Judgments
Supreme Court
Bank Of Baroda and Anr. Vs. Parasaadilal Tursiram Sheetgrah .Pvt Ltd. And Ors.
MANU/SC/0992/2022
11.08.2022
Commercial
For quick enforcement of the security, Section 17 of SARFAESI Act provides a time limit of 45 days for filing an application
Present appeal by Bank of Baroda is against an Interlocutory Order of stay passed by the High Court. The Writ Petition was filed by the Respondent Company against the order in appeal by the Debt Recovery Appellate Tribunal. By this order, the challenge laid to the Sale Certificate issued in favour of the Auction Purchaser under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 was dismissed on the ground of limitation.
Present is a case where the Company, with its own independent identity, is contesting the proceedings. It is apparent that, the Directors were also contesting the matter by filing the Section 17 application. Even the legal representatives of one of the deceased Directors were party to the application under Section 17. Further, DRAT came to the conclusion that the original order passed by the DRT has been arrived at after a detailed consideration and that there is no justifiable ground for invoking the review jurisdiction.
The reason for providing a time limit of 45 days for filing an application under Section 17 can easily be inferred from the purpose and object of the enactment. In Transcore v. Union of India and Anr., this Court held that the SARFAESI Act is enacted for quick enforcement of the security. It is unfortunate that proceedings where a property that has been brought to sale and third-party rights created under the provisions of the Act, have remained inconclusive even after a decade.
The High Court was not justified in staying the operation of the order of the DRAT which came to the conclusion that there was no error apparent on the face of record for the DRT to invoke the review jurisdiction and recall its order dismissing the application under Section 17 of the Act. Appeal allowed.
Tags : Stay Grant Legality
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Income Tax Appellate Tribunal
DCIT, New Delhi vs. Sh. Madhur Mittal, New Delhi
MANU/ID/1302/2022
10.08.2022
Direct Taxation
Burden is on the assessee to establish identity, creditworthiness and genuineness of the transaction for sum credited in the books of accounts to the satisfaction of the Assessing Officer
The assessee is an individual, who has not filed return under Section 139 of the Income Tax Act, 1961 (IT Act). Search and seizure operation under Section 132 of the IT Act was carried out in Triveni Group. The assessee belongs to that group. Notice under Section 153A of the IT Act and notice under Section 142(1) of IT Act were issued. Assessment order came to be passed by disallowing the deduction claimed under Section 80C of Rs.1,00,000 and also made addition on account of unexplained cash credit to the tune of Rs.2,43,07,000. Accordingly, assessment order came to be passed by assessing the income of the assessee at Rs.2,44,13,240 as against the returned income of Rs.6,240. As against the assessment order, the assessee has preferred appeal before the learned CIT (Appeals). The CIT (Appeals) vide order partly allowed the appeal by deleting the addition of Rs.2,43,07,000 which was added by the Assessing Officer on account of un-explained cash credit. Aggrieved by the order, the Revenue-Department has preferred the present appeal.
As per Section 68 of the IT Act, it is the burden on the assessee to establish identity, creditworthiness and genuineness of the transaction for sum credited in the books of accounts to the satisfaction of the Assessing Officer. Present Tribunal do not understand proposition of the assessee that cash of Rs.2.50 crores had changed the hands from the company to its promoter-Director without any reason and there is no reason forthcoming as to why the cash of Rs.3.25 crores was paid in cash by the three parties. There is no document produced before either the Assessing Officer or before the CIT (Appeals) or before present Tribunal to prove the genuineness of the transaction.
While deleting the addition, the CIT (Appeals) has not discussed about the proving of genuineness of the transaction by the assessee. The CIT (Appeals) merely relied on the submission made by the assessee and come to the conclusion in favour of the assessee. Therefore, the entire approach of the CIT (Appeals) is erroneous and the matter deserves to be re-looked by the Assessing Officer. Hence, in the interest of justice, present Tribunal deem it fit to set aside the issue of addition of Rs.2,43,07,000 under Section 68 of the IT Act to the file of the Assessing Officer with a direction to the assessee to prove the creditworthiness and genuineness of the transaction with creditable evidence and reasons for travelling such amount of cash from the company to the promoter and parties with whom share purchase agreement has been entered. Appeal allowed.
Tags : Assessment Transaction Genuineness
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Income Tax Appellate Tribunal
Kalyaniwalla & Mistry LLP vs. The Assistant Director Of Income Tax
MANU/IU/1137/2022
10.08.2022
Direct Taxation
No debatable issue can be considered while doing adjustment under Section 143(1)(a) of IT Act
The assessee-company filed its return of income under Section 139(1) of Income Tax Act, 1961 (IT Act) declaring total income at Rs. 6,34,38,721 under the normal provisions. The said return was processed under Section 143(1) of the IT Act in which the adjustment of Rs 2,82,895 was made to the return on account of deemed income under Section 36(1)(va) read with Section 2(24)(x) of the IT Act for late deposit of employee's contribution to P.F. and E.S.I. in accordance with timelines as specified in statutes governing P.F. and E.S.I. respectively.
