Supreme Court

Tamil Nadu Electricity Board Vs. TNEB-Thozhilalar Aykkiya Sangam

MANU/SC/0194/2019

13.02.2019

Service

State Government is not under any obligation to always adopt Dearness Allowance as revised by Central Government

Instant Appeals arise out of the judgment by which the High Court affirmed the order of the learned Single Judge directing the Appellant-Board to pay Dearness Allowance at the rate of 49% w.e.f. 1st January, 2002 to the members of Respondent(s)-union on par with the Central Government employees. Present appeals relate to the claim of employees of the Appellant-Board for the payment of difference of Dearness Allowance (DA) for a period of nine months

Question involved in present case is Pursuant to the Memorandum of Settlement dated 8th July, 1998 recorded under Section 18(1) of the Industrial Disputes Act, 1947 and BP (FB) No. 58 dated 18thJuly, 1998, when the Board has been adopting the formula of the State Government in revising the rate of Dearness Allowance on par with the State Government employees, whether the High Court was right in directing the Appellant-Board to pay the revised DA at the rate of 49% from 1st January, 2002 and 52% from 1st July, 2002.

The Appellant-Board has been adopting the formula of the State Government in revising the rate of Dearness Allowance, which was settled under Section 18(1) of the Act, 1947 and the settlement between the Appellant-Board and the Respondent union. The Appellant-Board is not bound to adopt the revised rate of Central Government, when the settlement prescribes the formula to be adopted from the rates of the State Government.

The High Court, did not keep in view the well settled principles that, the revision of wage or Dearness Allowance would depend upon the ability and the financial position of the employer. In G.O. Ms. No. 346 in and by which the Government of TN revised the Dearness Allowance from 45% to 49% (w.e.f. 1st October, 2002), it was made clear that the Government of TN was facing extremely difficult financial position and therefore, decided to sanction additional four per cent (45% to 49%) of Dearness Allowance to the employees of the State Government w.e.f. 1st October, 2002. In view of difficult finance situation which the State and the Board were facing and having regard to the terms of the settlement, Respondent(s) union cannot seek for sanction of enhanced rate of Dearness Allowance on par with the Central Government employees.

Each State Government following their own rate of Dearness Allowance payable to their employees may be adopting the revised Dearness Allowance of the Central Government. There is no Rule or obligation on the State Government to always adopt the Dearness Allowance as revised by the Central Government. It is absolutely not necessary for the State Government to adopt the Dearness Allowance rates fixed by the Central Government. It should be looked from the financial position of the State Government to adopt its own rates/revised rates of Dearness Allowance. The Board, being the State Government undertaking, the money has to come from the State Government. Keeping in view the extremely difficult financial position of the State Government, Board's order revising the Dearness Allowance rate from 45% to 49% only from 1st October, 2002 cannot be said to be arbitrary or in violation of the terms of the settlement.

The main source of finance of the Electricity Board is the State Government; the Board is run by the State Government. Unless the funds are provided by the State Government, the Electricity Board would not have sufficient funds of its own to pay the wages and the revised Dearness Allowance to its employees. Considering the financial difficulties which the State Government was facing, the revision of the Dearness Allowance from the above said dates at above said rate cannot be said to be arbitrary or without any reason.

It is within the power of the Board to set a cut-off date for payment of revised Dearness Allowance keeping in view its financial constraints. Moreover, the settlement agreement and the decisions taken by the Board in the Board Proceedings are to be harmoniously construed.

It is not disputed that Board is run by the State Government and unless the funds are provided by the State Government, the Electricity Board would not have adequate funds of its own to pay the wages. In that factual scenario, the decision of the Board to adopt the rate of Dearness Allowance as granted by the State Government cannot be said to be arbitrary.

