Supreme Court

ISSAC Vs. Ronald Cheriyan and Ors.

MANU/SC/0027/2018

23.01.2018

Criminal

Retrial cannot be ordered, when there is a mere irregularity or where it does not cause any prejudice

Instant appeal arises out of the judgment passed by Kerala High Court allowing Criminal Revision Petition preferred by Respondent No. 1 thereby setting aside the acquittal of the Appellant-Accused No. 1 for the offences punishable under Section 302, 394 of Indian Penal Code, 1860 (IPC) read with Section 34 of IPC and further remitting the matter back to the trial Court for retrial. The point falling for consideration is whether the High Court was right in setting aside the judgment of the trial Court and remitting the matter back to the trial Court for retrial.

Section 386 of Code of Criminal Procedure, 1973 (Cr. PC) defines the powers of the Appellate Court in dealing with the appeals. The powers enumerated thereon are vested in all Courts, whether the High Court or subordinate Courts, except that Clause (a) of the Section is restricted to the powers of the High Court only, since an appeal against an order of acquittal lies only to that Court, while Clause (b) of the Section is not so restricted and embraces all Courts.

Under Section 386(a) and (b)(i) of Cr. PC, the power to direct retrial has been conferred upon the Appellate Court when it deals either with an appeal against judgment of conviction or an appeal against acquittal (High Court). There is a difference between the powers of an Appellate Court under Clauses (a) and (b). Under Clause (b), the Court is required to touch the finding and sentence, but under Clause (a), the Court may reverse the order of acquittal and direct that further enquiry be made or the Accused may be retried or may find him guilty and pass sentence on him according to law.

A retrial may be ordered when the original trial has not been satisfactory for particular reasons like appropriate charge not framed, evidence wrongly rejected which could have been admitted or evidence admitted which could have been rejected etc. Retrial cannot be ordered when there is a mere irregularity or where it does not cause any prejudice, the Appellate Court may not direct retrial. The power to order retrial should be exercised only in exceptional cases.

In appeal against acquittal, in exceptional circumstances, the High Court may set aside the order of acquittal even at the instance of private parties, though the State may not have thought it fit for appeal. But it is to be emphasized that, this jurisdiction is to be exercised only in exceptional circumstances, when there is glaring defect in the conduct of trial which has materially affected the trial or caused prejudice.

In the present case, the High Court found that even though the trial Court has framed an issue on the point of sharing of common intention of Accused Nos. 1 and 2 in committing the offence, the omission to frame charges under Section 34 of IPC has materially affected the trial. The High Court further observed that, the fingerprint expert who prepared Ex. P8 ought to have been examined and other circumstances emerging out of evidence ought to have been examined by the trial Court. The High Court further observed that, because of the omission to frame the charges under Section 34 of IPC, in spite of framing the issue of common intention, the trial Court has not examined the evidence in proper perspective, which according to the High Court has materially affected the trial which is called for retrial. The discretion exercised by the High Court under Section 386(a) of CrPC directing retrial with certain directions cannot be said to be erroneous warranting interference. The trial court shall proceed with the matter as per the directions of the High Court and dispose of the matter as expeditiously as possible. The appeal is dismissed.

Tags : Conviction Validity Retrial

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Supreme Court

Sunita Singh Vs. State of Uttar Pradesh and Ors.

MANU/SC/0024/2018

19.01.2018

Service

Caste is determined by birth and cannot be changed by marriage with a person of scheduled caste

Judgment passed by the High Court dismissing the writ petition filed by the Appellant and confirming the order of termination from service passed against the Appellant, is called in question in instant appeal. Appellant was born in "Agarwal" family. She married Dr. Veer Singh, who happens to belong to "Jatav" Community (said to be one of the Scheduled Castes). A caste certificate dated 29th November, 1991 was issued by District Magistrate/Collector, Bulandshahar certifying the Appellant as of Scheduled Caste (Jatav). Based on the academic qualifications and the caste certificate, she was appointed initially as a Post Graduate Teacher (Hindi) vide letter dated 16th December, 1993 at Kendriya Vidyalaya. During the course of her service, she completed her M. Ed. and served the institution for about 21 years as teacher.

