Supreme Court

Jagmail Singh vs Karamjit Singh

MANU/SC/0444/2020

13.05.2020

Law of Evidence

Secondary evidence can be permitted to be produced where party establishes factual foundation

Present appeal is directed against the judgment passed by the High Court whereby the High Court confirmed the order passed by the Civil Judge in application filed under Section 65 and 66 of the Indian Evidence Act, 1872 by the Appellants herein seeking permission to prove the copy of the Will dated 24th January, 1989 executed by one Babu Singh in their favour by way of secondary evidence, as the original Will which was handed over to village patwari for mutation could not be retrieved. The High Court while dismissing the application observed that as the pre-requisite condition of existence of Will is not proved, the Will cannot be permitted to be approved by allowing the secondary evidence.

Aggrieved by the above order, the Appellants approached the High Court by way of a Revision Petition under Article 227 of the Constitution of India, 1950. Learned counsel for the appellants contended that the impugned order is not sustainable in the eyes of law as it suffers from patent errors of law and is against the letter & spirit of Sections 65 & 66 of the Evidence Act.

It is further pointed out that Section 65(a) of the Evidence Act allows the production of secondary evidence when the original is shown and appears to be in possession or power of one against whom the document is sought to be proved, or any person out of reach of, or not subject to, the process of the Court, or of any person legally bound to produce it, and when, after the notice mentioned in Section 66 of Evidence Act, such person does not produce it. In such contingency, party concerned is entitled to prove the same by way of secondary evidence.

A perusal of Section 65 of Evidence Act, makes it clear that secondary evidence may be given with regard to existence, condition or the contents of a document, when the original is shown or appears to be in possession or power against whom the document is sought to be produced, or of any person out of reach of, or not subject to, the process of the Court, or of any person legally bound to produce it, and when, after notice mentioned in Section 66 of Evidence Act such person does not produce it. It is a settled position of law that for secondary evidence to be admitted, foundational evidence has to be given being the reasons as to why the original Evidence has not been furnished.

It is trite that under the Evidence Act, facts have to be established by primary evidence and secondary evidence is only an exception to the rule for which foundational facts have to be established to account for the existence of the primary evidence. In the case of H. Siddiqui (dead) by LRs Vs. A. Ramalingam, this Court reiterated that where original documents are not produced without a plausible reason and factual foundation for laying secondary evidence not established it is not permissible for the court to allow a party to adduce secondary evidence.

In present case, it is imperative to appreciate the evidence of the witnesses as it is only after scrutinizing the same opinion can be found as to the existence, loss or destruction of the original Will. While both the revenue officials failed to produces the original Will, upon perusal of the cross-examination, it is clear that neither of the officials has unequivocally denied the existence of the Will.

The factual foundation to establish the right to give secondary evidence was laid down by the Appellants and thus the High Court ought to have given them an opportunity to lead secondary evidence. The High Court committed grave error of law without properly evaluating the evidence and holding that the pre-requisite condition i.e., existence of Will remained un-established on record and thereby denied an opportunity to the Appellants to produce secondary evidence. Merely the admission in evidence and making exhibit of a document does not prove it automatically unless the same has been proved in accordance with the law. The impugned judgment of the High Court suffers from material irregularity and patent errors of law and not liable to be sustained and is thus, hereby set aside. The appeal accordingly stands allowed.

The Appellants would be entitled to lead secondary evidence in respect of the Will in question. It is, however, clarified that such admission of secondary evidence automatically does not attest to its authenticity, truthfulness or genuineness which will have to be established during the course of trial in accordance with law.

Tags : Will Secondary evidence Entitlement

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High Court of Madhya Pradesh

Balveer Singh Bundela vs The State Of Madhya Pradesh

MANU/MP/0830/2020

12.05.2020

Criminal

Application under Section 438 of Cr. PC is maintainable, even if, a person has been declared as proclaimed offender

Present is first bail application preferred by the Applicant under Section 438 of Code of Criminal Procedure, 1973 (CrPC) wherein he is apprehending his arrest in a case registered at Police Station for alleged offence punishable under Sections 376, 386, 506 of Indian Penal Code, 1860 (IPC).

