Supreme Court

Malluru Mallappa (D) thr. L.Rs. Vs. Kuruvathappa and Ors.

MANU/SC/0166/2020

12.02.2020

Civil

An appeal is a continuation of proceedings of original Court and Court of first appeal must record its findings only after dealing with all issues of law as well as fact

Present is the Plaintiff's appeal challenging the judgment passed by the High Court, whereby the High Court has confirmed the judgment and decree passed by the trial Court. The Plaintiff filed the above suit against the Respondents/Defendants for specific performance of the agreement to sell dated 30th March, 2000. The agreement provided that, the sale was to be executed within three years from the date of the agreement, subject to the Defendants fulfilling certain obligations.

The trial Court held that, the suit was barred by time. It was also held that the Plaintiff was not ready and willing to perform his part of the contract. The suit was accordingly dismissed. The High Court has confirmed the said decree of the trial court.

Section 96 of the Code of Civil Procedure, 1908 (CPC) provides for filing of an appeal from the decree passed by any court exercising original jurisdiction to the court authorized to hear the appeals from the decisions of such courts. In the instant case, the appeal from the decree passed by the trial court lies to the High Court. In Hari Shankar v. Rao Girdhari Lal Chowdhury, it was held that a right of appeal carries with it a right of re-hearing on law as well as on fact, unless the statute conferring a right of appeal limits the re-hearing in some way as has been done in second appeal arising under the CPC.

It is a settled position of law that, an appeal is a continuation of the proceedings of the original court. Ordinarily, the appellate jurisdiction involves a re-hearing on law as well as on fact and is invoked by an aggrieved person. The first appeal is a valuable right of the Appellant and therein all questions of fact and law decided by the trial court are open for re-consideration. Therefore, the first appellate court is required to address itself to all the issues and decide the case by giving reasons.

The Court of first appeal must record its findings only after dealing with all issues of law as well as fact and with the evidence, oral as well as documentary, led by the parties. The judgment of the first appellate court must display conscious application of mind and record findings supported by reasons on all issues and contentions

The judgment of the first appellate court has to set out points for determination, record the decision thereon and give its own reasons. Even when the first appellate court affirms the judgment of the trial court, it is required to comply with the requirement of Order XLI Rule 31 of CPC and non-observance of this requirement leads to infirmity in the judgment of the first appellate court. When the appellate court agrees with the views of the trial court on evidence, it need not restate effect of evidence or reiterate reasons given by trial court. Expression of a general agreement with the reasons given by the trial court would ordinarily suffice.

The issue relating to readiness and willingness of the Plaintiff to perform his part of the contract and issue relating to limitation were held against the Plaintiff and the suit was accordingly dismissed. The appeal before the High Court involved both disputed questions of law and fact. The High Court without examination of any of these aspects has dismissed the appeal by a cryptic order. The court below has neither re-appreciated the evidence of the parties, nor it has passed a reasoned order. The High Court has failed to follow the provisions of Order XLI Rule 31 of the CPC while deciding the appeal. The judgment and decree of the High Court is set aside and the matter is remanded to the High Court for fresh disposal in accordance with law. Appeal allowed in part.

Relevant

Hari Shankar v. Rao Girdhari Lal Chowdhury MANU/SC/0346/1961

Tags : Contract Specific performance reasoned order

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Supreme Court

Nalin Kumar Bhatia Vs. Union of India (UOI) and Ors.

MANU/SC/0161/2020

11.02.2020

Service

There is no presumption that a decision taken by persons occupying high posts is valid

The Appellant was commissioned in the Mechanised Infantry of Indian Army on 13th June, 1981 and was subsequently transferred to the Corps of Intelligence in May, 1991. He was promoted as a Brigadier in September, 2008. His empanelment for promotion to the rank of Major General was placed before the Members of Selection Board on 24th April, 2015. On 31st July, 2015, he was declared as having not been empanelled for promotion to the rank of Major General. Being aggrieved by his non-empanelment, he filed Original Application (OA) before the Armed Forces Tribunal.

