MONTHLY REPORT FOR APRIL, 2009

CHIEF ADVISER

Pradeep K. Mittal B.Com., LL.B., FCS, pkm171@yahoo.com

Advocate--9811044365

Central Council Member The Institute of Company Secretaries of India

Sh C M Bindal, -9414962454 FCS

Company Secretary in Practice – JAIPUR

CONTRIBUTION FOR – SEBI LAWS

E-mail : cmbindal@yahoo.com

__________________________________________________________________ Sh. Rakesh Garg –9810216270 FCA

Practicing Chartered Accountant

CONTRIBUTION FOR - SALES TAX & VAT

E-mail: sahaigarg@hotmail.com ___________________________________________________________ Sh Himanshu Goyal – 9899566764 Chartered Accountants

M/s Ved Jain & Associates

CONTRIBUTION FOR – INCOME TAX

E-mail: goyalhimanshu@hotmail.com ___________________________________________________________ Sh. Pradeep kumar Aggarwal - 9811300732 Practicing Chartered Accountant

CONTRIBUTION FOR - Vedic Astrology

E-mail: peekay161@yahoo.com

_____________________________________________________________ HONORARY ASSOCIATES

Dr. Sanjeev Kumar M.Com. LL.B., Ph.D, PGDPIRL, FICWA, FCS

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SEB/SECURITIES LAWS BY SHRI C.M.BINDAL - 9414962454

NOTIFICATIONS/CIRCULARS/REGULATIONS/RULES:

Direct market access facility – Clarification in regard to para 3 of circular dated 3rd April, 2008. Circular No. MRD/DOP/SE/Cir-03/2009 dated 20th February, 2009.

SEBI Board decision – SEBI Board takes decisions on matters relating

to declaration of dividend, bonus issue, price band for IPO’s, etc. Press Release No.73/2009 dated 2nd February, 2009.

DIP Guidelines, 2002 – Amendments in Chapters II, IV, V, VIII, X, XI,

XIII and XV. SEBI/CFD/DIL/DIP/34/2009/24/09 dated 24th February, 2009.

Portfolio Manager – It has been decided to allow extension of three

months to comply with the requirements of sub-regulation (8) of regulation 16. IMD/Cir No.1/155740/2009 dated 27th February, 2009.

LEGAL CASES

VENEET AGRAWAL V. UNION OF INDIA (2009) 88 CLA 275 (SC):Where the statute provides the rules/regulations framed thereunder should be laid on the table of Parliament for a certain period which may be comprised in one session or two or more sessions, it is not necessary for the rules/regulations to be formally re-laid in the next session in

order to complete the prescribed period. Since section 31 permits the requisite period of 30 days in one or more sessions, there is no necessity to relay the rules/regulations before Parliament in the next session as per parliamentary procedure. Even if it is presumed that the Stock Brokers and Sub Brokers Rules/Regulations did not complete the requisite period of 30 days, in terms of the provisions of section 31 not being mandatory and merely directory, those Rules/Regulations cannot be held to be ultra vires on the ground of non-completion of 30 days period after laying of the Rules/Regulations before both the Houses of Parliament. [SEBI Act, 1992, sec. 31, and SEBI (Stock Brokers and Sub-Brokers) Rules and Regulations, 1992].

SATYANARAYANA AGARWAL V. ADJUDICATING OFFICER, SEBI

(2009) 89 SCL 229 (SAT-MUM): Magadh Stock Exchange Association (MSEA) was first recognized by the Government of India under s. 4 of SCRA in December, 1986. Due to breakdown in internal administration of the exchange and the malfunction of the council of management (CoM) of MSEA, the CoM was superseded by the Board in December, 1997 under s. 11 of SCRA and remained superseded till 7th June, 2000. Recognition of MSEA was renewed by the Board for three years on 9th Dec.,2000 and was again renewed on 19th Feb.,2004. MSEA was granted recognition for a further period of one year w.e.f. 11th Dec.,2004. Appellants pointed out the fact that in the website of the Board, MSEA was shown as a recognized stock exchange where the