It is submitted by learned counsel appearing for the applicant that, police has registered a false case against him. As per FIR, date of incident appears to be 27th October, 2019 whereas FIR lodged on 15th December, 2019, apparently delayed in nature. The question raised in present case is whether after being declared as an absconder under Section 82/83 of CrPC or by police through Farari Panchnama or through declaration of cash award for apprehension of accused, his application under Section 438 of CrPC seeking anticipatory bail before High Court or Sessions Court is maintainable or not.

In view judgments of Constitution Bench in the case of Gurbaksh Singh Sibbia etc. Vs. The State of Punjab, Sushila Aggarwal and others Vs. State (NCT of Delhi) and another, Bharat Chaudhary and another Vs. State of Bihar and another, and Ravindra Saxena Vs. State of Rajasthan, it is apparently clear that no bar can exist against a person seeking anticipatory bail. In other words, application under Section 438 of CrPC is maintainable even after filing of charge-sheet or till the person is not arrested. Personal Liberty of an individual as ensured by Section 438 of CrPC is embodiment of Article 21 of Constitution of India in CrPC. Therefore, scope and legislative intent of Section 438 of Cr.P.C. is to be seen from that vantage point.

Close scrutiny of judgment of Apex Court in the case of Lavesh Vs. State (NCT Of Delhi) nowhere bars maintainability of an application under Section 438 of CrPC, if a person is absconding. In fact, it takes care of Justifiability of any application under Section 438 of CrPC as per factors provided in Section 438 of CrPC itself. Application under Section 438 of CrPC is maintainable even if a person has been declared as proclaimed offender in terms of Section 82 of CrPC.

Therefore, in the considered opinion of present Court, even if the police authority has declared award or prepared Farari Panchnama, even then anticipatory bail application is maintainable. However, it is to be seen on merits that whether that application deserves to be considered and allowed as per the factors enumerated in Section 438 of CrPC itself and if any of those factors are not satisfied then the Court certainly has discretion to reject it.

As per facts of present case, it appears that on false promise of marriage, initially physical intimacy developed and later on both entered into wedlock but it is grievance of prosecutrix that he is already a married person. Certain bank transactions have already been referred and documented which indicate that they were in proximity. As submitted, both the parties earlier tried to settle the matter by filing petition under Section 482 of CrPC. Therefore, both matured individuals waited the consequences of their decisions and both lived some days together comfortably.

Applicant deserves consideration for anticipatory bail. Even otherwise the police nowhere referred criminal antecedents of the applicant and his presence can be ensured by marking his attendance before the Investigating Officer for investigation purpose. Consensual proximity of Body and Soul cannot be used as a weapon to wreak vengeance at a later point of time when Body and Soul drift apart. Present Court allows this bail application.

Tags : Bail Absconder Entitlement

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High Court of Bombay

Rashtriya Shramik Aghadi. Vs. The State of Maharashtra and Others

MANU/MH/0560/2020

12.05.2020

Labour and Industrial

The principle of 'No Work No Pay' cannot be made applicable in extraordinary circumstances prevailing in the country due to the pandemic of COVID-19

By present petition, the Petitioner Union has made a grievance that, after the lock-down has been effected and though the members of the Petitioner Union, are willing to offer their services as security guards and health workers with Shri Tuljabhavani Mandir Sansthan, Tuljapur, they are precluded from performing their duties on account of the clamping of lock-down for containment of COVID¬19 pandemic. Though certain proceedings are pending under the Industrial Disputes Act, 1947 and the Contract Labour (Regulation and Abolition) Act, 1970 before the Assistant Commissioner of Labour, further hearings in the matter are not possible due to the clamping of the lock¬down.

The learned advocate for the Petitioner has uploaded a ready reference chart to indicate the gross monthly wages of the employees till January-February, 2020 and the payments made by the contractors to the said employees for the months of March and April, 2020. Considering the submissions of the Petitioner, it appears that the payments made by the contractors for the month of March, 2020 are slightly lesser than the gross salary and for the month of April, 2020 a paltry amount is paid.

