Supreme Court

Trustees of H.C. Dhanda Trust Vs. State of Madhya Pradesh and Ors.

MANU/SC/0694/2020

17.09.2020

Civil

'Ten times penalty' prescribed for deficit stamp duty cannot be mechanically imposed

The Appellant by present appeals challenges the judgment of learned Single Judge of the High Court dismissing the Writ Petition of the Appellant as well as the judgment of the Division Bench dismissing the Writ Appeal filed by the Appellant against the judgment of the learned Single Judge. The Division Bench has dismissed the writ appeal vide its judgment holding it as not maintainable.

The Appellant submits that, the Deed of Assent executed on 21st April, 2005 is referable to Sections 331 and 332 of Indian Succession Act, 1925. Document in question is not a Gift Deed. The penalty imposed by the Collector of Stamps was wholly illegal. There was no dishonest conduct on the part of the Appellant, Deed of Assent was executed bona fide on which, there was no deficiency in the stamp duty. It is further submitted that, no reason has been given by the Collector of Stamps as to why maximum penalty of ten times was imposed on the Appellant while determining the stamp duty. The Collector of Stamps has not exercised his jurisdiction in reasonable and fair manner and imposition of ten times penalty on the Appellant deserves to be set aside. Only question to be determined in present appeals is as to whether the imposition of ten times penalty by the Collector of Stamps under Section 40 of the Indian Stamp Act, 1899 was validly imposed or not.

Section 40 of Act, 1899 provides for Collectors power to stamp instruments impounded. The amount of penalty can be an amount not exceeding ten times. The expression "an amount not exceeding ten times" is preceded by expression "if he thinks fit". The statutory scheme, thus, vest the discretion to the Collector to impose the penalty amount not exceeding ten times. Whenever statute transfers discretion to an authority the discretion is to be exercised in furtherance of objects of the enactment. The discretion is to be exercised not on whims or fancies rather the discretion is to be exercised on rational basis in a fair manner. The amount of penalty not exceeding ten times is not an amount to be imposed as a matter of force. Neither imposition of penalty of ten times under Section 40(1)(b) of Act , 1899 is automatic nor can be mechanically imposed.

The legislative intent is clear from reading of Sections 33, 35, 38 and 39 of Act, 1899 indicates that with respect to the instrument not duly stamped, ten times penalty is not always retained and power can be exercised under Section 39 of Act, 1899 to reduce penalty in regard to that there is a statutory discretion in Collector to refund penalty. The purpose of penalty generally is a deterrence and not retribution. When a discretion is given to a public authority, such public authority should exercise such discretion reasonably and not in oppressive manner.

It is only in the very extreme situation that penalty needs to be imposed to the extent of ten times. The Collector by imposing ten times penalty in his order has given the reason for imposition as "the party has not mentioned the actual nature of the document with the intention to escape the duty". When the Collector found intention to escape the duty, it was the case of imposition of penalty but whether the reason given by the Collector is sufficient for imposition of extreme penalty of ten times is the question which needs to be further considered.

No proper reasons have been given either by the Collector or by the High Court justifying the imposition of maximum penalty of ten times. The order of the Collector of Stamps is modified to the extent that penalty imposed of ten times of Rs. 12,80,97,000 is modified into five times penalty i.e. Rs. 6,40,48,500. The appeals are partly allowed.

Tags : Stamp duty Penalty Imposition

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Supreme Court

Jeet Ram Vs. The Narcotics Control Bureau, Chandigarh

MANU/SC/0684/2020

15.09.2020

Narcotics

False answers offered by Accused in examination under Section 313 of CrPC can be used against him

Present appeal is filed by the sole Accused aggrieved by the judgment of conviction and further order of sentencing the Appellant, passed by the High Court. The Appellant-Accused was tried for a charge punishable under Section 20 of Narcotic Drugs and Psychotropic Substances Act, 1985 ('NDPS Act'). The Sessions Judge, by judgment acquitted the Accused by recording a finding that the case of prosecution was not free from doubt and there were many infirmities in the case of the prosecution to hold that, the Accused was found to be in possession of charas, as alleged by the prosecution.

It is mainly contended by learned Counsel for the Appellant that, the well considered judgment of the trial court acquitting the Appellant from the charge, is reversed by the High Court without recording cogent reasons.

The view taken by the trial Court was not at all possible, in view of evidence on record. As submitted by the learned Additional Solicitor General appearing for the prosecution, it is always open to the appellate Court to re-appreciate the evidence, on which the order of acquittal is founded, and appellate Courts are vested with the powers to review and come to their own conclusion.