A complaint was lodged against the Appellant to the effect that, she was born in "Agarwal" family (general caste category) and after her marriage with a person of scheduled caste, she obtained a caste certificate in question. After making preliminary verification, the jurisdictional officer directed to conduct an enquiry in respect of the caste certificate of the Appellant. The Tehsildar vide his order cancelled the caste certificate of the Appellant and asked the Appellant to return the caste certificate issued earlier to the Appellant. The appeal filed by the Appellant before the State Level Committee against the order of the appellate authority cancelling her caste certificate came to be dismissed. The Appellant's further efforts of approaching the High Court by filing the writ petition also failed, as the High Court dismissed the writ petition by the impugned judgment.

There cannot be any dispute that, the caste is determined by birth and the caste cannot be changed by marriage with a person of scheduled caste. Undoubtedly, the Appellant was born in "Agarwal" family, which falls in general category and not in scheduled caste. Merely because her husband is belonging to a scheduled caste category, the Appellant should not have been issued with a caste certificate showing her caste as scheduled caste. In that regard, the orders of the authorities as well as the judgment of the High Court cannot be faulted.

The Appellant has already served as a Teacher and Vice-Principal of Kendriya Vidyalaya without any black spot in her service career for about 21 years, and that she is going to retire shortly. Supreme Court by exercising jurisdiction under Article 142 of the Constitution of India ordered to convert the order of termination to an order of compulsory retirement. While exercising leniency, it has to be kept in mind that, the Appellant has neither played fraud nor misrepresented before any of the authorities for getting the caste certificate and while continuing in service based on the caste certificate. No questions were raised against her till the complaint in question came to be lodged, even when the authorities had seen the High School Certificate, Marks Sheet etc. showing her caste as Agarwal at the initial stage. The impugned judgment of the High Court is modified. "The order of termination from service" passed against the Appellant shall be treated as "the order of compulsory retirement". However, Supreme Court made it clear that, present shall not be treated as a precedent in future. The appeal stands disposed off.

Tags : Caste certificate Cancellation Validity

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High Court of Delhi

The Oriental Insurace Co. Ltd. Vs. Devansh Real Estate Pvt. Ltd.

MANU/DE/0219/2018

19.01.2018

Tenancy

Honest guess work will always be required for calculating the mesne profits

Instant Regular First Appeal under Section 96 of the Code of Civil Procedure, 1908 (CPC) is filed by the Appellant/tenant/Oriental Insurance Company Limited impugning the judgment of the trial Court whereby the trial Court has decreed the suit filed by the Respondent/plaintiff/landlord for mesne profits. The suit filed by the Respondent/Plaintiff/landlord was for both possession and mesne profits. On account of a decree earlier being passed under Order XII Rule 6 of CPC against the Appellant/Defendant, during the pendency of the suit, the Appellant/Defendant vacated the suit premises on 25th March, 2014. However, the mesne profits have been granted by the trial Court not later till 25th March, 2014 but earlier only till 31st December, 2013 as there was an offer made by the Appellant/Defendant to vacate the suit premises by 31st December, 2013, but the Respondent/Plaintiff did not take possession of the suit premises and ultimately took possession only in Court on 25th March, 2014 pursuant to an application filed by the Appellant/Defendant for handing over possession. The limited issue in present appeal is as to what should be the rate of mesne profits which should be payable by the Appellant/defendant for the suit premises for the period from 1st February, 2011 to 25th March, 2014.

Trial Court has very extensively dealt with the issue with respect to rate of mesne profits payable by referring to the lease deeds filed by both the parties for arriving at a conclusion for payment of mesne profits at Rs. 100/- per sq. ft. per month. In terms of the documentary evidence led by both the parties it is seen that the rate of rent from the year 2003 till the year 2008 with respect to the same area viz Asaf Ali Road, varied between Rs. 22.50/- per sq. ft. to Rs. 260/- per sq. ft.

No doubt, rate of rent varies as per location of a property as also the condition of the property, however in the facts of the present case, this aspect has been duly considered by the trial Court because the trial Court has granted rent at Rs. 100/- per sq. ft. for the period from 01st February, 2011 till 31st December, 2013. As held by present Court on repeated occasions, some amount of honest guess work will always be required for calculating the mesne profits, and that once there is some factual basis especially documentary evidence to make an honest guess work, then the finding of the trial Court cannot be held to be perverse or in any manner illegal for this Court to interfere with the same in a first appeal.