Against this intimation, assessee filed an appeal before the CIT (A). The CIT (A)(NFAC) also confirmed the intimation processed under Section 143(1) of IT Act. Against this order of NFAC, Assessee Appellant instituted an appeal before Income Tax Appellant Tribunal.
On perusal of the order of CIT (A), he himself admitted that issue is a debatable one. It's an established position of law, no debatable issue can be considered while doing adjustment under Section 143(1)(a) of IT Act. Supreme Court in the matter of C.I.T vs. Raghuvir Synthetics Ltd. held that, A.O. is duty bound by the decision of the jurisdictional High Court and any view contrary to the jurisdictional High court is a mistake.
Further, both the lower authorities relied upon the amendment made by Finance Act, 2021 to Section 36(1)(va) and 43B, as per CIT(A), this amendment is curative in nature and retrospective in application. On this issue, jurisdictional ITAT and various coordinated benches held that, the amendment made by the finance Act, 2021 to Section 36(1)(va) and Section 43B are prospective in nature, effective from assessment year 2022-23.
Thus, the CIT (A) has erred in applying amended provisions of Section 36(1)(va) read with Section 43B to disallow assesses claim of deduction. The impugned order of CIT (A) is set aside. Appeal filed by the assessee is allowed.
Tags : Assessment Deduction Disallowance
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High Court of Delhi
Sanjay Sarin vs The Authorised Officer Canara Bank And Anr.
MANU/DE/2817/2022
08.08.2022
Commercial
When borrower is aggrieved by any of the actions of the bank for which the borrower has remedy under the SARFAESI Act, no writ petition should be entertained
The Petitioner, who stood as a guarantor to a loan facility, is aggrieved with the recovery action initiated by the bank, against the borrower and himself, under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. According to him, once a resolution plan qua the borrower was approved under Section 31 of the under the Insolvency and Bankruptcy Code, 2016, the bank's claims stood addressed. Thus, it could not have sought recovery for amounts over and above the amount approved by the NCLT, and seeks a mandamus to that effect.
The law relating to maintainability of a writ petition in matters relating to SARFAESI Act is no longer res integra. The Supreme Court in Phoenix ARC Pvt. Ltd. v. Vishwa Bharti Vidya Mandir and Ors., has held that where proceedings are initiated under the SARFAESI Act, and the borrower is aggrieved by any of the actions of the bank for which the borrower has remedy under the SARFAESI Act, no writ petition should be entertained.
Discharge of the corporate debtor from a debt owed by it to its creditors, by way of an involuntary process such as insolvency proceedings, does not absolve the guarantor of its liability, since it arises out of an independent contract. Thus, the passing of a resolution plan does not ipso facto discharge the personal guarantor. As regards the extent of liability of a personal guarantor is concerned, the same would have to be determined in light of the agreement between the borrower, i.e., the corporate debtor, and the personal guarantor, for which the appropriate forum would be the Debt Recovery Tribunal and not this Court. Thus, if the Petitioner is not absolved of his liability, the proceedings initiated by the bank under the SARFAESI Act cannot be held to be unconstitutional or in derogation of the Approval Order of the NCLT.
In relation to the other grievance raised by Respondent No. 1 qua non-implementation of the resolution plan, it must be noted that the aggrieved party is actually Respondent No. 1, who has not been paid in terms of the resolution plan approved by NCLT. As pointed out by the counsel for Respondent No. 1, there has been a default on the part of the resolution applicant in payment of instalments, and as per the counter affidavit, 15 instalments amounting to Rs. 4,53,60,000 remain pending. It is therefore for Respondent No. 1 to now take action for recovery of its dues from the resolution applicant, as it may deem fit, utilizing any remedy available to it under law.
Respondent No. 1 certainly has the right to proceed against the collateral securities for recovery of its dues - which are independent of the resolution plan approved by the NCLT. If the resolution plan approved by the Adjudicating Authority is contravened by the concerned corporate debtor, any person other than the corporate debtor, whose interests are prejudicially affected, may make an application to the Adjudicating Authority for an order for liquidation.
Where a resolution applicant succeeds as a corporate debtor, but fails to comply with its assurance in terms of the resolution plan, then subsequent step to be taken has been specified in Section 33(3) of the IBC. Therefore, Petitioner's grievance regarding non-implementation of the resolution plan, too, cannot be a ground for this Court to entertain the instant petition. Present Court finds no merit in the present petition.
Tags : Recovery action Initiation Legality
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High Court of Delhi
Javahar Lal vs. OVT India Pvt. Limited & Anr.
