19 October 2020


Judgments

Supreme Court

Saravanan vs. State Represented By The Inspector Of Police

MANU/SC/0764/2020

15.10.2020

Criminal

While granting default bail/statutory bail under Section 167(2) of the Code of Criminal Procedure, 1973, condition of deposit of amount cannot be imposed

The original accused has preferred the present appeals, feeling aggrieved and dissatisfied with the impugned order, by which the High Court has released the Appellant on default bail/statutory bail, on condition to deposit Rs. 8,00,000.

The Appellant has submitted that, condition imposed by the High Court imposed while releasing the appellant on default bail/statutory bail under Section 167(2) of Code of Criminal Procedure, 1973 ( CrPC) is contrary to the scheme of Section 167 of the CrPC. The short question which is posed for the consideration of this Court is, whether while releasing the Appellant-¬accused on default bail/statutory bail under Section 167(2) of CrPC, any condition of deposit of amount as imposed by the High Court, could have been imposed.

The High Court has committed a grave error in imposing condition that, the Appellant shall deposit a sum of Rs.8,00,000¬ while releasing the Appellant on default bail/statutory bail. As observed by present Court in catena of decisions and more particularly in the case of Rakesh Kumar Paul v. State of Assam, where the investigation is not completed within 60 days or 90 days, as the case may be, and no chargesheet is filed by 60th or 90th day, accused gets an “indefeasible right” to default bail, and the accused becomes entitled to default bail once the accused applies for default bail and furnish bail. No other condition of deposit of the alleged amount involved can be imposed. Imposing such condition while releasing the accused on default bail/statutory bail would frustrate the very object and purpose of default bail under Section 167(2) of CrPC.

As observed by this Court in the case of Rakesh Kumar Paul v. State of Assam and in other decisions, the accused is entitled to default bail/statutory bail, subject to the eventuality occurring in Section 167 of CrPC, namely, investigation is not completed within 60 days or 90 days, as the case may be, and no chargesheet is filed by 60th or 90th day and the accused applies for default bail and is prepared to furnish bail. The circumstances while considering the regular bail application under Section 437 of CrPC are different, while considering the application for default bail/statutory bail. Under the circumstances, the condition imposed by the High Court to deposit Rs.8,00,000, while releasing the Appellant on default bail/ statutory bail is unsustainable and deserves to be quashed and set aside. So far as condition imposed by the High Court, namely, directing the appellant to report before the concerned police station daily at 10:00 a.m., until further orders, for interrogation is concerned, the same is also unsustainable, as it is too harsh. The appeals are allowed.

Tags : Bail Deposit Condition

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Income Tax Appellate Tribunal

Acit, Cuttack vs Bishandayal Jewellers

MANU/IF/0079/2020

15.10.2020

Direct Taxation

Penalty cannot be imposed in absence of clarity on whether there is concealment of income

In present appeals, the grievance of the revenue is that the learned CIT(A) was not justified in deleting the penalty levied under Section 271(1)(c) of the Income Tax Act, 1961 (IT Act) by following the decision of decision of Hon'ble Supreme Court in the case of CIT vs. SSA's Emerald Meadows.

At the time of hearing, learned Departmental Representative by referring to the grounds of appeal submitted that the decision of Hon'ble Supreme Court in the case of CIT vs. SSA's Emeralds Meadow is not binding on the department in view of the decision of Hon'ble Supreme Court in the case of Shanmugavael Nadar, wherein, it is held that a rejection of SLP through a non-speaking order is not a binding precedent. He, therefore prayed that the orders of the learned CIT(A) be reversed by restoring the order of the AO.

The only issue to be decided in the grounds of appeal is regarding deletion of penalty levied under Section 271(1)(c) on the ground of inappropriate words in the said notices have not been struck off. A perusal of the notices issued under Section 274 read with Section 271 dated 29th December, 2017 show that the inappropriate words in the said notice have not been struck off. Even the last line of the said notice only speaks of Section 271 of the IT Act and does not even mention of Section 271(1)(c) of the IT Act. It is pertinent to note here that the penalty order is based on furnishing of inaccurate particulars but the notice is not specifying exactly on which limb the penalty under Section 271(1)(c) of IT Act has been initiated.

