Supreme Court

Surendra Kumar Bhilawe vs The New India Assurance Company

MANU/SC/0488/2020

18.06.2020

Insurance

If insured continues to remain the owner view of the statutory provisions of the Motor Vehicles Act, 1988, Insurer cannot evade its liability in case of an accident

In facts of present case, the Appellant was the owner of Ashok Leyland Truck which was covered by a Policy of Insurance issued by the Insurer effective for the period from 2nd June, 2011 to 1st June, 2012. On 13th November, 2011, while the said truck was on its journey from Raipur to Dhanbad, it met with an accident. The Appellant lodged a claim with the Insurer, through one Mohammad Iliyas Ansari. However, instead of reimbursing the loss, the Insurer issued a show cause Letter dated 22nd March, 2012 to the Appellant requiring the Appellant to show cause why the claim of the Appellant should not be repudiated, on the allegation that, he had already sold the said truck to the said Mohammad Iliyas Ansari on 11th April, 2008. It is, however, not in dispute that the Appellant continued to be the registered owner of the said truck, on the date of the accident.

Aggrieved by the action of the Insurer Company in not releasing the claim of the Appellant, towards reimbursement of losses on account of the accident, the Appellant approached the District Forum. By a judgment and order, the District Forum allowed the complaint filed by the Appellant and directed the Insurer to pay Rs.4,93,500 to the Appellant within a month along with interest @ 6% per annum from the date of filing of the complaint till the date of payment and further directed the Insurer to pay the Appellant a sum of Rs.5,000 towards compensation for mental agony and Rs.2,000 towards cost of litigation.

The Insurer appealed to the State Commission. The said appeal was dismissed by the State Commission by an order, which was challenged by the Insurer before the National Commission by filing the Revision Petition. By the Judgment and order impugned, the National Commission has allowed the Revision Petition, set aside the orders of the District Forum and the State Commission respectively, and dismissed the complaint of the Appellant.

In Naveen Kumar vs. Vijay Kumar and Others , a three- Judge Bench of this Court held that in view of the definition of the expression ‘owner’ in Section 2(30) of the Motor Vehicles Act, 1988, it is the person in whose name the motor vehicle stands registered, who, for the purposes of the said Act, would be treated as the owner of the vehicle. Where the registered owner purports to transfer the vehicle, but continues to be reflected in the records of the Registering Authority as the owner of the vehicle, he would not stand absolved of his liability as owner.

The registered owner continues to remain owner and when the vehicle is Insured in the name of the registered owner, the Insurer would remain liable notwithstanding any transfer, would apply equally in the case of claims made by the insured himself in case of an accident. If the insured continues to remain the owner in law in view of the statutory provisions of the Motor Vehicles Act, 1988 and in particular Section 2(30) thereof, the Insurer cannot evade its liability in case of an accident.

It is difficult to accept that a person who has transferred the ownership of a goods carriage vehicle on receipt of consideration, would not report the transfer or apply for transfer of registration, and thereby continue to incur the risks and liabilities of ownership of the vehicle under the provisions of law including in particular, under the Motor Vehicles Act, 1988 and other criminal/penal laws. It does not also stand to reason why a person who has transferred the ownership of the vehicle should, for over three years, benevolently go on repaying the loan for purchase of the vehicle, take out insurance policies to cover the vehicle or otherwise discharge obligations of ownership. The National Commission also failed to appreciate that Section 157 of the Motor Vehicles Act provides that where a person, in whose favour the certificate of insurance has been issued in accordance with the provisions of Chapter XI of the Motor Vehicles Act, transfers to another person the ownership of the motor vehicle in respect of which such insurance was taken together with the policy of insurance relating thereto, the certificate of insurance and the policy described in the certificate are to be deemed to have been transferred in favour of the person to whom the motor vehicle is transferred, with effect from the date of its transfer.

The FIR was lodged within three days of the accident. In the case of a major accident of the kind as in present case, where the said truck had turned turtle and fallen into a river, slight delay on the part of the traumatized driver to lodge an FIR, cannot defeat the legitimate claim of the Insured. In case of a serious accident in course of inter-state transportation of goods, delay of 20 days in lodging a claim is also no delay at all. It is nobody’s case that the claim application filed by the Appellant was time barred. Moreover, the Insurer had, in any case, duly sent its Surveyors/ Assessors to assess the loss. The claim of the Appellant could not have, in this case, been resisted, either on the ground of delay in lodging the FIR, or on the ground of delay in lodging an Accident Information Report, or on the ground of delay in making a claim.

