissed the suit filed by the Appellant, and decreed the suit filed by Respondent No. 1. The Plaintiff felt aggrieved and filed two first appeals under Section 96 of the Code of Civil Procedure, 1908 (CPC) before the High Court. By impugned judgment/decree, the Single Judge dismissed both the first appeals and affirmed the judgment/decree of the Trial Court, giving rise to filing of the present appeals by special leave.

The Single Judge dismissed the appeals without undertaking any appreciation of evidence, dealing with various issues arising in the case and discussing the arguments raised by the parties in support of their case. The disposal of the two first appeals could not be said to be in conformity with the requirements of Section 96 read with Order 41 Rule 31 of the CPC. It is a settled principle of law that, a right to file first appeal against the decree under Section 96 of the CPC is a valuable legal right of the litigant. The jurisdiction of the first Appellate Court while hearing the first appeal is very wide like that of the trial Court and it is open to the Appellant to attack all findings of fact or/and of law in first appeal. It is the duty of the first Appellate Court to appreciate the entire evidence and arrive at its own independent conclusion, for reasons assigned, either of affirmance or difference.

Similarly, the powers of the first Appellate Court while deciding the first appeal are indeed well defined by various judicial pronouncements of this Court and are, therefore, no more res integra. In Santosh Hazari v. Purushottam Tiwari (Deceased) by L.Rs., this Court held that, appellate Court has jurisdiction to reverse or affirm the findings of the trial Court. First appeal is a valuable right of the parties and unless restricted by law, the whole case is therein open for rehearing both on questions of fact and law. The judgment of the appellate court must, therefore, reflect its conscious application of mind and record findings supported by reasons, on all the issues arising along with the contentions put forth, and pressed by the parties for decision of the appellate court. While reversing a finding of fact, the appellate Court must come into close quarters with the reasoning assigned by the trial Court and then assign its own reasons for arriving at a different finding. This would satisfy the Court hearing a further appeal that the first appellate court had discharged the duty expected of it. The above view was followed by a three-Judge Bench decision of this Court in Madhukar and Ors. v. Sangram and Ors., wherein it was reiterated that, sitting as a Court of first appeal, it is the duty of the High Court to deal with all the issues and the evidence led by the parties before recording its findings.

In H.K.N. Swami v. Irshad Basith, this Court stated that, the first appeal has to be decided on facts as well as on law. In the first appeal, parties have the right to be heard both on questions of law as also on facts and the first appellate Court is required to address itself to all issues and decide the case by giving reasons. Unfortunately, the High Court, in the present case has not recorded any finding either on facts or on law.

In Jagannath v. Arulappa and Anr., while considering the scope of Section 96 of the CPC, this Court observed that, a Court of first appeal can reappreciate the entire evidence and come to a different conclusion. Impugned judgment is set aside and case remanded to the High Court for deciding the appeals afresh on merits in accordance with law. The appeals are accordingly allowed.

Relevant

Santosh Hazari v. Purushottam Tiwari (Deceased) by L.Rs.MANU/SC/0091/2001
: (2001) 3 SCC 179, Madhukar and Ors. v. Sangram and Ors., MANU/SC/0302/2001
: (2001) 4 SCC 756, H.K.N. Swami v. Irshad Basith, (2005) 10 SCC 243, Jagannath v. Arulappa and Anr.

Tags : Appreciation Evidence Appellate Court Duty

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Customs, Excise and Service Tax Appellate Tribunal

Pramod Kumar Vs. C.C., New Delhi

MANU/CE/0973/2017

04.12.2017

Customs

Penalty can be imposed for use of false and incorrect material, Authorities have to prove that person concerned has deceived exchequer for his wrongful gain

The Appellant imported Speed Post Parcel at Foreign Post Office. Goods were containing declaration of "Artificial Gift Item". Customs Officers after examining the goods, found that the parcel contained "unbranded Micro SD Cards" of various storage capacities. Since, there was mis-declaration, the Department seized the same. A show cause notice was issued, proposing to confiscate goods on the ground of mis-declaration and under-valuation of the same. By impugned order, Commissioner of Customs, Air Cargo Exports, rejected the value as declared by the Appellant and re-determined the assessable value and also confiscated the goods under Section 111(d) and (m) of the Customs Act, 1962, with the option to redeem the same on payment of redemption fine. Further, the impugned order has also imposed a penalty under Section 112 and 114AA of the Act.