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trades of the appellants were executed on the screen based trading system through a member broker who was registered with the Board and who issued the requisite contract notes to the appellants. Trades had been specifically permitted by the officiating executive director of the exchange. Surely, by executing the trades under such circumstances, the appellants cannot be said to have engaged in organizing or assisting in organizing an unrecognized stock exchange. Counsel for the appellants pointed out that they had not, at any stage, made any secret of their intention to purchase all the shares of BFSL through a recognized stock exchange. It is their case that they first went to the only stock exchange namely BgSE where the shares of BFSL were listed and were refused the facility of trading there. In the impugned order, the adjudicating officer merely expresses surprise at the refusal which, according to him, was not legally correct and points out that the appellants made no efforts to enforce their legal right to trade on BgSE. He, however, does not question the act of refusal by BgSE. After their effort to trade on the BgSE failed, the appellants got in touch with a member broker of MSEA and also a member of the CoM of MSEA at that time. Appellants relied upon the information regarding trading on MSEA furnished by B. No case has been made out by the Board that the appellants knew that though MSEA was a recognized stock exchange, trading was not allowed on its floor because it had not fulfilled certain conditions stipulated by the Board. Appellants cannot be held to have violated s. 19 of SCRA. [Securities Contracts (Regulation) Act, 1956, sections 19 & 23H].

D.G.GOENKA EQUITIES (P) LTD. V. SEBI (2009) 89 scl 259 (SAT-

MUM):If the regulations intended to include the heirs and successors of a corporate member of a stock exchange within the definition of a stock broker, the framers of the regulations would have specified so. However, the definition of a stockbroker in the regulations is simply that “stockbroker means a member of stock exchange”. This definition read with para 1(4) of Sch. III together with the Explanation thereunder makes it abundantly clear that the benefit of fee continuity is admissible only in case of conversion of an individual or partnership membership card into a corporate entity. In the present appeal, the erstwhile individual member expired even before the corporate entity was formed. Therefore, there was no question of his membership card being converted because his membership had ceased with his death. This case, therefore, cannot be covered by the Board’s Circular No. SMD/Policy/Cir-25/ 19058/2002 dated 30th Sept.,2002. In this view of the matter, there is no merit in the appeal. [SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992, regn. 10, Sch. III para 1(4)].

RITA RAJGOPAL V. COCHIN STOCK EXCHANGE LTD. (2009) 89 SCL 86 (SAT-MUM):Appellant sold shares to one J by way of a genuine transaction and sale consideration received. Stock Exchange could not demand exchange dues of J from appellant as a condition precedent for transfer of membership. In the affidavit filed on behalf of the exchange it is admitted that J had executed the transaction in question.

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Exchange has produced the computer statement and ledger extract showing that shares were sold by the appellant to J. No fault has been found with this trade. Trade is obviously genuine. Appellant sold the shares and received the consideration of Rs. 8.5 lakhs for the said sale. In this view of the matter, there is no justification on the part of the exchange to direct the appellant to settle the liability of J. If J was a defaulting member, it is for the exchange to take steps to recover the dues from him. Appellant cannot be made liable for those dues merely because she executed a trade whereby she sold shares to J. Action of the exchange cannot but be described as arbitrary. Exchange is directed to consider the application of the appellant for the transfer of her membership card in accordance with law. [Securities Contracts (Regulation) Act, 1956, s. 23L].

VAT / SALES TAX JUDGMENTS – SH. RAKESH GARG - 9810216270

VAT / SALES TAX JUDGMENTS (APRIL 2009)

Sale of ‘business’ as a going concern : - The dealer, who was engaged

in manufacture and sale of copper coated steel etc., sold its entire on-

going business including plant, machinery, movable and immovable

assets for a consideration. Held that transaction in question, though

resulting in sale of movable goods upon closure of business, by no

stretch of imagination or reasoning, could be said to have taken place

in the course of business of the petitioner as a dealer. [STI India Ltd.

vs. CCT (2009) 20 VST 37 (MP)]

Eligibility to purchase against form C : - Diesel, to be used in

operation of generator used for manufacture of ‘gur’, can be purchased

oat a concessional rate of CST on the strength of form C. [CTT vs.

