High Court of Delhi

Sujeet Bhati vs. The State

MANU/DE/0409/2023

27.01.2023

Criminal

Pre-arrest bail is to be granted only when the court is convinced that circumstances exist to resort to extraordinary remedy

The present application is filed by the Applicant under Section 438 of the Code of Criminal Procedure, 1973 (CrPC) praying for grant of pre-arrest bail in FIR registered at Police Station under Section 420, 467, 468, 471, 506 and 120B Indian Penal Code, 1860(IPC). The application filed by the applicant under Section 438 of the CrPC was dismissed by the learned Additional Sessions Judge by order.

In the present case, the accused persons are not only found to have committed the offence of cheating but also committed the offence of forgery. The applicant, at this stage, cannot be said to be only an accomplice. The allegations and the investigation carried out till this stage points out towards the active role of the applicant in the commission of the offence. The applicant has not cooperated at all in the investigation, which led to the issuance of non-bailable warrants by the concerned Trial Court. The proceedings under Section 82 of CrPC have already been initiated.

Arrest is a part of procedure of the investigation to secure not only the presence of the accused but also to complete investigation. The grant of pre-arrest bail to some extent interferes in the sphere of investigation of an offence and hence, the court must be circumspect while exercising such extra ordinary power. Pre-arrest bail is to be granted only when the court is convinced that circumstances exist to resort to that extraordinary remedy and cannot be a matter of routine. Custodial interrogation is a recognized mode of investigation which is not only permitted but is held to be more effective.

The Hon'ble Apex Court, in the case of CBI vs Anil Sharma held that investigating a person appearing before the Investigating Officer under the protection of the Court order under 438 of the CrPC is qualitatively different from the custodial interrogation which would lead to better collection of evidence, thereby ensuring a proper investigation. Custodial interrogation is more elicitation - oriented than questioning an individual/suspect ensconced with a protection of Court Order.

Even though the accused is in custody, the forged documents as well as the cheated amount is yet to be recovered. The offence cannot be held to be of minor nature. The applicant has been named by not only the complainant but also other public witnesses to be actively involved with the accused. It cannot be said that the custodial interrogation of the Applicant is not required at this stage. It cannot be said, at this stage, that the allegations made against the applicant are frivolous or have been made to falsely implicate the applicant.

In the nature of allegations, and the fact that the applicant has not joined and cooperated in investigation which has also led to initiation of proceedings under Section 82 of CrPC, this Court feels that it is not a fit case for exercise of discretion under Section 438 of CrPC. Application dismissed.

Tags : Bail Grant Discretion

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Income Tax Appellate Tribunal

Gajender Singh Jadon, New Delhi vs. ACIT

MANU/ID/0128/2023

25.01.2023

Direct Taxation

AO has to specify the default for which the penalty notice is issued so that the assessee is aware of the charge against him

In facts of present case, the Department received information that, the assessee has deposited cash of Rs. 14,62,150 in his savings bank account with Delhi Nagrik Sahkari Bank Ltd. Enquiry letter sent to the assessee was not complied with. The Learned Assessing Officer ("AO"), after going through the legal formalities brought the said cash deposit to tax in his assessment order passed under Section 144/147 of the Income Tax Act, 1961 (IT Act). He initiated penalty proceedings under Section 271(1)(c) of the IT Act.

The Learned AO passed penalty order imposing penalty of Rs. 4,36,060 under Section 271(1)(c) of the IT Act against which the assessee filed appeal before the Learned CIT(A) who confirmed the said penalty observing that, the assessee has not controverted the findings of the Learned AO in appellate proceedings. Aggrieved, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto.

It is now well settled that, the Learned AO has to specify the default for which the penalty notice is issued so that the assessee is aware of the charge against him. For this purpose, it is mandatory that the relevant limb of the notice be specified whether the notice for penalty is for concealment of income or furnishing of inaccurate particulars of income. The Bombay High Court in the case of Mohd. Farhan A. Shaikh vs. ACIT has held that, no specification of charge in the penalty notice leads to same becoming void and penalty on that count is to be deleted.

However, the parties have agreed that the matter may be sent to the AO to examine from the assessment records whether the penalty notice was properly ticked or not. Present Tribunal consider it just and fair to remit the issue to the file of the AO to ascertain from the records whether the charge was specified or not in the penalty notice issued to the assessee. If on verification it is found that the relevant charge was not ticked off and the notice was omnibus notice, the penalty levied will not be sustainable. Appeal allowed.

