11 November 2019


Supreme Court

Indian Oil Corporation Ltd. and Ors. Vs. R.M. Service Centre and Ors.




Stock variation beyond permissible limits is a critical irregularity entails termination of dealership

The challenge in the present appeal is to an order of the Division Bench of the Gauhati High Court passed in writ appeal maintaining an order of the Single Bench of the High Court whereby termination of dealership of Respondent No. 1 for violation of Marketing Discipline Guidelines, 2012 was set aside.

The dealer was granted retail dealership for sale of motor spirit (petrol), High Speed Diesel, motor oil and grease as a physical disabled person on a depot located at Ghograpar, National Highway -31 in the District of Nalbari, Assam. The sale and supply from the retail outlet of the dealer was suspended by the Appellants on 6th May, 2013 when it was found, on the joint inspection, variation of stock of High Speed Diesel beyond permissible limit; density of Tank No. 2 was not available and that tanker truck retention of the corresponding tank was not available at the time of inspection. On the basis of the test reports, the dealership was terminated after serving another show cause notice wherein, it has been stated that deviation was observed during inspection pertaining to stock variation and non-availability of reference density.

The dealer challenged the termination of the dealership before the Gauhati High Court. The learned Single Judge allowed the writ petition holding that, as per the Guidelines, the samples were required to reach the Laboratory preferably within ten days whereas, the first sample was tested on 29th May, 2013 that is after ten days and the umpire sample given to the dealer was tested on 19th August, 2013. It was held that, there is non-compliance of the time line fixed. The learned Single Judge also found that, the stock variation is not a critical irregularity within the meaning of Clause 8.2 of the Guidelines and cannot entail termination of dealership. The Division Bench of the High Court, in appeal, agreed with the finding recorded by the learned Single Bench.

There was variation in stock beyond permissible limits. In case of positive stock variation beyond permissible limits and on account of failure of sample, action in line with that of adulteration is to be initiated. The adulteration in these circumstances is a critical irregularity falling in Clause 8.2 of the Guidelines and the action required to be taken is termination of the dealership. However, in case of stock variation beyond permissible limits and the sample passing the quality test, it leads to suspension of sale and supply for fifteen days in the first instance, suspension of sale and supply for thirty days in the second instance and termination of dealership in the third instance. In this case, since the stock variation was beyond permissible limits and the sample failed, therefore, the action was rightly taken under Clause 5.1.11 of the Guidelines which is a critical irregularity when read with Sub-clause (i) of Clause 8.2 and Sub-clause (iv) of Clause 8.3 of the Guidelines.

In the present case, after failure of the first sample in the test report dated 29th May, 2013, the dealer was informed, who opted for testing of umpire sample in his possession. The said sample along with the sample in possession of the Field Survey Officer was sent for testing and in the report dated 19th August, 2013, the sample was found to have the same deviations. The dealer was informed of the result of the second test and was also given a show cause notice as to why the dealership should not be terminated. Therefore, the action taken against the dealer is in terms of the Guidelines, as a consequence of contractual obligations by the dealer.

Consequently, order passed by the High Court is not legal and sustainable and, thus, the same is set aside. The writ petition is dismissed and the termination of dealership is held to be valid and legal. Civil Appeal is allowed.

Tags : Stock variation Dealership Termination

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Supreme Court

Kalu Vs. State of Madhya Pradesh




Accused is obliged to furnish explanation under Section 313 of CrPC with regard to circumstances under which deceased met an unnatural death inside the house

The Appellant, husband of the deceased, is aggrieved by his conviction under Section 302 of the Indian Penal Code, 1860 (IPC) affirmed by the High Court. There is no eye witness and the case rests only on circumstantial evidence.

The police after completing investigation submitted charge sheet under Section 306 and 498 of IPC. During the course of the trial, considering the nature of evidence that emerged, the Sessions Judge also added Section 302 of IPC in the charges. The Sessions Judge held the charge under Section 302 of IPC to be established as the deceased had been strangulated to death. The High Court in appeal opined that the deceased had been hanged to death. Both the courts have unanimously held that, the deceased did not commit suicide but that it was a homicidal death.