The learned Single Judge and the Division Bench did not keep in view the terms of the Settlement and the Board Proceeding BP(FB) No. 58 dated 18th July, 1998 which stipulates that Dearness Allowance would be revised on par with the State Government employees and that it has been consistently followed by the Appellant-Board. The High Court erred not keeping in view the extremely difficult financial position of the State Government and the Board and also the additional financial burden which would be imposed upon the Appellant-Board if the demands of the Respondent(s)-union are acceded to. The impugned judgments of the High Court are set aside. Appeals are allowed.

Tags : Dearness Allowance Direction Validity

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Supreme Court

Sukhpal Singh Vs. State of Punjab

MANU/SC/0178/2019

12.02.2019

Criminal

Credibility of witnesses is ordinarily not re-visited by Supreme Court in an appeal by special leave

Present appeal by special leave is directed against the judgment of the High Court dismissing the appeal filed by the Appellant against his conviction under Section 302 of the Indian Penal Code, 1860 (IPC) and sentencing to rigorous imprisonment for life.

Upon discovery of an unidentified body near a canal and the case being registered and upon investigation being conducted the Appellant along with another came to be charge sheeted and charged with the commission of offences under Section 302 read with Section 34 of the IPC. They were also charged with the offence under Section 201 of the IPC. The trial Court convicted the Appellant while it acquitted the co-accused. The High Court has affirmed the conviction and sentence of the accused-Appellant.

The prosecution has established that the Appellant was indeed last seen with the deceased before his death and recovery of the body. The Appellant admittedly was working as a police officer. The circumstance which has been relied upon by the courts is the recovery of his service revolver - the gun along with empty cartridges and live cartridges. The evidence of PW15- officer would show that, the Appellant was arrested along with co-accused.

Apparently, the version that is sought to be set up is that the Appellant was under suspension, and therefore the Appellant had surrendered his revolver and therefore the case of the recovery of the gun and that the fatal shot was fired from the gun should not be believed.

In the absence of material to establish the case of suspension, present Court is not inclined to disturb the concurrent findings by the court which is based on evidence which establishes that there was a recovery of the gun along with 2 empty cartridges and 3 live cartridges on the statement given by the Appellant.

The evidence establishes that, the bullet found in the body of the deceased was fired from the gun which is allotted to the Appellant. There is ample evidence to show that, the Appellant was last seen with the deceased, again, a fact which is established on the basis of testimony of witnesses who have been found to be creditworthy by two courts. In an appeal maintained under leave under Section 136, this Court would not ordinarily go into the credibility of the witnesses whose testimony has inspired the confidence of the courts.

The evidence of three witnesses relating to last seen has been relied upon by two courts. It may be true that, there may be certain minor contradictions. The credibility of witnesses is ordinarily not re-visited by this Court in an appeal by special leave. That apart the circumstance as to the recovery and what is most important the report of the forensic laboratory is clinching. On account of the circumstances which stand established by evidence, there is no merit in the appeal and same shall stand dismissed.

Tags : Conviction Circumstantial evidence Validity

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Supreme Court

The State of Uttar Pradesh Vs. Faquirey

MANU/SC/0174/2019

11.02.2019

Criminal

When provocation was voluntary on part of offender, benefit of Exception I to Section 300 of IPC cannot be given

The Respondent was convicted under Section 302 of the Indian Penal Code, 1860 (IPC) and sentenced to undergo life imprisonment by the Trial Court. The High Court converted the conviction to an offence under Section 304 Part I, of IPC and sentenced the Respondent to 10 years rigorous imprisonment. Aggrieved thereby, the State of Uttar Pradesh is in appeal.

The judgment of the High Court is liable to be set aside and the judgment of the Trial Court to be restored. There is no dispute that, the shot fired from the pistol by the Respondent is due to the grudge that he had against the deceased. Immediately after the deceased arrived at the place of incident, the Respondent's attention was diverted from the dispute that was being settled in the Panchayat. He turned to the deceased and shot him in view of his past conduct relating to the visit of the deceased to his house to become close with his wife.