The Tribunal dismissed the OA filed by the Appellant by holding that there is no illegality or patent material irregularity in the constitution of the Selection Board or the procedure followed by the Selection Board. The Tribunal was convinced that, the overall reckonable profile of the Appellant was taken into account by the Selection Board and the decision of the Selection Board did not warrant interference. The contention of the Appellant that his non-empanelment was vitiated by a malice in law, was not accepted by the Tribunal.

Article 16 of the Constitution of India, 1950 confers a right to be considered for promotion. There is no right for promotion, but the right that is conferred by Article 16 is to be considered for promotion fairly and in accordance with the extant Rules or Regulations governing promotions. Violation of rules/Regulations or the policy governing promotions would entail in violation of Article 16 of the Constitution of India. The contention of the Appellant that he deserved to be empanelled on the basis of the promotion policy needs to be considered.

The quantification system for promotion was introduced to ensure objectivity and impartiality in the matter of promotions to higher ranks in the Army. It is clear from the policy that primacy is given to the CRs. Admittedly, the Appellant secured 89.667 marks in the first selection held in April, 2015 and 90.469 marks in the review selection held in September, 2015. He was the only eligible officer in the rank of Brigadier in Intelligence Corps belonging to the 1981 batch who was considered for empanelment to the rank of Major General.

The earlier policy followed for promotion to higher ranks in the Army from 1987 was revised in the year 2008 to introduce a quantification system to be followed by the Selection Boards. The policy governing promotions to higher ranks in the Army was issued on 4th January, 2011 in supersession of the earlier policy of the quantification system. Primacy is given to the CRs as is clearly mentioned in the policy. There is nothing mentioned in the policy that an officer can be ignored for empanelment only on the basis of the value judgment in spite of his securing high marks on the basis of the other criteria.

In the instant case, the Appellant was the only eligible Brigadier of his batch for empanelment to the rank of Major General with a meritorious record of service. He could not have been deprived of his empanelment only on the basis of value judgment of the Selection Board.

There is no presumption that a decision taken by persons occupying high posts is valid. All power vested in the authorities has to be discharged in accordance with the principles laid down by the Constitution and the other Statutes or Rules/Regulations governing the field. The judicial scrutiny of a decision does not depend on the rank or position held by the decision maker. The Court is concerned with the legality and validity of the decision and the rank of the decision maker does not make any difference.

The non-empanelment of the Appellant for promotion as Major General is contrary to the promotion policy. He is entitled for reconsideration for empanelment by a Review Selection Board strictly in accordance with the promotion policy by keeping in mind the observations in this judgment. The Respondents are directed to complete this exercise within a period of six months. The judgment of the Tribunal is set aside and the Appeal is allowed.

Tags : Promotion Non-empanelment Legality

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High Court of Bombay

Manohar Vs.The Election Commission of India and Ors.

MANU/MH/0220/2020

11.02.2020

Election

In absence of complete cause of action for declaring election of returned candidate to be void, election petition is to be summarily dismissed without trial

Present election petition filed under Section 80 read with Section 100(1) of the Representation of the People Act, 1951 challenges the election of the respondent no. 3 who has been declared as the returned candidate in the general elections from Nagpur Lok Sabha Constituency that were held in May 2019. According to the Petitioner who was also a candidate at the said election, on account of non-compliance with various statutory provisions, the election of the returned candidate is liable to be declared as null and void.

The election petitioner seeks to rely upon the provisions of Section 100(1)(d)(iv) of the said Act for seeking a declaration that the election of the returned candidate is void.

It is not sufficient to merely state that, there has been non-compliance with the provisions of the said Act and the Rules framed therein. It is also necessary to indicate that as a result of such violation, the election of the returned candidate has been materially affected. The pleadings do not indicate any pleadings whatsoever to atleast indicate that as a result of non-compliance with the provisions of the said Act and the Rules, the election of the returned candidate has been materially affected.