The National Commission erred in law in reversing the concurrent factual findings of the District Forum and the National Commission ignoring vital admitted facts including registration of the said truck being in the name of the Appellant, even as on the date of the accident, over three years after the alleged transfer, payment by the Appellant of the premium for the Insurance Policy, issuance of Insurance Policy in the name of the Appellant, permit in the name of the Appellant even after three years and seven months, absence of ‘No Objection’ from the financier bank etc. and also overlooking the definition of owner in Section 2(30) of the Motor Vehicles Act, as also other relevant provisions of the Motor Vehicles Act and the Rules framed thereunder, including in particular the transferability of a policy of insurance under Section 157 of Act.

In view of the definition of ‘owner’ in Section 2(30) of the Motor Vehicles Act, the Appellant remained the owner of the said truck on the date of the accident and the Insurer could not have avoided its liability for the losses suffered by the owner on the ground of transfer of ownership to Mohammad Iliyas Ansari. The judgment and order of the National Commission is unsustainable. The appeal is, therefore, allowed. The impugned order of the National Commission under appeal is set aside and the order of the District Forum is restored.

Tags : Claim Repudiation Legality

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Supreme Court

Mustak @ Kanio Ahmed Shaikh v. State of Gujarat

MANU/SC/0489/2020

18.06.2020

Criminal

When there is a time gap between an occurrence and the trial, it is impossible for police/Investigating Officer to recall minute details

Present appeal is against a common judgment and order passed by a Division Bench of the High Court dismissing Criminal Appeal filed by the Appellant, partly allowing Criminal Appeal, filed by Respondent State, affirming the judgment and order of conviction passed by Additional City Sessions Judge.

The learned Sessions Judge sentenced the Appellant and the first accused to undergo rigorous imprisonment for six years for offence under Section 307 read with Section 114 of the Indian Penal Code, 1860 (IPC) rigorous imprisonment for three years for offence under Section 25(1)(B)(a) of the Arms Act and rigorous imprisonment of six months for violation of Section 135(1) of the Bombay Police Act, to run concurrently. By the judgment and order under appeal, the High Court has confirmed the judgment and order of conviction of the Appellant and the first accused, passed by the Session Judge, but enhanced the sentence of imprisonment for offence under Sections 307/114 of the IPC to seven years instead of six.

When there is a time gap between an occurrence and the trial, it is impossible for police/Investigating Officer to recall minute details. There was sufficient incriminating evidence for conviction of the Appellant. Minor discrepancies in evidence and inability to recall details of the description of houses, roads and streets after several years, do not vitiate the evidence of recovery itself. The Appellant showed the police the spot where the weapons had been hidden under the sand.

Considering the gravity of offence and the seriousness of the injury and the manner in which the victim was shot, there can hardly be any doubt that the attempt was to murder the victim. The Trial Court after considering the evidence on record and after hearing the Prosecution, the Appellant and the other accused found that the third accused was not present at the place of occurrence and there was no evidence to establish that he was part of any conspiracy. The third accused was accordingly acquitted. The Sessions Court, however, found the Appellant and first accused guilty and convicted them of offences punishable under Section 307 read with Section 114 of the IPC read with Section 25(1)(B)(a) of the Arms Act read with Section 135(1) of the Bombay Police Act for having committed the offence of aiding and abetting each other in targeting and attempting to murder the victim. The sessions Judge correctly found that notwithstanding minor discrepancies, the Prosecution had successfully established the chain of events, linking the crime to the Appellant.

In this appeal, present Court is not concerned with the conviction of the first accused. The involvement of the Appellant in the offences alleged has duly been established by the injury of the victim; extraction of bullet from the body of the victim; linking of the bullet to the weapon recovered on the confession of the Appellant upon Forensic examination; the evidence of two eye-witnesses to the crime, namely the complainant (PW-8) and victim (PW-12); Identification by the complainant and the victim of the Appellant in the Identification Parades as also in Court; Identification by the Pancha witness (PW- 30 10) of the Appellant as the person at whose instance the weapon of offence was recovered. The conviction of the Appellant and the sentence imposed upon the Appellant as enhanced by the High Court confirmed. Appeal dismissed.

Tags : Conviction evidence credibility

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Supreme Court

Siri Chand (Deceased) thr. L.Rs. Vs. Surinder Singh

MANU/SC/0484/2020

17.06.2020

Tenancy

When there is no period agreed upon between the parties, duration has to be determined by referring to the object with which the tenancy is created

In present case, an application under Section 13 of East Punjab Urban Rent Restriction Act, 1949 was filed by the Appellant-landlord praying for eviction of the tenant along with arrears of rent and house tax and interest on the arrears of rent. The Appellant's case was that rent and house tax was not paid. The Rent Controller held that, there exist relationship of landlord and tenant between the parties. The Rent Controller allowed the application of the Appellant and directed eviction of the Respondent from the premises in question.