Even with regard to the plea of the Appellant that, the evidence on record on behalf of the prosecution is not sufficient enough to hold that the Appellant-Accused was in conscious possession of the seized material, also cannot be accepted. It is clear from the evidence on record that, the Appellant was on the counter of the dhaba which was constructed on the land owned by his wife near the temple and the charas was found in the counter of the dhaba in a gunny bag. The facts of the case show that, Accused not only had direct physical control over charas, he had the knowledge of its presence and character.

As rightly contended by Sri Aman Lekhi, learned Additional Solicitor General in the case of Mohan Lal vs. State of Rajasthan, present Court had held that, a functional and flexible approach in defining and understanding possession as a concept has to be adopted and the word has to be understood keeping in mind the purpose and object of the enactment. In the statement recorded under Section 313 of Code of Criminal Procedure, 1973 (CrPC) though the Appellant has referred to Brij Lal and Mantu in support of a version, contrary to that presented by prosecution but he has not chosen to examine either Brij Lal or Mantu. No defence witness has deposed to the chain of events, as has been stated by the Appellant in the statement under Section 313 of CrPC.

It is also fairly well settled that where Accused offers false answers in examination under Section 313 of CrPC, same also can be used against him. Further, onus was on the Appellant to explain the possession and in absence of the same being discharged, presumption under Section 54 of the NDPS Act also will kick in. The judgment of the High Court does not suffer from any infirmity so as to interfere with the judgment of conviction.

In facts and circumstances of the case and in view of the fact that, the incident occurred in the year 2001 and as the Appellant claimed to be a priest in the temple, who is now aged about 65 years, present is a fit case to modify the sentence imposed on the Appellant. Accordingly, the sentence awarded on the Appellant is reduced to a period of 10 years, while maintaining the conviction and the penalty as imposed by the High Court. The order of sentence passed by the High Court stands modified. The appeal is partly allowed.

Relevant

Mohan Lal vs. State of Rajasthan MANU/SC/0465/2015

Tags : Conviction Sentence Legality

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High Court of Kerala

Nabeel Vs.State of Kerala and Ors.

MANU/KE/2468/2020

14.09.2020

Criminal

Power to arrest a person by a customs officer is statutory in character and cannot be interfered with

Present is a petition filed under Section 482 of Code of Criminal Procedure, 193 (CrPC). The Petitioner is the 3rd accused for allegedly committing an offence punishable under Section 135 of the Customs Act, 1962. The allegation against him is that, along with the other accused, the Petitioner/3rd accused used ladies as carriers for smuggling gold through various Airports in India. In the instant case, the smuggling gang had allegedly used two ladies accused Nos. 4 and 5, respectively as mules to smuggle 39 KGs of gold worth Rs. 11.7 crores which includes the smuggling of 6 KGs of gold on 8th November, 2013 through the Calicut Airport which was intercepted and seized by the D.R.I.

The Petitioner has approached present Court under Section 482 of the CrPC to quash the proceedings against him stating that, apart from the confession statements of accused numbers 1, 4 and 5 under Section 108 of the Customs Act, there is no other reliable evidence against the Petitioner holding guilty of having committed the offence alleged.

On contrary, the learned Standing Counsel for the Directorate of Revenue Intelligence (DRI), submits that customs officers are not Police officers. They are revenue officers, primarily concerned with detection of smuggling and enforcement of proper duties. It is stated that an occurrence report submitted by a customs officer cannot be equated with an FIR, and therefore, the provisions of the CrPC cannot strictly apply to an investigation under the Customs Act. The learned Standing Counsel argues that, the power to arrest a person by a customs officer is statutory in character and cannot be interfered with. The person who gives a statement under Section 108 of the Customs Act may not necessarily be made an accused and the provisions of Sections 154 to 157 and Section 173(2) of the CrPC do not apply to a case under the Customs Act.

The Customs Officials are not Police Officers. The confession, though retracted, is an admission and binds on the Petitioner as per judgment of present Court in Surjeet Singh Chhabra v. Union of India.

Statement given under Section 108 of the Customs Act, which is inculpatory, is not hit by the provisions under Sections 25 and 26 of the Evidence Act. Whether the statements of the co-accused could be used against the Petitioner is a question to be determined by the trial Court. It is, therefore, premature for this Court to discard the materials against the Petitioner in the form of statements under Section 108 of the Customs Act given by the other accused. Present is not a fit case for invoking the jurisdiction of this Court under Section 482 of CrPC to quash the proceedings. Criminal miscellaneous case is dismissed.

Relevant

Surjeet Singh Chhabra v. Union of India MANU/SC/0660/1997

Tags : Smuggling Proceedings Quashing of

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High Court of Madras

Tamil Nadu Atomic Power Employees Union Vs. Nuclear Power Corporation of India Ltd.