There is no dispute that the shot fired from the pistol by the Respondent is due to the grudge that he had against the deceased. Immediately after the deceased arrived at the place of incident, the Respondent's attention was diverted from the dispute that was being settled in the Panchayat. He turned to the deceased and shot him in view of his past conduct relating to the visit of the deceased to his house to become close with his wife.

According to Exception I to Section 300 of IPC, culpable homicide is not murder if offender causes death of person who gave provocation, whilst deprived of power of self-control by grave and sudden provocation. It would be relevant to refer to the First Proviso to Exception I which provides that the provocation should be one which is not sought or voluntarily provoked by the offender as an excuse for killing or doing harm to any person. No overt act is alleged against the deceased by which it can be stated that, the Respondent was provoked. From the proved facts of this case, it appears that the provocation was voluntary on the part of the offender. Such provocation cannot come to the rescue of the Respondent to claim that he is not liable to be convicted under Section 302 of IPC.

The High Court committed a serious error in converting the conviction of the Respondent from under Section 302 of IPC to under Section 304 Part I of IPC, without proper appreciation of the scope of Section 300 of IPC. There was no submission made on behalf of the Respondent before the High Court on the merits of the matter. If the offence committed by the Respondent is murder, he has to undergo the imprisonment provided under Section 302 of IPC. Though the Respondent has undergone imprisonment for a period of 10 years, the Respondent is liable to go back to jail to undergo the remaining sentence on being sentenced to life imprisonment.

The judgment of the High Court is set aside and the judgment of the Trial Court convicting the Respondent under Section 302 of IPC and sentencing him to life imprisonment is restored. The Respondent is directed to surrender within a period of four weeks to serve the remaining sentence. Accordingly, the appeal is allowed.

Tags : Sentence Conversion Legality

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High Court of Karnataka

Nitesh Urban Development Pvt. Ltd. Vs. Brigadier Peter Anthony Lopes and Ors.

MANU/KA/0473/2019

11.02.2019

Arbitration

Where there is merely a possibility of parties agreeing to arbitration in future, as contrasted from an obligation to refer disputes to arbitration, there is no valid and binding arbitration agreement

In facts of present case, the Petitioner and Respondent Nos. 1 to 4 entered into joint development agreement on 25th November, 2011 for development of properties mentioned in schedule B and C annexed to the agreement. A memorandum of understanding was executed by the Petitioner and the Respondents to enforce the execution and registration of the joint development agreement. The Petitioner paid a sum of ` 7.5 lakhs to the Respondent Nos. 1 to 4 which was refundable on the first day of the month following the date of completion as defined in joint development agreement.

The Respondent Nos. 1 to 4 issued a notice on 29th January, 2013 to terminate the joint development agreement, to which the Petitioner responded by submitting a reply. The Petitioner thereafter filed an application under Section 9 of the Arbitration and Conciliation Act, 1996. However, the Respondent Nos. 1 to 4 on 12th September, 2014 sold Schedule B and C properties to Respondent No. 5. On 22nd July, 2015, the Petitioner issued a legal notice for appointment of an arbitrator to resolve the dispute between the parties. The Petitioner, thereafter filed an application to implead Respondent No. 5. Respondent No. 5 was impleaded in Section 9 of the Act, in the absence of any objection by it.

In present petition, under Section 11 of the Act, 1996, the main issues which arise for consideration are, whether Clause 27.4 of the agreement is an arbitration agreement and whether Respondent No. 5 who is third party to the agreement can be subjected to arbitration proceeding.

Section 7 of the Act deals with the expression of 'arbitration agreement' and provides that arbitration agreement means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of defined legal relationship, whether contractual or not. The intention to refer the dispute to the arbitration must be clearly discernable from the terms of the agreement. Where there is merely a possibility of the parties agreeing to arbitration in future, as contrasted from an obligation to refer disputes to arbitration, there is no valid and binding arbitration agreement.