An appeal was filed by the tenant against the order of the Rent Controller. The Appellate Court did not agree with the findings of the Rent Controller that document was not compulsorily registrable. Appellate Court observed that perusal of the document reveals that there would be increase in the rent to the tune of 10% every year, hence the document was not executed for a period of less than a year rather the intention of the parties is clear that it was executed for more than one year, hence the document was required to be registered under Section 17(1)(d) of the Registration Act, 1908 (Act). However, the Appellate Court rejected the claim of the tenant that rate of rent was Rs. 1,000 only. The Appellate Court after holding that document was compulsorily registrable took the view that the Clause regarding 10% yearly increase cannot be relied and judgment of Rent Controller was accordingly set aside and the appeal was allowed.

The Appellant aggrieved by the order of the Appellate Court filed a revision before the High Court. The High Court dismissed the revision referring to the finding of the Appellate Court that rent note- was compulsorily registrable. Aggrieved by the said judgment, this appeal has been filed. Learned Counsel for the Appellant in support of the appeal contends that rent note dated 27th July, 1993, which was signed by the tenant was valid Rent note and was covered within the definition of lease as given in the Registration Act, 1908. The document was not registrable under Section 17(1)(d) of Act.

First issue, which has arisen for consideration in present appeal is as to whether the rent note dated 27th July, 1993, was a document, which required compulsory registration under Section 17(1)(d) of Act. The second issue to be considered is as to whether the Appellate Court could have set aside the decree of eviction without recording finding that there was no default on the part of the tenant in payment of rent and house tax etc. and the amount deposited by the tenant was sufficient to save him from eviction.

The present is a case where rent deed does not prescribe any period for which it is executed. When the lease deed does not mention the period of tenancy, other conditions of the lease/rent deed and intention of the parties has to be gathered to find out the true nature of the lease deed/rent deed. The two conditions written in the rent note are also relevant to notice. First, if payment of rent in any month is not made up to 5th of month, owner shall have right to get the shop evicted and second if the owner is in need of shop, he by serving notice of one month can get the shop vacated. This Court had occasion to consider the provision of Section 106 of the Transfer of Property Act, 1882 and noted the Rule of construction, which is to be applied when there is no period agreed upon between the parties in a lease deed. In Ram Kumar Das v. Jagdish Chandra Deo, Dhabal Deb and Another, this Court held that when there is no period agreed upon between the parties, duration has to be determined by referring to the purpose and object with which the tenancy is created.

As per law laid down by this Court in Ram Kumar Das v. Jagdish Chandra Deo, Dhabal Deb and Another, there shall be a presumption that the tenancy in the present case is monthly tenancy. When the clauses of rent note are cumulatively read, the intention of the tenant is more than clear that, tenancy was only monthly tenancy, which could have been terminated on default of payment of rent by 5th day of any month or by notice of one month. The rent deed did not confer any right to tenant to continue in the tenancy for a period of more than one year nor it can be said that tenancy was created for a period of more than one year. Present was a case of tenancy for which no period was specified and looking to all the clauses cumulatively, present Court finds that, the rent note was not such kind of rent note, which requires compulsory registration under Section 17(1)(d) of Act.

The Rent Controller had returned a finding regarding rate of rent @ Rs. 2,000 per month and further the tenant was liable to pay the house tax, which was not paid from 1999 to 2005 and the decree of eviction was passed accordingly. The Appellate Court although accepted the finding of the Rent Controller that rate of rent was @ Rs. 2,000 and not Rs. 1,000 but merely on the finding that landlord cannot claim 10% increase of rent every year since the document was not registered had allowed the appeal and set aside the judgment. There is no specific finding by the Appellate Court regarding the liability of the tenant to pay the house tax. The Appellate Court after holding that document-rent deed was compulsorily registrable and having not registered allowed the appeal. No finding was returned by the Appellate Court that tenant was not in default and tenant has deposited the necessary amount to save himself from eviction. The judgment of the Appellate Court is unsustainable. The judgment and decree of the Rent Controller directing eviction ought not to have been interfered by the Appellate Court. The judgment and decree of the Rent Controller directing eviction of the tenant is restored. Appeal allowed.

Relevant

Ram Kumar Das v. Jagadish Chandra Deb Dhabal Deb and Ors. MANU/SC/0056/1951

Tags : Eviction Rent deed Registration

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High Court of Delhi

Divya Gauba vs. Union of India & Ors.