The deceased lived alone with the Appellant and their minor child. The evidence of the relatives of the deceased, PW 2, PW 4 and her parents PWs. 6 and 8 reveal that, all was not well between the Appellant and the deceased. Because of the strained relations between them, the deceased had stayed at her parents' home for nearly 10 months prior to the occurrence and had returned barely a month before the fateful day after her father-in-law had come to take her back.

The injuries on the person of the deceased, as noticed in the inquest report as also in the post mortem report, are clearly indicative of a struggle or resistance put up by the deceased in the last hour. The onus clearly shifted on the Appellant to explain the circumstances and the manner in which the deceased met a homicidal death in the matrimonial home, as it was a fact specifically and exclusive to his knowledge. It is not the case of the Appellant that, there had been an intruder in the house at night.

In Tulshiram Sahadu Suryawanshi and Ors. v. State of Maharashtra, present Court observed that, It is settled law that presumption of fact is a Rule in law of evidence that a fact otherwise doubtful may be inferred from certain other proved facts. When inferring the existence of a fact from other set of proved facts, the court exercises a process of reasoning and reaches a logical conclusion as the most probable position. The above position is strengthened in view of Section 114 of the Evidence Act, 1872. It empowers the court to presume the existence of any fact which it thinks likely to have happened. In that process, the courts shall have regard to the common course of natural events, human conduct, etc. in addition to the facts of the case.

The prosecution has clearly established a prima facie case. Once the prosecution established a prima facie case, the Appellant was obliged to furnish some explanation under Section 313 of Code of Criminal Procedure, 1973 (CrPC) with regard to the circumstances under which the deceased met an unnatural death inside the house. His failure to offer any explanation whatsoever therefore leaves no doubt for the conclusion of his being the assailant of the deceased. Appeal dismissed.


Tulshiram Sahadu Suryawanshi and Ors. v. State of Maharashtra, MANU/SC/0748/2012

Tags : Conviction Circumstantial Evidence Credibility

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High Court of Delhi

Central Board Of Trustees EPFO Through APFC Delhi (South) v. Kendriya Bhandar




Tribunal has discretion to grant waiver from pre-deposit by recording reasons which are not necessarily be detailed and exhaustive

The present writ petition filed by the Central Board of Trustees EPFO assails the order passed by the Employees’ Provident Fund Appellate Tribunal. Under the impugned order, the Tribunal while admitting the Respondent’s appeal against the assessment order passed by the Petitioner under Section 7(A) of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (‘the EPF Act’), has granted complete waiver from pre-deposit to the respondent.

The Petitioner, alleging that, the Respondent had defaulted in paying the requisite provident fund dues, had initiated an inquiry under Section 7 (A) of the EPF Act. After granting due opportunity of hearing to the Respondent, the Petitioner passed an assessment order holding the Respondent liable to pay a sum of Rs.6,31,707 on the ground that, the Respondent was the principal employer and, therefore, liable to remit the dues in respect of the employees engaged by one M/s Shramika Kutir Udyog.

Aggrieved by this assessment order, the Respondent approached the Tribunal by way of an appeal under Section 7(I) of the EPF Act, alongwith an application seeking waiver of the 75% pre-deposit, mandated in terms of Section 7(O) of the EPF Act. The Tribunal, while admitting the appeal under the impugned order, also granted complete waiver to the Respondent from pre-deposit by exercising its powers under the proviso to Section 7(O) of the EPF Act and it is this grant of waiver which is being assailed in the present petition.

Learned counsel for the Petitioner submits that, the impugned order fails to adhere to the express stipulations of the EPF Act; although the Act empowers the Tribunal to grant complete waiver of pre-deposit, it also sets down that such grant can only be made after carefully recording the reasons for the same, in writing. In the present case, however, the impugned order fails to record any reasons warranting the grant of such waiver.

Once the proviso to Section 7(O) of the EPF Act specifically empowers the Tribunal with the discretion to grant complete or partial waiver to an Appellant from the rigours of making pre-deposit, after recording reasons for such grant, it cannot be urged that, even if the Tribunal finds a strong prima facie case in favour of the Appellant, it should not exercise such discretion. Once the provisions of the EPF Act itself vests the Tribunal with the power to exercise its discretion for grant of waiver from pre-deposit by recording reasons, it cannot be said that reasons provided by the Tribunal must necessarily be detailed and exhaustive.