There is no illegality in impugned judgment. In fact, the Appellant/Defendant is very lucky because the rate of interest granted is also not at a high rate as the rate of 8% p.a. has been awarded although the letting out is for commercial purposes. Appeal dismissed.

Tags : Mesne profits Determination Grant

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Customs, Excise and Service Tax Appellate Tribunal

Hng Float Glass Ltd. Vs. Commissioner of Central Excise and Service Tax, - Vadodara-II

MANU/CS/0012/2018

19.01.2018

Excise

For erroneous credit availed, even if, not utilized, interest could be applicable for the normal period of limitation

In the facts of present case, the Appellant had wrongly taken excess credit of Rs. 9,97,32,292 during the period September 2008 to January 2009 on imported capital goods. Consequently, they have reversed the credit in February 2009, but availed to discharge interest for wrong availment of the said credit. Consequently, a show cause notice was issued to them on 31st August, 2009 proposing recovery of interest of Rs. 17,80,894/- under the provisions of Section 11AB read with Rule 14 of CCR, 2004 and penalty. On adjudication, the demand was confirmed, however, no penalty imposed. Hence, the present appeal. The issue involved in the present appeal is whether interest is payable on the erroneous Cenvat credit availed during the period September 2008 to January 2009.

There is no dispute of the fact that, the Appellant had incorrectly availed Cenvat credit of the amount of additional customs duty and countervailing duty forgone while the capital goods are imported under the EPCG Scheme. It is the contention of the Appellant that, since the said credit has not been utilized, therefore, interest for the intervening period is not applicable. Present Tribunal in the case of Atul Ltd. and others vide its final order after analyzing the principles of the law laid down in this regard held that, erroneous credit availed even if not utilized; interest could be applicable for the normal period of limitation.

The principles of law laid down in Bharat Heavy Electricals Ltd., case by the Karnataka High Court, was in a different factual matrix, whereas the present case relates to excess credit availed, but, not utilized, hence, the said judgment is not applicable to the facts and circumstances of the present case. In these circumstances, the impugned order is upheld and the appeal being devoid of merit is dismissed.

Tags : Excess credit Interest Payment

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High Court of Delhi

Honshu Buildcon Private Limited and Ors. Vs. North Delhi Municipal Corporation

MANU/DE/0173/2018

18.01.2018

Commercial

A letter of intent is not a binding agreement enforceable in Courts, and nor it is a promise to issue a subsequent allotment letter

In facts of present case, Petitioner received a Show Cause Notice from the NDMC, by it (the NDMC) while referring to clause 1(i) of NIT, which provides "in case an individual whether in person or as a part of the company/firm etc. is a defaulter is debarred from some reason, any other company where the above individual has an interest will not be allowed to participate in the auction", alleged that Petitioner (Honshu) had a direct connection with certain defaulter companies which violated the terms and conditions of the NIT and asked Honshu to explain why its application submitted for participation in the e-auction held on 13th April, 2016 for the Civil Line Zone Cluster should not be cancelled and further action not be initiated against them for submission of facts as per the Delhi Municipal Corporation Act.

On receipt of the Show Cause Notice Honshu confirmed that its directors, as well as its shareholders had no direct relation with the defaulter companies as alleged, and requested the NDMC to withdraw the said Show Cause Notice on this ground alone. By the said letter, Honshu also confirmed of having appeared before the concerned officer of the NDMC. It, requested the NDMC to withdraw the Show Cause Notice being without any merit. The NDMC, on receipt of Honshu's reply, by the impugned letter, cancelled the Letter of Intent (LoI) dated 17th May, 2016 issued to the Petitioner No. 1 and also forfeited EMD amount deposited by the Petitioner in respect of Cluster No. 04 Civil Lines Zone. Honshu is aggrieved by the actions of the NDMC, and has preferred writ petition alleging that, the cancellation is arbitrary and mala fide.

