Supreme Court

S.P. Mani And Mohan Dairy vs. Dr. Snehalatha Elangovan

MANU/SC/1189/2022

16.09.2022

Criminal

For quashing of complaint, it must be shown that no offence is made out against the Director or Partner

Present appeal is at the instance of the original complainant of a complaint filed under Section 138 of the Negotiable Instruments Act, 1881 (“the NI Act”) and is directed against the order passed by the High Court whereby the High Court allowed the application and quashed the criminal proceedings initiated against the Respondent.

It is not in dispute, that no reply was given by the Respondent to the statutory notice served upon her by the Appellant. In the proceedings of the present type, it is essential for the person to whom statutory notice is issued under Section 138 of the NI Act to give an appropriate reply. The person concerned is expected to clarify his or her stance. Once the necessary averments are made in the statutory notice issued by the complainant in regard to the vicarious liability of the partners and upon receipt of such notice, if the partner keeps quiet and does not say anything in reply to the same, then the complainant has all the reasons to believe that what he has stated in the notice has been accepted by the noticee.

When in view of the basic averment process is issued the complaint must proceed against the Directors or partners as the case may be. But, if any Director or Partner wants the process to be quashed by filing a petition under Section 482 of the Code of Criminal Procedure, 1973 (CrPC) on the ground that only a bald averment is made in the complaint and that he is really not concerned with the issuance of the cheque, he must in order to persuade the High Court to quash the process either furnish some sterling incontrovertible material or acceptable circumstances to substantiate his contention. Quashing of a complaint is a serious matter. Complaint cannot be quashed for the asking. For quashing of a complaint, it must be shown that no offence is made out at all against the Director or Partner.

The primary responsibility of the complainant is to make specific averments in the complaint so as to make the accused vicariously liable. For fastening the criminal liability, there is no legal requirement for the complainant to show that the accused partner of the firm was aware about each and every transaction. On the other hand, the first proviso to sub¬section (1) of Section 141 of the Act clearly lays down that if the accused is able to prove to the satisfaction of the Court that the offence was committed without his/her knowledge or he/she had exercised due diligence to prevent the commission of such offence, he/she will not be liable of punishment.

The final judgement and order would depend on the evidence adduced. Criminal liability is attracted only on those, who at the time of commission of the offence, were in charge of and were responsible for the conduct of the business of the firm. But vicarious criminal liability can be inferred against the partners of a firm when it is specifically averred in the complaint about the status of the partners ‘qua’ the firm. This would make them liable to face the prosecution but it does not lead to automatic conviction. Hence, they are not adversely prejudiced, if they are eventually found to be not guilty, as a necessary consequence thereof would be acquittal. The impugned order passed by the High Court is set aside. Appeal allowed.

Tags : Proceedings Quashing of Legality

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Supreme Court

Nitu Kumar vs. Gulveer & Anr.

MANU/SC/1186/2022

16.09.2022

Criminal

Gravity and seriousness of the offence is relevant consideration for grant of bail

The original complainant has preferred the present appeal dissatisfied with the impugned judgment and order passed by the High Court by which, the High Court has directed to release Respondent No. 1 – accused on bail in connection with Case Crime for the offence punishable under Section 302 of Indian Penal Code, 1860 (IPC)

It can be seen that nothing has been discussed by the High Court on the role attributed to Respondent No. 1 – accused and his overt act in commission of the offence. The High Court has not appreciated that there is an eye witness, who has categorically stated that Respondent No. 1 caught hold of the deceased. The High Court ought to have appreciated that if Respondent No. 1 would not have caught hold of the deceased, it would not have been possible for the co- accused Shekhar to cause injuries on the deceased. Therefore, the High Court ought to have appreciated that the role attributed to Respondent No. 1 can be said to be very serious like co-¬accused Shekhar.

As per the settled position of law, gravity and seriousness of the offence is a relevant consideration for the purpose of grant of bail. The High Court was required to consider the gravity and the seriousness of the offence and the nature of the allegations against Respondent No. 1 – accused. Under the circumstances, the impugned judgment and order passed by the High Court releasing respondent No. 1 on bail for the offence punishable under Section 302 of IPC is unsustainable. The impugned judgment and order passed by the High Court releasing respondent No. 1 accused on bail in Case Crime for the offence punishable under Section 302 of IPC is quashed and set aside.

Now, Respondent No. 1¬ Gulveer – accused shall surrender before the concerned Court/Jail authority forthwith failing which he be arrested by issuing non-¬bailable warrant. However, it is observed that the learned Trial Court to conduct the trial in accordance with law and on its own merits and on the basis of the evidence led before it. Appeal allowed.