Shubham Cane Crusher (2009) 20 VST 104 (All)]

Fee and taxes realized from the purchaser and paid – Not form part

of ‘sale price’ : - Rural Development Fee realized from the purchaser

and paid on behalf of purchaser is not includible in the ‘sale price’

since it was not an obligation of seller to pay the same. [Tilak Raj

Madan Mohan vs. State of Punjab (2009) 20 VST 351 (P&H)]

Tribunal to follow the earlier judgment by its predecessor : - A

Bench of co-ordinate jurisdiction should not disregard the decision of a

bench of the same strength on its own on an identical question, to

maintain the consistency, certainty and predictability in the

administration of justice. It should be referred to a Larger Bench in

case of difference of opinion. [Tilak Raj Madan Mohan vs. State of

Punjab (2009) 20 VST 351 (P&H)]

Service of notice etc. : - Notice was served by affixation, without

recording any finding that notice could not be served either personally

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or through registered post. Further, the procedure

prescribed for affixation of notice was also not followed. Held that it was

an invalid service of notice. [Gurprasad Ramprasad Agencies vs.

CTT (2009) 20 VST 368 (All)]

Liability of a director at the time of recovery proceedings : -

Director of the company cannot be proceeded against for the tax

payable by the company, as the company is a legal entity by itself,

unless there is an allegation that funds of the company had been

fraudulently transferred or siphoned off by the individual in its capacity

as director or the director has given his personal guarantee/surety for

the dues of the company. [Smt. Uma Singhania vs. Asstt. Collector

(Collection), Trade Tax (2009) 20 VST 252 (All); also Ravindra

Maheswari vs. CTO (2009) 20 VST 422 (Mad)]

Reassessment on the basis of figures disclosed before bank : -

Assessment was completed on the basis of returns filed by the dealer.

Subsequently, the AA came to know that the dealer has given much

higher figures of opening and closing stock to the bank for availing

cash credit limit. Reassessment order was passed on the basis of

figures given to the bank. However, the High Court held that in the

absence of sufficient material to substantiate that the figures given to

the bank by the dealer are correct and the transactions were outside

and beyond the account books, for which the burden lies on the

Department, reassessment is unjustified.[Asha Industries vs. CTT

(2009) 20 VST 465 (All)]

Reassessment on the basis of surrender of income: - Additions

cannot be made in the tax matters if the income is from undisclosed

sources and there is no material to show that the surrendered income

relates to the business activity of the dealer.[CTT vs. Panna Lal

Pramod Kumar (2006) 29 NTN 226 (All) relying upon P.C.

Ittymathew & Sons vs. Dy. CST (2001) 121 STC 1 (SC)]

Purchase against Form C : - Spare parts, to be supplied to the

customers against their warranty claims, amounts to resale and,

therefore, can be purchased against form C.[CTT vs. Kanpur Tractors

(P) Ltd. (2009) 20 VST 493 (All)]

Taxability of hospitals : - Replacement of natural lens with artificial

lens in the course of cataract operation, and the cost of lens being a

substantial amount, is a sale even if consolidated amount is charged

from the patient [Comtrust Eye Hospital vs. Addl. STO (2009) 20

VST 532 (Ker)]

Taxability of hospitals : - When artificial stent is fixed inside the blood

vessel or steel rod is installed to repair or reconstruct damaged human

bones, is a sale even if consolidated amount is charged from the patient

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since the cost of the implants is a substantial component

in the total consideration. [Malankara Orthodox Syrian Church vs.

STO (2004) 135 STC 224 (Ker)]

INCOME TAX – BY SH.HIMANSHU GOYAL - 9899566764

COMMISSIONER OF INCME TAX VS. P.M. ELECTRONICS LTD. (2009) 177 TAXMAN 1 (DELHI) : Section 43B, read with Section 36(1)(va), of the Income Tax Act, 1961 – Business disallowance – Certain deductions to be allowed only on actual payment. – Assessment year : 1998-99. Whether deletion of second proviso to Section 43B by way of amendment by Finance Act, 2003 is retrospective in nature. Held, yes. Whether amounts paid by employer towards provident fund contributions after due date prescribed under Employees’ Provident Fund Act but before due date for furnishing of return of income are allowable in view of section 43B, read with Section 36(1)(va) – Held, yes.