There is no merit in the Petitioner’s contention that, merely because the Respondent had not disputed the calculations made by the Petitioner at the time of passing the assessment order, it implies that, the Respondent had admitted its liability. In fact, all along the entire case of the Respondent has been that since M/s Shramika Kutir Udyog was not exclusively performing work for the Respondent, it could not be held liable for paying the provident fund dues of its employees. The appeal before the Tribunal has remained pending since 2014 and, yet, the Petitioner chose to assail the order granting waiver from pre-deposit after an inordinate delay of three and a half years. On this ground also, no interference is warranted with the impugned order at this belated stage. Petition dismissed.

Tags : Pre-deposit Waiver Grant

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Supreme Court

Oriental Kuries Ltd. Vs. Lissa and Ors.




Chit foreman authorized to recover amount of future subscription from defaulting subscriber

The issue which has arisen for consideration in the present Civil Appeal is with respect to the jural relationship between a chit fund entity and the subscribers, created by a chitty agreement; and whether it is a debt in praesenti or a promise to discharge a contractual obligation.

The present Appeal arises out of a Chit Fund conducted by the Appellant, a chit fund entity. The duration of the chit fund was from 1978 to 1990. The Respondents were subscribers of the chit fund. During the subsistence of the chit fund, the Respondents defaulted in the payment of 12 instalments.

The chit subscriber at the time of subscription, incurs a debt which is payable in instalments. If a subscriber is permitted to withdraw the collected sum on his turn, without being bound to pay the future instalments, it would jeopardize the interest of all other subscribers, and the entire mechanism of the chit fund system would collapse.

A perusal of the provisions of Chapter V of the Chit Funds Act, 1982 makes it clear that, if a prized subscriber defaults in making payment of an instalment, the chit foreman has the right to recover the amount covering all future subscriptions from the defaulting subscriber as a consolidated amount. Section 32 of the 1982 Act empowers the foreman to recover the consolidated payment of all future subscriptions forthwith in the case of a default.

The relationship between the foreman and the subscribers in a chit fund transaction is of such a nature that there is a necessity and justification for making stringent provisions to safeguard the interest of the other subscribers, and the foreman. If a prized subscriber defaults in payment of his subscriptions, the foreman will be obliged to obtain the equivalent amount from other sources, to meet the obligations for payment of the chit amount to the other members, who prize the chit on subsequent draws. For raising such an amount, the foreman may be required to pay high rates of interest.

The stipulation of empowering the foreman to recover the entire balance amount in a lump sum, in the event of default being committed by a prized subscriber, is to ensure punctual payment by each of the individual subscribers of the chit fund. Without punctual payments, the system would become unworkable, and the foreman would not be in a position to discharge his obligations to the other members of the chit fund.

The relationship between a chit subscriber and the chit foreman is a contractual obligation, which creates a debt on the day of subscription. On default taking place, the foreman is entitled to recover the consolidated amount of future subscriptions from the defaulting subscriber in a lump sum. The impugned judgment passed by the Division Bench of the High Court is set aside. The Civil Appeal is allowed.

Tags : Defaulting subscriber Payment Recovery

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High Court of Delhi

B N Singh v. M/s Hindustan Antibiotics Limited



Labour and Industrial

Date of filing of affidavit is not starting point from when workman would become entitled to receive last drawn full wages

The grievance of the Appellant, who appears in person, is that under Section 17B of Industrial Disputes Act, 1947, he was entitled to payment of the last drawn wages from the date of institution of the writ proceedings by the Respondent in present Court to assail the industrial award in his favour, and merely because the affidavit in support of the application in terms of Section 17B was filed on 26th February, 2019, the date from which he was entitled to receive the last drawn wages was not postponed to the said date. He submits that, the learned Single Judge has wrongly read and interpreted the decision of the Supreme Court in Uttaranchal Forest Development Corporation v. K.B. Singh.