Present Court cannot turn a Nelson's eye to an extraordinary situation on account of Corona virus/ COVID¬19 pandemic. Able bodied persons, who are willing and desirous to offer their services in deference to their deployment as contract labourers in the security and house keeping sector of the Trust, are unable to work since the temples and places of worships in the entire nation have been closed for securing the containment of COVID-19 pandemic. Even the principal employer is unable to allot the work to such employees in such situation. Prima facie, the principle of “no work¬ no wages” cannot be made applicable in such extraordinary circumstances. The Court cannot be insensitive to the plight of such workers, which has unfortunately befallen them on account of the Covid-19 pandemic.

In view of the above, the Petitioner is directed to add the two contractors as Respondent Nos.4 and 5. Liberty is granted to serve the contractors through all legally permissible and possible modes of service. In the meanwhile, the District Collector, in his capacity as President of Respondent No.2 Trust/ Principal Employer, shall ensure that full wages, save and except food allowance and conveyance allowance (only with regard to the employees who are not required to report for duties), shall be disbursed by the contractors to the concerned employees for the months of March, April and May, 2020. The principle of “no work- no wages” shall not be invoked until further orders in present petition.

Such payment of wages would be subject to the result of this petition or the proceedings before the Assistant Commissioner of Labour, Latur, which would progress only if the lockdown is completely lifted and free movement of citizens would be permitted.

Tags : Wages Payment Direction

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Income Tax Appellate Tribunal

Glebe Trading Pvt. Ltd. Vs ITO

MANU/ID/0462/2020

12.05.2020

Direct Taxation

Transfer of Shares being an internal family realignment cannot be treated as Gift or Perquisites

The Assessee is an investment company. Return of income was electronically filed declaring total income of Rs. 2,75,836. During the course of assessment proceedings, the Assessing Officer observed that, the assessee company has claimed to receive shares of various companies from various companies as gift without paying any consideration.

The Assessing Officer further observed that, the financials filed by the assessee company clearly shows that Arti Jindal was holding 99.9% shares of the assessee company. However, during the Financial Year 2013-14 relating to the Assessment Year 2014-15, 99.6% of shares holding of Glebe Trading was transferred to P R J Holdings Private Trust as gift. The Assessing Officer made addition of Rs. 1593,19,34,79 in the hands of the beneficiary within the provisions of Section 2(24) (iv) of the Income Tax Act, 1961. There is no addition made in the hands of the assessee company. The assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.

It is submitted that, the CIT(A) failed to adjudicate the grounds raised by the assessee, challenging the extraneous and extra-jurisdictional findings/observations of the Assessing Officer in the assessment order. Further, Assessing Officer failed to appreciate that the shares of listed companies received by the assessee company as gift without consideration, as part of internal family realignment amongst members of the family, could not be regarded as valid “gift”, and further grossly erred in alleging the same to be sham and colourable transactions, without any cogent reasons.

The Assessing Officer did not make any addition in the hands of the assessee but held that benefit arose to the assessee through receipt of shares from various companies and holding the same to be taxable under Section 2(24)(iv) of the Income Tax Act, 1961 in the hands of Arti Jindal as the beneficiary.

As per 2(24)(iv) of Act, “income” includes the value of any benefit or perquisite, whether convertible into money or not, obtained from a company either by a director or by a person who has a substantial interest in the company, or by a relative of the director or such person, and any sum paid by any such company in respect of any obligation which, but for such payment, would have been payable by the director or other person.

The words benefit and perquisite are used in sub-section (24) to Section 2. Whether gifting shares amounts any benefit or perquisite has to be looked into. In the present case, at one point the Assessing Officer has stated that there is benefit to Assessee company but at the same time states that the transaction of gift of shares held by Arti Jindal in the Assessee company to PRJ Holding Private Trust was not valid and was a sham and void transaction which was undertaken to avoid tax. But from the MOU submitted by the Assessee company, it can be clearly seen that it a family arrangement and internal family realignment amongst the members of the family of Late Shri O.P. Jindal and cannot be taken as gift.

It is not a gift but a family arrangement and these kind of family arrangement cannot be termed as gift/benefit or perquisite. The Assessing Officer by lifting the corporate veil, without providing any cogent reasons, and without appreciating that the beneficiary never obtained any benefit from this transaction at any time cannot comment on the said transaction as sham and bogus. Thus, the observations made by the Assessing Officer in the present assessment order are without any jurisdiction.