COMMISSIONER OF INCOME TAX VS. TRIVENI ENGINEERING &

INDUSTRIES LTD. (2009) 19 DTR (Del) 274 : Business expenditure – Capital or revenue expenditure – Administrative expenses incurred in connection with modernization of existing units. Through capitalized in the books of account, whole of the expenditure is allowable as revenue expenditure. Tribunal having correctly appreciated the law on the point and applied the same to the undisputed facts, no substantial question of law arises for consideration.

Raghuraj Prasad Pratap Singh & Ors. Vs. Asstt. CIT(AII) (2009)

222 CTR Reportrs : Search and Seizure – Authorisation under s. 132(1). Powers of Addl. Director of IT. Warrant of authorization issued by Addl. Director of IT (Inv.) was not a legal authorization, hence search made in pursuance of such authorization as well as proceedings for block assessment under s. 158BC were invalid.

ASSISTANT COMMISSIONER OF INCOME TAX VS. KEWALCHAND

DAKALIA (2009) 19 DTR (Jd)(Trib) 317 : Assessment – Validity – Absence of service of notice under s. 143(2). Service of notice under s. 143(2) by affixture on a chartered accountant, the holder of earlier of power of attorney filed along with return being invalid, consequent best judgement assessment was also invalid. There is no compliance of mandatory requirement of service of notice under s. 143(2) which resulted in not affording proper opportunity to the assessee of hearing.

KOPRAN PHARMACEUTICALS LTD. VS. DEPUTY COMMISSIONER

OF INCOME TAX (2009) 121 TTJ (Mumbai) 77 : Company-Book profit under s. 115JB – Capital gains –In view of cl. (3)(xii)(b) of Part-II

of Sch.VI to the Companies Act, 1956, profits and losses from transactions of exceptional nature are required to be disclosed, therefore, capital gains arising from transfer of assessee’s factory gala shall form part of book profits for purposes of s.115 JB. – CIT Vs.

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Veekaylal Investment Co. (P) Ltd. (2001)m 166 CTR (Bom) 96 : (2001) 249 ITR 597 (Bom) followed

COMMISSIONER OF INCOME TAX VS. SAMTEL COLOR LTD. (2009)

19 DTR (Del) 295 : Business expenditure- Allowability – Corporate membership fee paid to clubs – Is allowable expenditure being for business purpose. Business expenditure-Capital or revenue expenditure – Corporate membership fee paid to clubs – Admission fee paid towards corporate membership is an expenditure incurred wholly and exclusively for the purposes of business and not towards capital account as it only facilitates smooth and efficient running of a business enterprise and does not add to the profit earning apparatus of a business enterprise. An expenditure which gives enduring benefit is by itself not conclusive as regards the nature of the expenditure – Even lump sum payment which was the case in the instant matter, is not decisive as regards the nature of the payment.

EMERSON NETWORK POWER INDIA (P) LTD. VS. ASSISTANT

COMMISSIONER OF INCOME TAX (2009) 19 DTR (Mumbai)(Trib)441 : Business expenditure – Allowability – Class made at the time of assessment – Claim not made in the course of assessment. AO was made obliged to give due relief to assessee or entertain its claim if admissible as per law even though the assessee had not filed revised return. Legitimate claim of assessee should not be rejected on technical grounds.

CANARA BANK GOLDEN JUBILEE STAFF WELFARE FUND VS.