A reading of Section 17B of Act shows that, when an award made by the Labour Court, Tribunal or National Tribunal directs reinstatement of any workman, and such an award is assailed before the High Court, or the Supreme Court by the employer, the workman is entitled to seek, during the pendency of such proceedings in the High Court, or the Supreme Court, the full wages last drawn by him, inclusive of any maintenance allowance admissible to him under the Rules. This is subject to the condition that, he should not have been employed in any establishment during such period. For this purpose, he is required to file an affidavit stating that, he had not been employed in any such establishment during the relevant period.

It is clear from the plain reading of Section 17B of Act that, the period for which the workman can claim the last drawn wages commences from the date of filing of the proceedings challenging the industrial award before the High Court, or the Supreme Court, or as the case may be. The date of filing of the affidavit is not the starting point from when the workman would become entitled to receive the last drawn full wages. The filing of the affidavit is only a pre-condition to trigger the obligation of the employer to make payment of the last drawn wages from the date of filing of the petition in the Court, in terms of the order that the Court may pass after perusing the application and the affidavit.

Even the Supreme Court has not stated in Uttaranchal Forest Development Corporation v. K.B. Singh that, the entitlement for such wages would be from the respective dates “of” filing of the affidavits by the workman. The Supreme Court has cautiously used the words “their entitlement for such wages would be from the respective dates by filing affidavits by each of them in this Court in compliance with Section17-B of Act, 1947” This aspect has been missed by the learned Single Judge.

The learned Single Judge has wrongly interpreted both Section 17B of Act, as well as the decision of the Supreme Court. Impugned order is set aside to the extent that it restricts the right of the Appellant to receive wages under Section 17B only from 26th February, 2019. The said wages would be payable from the date of filing of the writ petition, keeping in view the affidavit filed by him that, he has remained unemployed since the date of his termination.

Tags : Wages Payment Right to receive

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Customs, Excise and Service Tax Appellate Tribunal

Varsana Ispat Ltd. and Ors. Vs. C.C.E. & S.T., Rajkot




Where shortage was insignificantly low as compared to total production and in absence of any positive evidence of clandestine removal, charge of clandestine removal cannot be sustained

Present appeal has been filed by Appellant against the confirmation of demand of Central Excise, interest and imposition of penalty under Section 11AC of Central Excise Act, 1944 read with Section 25 of the Central Excise Act, 2005.

The Commissioner (Appeals) relies on the decision of the Tribunal in the case of B.R. Industries Ltd.- and in case of Swastic Industries vs. Commissioner of Central Excise to uphold the charge of clandestine removal. He rejected the contention of the Appellant that, shortage was just 0.31% of the total production of the relevant period and the fact that there was no production of TMT bars in last one year. He also holds that, the Appellant had failed to explain the reason for shortage at the time of verification or subsequently.

In the instant case, on the visit of Central Excise Officer, no stock of TMT 12mm bars was found while the daily stock account showed the quantity of 368.540 MT. The Revenue recorded the statements of Shri Dipak Arora, Manager (Commercial) and Shri Kunal Bubna, General Manager (Commercial and Finance) both of them admitted that while there was no stock of 12mm TMT bars, the daily stock account showed 368.54 MT. However none of them admitted that there was any clandestine clearance. The charge of clandestine clearance has been made without any other evidence and it is a conclusion drawn solely on the basis of the discrepancy in the physical stock vis a vis daily stock account.

This discrepancy needs to be appreciated in the background of the fact that, the discrepancy consist of only 0.31% of the total production during said period and also from the fact that, the Appellant do not stand to gain by evading Central Excise Duty as they were availing benefit of Notification No. 39/2001-CE, which entitled them to claim refund duty paid through PLA in cash. In this background, where the shortage was insignificantly low as compared to total production and the appellants were not gaining by clandestine clearance and in absence of any positive evidence of clandestine removal, the charge of clandestine removal cannot be sustained.

In instant case, Appellant has been able to show that plausible reason of the discrepancy and also the fact that there is no gain to be made by clandestine clearance in terms of Central Excise Duty thus decisions relied upon by the Commissioner (Appeals) are on significantly different facts. In view of above the demand is set aside and appeals are allowed.

Tags : Demand Confirmation Legality

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