In fact, the Assessing Officer overstepped the provisions of the Income Tax Act wherein the Assessment is nil in the case of present Assessee company and commented on the third party assessee which is not permissible under the Act. The appeal of the assessee is allowed.

Tags : Family arrangement Additions Legality

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Supreme Court

South East Asia Marine Engineering and Constructions Ltd. Vs. Oil India Limited

MANU/SC/0441/2020

11.05.2020

Arbitration

A Court cannot interfere in the plausible view taken by the arbitrator which is supported by reasoning

In facts of present case, Appellant was awarded the work order dated 20th July, 1995 pursuant to a tender floated by the Respondent in 1994. The contract agreement was for the purpose of well drilling and other auxiliary operations in Assam. Although, the contract was initially only for a period of two years, the same was extended for two successive periods of one year each by mutual agreement, and finally the contract expired on 4th October, 2000.

During the subsistence of the contract, the prices of High-Speed Diesel ("HSD"), one of the essential materials for carrying out the drilling operations, increased. Appellant raised a claim that increase in the price of HSD, an essential component for carrying out the contract triggered the "change in law" Clause under the contract (i.e., Clause 23) and the Respondent became liable to reimburse them for the same. When the Respondent kept on rejecting the claim, the Appellant eventually invoked the arbitration Clause vide letter. The dispute was referred to an Arbitral Tribunal.

The Arbitral Tribunal issued the award. The majority opinion allowed the claim of the Appellant. The Arbitral Tribunal held that while an increase in HSD price through a circular issued under the authority of State or Union is not a "law" in the literal sense, but has the "force of law" and thus falls within the ambit of Clause 23. On the other hand, the minority held that, the executive orders do not come within the ambit of Clause 23 of the Contract.

Aggrieved by the award, the Respondent challenged the same under Section 34 of the Arbitration And Conciliation Act, 1996 (Arbitration Act) before the District Judge. The learned District Judge, upheld the award. The Respondent challenged the order of the District Judge by filing an appeal under Section 37 of the Arbitration Act, before the High Court. By the impugned judgment, the High Court, allowed the appeal and set aside the award passed by the Arbitral Tribunal.

The High Court held that the interpretation of the terms of the contract by the Arbitral Tribunal is erroneous and is against the public policy of India. On the scope of judicial review under Section 37 of the Arbitration Act, the High Court held that the Court had the power to set aside the award as it was passed overlooking the terms and conditions of the contract. Aggrieved by the same, the Appellant has filed this present appeal. The question in the present case is whether the interpretation provided to the contract in the award of the Tribunal was reasonable and fair, so that the same passes the muster under Section 34 of the Arbitration Act.

It is a settled position that, a Court can set aside the award only on the grounds as provided in the Arbitration Act as interpreted by the Courts. It is also settled law that where two views are possible, the Court cannot interfere in the plausible view taken by the arbitrator supported by reasoning.

The High Court, in its reasoning, suggests that Clause 23 is akin to a force majeure clause. Under Indian contract law, the consequences of a force majeure event are provided for under Section 56 of the Contract Act, which states that on the occurrence of an event which renders the performance impossible, the contract becomes void thereafter.

The Supreme Court in Satyabrata Ghose v. Mugneeram Bangur & Co., held that when the parties have not provided for what would take place, when an event which renders the performance of the contract impossible, then Section 56 of the Contract Act applies. When the act contracted for becomes impossible, then under Section 56, the parties are exempted from further performance and the contract becomes void.

Under Indian contract law, the effect of the doctrine of frustration is that it discharges all the parties from future obligations. In order to mitigate the harsh consequences of frustration and to uphold the sanctity of the contract, the parties with their commercial wisdom, chose to mitigate the risk under Clause 23 of the contract. The interpretation of Clause 23 of the Contract by the Arbitral Tribunal, to provide a wide interpretation cannot be accepted, as the thumb Rule of interpretation is that the document forming a written contract should be read as a whole and so far as possible as mutually explanatory. In the case at hand, this basic Rule was ignored by the Tribunal while interpreting the clause.