From the notices dated 29th December, 2017, for both the assessment years produced during the hearing, it can be seen that the Assessing Officer was not sure under which limb of provisions of Section 271 of the IT Act, the assessee is liable for penalty. In the instant case also, the inappropriate words in the penalty notices have not been struck off and the notices do not specify as to under which limb of the provisions, the penalty under Section 271(1)(c) of IT Act has been initiated.

On perusal of the impugned order, present Tribunal observe that, the learned CIT(A) deleted the penalty after considering the decision of Hon'ble Karnataka High Court in the case of CIT vs Manjunatha Cotton & Ginning Factory, and also the decision of Hon'ble Supreme Court in the case of CIT vs SSA's Emerald Meadows. Hon'ble High Court of Karnataka in the case of Manjunatha Cotton & Ginning Factory has held that, the Assessing Officer has to clearly specify whether there is concealment of income or whether there is filing of inaccurate particulars of income and in the absence of such clarity, the levy of penalty will be bad in law.

The learned CIT(A) has followed the judicial discipline by following the proposition in the case of Manjunatha Cotton, which decision has been upheld by Hon'ble Supreme Court in the case of CIT vs. SSA's Emerald Meadows. Therefore, the learned CIT(A) was justified in deleting the penalty levied under Section 271(1)(c) of the IT Act. Hence, there is no infirmity in the orders of the CIT(A). Appeals of the revenue are dismissed.

Tags : Deletion Penalty Validity

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Supreme Court

Ganesan Vs. State Represented by it Inspector of Police

MANU/SC/0763/2020

14.10.2020

Criminal

Conviction Can Be Based On Sole Testimony Of Victim If Reliable And Trustworthy

The Appellant – original accused has preferred the present appeal, feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court. The Appellant herein – original accused was tried by the learned Fast Track Mahila Court, for the offences punishable under Section 7 read with Section 8 of the Protection of Children from Sexual Offences Act, 2012 (“POCSO Act”). The Appellant has vehemently submitted that, no sufficient opportunity was given to the accused before passing the impugned judgment and order.

It is true that, PW2¬ mother of the victim has turned hostile. However, PW3¬ victim has fully supported the case of the prosecution. She has narrated in detail how the incident has taken place. She has been thoroughly and fully cross¬-examined. There is no good reason not to rely upon the deposition of PW3 – victim. PW3 aged 15 years at the time of deposition is a matured one. She is trustworthy and reliable. As per the settled proposition of law, even there can be a conviction based on the sole testimony of the victim, however, she must be found to be reliable and trustworthy.

The law that emerges on the issue is to the effect that the statement of the prosecutrix, if found to be worthy of credence and reliable, requires no corroboration. The court may convict the accused on the sole testimony of the prosecutrix." Therefore, in the facts and circumstances of the case, the learned trial Court has not committed any error in convicting the accused, relying upon the deposition of PW3 – victim. The learned trial Court has imposed the minimum sentence provided under Section 8 of the POCSO Act. Therefore, the learned trial Court has already shown the leniency. At this stage, it is required to be noted that allegations against the accused which are proved from the deposition of PW3 are very serious, which cannot be permitted in the civilized society. Therefore, considering the object and purpose of POCSO Act and considering the evidence on record, the High Court has rightly convicted the accused for the offence under Section 7 of the POCSO Act and has rightly sentenced the accused to undergo three years R.I. which is the minimum sentence provided under Section 8 of the POCSO Act. Appeal dismissed.

Tags : Conviction Evidence Credibility

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NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI

B. Prashanth Hegde vs State Bank Of India and Ors.

MANU/NL/0376/2020

14.10.2020

Company

“Right to sue" accrues when a default occurs and if the default has occurred over three years prior to the date of filing of the Application, the Application would be barred

Present Appeal emanates from the Impugned Order passed by the Adjudicating Authority, whereby the Adjudicating Authority has admitted the Application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 ('I&B Code'). The Appellant submits that, the initiation of the CIRP was fraudulent, malicious and not intended for any resolution.