In absence of any pleadings whatsoever that on account of non-compliance of the provisions of the said Act and the Rules framed therein the election of the returned candidate was materially affected, it would have to be held that the election petition is based on an incomplete cause of action. Thus following the law as laid down in Ram Sukh vs. Dinesh Aggarwal and in view of the failure on the part of the election petitioner to aver non-compliance with the provisions of Constitution of India or the provisions of the said Act or any Rules/Orders framed under the said Act thereby materially affecting the result of the election insofar as it concerned the returned candidate was concerned, the election petition is liable to be summarily dismissed without trial.

No useful purpose would be served by permitting the election petition to proceed for trial in absence of any pleadings whatsoever in the election petition that the election of the returned candidate was required to be declared void under Section 100(1)(d)(iv) of the said Act. In absence of basic averments, it would also not be permissible for the election petitioner to lead any evidence in that regard.

The election petition is liable to be rejected under the provisions of Order VII Rule 11(a) of the CPC as there is absence of complete cause of action for declaring the election of the returned candidate to be void under Section 100(1)(d)(iv) of the said Act. Election Petition dismissed.

Tags : Non-compliance Provisions Cause of action Absence

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NATIONAL COMPANY LAW APPELLATE TRIBUNAL

M/s Steel India Versus Theme Developers Pvt. Ltd.

MANU/NL/0100/2020

11.02.2020

Insolvency

Interest alone cannot be construed as operational debt

Present appeal emanates from the order passed by the Adjudicating Authority on the application filed under Section 9 of the Insolvency and Bankruptcy Code 2016 (I & B Code) by the Appellant /applicant Steel India to initiate Corporate Insolvency Resolution Process (CIRP) against the corporate debtor Theme Developers Pvt. Ltd. The Appellant contends that, the Corporate Debtor committed default in making payment to the extent of Rs.22,64,054, which is inclusive of interest calculated @ 2% on the delayed payments against goods sold and delivered by Operational Creditor to the Corporate Debtor.

The Applicant states that it supplied the steel bars to the Corporate Debtor for their construction activity, at their project sites and against these supplies, various invoices have been raised. It is further stated by the Operational Creditor that as per the terms and conditions between the parties; it was agreed that in case the payment is delayed beyond 60 days, 2% interest per month will be charged.

The Appellant/Operational Creditor further contends that amount due towards the Corporate Debtor is of interest amounting to Rs.22,64,054., for delayed payment against the goods sold and delivered. The details of computation of outstanding amount, relating to the payment of interest for delayed payment is Rs.22,64,054, which is due and payable, against the Corporate Debtor. The Adjudicating Authority rejected the petition, on the ground that outstanding amount is relating to the payment of interest-only, on account of the delayed payment, to the extent of Rs.22,64,054,i.e. for the period from 2015 to 2018.

Admittedly, the outstanding amount against the Corporate Debtor is towards interest amount of Rs.22,64,054, for delayed payment against the goods sold and delivered. It is pertinent to mention that, Operational Creditor issued first demand notice on 28th December 2018. Based on this first demand notice, the Corporate Debtor made the payment of the principal amount, and only an interest amount of Rs.22,64,054 remained outstanding towards interest, for which the Corporate Debtor raised the dispute. After that, the Operational Creditor issued the demand notice on 15th January 2019 Application for initiation of corporate insolvency resolution process under Section 9 of the I & B Code was filed before the Adjudicating Authority.

Before the issuance of the second demand notice, the dispute relating to the payment of interest was existing. Therefore, the Adjudicating Authority rejected the Application by the Impugned Order. It is also pertinent to allege that, the outstanding amount is towards interest on the delayed payments, for which there was a pre-existing dispute, before issuance of demand notice. The alleged claim amount, towards interest on loan alone, cannot be termed as an Operational Debt. Present Tribunal is not inclined to interfere with the order passed by the Learned Adjudicating Authority. The Appeal is dismissed.