MANU/DE/1260/2020

17.06.2020

Service

Transfer is an exigency of service and it is not in the domain of the Court to interfere with a transfer order unless it is malafide

Petitioner is a regular employee of Air India and was working in 2017 as a Senior Assistant General Manager (Commercial). Vide order dated 28.06.2017, Petitioner was approved for a foreign posting as Manager, Denmark and according to the Petitioner, the tenure of posting was 3 years. Vide order dated 20.05.2020, Petitioner has been reposted back to India and is required to join Southern Region, Chennai. It is this order which is assailed by the Petitioner in the present petition. Principal contention in the present petition is that the Petitioner is suffering from certain health issues which makes her very vulnerable and if she travels back to India, in the present circumstances of the Pandemic Covid-19, there is a high risk of her catching infection both during the flight and after she lands at the Airport in India. Petitioner, therefore, requests that the Posting Order dated 20.05.2020 be kept in abeyance until things normalise and she is able to travel back to India without the risk of catching infection on account of Covid-19.

This Court is of the opinion that no ground has been made out by the Petitioner for quashing the Posting Order. Transfer is an exigency of service and it is not in the domain of the Court to interfere with a transfer order unless it is malafide or in violation of the transfer policy. None of the two exceptions have been either pleaded or have been substantiated by the Petitioner during the arguments. Even going by the averment of the Petitioner that the tenure of the posting was three years, which was disputed by Air India, the three years have come to an end and the Petitioner has no vested right to continue in Denmark.

Court has been taken through the orders of the Supreme Court and the Bombay High Court as well as the Recommendations of the Expert Committee and in my opinion the concern of the Petitioner for safe flight back to India stands adequately addressed by the safety measures recommended and being undertaken by the Airlines. Additionally, it is assured that, all necessary steps shall be taken to ensure safe travel of the Petitioner including Institutional Quarantine, if required. Certain allowances, as shall also be disbursed to the Petitioner. The assurance given is taken on record and in my view no further orders are required in the present petition.

However, keeping in view the unprecedented situation that has arisen on account of the Pandemic Covid-19, this Court deems fit in the special circumstances of this case to permit the Petitioner to join back by 15th July, 2020. It is made clear that the Petitioner will not misuse the indulgence granted by the Court and stay beyond the period permitted by the Court. Petition is disposed of in the above terms.

Tags : Tenure Reposting Legality

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High Court of Karnataka

Commissioner Of Income Tax vs M/S Ncr Corporation Pvt Ltd

MANU/KA/2258/2020

16.06.2020

Direct Taxation

ATMs are to be treated as computers, entitled to a high rate of depreciation

Assessee is engaged in the business of manufacture of automated teller machines (ATMs) and distribution of NCR book products and commissions in India. The assessee filed the return of income declaring taxable income of Rs.4,66,32,670. The return was processed under Section 143(1) of Income Tax Act, 1961 and was selected for scrutiny and notice under Section 143(2) of the Act was issued. The assessee had taken premises on lease for a period of three years. The assessee claimed expenditure of Rs.89,23,817 on account of leasehold improvements as revenue expenditure in the computation of income.

The assessing officer by an order held that leasehold improvements expenditure is incurred towards purchase of workstations, improvement of interiors and electrical works, fee paid to the architect, cabling work for networking of computers in connection with setting up of office. Thus, the expenditure was incurred to bring into existence an asset or an advantage for enduring benefit of business, his property is computable as capital expenditure. Accordingly, the leasehold improvement for an amount of Rs.89,23,817 was disallowed and added back and depreciation towards furniture and fitting at the rate of 15% was allowed. The assessing officer further held that the assessee has changed the revenue recognition method and therefore it is not possible to ascertain true and correct profit of the assessee for the accounting year in question. It was further held that ATMs cannot be termed as computers and therefore are eligible for depreciation to the extent of 25%. Being aggrieved, the assessee preferred an appeal.

The assessee assailed the order passed by the Commissioner of Income Tax (Appeals) before the Income Tax Appellate Tribunal. The Income Tax Appellate Tribunal by an order held that, the expenditure incurred by the assessee for leasehold improvements has to be treated as revenue expenditure under Section 37 of the Act. It was further held that ATMs are computers and therefore, assessee is eligible to depreciation of 60%. It was further held that even though the assessee had changed the method of revenue recognition, however, he is entitled to change the method of accounting as the same has no impact on the revenue. Accordingly, the appeal preferred by the assessee was partly allowed. Being aggrieved, the Revenue is in appeal before present Court.

Learned counsel for the revenue submitted that the assessee had created an asset resulting in enduring benefit for business, which was capital in nature and therefore, the tribunal grossly erred in treating the same to be a revenue expenditure and that the asset was capital in nature.