NDMC alleges to have discovered that Honshu and Reihen had relations with certain defaulter companies/entities, which is in violation of the terms and conditions of the NIT, in both the issues. When the State invites tender bids, it ought to adhere to the terms of the NIT, and ideally not waver from complying with the conditions set forth in the NIT. This was highlighted in the Supreme Court decision of Harminder Singh Arora v. Union of India and Ors. The terms of the NIT are the guidelines that enable the procedure of conducting the tender process, thus, in order to ensure that the same is conducted efficiently, they should not be digressed from, as far as applicable. The Supreme Court in Central Coalfields Limited and Ors. upheld the sanctity of administrative decision making, This judgment has found resonance in numerous decisions thereafter to ensure and enforce adherence to this principle. Hence, as a state agency, the NDMC has invited tenders extended through the respective NITs, and has carried out the bidding process accordingly; and due regard ought to be given to such decision making process.

The scope of judicial review in the award of tender of a contract by the State or a state agency has the subject of discussion in a number of Supreme Court decisions. Therefore, consistent judicial view has been that, public law review of tender matters ought to be exercised, judiciously. Such judicial review must be restrained to ensure that the choice or decision is made "lawfully" and not to exercise oversight over whether choice or decision is "sound". This Court, therefore, will apply the same standard in the present cases. Public and state contracts involve expenditure of substantial public money. Therefore, it is quite crucial to ensure that no anomaly arises that could jeopardise such expenditure. The fact that, the Petitioners were found to have relations with black-listed companies not only violates the clauses of the NIT, but also emerge as red flags to the safe and effective implementation of public resources. These considerations have been given due regard by the administrative authorities in arriving at its decision.

As regards cancellation of the letters of intent initially issued to the petitioners, the Court has to be mindful of the fact that, a letter of intent is not a binding agreement enforceable in Courts, and neither is it a promise to issue a subsequent allotment letter. As regards the arbitrariness alleged to be the basis on which the NDMC cancelled the letters of intent, the Court observes that, the Petitioners have merely denied the grounds of the respective Show Cause Notices, without countering them substantially. Particularly, in light of the bank statements that clearly indicate a strong financial relationship between the Petitioners and a list of black-listed companies, a mere denial of such association cannot be accepted.

Impugned letters of the NDMC withdrawing the LoIs is based on justifiable grounds, inter alia: violation of the conditions of the NIT by the Petitioners (such as, non-deposit of the security money and request for "adjustments" not provided for in the NIT, in the case of Honshu), and engaging in business relationships with black-listed companies in violation of the conditions of the NIT. In Central Coalfields Limited, the terms of the NIT cannot be ignored, hence, neither can be their violation. Such violation of the NIT conditions tempered the decision of withdrawal of the LoIs by the NDMC. Further, in light of judicial precedence, particularly, Jagdish Mandal v. State of Orissa, Tata Cellular v Union of India and Bakshi Security and Personnel Services Pvt. Ltd., present Court in appreciation of the judicious exercise of judicial review, given the facts and circumstances of the present writ petitions, finds no reason to interfere with the decisions of the NDMC. The decision to award a public contract is not premised merely on fulfillment of technical qualification and financial viability of the offer of a given bidder; the larger public interest is a necessary condition which invariably informs every decision of the executive authority or agency that is to award the contract. The vital public interest in ensuring that, contracts are awarded to genuine bidders, and not to those who devise myriad devices to keep out true competition on one hand, and corner contracts- in this case, in relation to parking lots cannot be undermined. The NDMC thus, had a vital interest in ensuring that, the group of individuals, who adopted the stratagem of ensuing that they "rotated" the contracts, through different entities, which came to light in the financial linkage between them - as well as controls through the same set of people does not hamper the transparency of the bidding process. This linkage was also evident from other materials such as common email identities of some of the entities; common premises and, in some cases, common directors or individuals controlling the entities.

Further, the cancellation of the letters of intent by NDMC and thereby rejecting the tender bids of the Petitioners cannot be accepted to be arbitrary and malafide as such decision is based on concrete grounds, and opportunity was afforded to the Petitioners to negate the same and make their stance when Show Cause Notices to that end were sent to them by the NDMC, as mentioned previously. The writ petitions are accordingly dismissed.