MANU/TN/4923/2020

14.09.2020

Labour and Industrial

Right to form association or union is subject to reasonable restriction in the interest of sovereignty or integrity of India, public order and morality

The Plaintiff is the Nuclear Power Corporation of India Limited located within the campus of Madras Atomic Power Station at Kalpakkam. It is a Government of India enterprise. The Defendant is the Employees Union in the plaintiff's establishment. Against the concurrent findings of the Courts below granting permanent injunction, the aggrieved Defendant has filed the present second appeal.

The trial Court has taken into consideration the security risk in allowing the Defendants union members and representatives to conduct gate meeting or slogan raising within the prohibited area and near the sensitive installations. The appeal suit filed by the Defendant was dismissed by the first appellate Court confirming the reasons assigned by the trial Court.

In present second appeal, the learned counsel for the Appellant contended that, civil suit is not maintainable to restrain the recognised trade union form exercising its rights in the form of protest and by conducting gate meetings. The alleged understanding between the Management and the Unions in the Joint Consultative Council is not a settlement under Section 18 or under Section 12(3) of the Industrial disputes Act, 1947. The prohibitory decree of injunction had taken away the fundamental right of the workman under Article 19 of the Constitution of India, 1950.

Right to form association or union is a fundamental right guaranteed under Article 19 (1) (c) of the Constitution. This covers variety of right including expressing the grievance in lawful and peaceful manner. However, this right is subject to reasonable restriction in the interest of sovereignty or integrity of India, public order and morality.

In the instant case, the Plaintiff has demonstrated before the Civil Court, that the members of the Appellant union in the name of gate meeting and slogan shouting are disturbing the industrial peace. The reasonable restriction is imposed on them by the Civil Court which has jurisdiction under Section 9 of the Code of Civil Procedure, 1908 (CPC) to try cases of these nature. There is no bar under the Industrial Dispute Act or any other statute for the Civil Court to entertain suits when the civil right of the larger public is affected. The fundamental right of any individual or group of individuals is subservient to the fundamental right of larger public. When there is conflict between two fundamental right or between two groups over exercise of their respective fundamental rights, the right which would advance the public interest should be enforced through the process of the court.

Permitting to gather and agitate, to shout slogan and to gherao within the security sensitive areas like the plaintiff premises where atomic plant is installed, may lead to breach of security. It may cause security threat to nation in general and to the installation in particular. A restriction of 100 meters away from the premises outer compound for all these activities is reasonable and a good balance between fundamental rights of life and liberty of the others, fundamental right of trade of the Plaintiff Management and the fundamental right of association vest with the defendant Union.

Therefore, present Court concurs and confirms the judgment and decree of the Courts below. It is also to be noted that, the restrain order of injunction is only upto 100 meters from the main gate and within the prohibited area and not beyond that. The injunction decree cannot be construed as a ban on Respondent union activities anywhere beyond the 100 meters. The Second Appeal is dismissed.

Tags : Agitation Injunction Legality

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High Court of Punjab and Haryana

Ankush Anand Vs. Ram Kishan Singh and Ors.

MANU/PH/0871/2020

11.09.2020

Contract

A stranger to agreement cannot be impleaded as a party so as to convert a suit of one character into a suit of different character

Petitioner has assailed the order passed by the Additional Civil Judge vide which the application under Order 1 Rule 10 read with Section 151 of Code of Civil Procedure, 1908 (CPC) filed by him was dismissed. Plaintiff/Respondent No. 1 filed a suit for specific performance of the agreements to sell and mandatory injunction against the Defendant/Respondent No. 2. As per pleadings in the plaint, the Plaintiff submitted that, he being Managing Director of AMCIPI Electronics Pvt. Ltd., has a legal right to file the suit.

The Additional Civil Judge vide order dismissed the application on the ground that, the Petitioner is neither a necessary nor property party to be impleaded in a suit for specific performance. The Petitioner has no cause of action in the suit and there is no infringement of his legal right in any manner. Petitioner is not privy to any Article of Association between the Defendant and Plaintiff. Agreement to sell was strictly in relation to the shares of the Defendant to the extent of 33% only. Co-sharer is competent to sell his shares subject to ultimate partition between the parties. The vendee would step into shoes of original co-sharer to the extent of his defined shares. Petitioner is stranger to the agreement between Plaintiff and the Defendant.

Learned counsel for the Petitioner submitted that, 3rd party can be impleaded in the suit where 3rd party shows some semblance of title or interest in the property. Even in a case for specific performance vendee lis pendens can be impleaded as necessary party being assignee by sale. The 3rd party having some semblance of interest in the property is a necessary party in order to avoid multiplicity of litigation and in order to decide the suit in a more effective manner.