In present case, the Appellant had classified the imported goods i.e. "unbranded Micro SD Cards" under CTH 85235220, providing for 'Nil' rate of Basic Customs Duty. However, Adjudicating authority had classified the subject goods under CTH 85235100, which attract 10% Basic Customs Duty. For arriving at classification issue, Adjudicating authority has referred to the CBEC Circular No. 12/2002 : MANU/CUCR/0026/2012
dated 1st March, 2012. Goods of Tariff Item No. 8523 are exempted from payment of Basic Customs Duty under Notification No. 24/2005-Cus., dated 1st March, 2005, as amended. Further, the CBEC vide Circular dated 20th July, 2016 has also clarified that, the benefit of the said notification is extendable to Micro/Mini SD cards classified under CTH 85235100. Thus, it is apparent that, change in classification of subject goods by the Department will not create any additional Basic Customs Duty liability for the Appellant. Therefore, the Appellant is not liable to pay the Basic Customs Duty on the imported goods, even under the classification made by the Department, which was different than the classification made by it.

The adjudicating authority has rejected the value of imported goods declared by the Appellant on the import documents and re-determined the assessable value as Rs. 2,10,71,523/-. Further, such goods were confiscated under Section 111(d) and (m) of the Act, with option to the importer-appellant to redeem the same on payment of redemption fine of Rs. 40,00,000/- in terms of the provisions of Section 125 of the Act. So far as the issue of confiscation of impugned goods is concerned, provisions of clause (m) of Section 111 is attracted as the value and declaration of the goods made in the post parcel do not correspond to the actual goods imported by the Appellant. Thus, confiscation of goods and imposition of redemption fine in the impugned order is sustainable under the law. However, quantum of redemption fine imposed on the Appellant, is in the higher side, inasmuch as, the Appellant had not made any false declaration with regard to the actual content in the parcel, filed proper documents for assessment of the Bill of Entry, paid applicable duty. Therefore, in the interest of justice and in view of possible benefit of Commercial profit on such import, the quantum of redemption fine is reduced to Rs. 20,00,000/-.

The impugned order has confiscated the impugned goods and imposed penalties on the ground that, Appellant had contravened the provisions of Section 82 of the Act. In case of import of goods by post parcel, a deeming fiction has been created in Section 82 of Act, providing that any label or declaration accompanying the goods should be deemed to be an entry for import, for the purpose of the Customs Act. As per such statutory provision, the proper officer of Customs goes by the declaration of the content of goods in the parcel, declared or labelled. Further, imposition of penalty under Section 112 and 114AA of the Act are not dependant on the provisions of deeming fiction under Section 82 of the Act. Since, the goods were not accompanied by correct declaration as to the contents, the confiscation and redemption is justifiable. However, the statute mandates that penalty can be imposed for use of false and incorrect material, the authorities have to prove that in fact, the person concerned has deceived the exchequer for his wrongful gain.

In instant case, the Department has not brought on any evidence to prove Appellant's guilt in mis-declaring the goods. Rather, the submissions of the Appellant recorded in the impugned order has been completely ignored and brushed aside by the original authority. Thus, in absence of any specific substantiation regarding the involvement of the Appellant in fraudulent activities like mis-declaration in the present case, imposition of penalty, will not stand for the judicial scrutiny. Accordingly, penalty imposed on the appellant is set aside. The Appellant is not liable to pay Basic Customs Duty in terms of Notification No. 24/2005-Cus., dated 1st March, 2005, as amended read with CBEC Circular dated 20th July, 2016. Redemption fine is reduced. Penalties imposed under Section 112 and 114AA are set aside.

Tags : Goods Confiscation Penalty

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