Tags : Bail Grant Validity

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Income Tax Appellate Tribunal

Harvinder Singh Girgla, Delhi vs. Commissioner of Income Tax

MANU/ID/1537/2022

15.09.2022

Direct Taxation

Once the defects in the return filed under Section 139(1) of IT Act are removed within the time permitted, the same would relate back to the original date of filing of the return

The assessee is an individual who filed his original return of income for the A.Y. 2017-18 declaring total income of Rs.11,43,530. The assessee had received intimation under Section 143(1) of the Act wherein the total income was determined at Rs.15,41,050 by disallowing the claim of set off of brought forward loss of Rs.3,97,520.

Aggrieved by the order of CPC, assessee carried the matter in appeal before the Learned CIT(A). Before the Learned CIT(A), the grievance of the assessee was that the claim of set off of capital loss at Rs.3,97,520 which was brought forward from earlier years should have been allowed to assessee but the same has not been allowed to the assessee.

The Learned CIT(A) noted that, assessee had filed the original return of income for the A.Y. 2016-17 on 5th August, 2016 which was within the due date. However, notice under Section 139(9) of the Income Tax Act, 1961 (IT Act) was issued to the assessee to rectify the defects in the return filed therein. He noted that since assessee had filed the revised return on 12th November, 2016 which was after the due date of filing the return of income, the benefit of carry forward of losses cannot be allowed to assessee. He thus upheld the order of CPC. The issue in the present case is with respect to set off of brought forward long term capital losses.

Sub Section (9) of Section 139 of the IT Act is attracted, when the AO considers the return of income filed by the assessee to be defective. If the AO considers the return of income to be defective, he is required to intimate such defects to the assessee and give him an opportunity to rectify such defect within a period of 15 days from the date of such intimation or within such further time as granted by the AO. If the defects are not removed within 15 days or such extended time granted by AO, then the return of income shall be treated as invalid return and the provisions of the Act would apply as if the assessee has failed to furnish his return of income. Once the defects which existed into original return of income are removed within 15 days or such extended time granted by AO, the original return upon removal of defects under Section 139(9) of the Act becomes a valid return.

Bombay High Court in the case of Prime Securities Ltd vs. Varinder Mehta has held that, once the defects in the return filed under Section 139(1) of IT Act are removed within the time permitted by the Department, the same would relate back to the original date of filing of the return.

In the present facts, once the defects in the original return of income have been removed, then seen in the light of the ratio of Bombay High Court decision, it would relate back to the original date of filing of return of income, which was within the prescribed time and therefore, the benefits of filing the return of income under Section 139(1) of the Act shall follow. In such a situation, the CPC and CIT(A) was not justified in denying the benefit of setting of brought forward losses of A.Y. 2016-17 while computing the total taxable income for A.Y. 2017-18. The order of CIT(A) is set aside and it is directed that the benefit of carry forward of losses of A.Y. 2016-17 be allowed for set off against the income for A.Y. 2017-18 to the assessee. Appeal allowed.

Tags : Carry forward Losses Benefit

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Customs, Excise and Service Tax Appellate Tribunal

Satya Power & Ispat Ltd vs Commissioner of Central Excise

MANU/CE/0328/2022

13.09.2022

Excise

Mere shortage cannot ipso facto lead to the allegation of clandestine removal

Present appeal has been filed challenging the Order-in-Appeal passed by the Commissioner (Appeals), by which the learned Commissioner dismissed the appeal filed by the Appellant by holding that the order passed by the Adjudicating Authority for denial of credit and imposition of penalty does not warrant any interference.

In the instant case, while explaining the procedure, learned counsel submits that during the manufacturing process of the sponge iron, iron ore fines are generated at the time of screening/grading and crushing, which is nothing but waste and in order to keep the production at a constant pace the aforesaid process of screening is essential and indispensable and iron ore and coal fines contents have to be removed else it would stick on the inner wall of the kiln and reduce the space inside the kiln, called accretion. Therefore it can safely be concluded that the fines etc are by-product or incidental product which cannot be said to be inputs. This issue is decided in favour of the Appellant.

So far as short receipt of 268.420 MT of coal is concerned on which department is demanding duty, that is also not sustainable. There is no allegation or any evidence of clandestine removal of the said quantity of coal. Mere shortage cannot ipso facto lead to the allegation of clandestine removal. According to learned counsel, the said short receipt is sometimes due to transit loss/theft and as per industrial practice ± 4% is permissible. Since this short receipt cannot be treated as clandestine removal therefore, there is no reason not to accept the submission/explanation given by the learned counsel. Therefore, demand cannot be sustained.

Regarding the issue of wrongly availed Cenvat credit of Rs.9,768 on input service paid on GTA service against sponge iron received back from the customers is concerned, this issue is also covered in favour of the assessee in view of the decision of a co- ordinate Bench of the Tribunal in the matter of Chitrakoot Steel & Power Pvt. Ltd. Vs. CCE, Chennai in which it has been held that no demand can be made for input services, if the finished goods are received back. As in view of facts of this case, all the issues involved are decided in favour of the Appellants. Appeal allowed.