Tags : Penalty Levy Legality

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NATIONAL COMPANY LAW APPELLATE TRIBUNAL

DCB Bank Limited vs. Mr. R. Sadasivan

MANU/NL/0060/2023

25.01.2023

Insolvency

Presumption of due service arises, when 'Notice' is sent to the proper and correct address

The 'Appellant' / 'Bank' has preferred the instant Comp. App. before present 'Tribunal' as an 'Aggrieved Person' being dissatisfied with the 'impugned order' passed by the 'Adjudicating Authority', whereby and whereunder, the 'Appellant' / 'Bank' was directed to refund a sum of Rs.11,30,40,034 to the 'Corporate Debtor's' Account in the 'Corporate Insolvency Resolution Process'.

When 'Notice' is sent to the 'proper' and 'correct address' of the 'Respondent', where he actually and voluntarily resides or carries on business or personally works for gain, there arises a 'presumption' of 'due service'.

At this stage, present 'Tribunal', on going through the 'order' is of the earnest opinion that the 'Appellant' / 'Bank' had candidly admitted that the 'Appellant' / 'Bank' was served 'Notices' not only to its 'Corporate Branch Office' and also, other 'Alternative Offices' on 16th July, 2021 and the same was duly served on 17th July, 2021 and 22nd July, 2021 respectively. It cannot be said that the Appellant was not provided with an 'enough opportunity' or 'adequate opportunity' to take its own decision in the subject matter in issue.

In the instant case, although the Appellant, has come out with a 'specific plea' that only due to 'Covid-19 Pandemic', the Appellant had 'skeletal staff' operation, both at the 'Corporate Office, Branch Office, etc. and that were the only reasons for the Appellant was not quite enough to enter its appearance in the 'subject matter' of the case before the 'Adjudicating Authority' ('Tribunal').

In spite of the reasons ascribed on behalf of the Appellant that, it was prevented because of 'Covid-19 Pandemic' and also added further the Staff members were in operation only in a 'skeletal manner' both at the 'Corporate and Branch Office', yet, present 'Tribunal', is of the considered view that the said reason of 'Pandemic' cannot hold water to and in favour of the Appellant and, especially, in the teeth of the Notices sent to the Bank's Corporate Office, Branch Office and Alternative Office were duly served on 17th July, 2021 and 22nd July, 2021, etc. when once the 'Notice' to a 'Person' / 'Entity' / 'Organisation' was duly served in terms of the NCLT Rules, 2016, then, the 'Adjudicating Authority' ('Tribunal') is left with no action but to Record that the Notices sent were held sufficient. Application dismissed.

Tags : Direction Refund Notice

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Supreme Court

The ESI Corporation vs. Radhika Theatre

MANU/SC/0055/2023

20.01.2023

Insurance

A factory or an establishment shall be governed by the ESI Act irrespective of number of persons employed

The ESI Corporation has preferred the present appeal feeling aggrieved and dissatisfied with the impugned judgment, passed by the High Court by which, the High Court has allowed the said appeal and has set aside the order passed by the Employees Insurance Court (EI Court) dismissing EIC in which the Respondent challenged the demand notice dated 31th August, 1994 issued by the ESI Corporation.

The short question which is posed for consideration of this Court is whether with respect to the demand notices post 20th October, 1989 a factory or an establishment, established prior to 20th October, 1989 shall be governed by the ESI Act notwithstanding that the number of persons employed therein at any time falls below the limit specified by or under the ESI Act?

The ESI Act being a social welfare legislation, any interpretation which would lean in favour of the beneficiary should be given. ESI Act should be given liberal interpretation and should be interpreted in such a manner so that social security can be given to the employees.

Prior to insertion of Sub-section (6) of Section 1 of the ESI Act, only those establishments/factories engaging more than 20 employees were governed by the ESI Act. However, thereafter, Sub-section (6) of Section 1 of the ESI Act has been inserted on 20th October, 1989, and after 20th October, 1989, there is a radical change and under the amended provision, a factory or establishment to which ESI Act applies would be governed by the ESI Act notwithstanding that the number of persons employed therein at any time falls below the limit specified by or under the ESI Act. Therefore, on and after 20.10.1989, irrespective of number of persons employed, a factory or an establishment shall be governed by the ESI Act.