Tags : Delayed payment Interest Operational Debt

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Supreme Court

Rajeshbhai Muljibhai Patel and Ors. Vs. State of Gujarat and Ors.

MANU/SC/0155/2020

10.02.2020

Criminal

Complaint under Section 138 NI Act cannot be quashed when disputed question of facts are involved

Present appeals arise out of the impugned judgment passed by the High Court dismissing Criminal Miscellaneous Application thereby declining to quash the FIR. By the same order, the High Court has allowed Criminal Miscellaneous Application and quashed the criminal case filed by Appellant No. 3-Hashmukhbhai Ravjibhai Patel against Accused Yogeshbhai Muljibhai Patel under Section 138 of The Negotiable Instruments Act, 1881 (N.I. Act).

The issue relates to the alleged forgery of four receipts. Appellants has submitted that, the High Court has failed to appreciate that the FIR lodged by Respondent No. 2-Mahendrakumar is false and frivolous as the same subject matter is pending consideration in Summary Suit. While so, the criminal case could not have been registered on the four receipts which are the subject matter of the pending litigations between the parties.

On the contrary, the Respondents has submitted that, Appellants made four forged receipts of Rs. 30,00,000 each by forging the signatures of Respondent No. 2 and the handwriting expert opined that four receipts relied upon by Appellant No. 3 have not been signed by Respondent No. 2- and on the basis of FSL report, FIR has been registered under Sections 406, 420, 465, 467, 468, 471 and 114 of Indian Penal Code, 1860 (IPC). It was submitted that since there is a prima facie case of forgery and cheating made out against the Appellants, the High Court rightly declined to quash the FIR and the impugned order warrants no interference.

In terms of Section 45 of the Indian Evidence Act, 1872 the opinion of handwriting expert is a relevant piece of evidence; but it is not a conclusive evidence. It is always open to the Plaintiff-Appellant No. 3 to adduce appropriate evidence to disprove the opinion of the handwriting expert. Section 73 of the Indian Evidence Act empowers the Court to compare the admitted and disputed writings for the purpose of forming its own opinion. Based on the sole opinion of the handwriting expert, the FIR ought not to have been registered. Continuation of FIR would amount to abuse of the process of Court and the petition filed by the Appellants under Section 482 of CrPC in Criminal miscellaneous Application to quash the FIR I-194/2016 is to be allowed.

The High Court erred in quashing the criminal case filed by Appellant No. 3 under Section 138 of N.I. Act. Yogeshbhai has admitted the issuance of cheques. When once the issuance of cheque is admitted, the presumption would arise under Section 139 of the N.I. Act in favour of the holder of cheque that is the complainant-Appellant No. 3. The nature of presumptions under Section 139 of the N.I. Act and Section 118(a) of the Indian Evidence Act are rebuttable. Yogeshbhai has of course, raised the defence that, there is no illegally enforceable debt and he issued the cheques to help Appellant No. 3-Hasmukhbhai for purchase of lands. The burden lies upon the Accused to rebut the presumption by adducing evidence. The High Court did not keep in view that until the Accused discharges his burden, the presumption under Section 139 of N.I. Act will continue to remain. It is for Yogeshbhai to adduce evidence to rebut the statutory presumption.

When disputed questions of facts are involved which need to be adjudicated after the parties adduce evidence, the complaint under Section 138 of the NI Act ought not to have been quashed by the High Court by taking recourse to Section 482 of CrPC. Though, the Court has the power to quash the criminal complaint filed under Section 138 of the NI Act on the legal issues like limitation, etc. Criminal complaint filed under Section 138 of the NI Act against Yogeshbhai ought not have been quashed merely on the ground that, there are inter se dispute between Appellant No. 3 and Respondent No. 2.