It can be said that the contract was based on a fixed rate. The party, before entering the tender process, entered the contract after mitigating the risk of such an increase. There is no gainsaying that there will be price fluctuations which a prudent contractor would have taken into margin, while bidding in the tender. Such price fluctuations cannot be brought under Clause 23 unless specific language points to the inclusion.

The interpretation of the Arbitral Tribunal to expand the meaning of Clause 23 to include change in rate of HSD is not a possible interpretation of this contract, as the Appellant did not introduce any evidence which proves the same. Present Court is not inclined to interfere with the impugned judgment and order of the High Court setting aside the award. The appeal is accordingly dismissed.

Tags : Award Quashing of Legality

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Competition Commission of India

Re: Accessories World Car Audio Private Limited vs. Sony India Private Limited & Other

MANU/CO/0018/2020

11.05.2020

MRTP/ Competition Laws

Vertical restraints are not generally perceived as being anti-competitive, when substantial portion of the market is not affected

The present Information has been filed on behalf of Accessories World Car Audio Private Limited ('the Informant') under Section 19(1) (a) of the Competition Act, 2002 against Sony India Private Limited ('Opposite Party No. 1' / 'OP-1') and Sony Corporation, Japan ('Opposite Party No. 2' / 'OP-2') ('the OPs') alleging contravention of the provisions of Section 3 and 4 of the Act.

It is stated that the Informant is a distributor of Sony car audio products and is engaged in the business of sale and marketing of car audio and related accessories. OP-1 is a private limited company incorporated in India and has footprints across all major towns and cities in India through a distribution network comprising of over 20,000 dealers and distributors; 300 exclusive outlets and 25 branch locations. OP-2 is holding company of OP-1 incorporated under laws of Japan. The Informant is primarily aggrieved of the fact that, OPs imposed alleged unfair terms and conditions in the distributorship agreement and arbitrarily terminated the agreement.

At the outset, the Commission notes that the Informant was offered dealership in 2005 and was appointed as distributor by OPs in August 2006. The distributor agreement is stated to be cancelled/ terminated on 23rd June, 2015. Besides the allegations span a period covering years 2012-13. Thus, the Information appears to have been filed belatedly, yet the Commission has examined the Information within the framework of the Act based on the material made available by the Informant.

So far as the allegations pertaining to abuse of dominance are concerned, the Commission notes that the Informant has defined the relevant market by confining the same to 'distribution and sale of car audio products in the aftermarket'. However, the Commission is of the opinion that the market cannot be confined to this level. It is axiomatic that buyers of car can install such accessories even after purchase of car from the open market and as such the market has to be considered as car audio products as a whole.

The market for car audio products is fragmented with the presence of number of players/ competitors. As per the information available in the public domain, there are number of other competing players. Hence, it does not appear that OPs enjoy a position of strength, which enable them to operate independently of competitive forces prevailing in the distribution and sale of car audio products in India or to affect their competitors or consumers or the market in their favour. Since, OPs do not enjoy dominant position in this market, question of abuse of dominant position within the meaning of the provisions of Section 4 of the Act does not arise.

As regard as provisions of Section 3(4) of the Act is concerned, the Commission observes that allegations specifically pertain to the issue of exclusive supply agreement, exclusive distribution agreement, refusal to deal and resale price maintenance. The Commission observes that an important and crucial consideration for analysing vertical restraints under the provisions of Section 3(4) of the Act is the requirement of market power. In order to appreciably restrain free competition in the downstream market for distribution of car audio products, seller must have sufficient market power in the upstream market for car audio products. Moreover, vertical restraints are not generally perceived as being anti-competitive, when substantial portion of the market is not affected.

The Commission observes that the market for car audio products is fragmented with presence of large number of players without any entity enjoying a significant market power. The presence of such players exerts competitive constraints on OPs. Therefore, the purported vertical restraints imposed by OPs are not likely to have any appreciable adverse effect on competition in India. Resultantly, the Commission is of the view that no case is made out against OPs for contravention of the provisions of Sections 3 and 4 of the Act and the Information is ordered to be closed forthwith in terms of the provisions contained in section 26 (2) of the Act.

Tags : Contravention Provisions Vertical restraints

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