The arbitration clause in the instant case, does not require the parties to mandatorily refer the dispute to the arbitration but indicate a desire or hope to have the disputes settled by an arbitration, or a tentative arrangement to explore arbitration as a mode of settlement if and when a dispute arises. Thus, the aforesaid agreement is an agreement requiring or contemplating a further consent or consensus before a reference, is not an arbitration agreement, but an agreement to enter into an arbitration agreement in future. Thus, Clause 27.4 cannot be termed as an arbitration clause.

In order dated 11th April, 2018, the Division Bench of present Court held that, joint development agreement pertains to Schedule B & C properties. Indeed, as per the averments made in the appeal memo, 'C' Schedule property was yet to be acquired and sale deed in respect thereof, had to be obtained, and it was for this reason, the joint development agreement was kept with an advocate who agreed to act as an Escrow agent for the Appellant and respondents 1 to 4. Question of appellant specifically enforcing the joint development agreement in respect of both Schedule B & C properties would not arise.

The agreement is an escrow agreement and therefore, the question of enforcing the same does not arise. It was further held that, Schedule C property could not be made part of the agreement as the Petitioner was not the owner of the same and the joint development agreement pertains to Schedule B and C properties and in the absence of owners of Schedule B and C properties, no relief can be granted.

In the instant case, the joint development agreement pertains to Schedule B and C properties and owners of Schedule B and C properties are not parties to the arbitration agreement. It is the specific stand of the Respondent No. 5 that, he is not claiming any title or interest through Respondent Nos. 1 to 4. Clause 27.4 does not mandatorily require the parties to refer the dispute to the arbitration. Therefore, the same cannot be considered as an arbitration clause.

Clause 27.4 of the agreement is not an arbitration clause and Respondent No. 5 cannot be subjected to arbitration proceeding. Present Court does not find any reason to disagree with the view taken by the Division Bench of this Court. There is no merit in the petition. However, the same is disposed of with the liberty to the Petitioner to take recourse to such remedy as may be available to the petitioner under the law.

Tags : Agreement Dispute Reference

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Customs, Excise and Service Tax Appellate Tribunal

VLCC Healthcare Ltd. Vs. The Commissioner of G.S.T. & Central Excise, Chennai South

MANU/CC/0050/2019

11.02.2019

Service Tax

When Appellant has reversed Credit as per Rule 6(3A)(ii) of CCR, 2004, Department cannot insist Appellant to pay an amount equal to 6% of value of the exempted services/products

The Appellants are engaged in providing 'Beauty Treatment Service' and 'Health Club and Fitness Service'. They are also engaged in trading activity and selling their products, mainly cosmetics, to their customers. Their trading activity was deemed to be an exempted service with effect from 1st April, 2011. Since Appellants were using common inputs/input services for their trading activity also, the Department was of the view that, they are not eligible to avail the entire Credit. Though the Appellants had reversed Credit as per Rule 6(3)(ii) of the CENVAT Credit Rules (CCR), 2004, the Department took the view that, the Appellant has to pay 5%/6% respectively of the value of exempted services, as required under Rule 6(3)(i) of the CCR, 2004.

Show Cause Notices were issued for different periods raising the above allegations and proposing to demand the differential tax along with interest and also for imposing penalties. After due process of law, the Original Authority confirmed the demand, interest and imposed penalty. In appeal, the Commissioner (Appeals) vide impugned Orders upheld the same. Hence, present appeals.

The issue that arises for consideration in all these appeals is whether the Appellant is liable to pay an amount equal to 6% of the value of exempted services or products when they have opted to reverse the proportionate Credit in respect of the trading activity (exempted service).

As per the observation In the case of M/s. Mercedes Benz India (P) Ltd. Vs. Commissioner of C.Ex., Pune-I -, when the Appellant has reversed the Credit as per Rule 6(3A)(ii) of the CCR, 2004, the Department cannot insist that the Appellant has to pay an amount equal to 6% of the value of the exempted services/products.