The nature of order passed in the instant case by the trial Court cannot be termed as an interlocutory order as the same has decided the right of the petitioner finally by concluding that, he is not necessary and property party in the suit. Even if the order is considered to be interlocutory order, a person cannot be remediless. Where there is a right, there has to be a remedy to redress the grievance in case the Court has not exercised the jurisdiction vested in it. Ubi jus ibi remedium applies to the present set of circumstances. In view of Order 43 Rule 1 of CPC, no alternative remedy is available to the Petitioner. Revision petition under Article 227 of the Constitution of India, 1950 is maintainable in view of facts and circumstances of the case.

Evidently, the Petitioner is not privy to the agreement to sell. Plaintiff is not privy to any memorandum of understanding between the shareholders of VED Sons Engineers Private Limited. It is a case of agreement to sell in respect of 33% shares of the Defendant in which other co-sharers have no right, title or interest in any manner. The specification of shares is however subject to division in a lawful manner.

For impleading a party in a suit for specific performance, two tests are to be satisfied. Firstly, there must be a right to some relief against the plaintiff in respect of suit property. Secondly, that in the absence of the petitioner/proposed defendant, no effective adjudication can be done by the trial Court. In a suit for specific performance, necessary party is that person in whose absence no decree can be passed. Proper party is that person whose presence before the Court would be necessary in order to enable the Court to decide and adjudicate the lis in an effective manner. A person stranger to the agreement to sell cannot be termed as necessary and appropriate party as collateral matters cannot be adjudicated in a suit for specific performance. By allowing such a course, the suit itself will be converted into a complicated suit for title.

The scope of a suit for specific performance cannot permit third party claiming to be joint owner in the property in question. A stranger to the agreement/contract making a claim adverse to the title of the defendant by claiming right of co-sharership in the suit property cannot be termed to be necessary party, nor proper party for adjudication of the case on merits.

A stranger to agreement cannot be impleaded as a party so as to convert a suit of one character into a suit of different character. It is only an assignee by sale in a case of specific performance who can be impleaded as party defendant. Section 19(b) of the Specific Relief Act, 1963 enables the assignee by sale in a suit for specific performance to be impleaded as party.

It is a settled principle of law that, doctrine of lis pendens is a doctrine based on the ground that, it is necessary for the administration of justice that the decision of a Court in a suit should be binding not only on the litigating parties, but on those who derive title pendente lite. This provision does not intend to annul the conveyance or the transfer otherwise to render it subservient to the right of a party to litigation. The impugned order does not suffer with any error of jurisdiction. Petition dismissed.

Tags : Legal right Litigation Impleadment

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Income Tax Appellate Tribunal

Bhavna B. Kothari vs. Respondent: Income tax Officer

MANU/IU/0596/2020

11.09.2020

Direct Taxation

Mere suspicion could not be a ground to invoke jurisdiction under Section 263 of IT Act

By way of present appeal, the Assessee contest correctness of revisional jurisdiction under Section 263 of Income Tax Act, 1961 (IT Act) as exercised by Learned Principal Commissioner of Income Tax for Assessment Year 2014-15, vide order. The grounds raised by the Assessee is that, revisionary proceedings and order under Section 263 of IT Act are void ab initio, invalid, beyond the authority of law and devoid of any legal force.

There was proper disclosure of exempt LTCG in Assessee's computation of income. The transactions were duly explained by the Assessee with requisite documentary evidences during the course of regular assessment proceedings. The assessment order takes note of the fact that, various details were called from Assessee which were duly submitted and placed on record. These details include notes and explanations on the issues that came up for discussion during the course of hearing. Therefore, it could be concluded that there was due application of mind by Learned Assessing Officer (AO) on the stated issue and the claim was admitted after due verification. Merely because the issue was not elaborately discussed in the quantum assessment could not be a ground to invoke revisional jurisdiction under Section 263 of Act particularly when the details called for by Learned AO were submitted and placed on record.

Another fact to be noted that the copies of documents/office note which formed the basis of invocation of jurisdiction was never supplied to the Assessee. The Assessee all along denied having made any such affidavit that aforesaid income was declared under Income Declaration Scheme, 2016. However, the copy of the affidavit, stated to be in assessment records, was never confronted to the Assessee to controvert his submissions. Mere suspicion could not be a ground to invoke jurisdiction under Section 263 of IT Act. It was obligatory on the part of revisional Authority to demonstrate that, the order was erroneous as well as prejudicial to the interest of the revenue. There is no adequate material on record which would demonstrate the fulfillment of both conditions. Therefore, the revisional jurisdiction under Section 26 of IT Act could not be sustained in the eyes of law. Appeal allowed.

Tags : Suspicion Jurisdiction Legality

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