Relevant

Harminder Singh Arora v. Union of India and Ors. MANU/SC/0148/1986
: AIR 1986 SC 1527, Central Coalfields Limited and Ors. vs. SLL-SML (Joint Venture Consortium) and Ors. MANU/SC/0919/2016

Tags : Tender Cancellation Validity

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Customs, Excise and Service Tax Appellate Tribunal

CCE, Meerut-I Vs. Amrit Varsha Ispat (P) Ltd. and Ors.

MANU/CE/0020/2018

18.01.2018

Excise

Allegations of clandestine manufacture and removal are required to be proved by production of sufficient evidence

All the present appeals have been filed against the Order-in-Original. Four appeals have been filed by the assessee as well as related parties, challenging the demand of Central Excise Duty as well as imposition of penalties on various persons. Revenue has also filed an appeal contending that, the demand confirmed in the impugned order has omitted the month of November, 2001, which also falls within the extended period of 5 years.

The Appellant-Assessee is engaged in the manufacture of M.S. Ingots. Department received an intelligence regarding suppression of production by the manufacturers of M.S. Ingots in the form of a technical opinion of IIT Kanpur that an induction furnace unit should consume electricity in the range of 555 to 1046 units for the manufacture of 1 MT of MS ingots. To verify the same, the departmental officers called for the balance-sheet, income ledgers, documents relating to other income, electricity bills, etc for the period 2001-2006. After scrutiny of the details, the Revenue concluded that the assessee had consumed electricity in the range of 1395-2059 units for every 1 MT of MS Ingots. This was considered to be in excess of the suggested guideline by IIT Kanpur. It was further concluded that, the selling price of the product of the appellant was below its cost and "other income" shown in the balance-sheet towards receipt by way of share trading and commodity trading were shown fictitiously. After conclusion of verification, SCN was issued and the impugned order was passed in which the assessee was held to have clandestinely cleared the finished products and the income generated from such clandestine clearance was being reflected in their balance-sheet as share trading and commodity trading. Accordingly, duty to the extent of Rs. 2.96 crores was demanded along with interest and penalty of equal amount. Penalties were also imposed on the Directors and other connected persons.

The Revenue's entire case is based upon the investigations conducted by them in respect of entries made in the balance-sheet. The said entries reflect income of the Appellant made through other businesses like share trading, sales commission and commodity trading. It is not disputed on record that income reflected in the balance-sheet stands included by the assessee for payment of Income Tax. Such Income Tax Returns have also been assessed by the Income Tax Department. The said returns have also been audited by their statutory auditor. Central Excise authorities have no jurisdiction to interfere in the orders passed by Income Tax authorities and to hold that transactions which stand accepted by the Income Tax authorities were not genuine transactions.

The Tribunal in the case of R.A. Casting Pvt. Ltd. Vs. CCE Meerut-I has dealt with an identical question. By referring to the Gujarat High Court decision in the case of Arabian Express Line Ltd. Vs. Union of India, it stands held by the Tribunal that law does not entitle the Revenue to disregard all the statutory excise records as well as audited financial accounts and records of the assessee-company, which have been duly verified and accepted by the competent authorities from time to time not only for Central Excise but also for purposes of Income Tax etc. It was further held that, the Central Excise authorities have no jurisdiction to examine or determine whether the share transactions of the assessee company are genuine or not and whether the income from share trading duly verified, accepted and assessed to Income Tax authorities could be disregarded by them so as to treat the same as proceeds of ingots alleged to have been clandestinely produced and sold by the Appellants. The entire action of the Revenue was held to be without jurisdiction.

No evidence is produced by the Revenue as regards the clandestine manufacture and clearances of appellants final product. It is well settled law that, the allegations of clandestine manufacture and removal are required to be proved by production of sufficient evidence in the shape of production of raw material, the actual manufacture of the goods, transportation of the same or in the shape of identification of the buyers. There is no statement of any persons indicating or admitting that income as reflected by the appellants in balance sheet stands derived from clandestine activities of manufacturer and clearance of their final products. Accordingly, the impugned order is set-aside. The appeal filed by Revenue is dismissed and all the others by the Assessee and connected persons are allowed.

Relevant

Arabian Express Line Ltd. Vs. Union of India [MANU/GJ/0047/1994
: 1995 ITR 31]

Tags : Penalty Imposition Validity

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