Admittedly, in the year 2007, State Bank of India granted credit facilities to the Corporate Debtor Metal Closures Private Limited. The account of the Corporate Debtor was classified as NPA by SBI on 31st January 2010. However, it was restructured on 17th February 2010, and the Punjab National Bank entered into the Consortium by sanctioning certain credit facilities to the Corporate Debtor on 26th June 2010. As a member of Consortium, the UCO Bank sanctioned 'Working Capital Cash Credit' and 'Letter of Credit Limit 'to the Corporate Debtor on 11th April 2012. The Consortium executed the Master Joint Lenders Forum Agreement on 21st June 2014. The Corporate Debtor's account was classified as NPA by SBI on 28th May 2014; by Corporation Bank on 30th June 2013. After the failure of restructuring, the NPA date of the Corporate Debtor was changed to 31st January 2010.

The Appellant contends that, due to repeated failures of Metal Closures Pvt Ltd ('Corporate Debtor') to regularize the accounts of the members of the Consortium of Banks, the debts of the Corporate Debtor were classified as Non Performing Asset on 31st October 2010 by State Bank of India; by Punjab National Bank on 30th June 2014; by Corporation Bank on 31st December 2014; and by UCO Bank on 31st December 2014. Even if the date of default is taken to be the last of the four dates, when the account of the Corporate Debtor was classified as NPA, i.e. 31st December 2014, then also it is clear that default occurred prior to 31st December 2014. As per Article 137 of the Limitation Act, 1963 three years period of Limitation ended on 30th December 2017. However, this petition is filed on 23rd July 2018, i.e. beyond three years from the time, when account of the Corporate Debtor was classified as NPA on 31st December 2014.

It is clear that, the Application filed by the Respondents under Section 7 of the I & B Code in the present case is an effort to revive a dead debt. The date of default is crucial to determine the date when the cause of action accrued. In this case, the Respondent has not mentioned the date of default. In the case of Gaurav Hargovindbhai Dave, Hon'ble Supreme Court has considered that the date of default to be the date of NPA. Therefore, the date of default, in this case, is 31st January 2010. The right to sue under IBC occurs, when default occurs. If the default has occurred over three years period prior to the date of filing the Application, the Application would be time-barred given the law laid down by Hon'ble Supreme Court in B K Educational Services vs. Parag Gupta and Associates.

Admittedly, in this case the Corporate Debtor was declared to be Non-performing Asset on 28th May 2014. The date was later changed to 31st January 2010. Therefore, if the position taken by the Financial Creditor Bank is taken as correct, 'Default' occurred on or before 31st January 2010. The period of Limitation for the same would expire on 30th January 2013. The Application for initiation is filed on 23rd July 2018. The contention of the Respondent that, their right accrued only on 01st December 2016 is not consonant to the ratio of judgement in B K Educational Services vs. Parag Gupta and Associates wherein the Hon'ble Supreme Court has held that "It is thus clear that since the Limitation Act is applicable to applications filed under Sections 7 and 9 of the I & B Code from the inception of the I & B Code, Article 137 of the Limitation Act gets attracted. "The right to sue", therefore, accrues when a default occurs. If the default has occurred over three years prior to the date of filing of the Application, the Application would be barred under Article 137 of the Limitation Act, save and except in those cases where, in the facts of the case, Section 5 of the Limitation Act may be applied to condone the delay in filing such Application".

In view of the law enunciated by the Hon'ble Supreme Court of India and the facts and circumstances of this case, it is clear that the Application filed under Section 7 of the I & B Code by the Financial Creditor is barred by Limitation. The Impugned Order is set aside. The Application preferred by Respondent No.1 State Bank of India, against the Corporate Debtor under Section 7 of the I & B Code is dismissed. The Appellant' Corporate Debtor' (Company) is released from all rigours of 'Moratorium' and is allowed to function through its Board of Directors with immediate effect.

Tags : Initiation CIRP Legality

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High Court of Jammu and Kashmir

J&K Service Selection Recruitment Board and Ors. Vs. Basit Aslam Wani and Ors.

MANU/JK/0359/2020

13.10.2020

Service

Prescription of qualification for a post is a matter of recruitment policy, judicial review cannot expand upon the ambit of prescribed qualifications to decide equivalence thereof

Present two Letters Patent Appeals arise from the judgment and order passed in writ petition, whereby the learned Writ Court, while holding that the candidates, Petitioners before the Writ Court, possessing higher Degree of B. Pharmacy, could not be treated as ineligible for the post of Junior Pharmacist advertised by the Services Selection Board (the Board) prescribing the minimum qualification of 10+2 and Diploma in Pharmacy, allowed the writ petition, quashed the select list prepared by the Board and directed reframing of the same and to recommend the writ petitioners for appointment against the advertised posts.