Therefore, for the demand notices for the period after 20th October, 1989, there shall be liability of every factory or establishment irrespective of the number of persons employed therein. The High Court has committed a very serious error in observing that even for the demand notices for the period subsequent 20th October, 1989 i.e., subsequent to inserting Sub-section (6) of Section 1, the said provision is applied retrospectively and the High Court has erred in allowing the appeal and setting aside the demand notices even for the period subsequent to 20th October, 1989.

Sub-section (6) of Section 1 therefore, shall be applicable even with respect to those establishments, established prior to 31st March, 1989/20.10.1989 and the ESI Act shall be applicable irrespective of the number of persons employed or notwithstanding that the number of persons employed at any time falls below the limit specified by or under the ESI Act. The impugned judgment and order passed by the High Court is set aside and the demand notices for the period post 20.10.1989 are restored. Appeal allowed.

Tags : Demand Notices Legality

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NATIONAL COMPANY LAW APPELLATE TRIBUNAL

Ashoka Hi-Tech Builders Private Limited vs. Sanjay Kundra and Anr.

MANU/NL/0061/2023

18.01.2023

Insolvency

A collaborator in the development agreement is not a financial creditor

Present Appeal has been filed against the Order by which on an Application filed by the Home-Buyers, the Appellant has been removed from the Committee of Creditors. Appellant's case is that Appellant was a land owner on which the development project was to be constructed and he had filed the claim before the Resolution Professional which was admitted and he was inducted in the Committee of Creditors however subsequently on an Application filed by the Home-Buyers, impugned Order has been passed removing the Appellant from the Committee of Creditors holding that he is not the financial creditor.

Looking into the terms and conditions of the development agreement, the Adjudicating Authority has come to the conclusion that, the Appellant was not a financial creditor since no amount was disbursed for the time value of money on the basis of which the Appellant can be held to be financial creditor.

Judgement of this Tribunal in Namdeo Ramchandra Patil & Ors. Vs. Vishal Ghisulal Jain fully covers the issues and Adjudicating Authority has rightly referred to the Judgement holding that Appellant is not a financial creditor. The terms and conditions of development agreement entered Company Appeal between the appellant and the corporate debtor, makes it clear that the Appellant was a collaborator in the development agreement and not a financial creditor. There was no disbursement for time value of money by the Appellant within meaning of Section 5(8) of the IBC. There is no error in the order impugned. The Appeal is dismissed.

Tags : Committee Creditors Removal

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NATIONAL COMPANY LAW APPELLATE TRIBUNAL

Maharashtra State Electricity Distribution Company Ltd. Vs. NRC Limited & Anr.

MANU/NL/0062/2023

17.01.2023

Insolvency

Section 17 of Limitation Act does not come into play, when limitation is prescribed for an Appeal

The Appellant who is Maharashtra State Electricity Distribution Company Ltd. has filed present Appeal challenging the order of the Adjudicating Authority by which Resolution Plan was approved by the Adjudicating Authority.

The Appellant submits that, Appellant came to know about the fact that the order need to be challenged only on 29th June, 2022 when writ petition was filed by Successful Resolution Applicant seeking direction against the Appellant. It is submitted that, Appellant was not aware that he has to challenge the Order by that time and thereafter this Appeal has been filed on 22nd November, 2022. The Appellant has further relied on Section 17(1)(c) of the Limitation Act, 1963 to submit that Appellant is entitled to benefit of limitation.

In the present case, the Order which has been challenged is dated 13th March, 2020 and the Appeal has been filed in this Tribunal on 22nd November, 2022. The limitation for filing an Appeal is 30 days as per Section 61 of the Insolvency and bankruptcy Code 2016. The power of this tribunal for condoning the delay is of only 15 days as provided under Section 61(2) proviso of the IBC.

Section 17(1) of Limitation Act deals with period of limitation in the case of any suit or application. On the face of it, Section 17(1)(c) does not come into play in an Appeal when limitation is prescribed for an Appeal. Therefore, considering the limitation for filing an Appeal hence, Section 17(1)(c) of Limitation Act has no application in the facts of the present case. Application filed by the Appellant praying for condonation of delay of 244 days cannot be accepted. The Delay Condonation Application is dismissed.

Tags : Delay Condonation

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