The Department alleges that, since the Appellants have not maintained separate accounts, they have to pay an amount equal to 6% of the value of their exempted clearances for the reason that, they have not intimated the Department about exercising the option. Rule 6(3A) provides for intimating the Department by issuing a letter as to the exercise of option of reversal of proportionate Credit. In M/s. Mercedes Benz India (P) Ltd. Vs. Commissioner of C.Ex., it has been held that, said requirement is only procedural in nature and the substantive benefit cannot be denied on such grounds.

Further, in this case, the Appellants have in fact issued a letter dated 16th May, 2013 to the jurisdictional Range Officer, explaining that they were availing only the proportionate Credit on the value of taxable services, which is also reflected in their balance sheet as well as their ST-3 returns.

The Department ought to have taken note of the fact that, the Appellant has exercised the option. The Department cannot force the assessee to pay 5% or 6% of the value of exempted services when the assessee has exercised the option of reversing the proportionate Credit. In view of facts placed as well as the decision in the case of M/s. Mercedes Benz India (P) Ltd., the demand raised cannot sustain and requires to be set aside. The impugned Orders were set aside. The appeals are allowed.

Tags : Demand Confirmation Validity

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High Court of Madhya Pradesh

Monu Vs. The State of Madhya Pradesh

MANU/MP/0054/2019

06.02.2019

Criminal

A person should not be kept in jail ordinarily, if a trial for non-bailable offence which is triable by Magistrate, is not concluded within a period of sixty days from date fixed for evidence

Present petition has been filed under Section 482 of the Code of Criminal Procedure, 1973 (CrPC) against the order passed by the learned Sessions Judge, whereby learned Sessions Judge rejected the applicant's revision and affirmed the order passed by the learned Judicial Magistrate, whereby learned Judicial Magistrate rejected the Applicant's application filed under Section 437(6) of the CrPC for releasing him on bail, without going into the merits of the case observing that, the order passed by the JMFC under Section 437(6) is an interlocutory order against which revision is not maintainable. Question involved in present case is whether the order passed by the learned Magistrate under Section 437 (6) of CrPC is revisable or not.

Section 437(6) of CrPC mandates that in case of non-bailable offence, which is being tried by a Magistrate and where the trial has not concluded within a period of sixty days from the first date fixed for taking evidence in the case and the accused has remained in custody during whole of the said period, he becomes entitled to be released on bail. Though, the Magistrate can decline the benefit of aforesaid provisions by recording reasons in writing. That section on one side provides an absolute right in favour of the Applicant to secure bail under Section 437(6), but, at the same time, puts a check on the said right by conferring jurisdiction upon the Magistrate to reject the applications for the reasons to be recorded in writing.

The stage contemplated under Section 437(6), is accrued after filing of charge-sheet and framing of charge when trial commences and the accused prefers an application after lapse of 60 days from first date fixed for taking evidence. Reasons for rejection of application under sub-section (6) of the said Section have to be different and little more serious than the reasons that may be relevant for rejection for bail at the initial stage.

The Division Bench of present Court in the case of Devraj Maratha @ Dillu v. State of Madhya Pradesh observed that, on a plain reading of the provision of Section 437(6) of the CrPC, it is graphically clear that it is mandatory in the sense that a person should not be kept in jail ordinarily if a trial for non-bailable offence which is triable by the Magistrate, is not concluded within a period of sixty days from the date fixed for evidence.

Section 437(6) of Cr.P.C. provides a right in favour of the accused to secure bail where the trial could not be concluded within a period of 60 days, from the first date fixed for taking evidence with some restrictions. The order passed by the magistrate under Section 437(6) of Cr.P.C. affects the rights of the accused. So it cannot be said to be an interlocutory.

Learned Sessions Judge committed mistake in rejecting the applicant's revision without going in to the merits of the case with the observation that the impugned order was an interim order and hence revision was not maintainable against it. The order passed by learned Sessions Judge, is set-aside and the case is remanded back to the learned Sessions Judge with the direction to pass a reasoned order after hearing both the parties. Petition disposed off.

Tags : Bail Grant of Revision Maintainability

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