Tags : Demand Confirmation Penalty

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High Court of Delhi

Bank Of India vs. Suresh Chand

MANU/DE/3492/2022

12.09.2022

Service

Tribunal has power under Section 11A of ID Act to interfere with the punishment inflicted on an employee by the Management

The Petitioner in the present Writ Petition is aggrieved by the Award passed by the Presiding Officer. Vide the impugned Award, the learned Industrial Tribunal directed the reinstatement of the workman with 50% back wages and continuity of service and all other consequential benefits after stopping all increments for 7 years.

The question to be examined is whether the Industrial Tribunal has power under Section 11A of the Industrial Disputes Act, 1947 to interfere with the punishment inflicted on an employee by the Management.

After the introduction of Section 11A, now the Industrial Tribunal have the power to interfere with the punishments. However, cogent reasons should be recorded for the same. In the present case, the Learned Tribunal in the impugned Award noted that there were 7 employees against whom identical charges were imposed. In all cases, charges were proved. Out of the 7 Workmen on whom similar charges were proved, 5 of them were retained in service by imposing the penalty of reduction in increments. One person was dismissed from service and the Respondent Workman was discharged from service with superannuation benefits. Hence according to the Learned Tribunal, there is discrimination as there was no justification offered by Petitioner/Management on how the Respondent/Workman's case is different from the other similarly situated employees against whom lesser punishments were imposed.

The learned Tribunal interfered with the penalty imposed by the Petitioner/Management as the Respondent/Workman was discriminated against similarly situated employees. The learned Tribunal has the power under Section 11A of the Industrial Disputes Act, 1947, to differ from the conclusions arrived at by the Petitioner/Management.

There is no infirmity or perversity in the Award passed by the learned Tribunal. Hence this Court is not inclined to exercise its extra ordinary jurisdiction under Article 226 of the Constitution of India and the present Writ Petition is accordingly dismissed.

Tags : Reinstatement Workman Legality

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High Court of Delhi

Mayank Garg Vs. Delhi High Court

MANU/DE/3386/2022

12.09.2022

Education

Court may exercise powers under Article 226 of the Constitution to provide appropriate relief when it is established that there is a manifest error in evaluation of examination papers

The Petitioner has filed the present petition under Article 226 of the Constitution of India, 1950 praying that direction be issued to the Respondent ('DHC') to 'recheck/re-examine/reassess' the Petitioner's answer-sheets in respect of examination paper, Law-III. The petitioner has scored 89 marks out of the maximum of 200 marks in the said paper. This is one mark short of qualifying threshold of 45%. The petitioner's aggregate marks of all papers is 437 marks out of a maximum of 750 marks. This is the highest amongst all unsuccessful candidates and is significantly higher than the qualifying cut off of 50%. The petitioner has been eliminated from the competitive examination for appointment to Delhi Higher Judiciary Services, solely on account of not securing 45% marks in the examination paper, Law-III.

The principal question that falls for consideration of this court is whether the Petitioner is entitled to seek re-evaluation of his answer-sheets in respect of the examination paper, Law-III.

The Petitioner is a meritorious candidate and the same is evidenced by the fact that he has scored significantly higher marks in all papers other than the examination paper of Law-III. He was short by only one mark, which translates to 0.5%. He has secured 44.5% in paper of Law-III, which is below the qualifying marks as stipulated. There is no cavil with the provision that in cases where the court finds that there is manifest error in the marking system; failure to follow the procedure; or a systemic failure of the examination/selection scheme, the court can exercise the powers under Article 226 of the Constitution of India to remedy the same.

Undoubtedly, this is a hard case where a meritorious candidate has not met the requisite cut-off. However, this Court is unable to accept that there is any manifest error in the marking system or any systematic failure. There is no credible challenge to the relevant rules or any allegation that the procedure as prescribed has not been followed. Undeniably, the marking in examination of paper Law-I and Law-III has been strict. It is apparent that even though the marking has been somewhat strict, sufficient number of candidates have secured the qualifying marks.

Thus, in rare and exceptional cases, where it is established that there is a manifest error in evaluation of examination papers, the court may exercise powers under Article 226 of the Constitution of India to provide appropriate relief. In cases where it is established that the right of candidates for a fair evaluation in accordance with the specified procedure has been impinged, it may be necessary for the courts to exercise power to ensure that the rights of examinees are preserved.

The present case is undoubtedly a hard case but present Court is unable to accept that there is any manifest error in evaluation of the answer sheets that warrants any interference by this Court. It is relevant to note that answers to the questions set in the paper for Law-III were essay type questions and were evaluated subjectively. To ensure consistency, the answer-sheets were evaluated by the same examiner. In the given facts, this Court is unable to accept that any interference in the marks awarded to the petitioner is permissible, or any direction can be issued for revaluation of answer sheets, in exercise of its power under Article 226 of the Constitution of India. Petition dismissed.

Tags : Re-evaluation Answer-sheets Entitlement

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