If the facts of the case in hand is examined, it is evident that the assessee had taken the premises on lease for a period of three years and had incurred expenditure of Rs. 89,23,817 for improvements in the lease premises. The premises did not belong to the assessee and the expenditure did not bring into existence any capital asset for the assessee. The expenses were incurred for conducting the business of the assessee more profitably and more successfully. The assessee therefore, got the business advantage and therefore, the tribunal has rightly treated the expenses incurred as revenue expenditure incurred for improvement in leasehold property as revenue expenditure.

Another question is whether ATMs are computers and are eligible for 60% depreciation. It is pertinent to note that provisions of the Karnataka Sales Tax Act, 1957 and provisions of Income Tax Act, 1961 are not pari materia provisions. The classification of goods has been provided only for the purposes of sales tax whereas, the provisions of the income tax levy tax on income. It is pertinent to mention here that in Appendix 1 to Income Tax Rules, the computer has been treated as plant and machinery. The Tribunal by placing reliance on the decision of Bombay High Court in 'DCIT vs. Data Craft India Ltd.,' has held that so long as functions of the computers are performed with other functions and other functions are dependent on the functions of the computer, ATMs are to be treated as computers and are entitled to higher rate of depreciation. It has further been held that computer is integral part of ATM machine and on the basis of information processed by the computer in ATM machine only, the mechanical function of the dispensation of cash or deposit of cash is done. Therefore, it was held that ATMs are computers and are entitled to higher rate of depreciation.

The Supreme Court in COMMISSIONER OF INCOME-TAX vs. Bilahari Investments (P) Ltd., has held that in every case of substitution of one method by another method, it has been held that burden is on the department to prove that the method in vogue is not correct and distorts the profit of a particular year. From perusal of the order passed by the assessing officer as well Commissioner of Income Tax (Appeals), it is evident that revenue has failed to discharge the aforesaid burden. Therefore, the tribunal has rightly held that the assessee is entitled to change the method of accounting. In view of the preceding analysis the substantial questions of law framed by this court are answered against the revenue and in favour of the assessee. Appeal dismissed.

Tags : Assessment Expenditure Depreciation

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High Court of Rajasthan

Sanjay Kumar Sharma and Ors. Vs. State of Rajasthan and Ors.

MANU/RH/0346/2020

15.06.2020

Service

A petition cannot be entertained on the basis of assumptions and presumptions

The Petitioners, by way of present writ petition, assail the result dated 14th May, 2020 and waiting list result dated 14th May, 2020, for the post of Assistant Statistical Officer. After selection process having been conducted under the advertisement dated 28th March, 2018 for 209 posts of Assistant Statistical Officer in Planning Department under Rajasthan Statistical Subordinate Service Rules, 1971, read with dated 23rd December, 2019.

The process of selection was based on written examination carrying maximum 100 marks consisting of multiple choice objective type questions of 100 marks. The written examination was conducted on 27th May, 2019 and a provisional list was published of the candidates for eligibility checking on 3.1.2020 for 1.5 times of the number of vacancies in TSP and Non-TSP area, who were called for document verification. The cut off marks for Open (General) Category was declared as 56.01 marks and for OBC (General) Category, the cut off marks was declared as 52.92 and the final result was declared on 14th May, 2020 which is impugned in this writ petition.

The only argument, which is being advanced and require to be considered is whether a presumption can be drawn of leakage of papers on account of there being vast difference and the marks obtained by same candidates and others in the main list and in the waiting list and also between the cut off of General Category and OBC Category. It is thus submitted that it would be logical to be presumed of leakage of paper.

It is a well settled that once, a candidate has participated in the selection and examination process is completely over and final result is declared, he/she cannot be turned around and challenged the same after its completion with regard to the aspect of examination.

Present Court is of further view that, a petition cannot be entertained on the basis of assumptions and presumptions. There is no factual basis of the allegations as levelled in the petition. Merely because some candidates have scored higher marks and they all belong to a particular community, would not be a ground to cancel the entire examination. Candidates, who have scored higher marks, do not belong to a particular place or from the same examination centre and therefore, the presumption of leakage of paper in the aforesaid circumstances cannot be remotely drawn.

The prayer for cancellation of the result and also cancellation of examination are found to be wholly based on the surmises and conjectures. Attempt has been made to scandalize the entire selection process without any basis. Accordingly, the writ petition is dismissed with exemplary cost of Rs. 1 lacs to be deposited with the Rajasthan Legal Services Authority and to be borne equally by all the Petitioners.

Tags : Selection process Leakage of paper Presumption

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