Without keeping in view the statutory presumption raised under Section 139 of the N.I. Act, the High Court, committed a serious error in quashing the criminal complaint filed under Section 138 of NI Act.

Criminal Miscellaneous Application filed by the Appellants is allowed and the FIR is quashed. Criminal Misc. Application filed by Yogeshbhai Muljibhai Patel stands dismissed. Case filed by Appellant No. 3 under Section 138 of N.I. Act stands restored. In the result, the impugned order is set aside and these appeals are allowed.

Tags : FIR Quashing of Legality

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Supreme Court

Arun Singh and Ors. Vs. State of U.P. and Ors.

MANU/SC/0160/2020

10.02.2020

Criminal

Offences pertaining to demand of dowry are offences against the society

Present appeal is directed against the impugned judgment passed by the High Court dismissing the petition filed by the Appellants under Section 482 of the Code of Criminal Procedure, 1973 (CrPC) challenging the charge sheet filed against them.

Learned Counsel for the Appellant vehemently contended that the High Court has failed to appreciate and consider that the fresh criminal action can not be launched on the basis of the same cause of action, which was already settled 10 months back by way of compromise which was acted upon by both the parties. Learned Counsel further submits that the High Court has failed to consider and appreciate that the allegations as contained in the First Information Report even if taken on the face value and assumed to be correct in entirety, do not prima-facie disclose commission of any offence, much less a cognizable offence.

Offences for which the Appellants have been charged are infact offences against society and not private in nature. Such offences have serious impact upon society and continuance of trial of such cases is founded on the overriding effect of public interests in punishing persons for such serious offences. It is neither an offence arising out of commercial, financial, mercantile, partnership or such similar transactions or has any element of civil dispute thus it stands on a distinct footing. In such cases, settlement even if arrived at between the complainant and the Accused, the same cannot constitute a valid ground to quash the F.I.R. or the charge sheet. Thus the High Court cannot be said to be unjustified in refusing to quash the charge sheet on the ground of compromise between the parties.

To constitute an offence under Section 493 of IPC, the allegations in the FIR must demonstrate that Appellant had practiced deception on the daughter of the complainant causing a false belief of existence of lawful marriage and which led her to cohabit with him.

A perusal of the averments would go to show that ingredients to constitute an offence Under Section 493 Indian Penal Code are missing from the averments.

The allegations in the First Information Report in respect of Section 3/4 of the Dowry Prohibition Act, 1961 are very specific. Essential ingredients of the offence under Section 3/4 of Act are that the persons Accused should have made demand directly or indirectly from the parents or other relatives or guardians of a bride or a bridegroom as the case may be any dowry and/or abets the giving and taking of dowry. The allegations of the F.I.R. quoted clearly go to show that a demand of dowry of Rs. 5 Lakhs was made by the Appellants from the complainants and thus, it can not be said that no offence under the Dowry Prohibition Act are made out against the Appellants. There being direct allegations of demand of Dowry in the First Information Report, the allegations prima-facie constitute a commission of an offence under the Dowry Prohibition Act and thus the charges leveled against the Appellants under Section 3/4 of the said Act, are not liable to be quashed.

Insofar as offence under Section 493 of IPC is concerned, since F.I.R. does not disclose the commission of any offence under the said Section and thus continuance of the criminal prosecution under said Section would amount to abuse of process of the Court and the order of the High Court to that extent is liable to be set aside. However, insofar as offence against the Appellants under Section 3/4 of the Dowry Prohibition Act is concerned, since the allegations disclose the commission of cognizable offence in the F.I.R., it is not a fit case to exercise power under Section 482 of CrPC and to quash criminal proceedings against the Appellants for the said offence.

The charge sheet insofar as Section 493 of IPC is concerned stands quashed. However, in respect of charge sheet under Section 3 read with Section 4 of Dowry Prohibition Act, the Appeal stands dismissed.

Tags : Charge sheet Quashing Compromise

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