MANU/DE/2804/2022
08.08.2022
Criminal
Without specific allegations in the complaint reflecting the role of the accused, the persons named cannot be summoned in case under Section 138 of NI Act
The Respondents had filed the complaints under Section 138 read with Section 141 of the Negotiable Instrument Act, 1985 (N.I. Act) against Pantel Technologies Pvt. Limited and its directors, the present petitioners Javahar Lal and Vivek Prakash. The learned Trial Court after considering the material on the record, took cognizance of the complaint and issued summons. The present petitions have been filed praying that the proceedings pending before the learned MM be quashed qua the Petitioner arrayed as accused No.2 in the complaints.
It is trite that without specific allegations in the complaint reflecting the role of the accused, the persons named cannot be summoned in case under Section 138 read with 141 of N.I. Act. As has been held in Ramrajsingh vs. State of Madhya Pradesh, it is necessary to specifically aver in a complaint under Section 141 that at the time the offence was committed the person accused was in charge of and was responsible for the conduct of the business. This averment is an essential requirement of Section 141 and has to be made in the complaint without which the requirements of Section 141 cannot be held to be satisfied.
Since Section 141 of the N.I. Act raises a legal fiction creating vicarious liability, strict compliance with statutory requirements was called for. A joint liability to pay a debt will not be sufficient to make a person vicariously liable under Section 148 of N.I. Act as observed in Alka Khandu Avhad vs. Amar Syamprasad Mishra & Anr. A civil liability cannot be confused with the criminal liability under Section 138 read with Section 141 of N.I. Act.
The document relied upon by the Respondents does not reflect the fact that, the Petitioner while being a Director of the accused company was participating in the conduct of the business by entering into trade agreements on behalf of the company. The averments do not find support from the very documents relied upon by the complainant/respondent.
Thus, the Petitioner is not responsible for and in-charge of the business of the accused company. It is not pleaded in the complaints that the dishonoured cheques had been signed by the Petitioner. Nor has it been so urged before this Court. Thus, the averments made in the complaints even if be fully accepted, the documents annexed thereto ex facie show that the Petitioner though a Director of the accused company was not in-charge of or responsible for the conduct of its business. Thus, an essential ingredient of Section 141 of N.I. Act based on which vicarious liability could be attached to the Petitioner is missing. The complaint cases qua the petitioner are required to be and are quashed. Petitions allowed.
Tags : Complaint Proceedings Quashing of
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High Court of Delhi
Narinder Kumar Govil vs. M K Govil & Ors
MANU/DE/2811/2022
08.08.2022
Civil
Mere writing a document by hand without execution and without compliance of the prescribed legal standards does not render it final, as a Will
By virtue of instant appeal, Appellant impugns the preliminary decree of partition and the final decree of partition passed by Learned Single Judge. Learned Single Judge proceeded to pass a preliminary decree of partition of property declaring Respondent nos. 1 to 3 to be the rightful owner of 1/5th share each and Respondent nos.4 and 5 to be the rightful owner of 1/5th share together in the said property. Learned Single Judge further passed a decree for recovery of the rental amount of Rs. 57,600 in favour of Respondent nos.1 to 3 each and Respondent nos.4 and 5 together against Appellant. In the end, Learned Single Judge granted an opportunity to the parties to consider amicable settlement.
Since there was no amicable settlement, Learned Single Judge proceeded to pass a final decree for partition and sale of property and distribution of sale proceeds amongst the parties thereof as per their respective proportionate shares set out in the preliminary decree as the property was incapable of partition by metes and bounds. Hence, the Appellant vide present appeal challenges both the preliminary decree and the final decree passed by the Learned Single Judge.
A bare perusal of the document proclaimed as a Will by Appellant reveals that, though handwritten, however, it does not bear signature of the so-called Testator; does not bear the details/ signatures of either of the 2 witnesses; and is an incomplete document as it contains blanks and corrections. The document proclaimed as a Will is not final and was never concluded by Late N.K. Govila, the Testator named therein. The said document is not a validly executed Will as per Section 63 of the Indian Succession Act, 1925. Mere writing a document by hand without execution and without compliance of the prescribed legal standards of Section 63 of the Act does not render it final, as a Will. Even otherwise, neither Section 59 nor Section 63 of the Act come to the aid of Appellant. The said Will being non-est in law, cannot be read in evidence and thus, Appellant is barred from placing any reliance upon it and cannot take any benefit thereof.
Appellant has failed to show or prove the Will, the same cannot be considered. Appellant has also failed to show that Late N.K. Govila had ever executed any document, much less the alleged Will during his lifetime, either in favour of appellant or disowning Respondent no.1. As such Late N.K. Govila never conferred any right, title, interest or share upon any of the parties herein and thus the Appellant and respondent nos.1 to 3 have rightly acquired 1/5th share each and the Respondent nos.4 and 5 also have rightly acquired 1/5th share together in the property. Thus, the preliminary decree and the final decree passed by Learned Single Judge do not call for any interference by this court. Appeal dismissed.
Tags : Will Execution Proof
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