The law is settled that, prescription of qualification for a post is a matter of recruitment policy, and that the State as employer is entitled to prescribe qualifications as a condition of eligibility after taking into consideration nature of job, aptitudes required for efficient discharge of duties, functionality of qualifications, course content leading up to acquisition of qualification etc. Further, that judicial review cannot expand upon the ambit of prescribed qualifications to decide equivalence thereof. In absence of specific statutory rule under which holding of higher qualification could presuppose acquisition of lower qualification, such inference cannot be drawn.

It is also settled that, the Note of the advertisement notice, postulating that mere possession of prescribed qualification would not entitle a candidate to be called for written test or interview and the Board may shortlist among eligible candidates by granting weightage to higher qualification as may be decided by it, merely indicates that Board is vested with discretion in pursuance of enabling power which it may or may not exercise, and that a candidate has no vested right to assert that Board must as a mandate assign additional weightage to higher qualification.

It is the Government which is competent to decide what should be the qualification prescribed for a post and, in the instant case, the Government has, in fact, made Rules, namely, prescribing the qualifications. These Rules do not contain any provision stating that, B. Pharmacy is equivalent to Diploma in Pharmacy or that, B. Pharmacy presupposes acquisition of Diploma in Pharmacy. In these circumstances, present Court does not have the power to substitute the Government's policy or decision in this regard by its own opinion or view, or to add to the Rules what is not contained therein.

Participation of the writ Petitioners in the written test and interview or the fact that their names had figured in merit list would not alter the situation and make them eligible for the post, especially so when the Government had clearly conveyed to the Board that candidates possessing B. Pharmacy were not eligible for the post. The learned Writ Court, while holding that the writ Petitioners possessed higher degree and that they could not be excluded from the select list, has been clearly in error. The impugned judgment passed by the learned Writ Court is set aside. Appeals allowed.

Tags : Appointment Direction Legality

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High Court of Uttarakhand

Ashish Bisht and Ors. Vs. State of Uttarakhand and Ors.

MANU/UC/0250/2020

13.10.2020

Service

Cancellation of the written examination by the Selection Committee is an administrative decision and the Court should not ordinarily interfere

Petitioners have approached this Court praying to declare cancellation of entire selection for the post of Forest Guard in the absence of any material for forming an opinion that the selection is tainted, as arbitrary and illegal. Further, to issue a writ, order or direction in the nature of certiorari for quashing the order/notification issued by Respondent no. 4 as published in Hindi daily newspaper Amar Ujala dated 18th October, 2015 whereby entire selection has been cancelled without assigning any reason.

Learned counsel for the Petitioners contended that, there was no reason to cancel the entire selection. Cancellation of entire selection is an extreme step which can be ordered when there are cogent reasons therefore. Sufficiency of material for forming an opinion is a vital aspect which deserves consideration, but in the present case, there is no material whatsoever which may warrant such decision to cancel the selection. It is also contended that, the cancellation of the selection has a serious consequence for the petitioners which may result in the denial of the petitioners of a public employment to them forever.

The reason shown by the Respondents for cancelling the entire selection process is that, a complaint was received in the department alleging favouritism, unfair means, irregularities and malpractice in the process of selection. Record reveals that, in order to look into the genuineness of the complaint, enquiry was conducted. Said enquiry report was placed before the Committee which was duly considered and a decision was taken to cancel the written examination and to conduct written examination afresh. Foul play and unfair practice in the selection process cannot be ruled out and the cancellation of selection process cannot be said to unjustified or irrational.

Cancellation of the written examination by the Selection Committee is an administrative decision and the Court should not ordinarily interfere in the administrative decision. Furthermore, merely because the name of a candidate finds place in the select list, it would not give the candidate an indefeasible right to get an appointment.

As regards the jurisdiction of this Court under Article 226 of The Constitution of India, 1950 it is well settled principle in law that while exercising its powers of judicial review of any administrative action, Courts could not interfere with the administrative decision unless it suffers from the vice of illegality, irrationality or procedural impropriety.

A detailed enquiry was conducted and the answer sheets of the candidates were analysed. On the basis of sufficient proof, decision was taken to cancel the written examination. No ground for interference is made out. Petitions dismissed.

Tags : Written examination Cancellation Legality

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