DEPUTY COMMISSIONER OF INCOME TAX (2009) 222 CTR (Kar) 286 : Income – Mutuality – Interest and dividend income of welfare society of employees of bank – Assessing society has been formed for the mutual benefit of its members and advancing loans to members. Source of the funds was only the contributions made by the members of the assessee and it did not receive any donation or monetary grant from any outside source during the relevant assessment years. It is the members’ contribution which he has become the corpus fund and the portion of the fund which was not advanced to the members was invested for the purpose of safe custody and not with an intention to derive profit by way of interest or dividend. Though the bank in which the surplus fund was deposited forms a third party vis-à-vis the assessee, it can not be said that the identity between the contributors and the recipients is lost. Therefore, income earned by the assessee by way of interest on investment and dividend on shares is governed by the principle of mutuality and is not taxable.

COMMISSIONER OF INCOME TAX VS. SAMTEL COLOR LTD. (2009)

19 DTR (Del) 295 : Business expenditure- Allowability – Corporate membership fee paid to clubs – Is allowable expenditure being for business purpose. Business expenditure-Capital or revenue expenditure – Corporate membership fee paid to clubs – Admission fee paid towards corporate membership is an expenditure incurred wholly and exclusively for the purposes of business and not towards capital

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account as it only facilitates smooth and efficient running of a business enterprise and does not add to the profit earning apparatus of a business enterprise. An expenditure which gives enduring benefit is by itself not conclusive as regards the nature of the expenditure – Even lump sum payment which was the case in the instant matter, is not decisive as regards the nature of the payment.

EMERSON NETWORK POWER INDIA (P) LTD. VS. ASSISTANT

COMMISSIONER OF INCOME TAX (2009) 19 DTR (Mumbai)(Trib)441 : Business expenditure – Allowability – Class made at the time of assessment – Claim not made in the course of assessment. AO was made obliged to give due relief to assessee or entertain its claim if admissible as per law even though the assessee had not filed revised return. Legitimate claim of assessee should not be rejected on technical grounds.

CENTRAL EXCISE LAWS - BY SHRI P K MITTAL

As per Agreement if the goods sold are either ex-factory or ex-depot, then the transportation and insurance charges, if any, incurred are liable to be excluded from the assessable value of the goods under Section 4 of the Central Excise Act, 1944. CCE Vs. Accurate Meters Ltd 2009(235) ELT 581 (SC).

The rectification/review application would be maintainable to take into

consideration the judgment of the Supreme Court, if delivered subsequently, declaring the law as it always was, after the passing final judgment of the Tribunal. Shree Madhi Vibhag Khand Udyog Sahakari Mandli Ltd Vs. CCE 2009(235) ELT 670 (Tri).

If the demand is raised in the Notice straightway without first issuing

Show Cause Notice and adjudicating the same, then the Commissioner (Appeal) would not be justified in holding that no appeal lies against the order of notice by the Department. Hinduja Foundries Ltd vs. CCE 2009(235) ELT 678. (Tri).

As per the provisions of Standards of Weights & Measures Act, if no

MRP is required to be mentioned, then no excise duty is required to be paid as per Section 4A of the Central Excise Act, 1944. CCE Vs. Acme Heathcare 2009(235) ELT 682 (Tri).

The Limitation for issuance of Show Cause Notice starts from the date

of search and seizure of documents or from date of completion of investigation. CCE Vs. Nandeshwari Packaging 2009(235) ELT 697 (Tri).

The different assessable value would be permissible for the purpose of

calculation of Excise Duty when the same goods are transferred to assessee’s own depot as well as sold to other oil companies. Indian Oil Corporation Ltd Vs. CCE 2009(235) ELT 702(Tri).

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The goods, when sold, are in bulk and not in retail sale, then under the provisions of Standards of Weight & Measures Act do not apply and, therefore, the duty would be payable under Section 4 of the Central Excise Act, and not under Section 4A – even if on the very same goods, the duty is otherwise payable under Section 4 of the Central Excise Act,1944.

The penalty for non-realization of export proceeds could be imposed on

firm. The writing of one or two letters by a partner could not construed as a definite efforts in realilzation of export proceeds. The penalty would yet be imposable even if no sale proceeds have been received and there was a total loss in the transaction. Nazneen Vs. Director of Enforcement 2009(235) ELT 779(Raj).

The “Tatoo” kept inside in the pack of chewing toffee by way of sale

promotion, could not be treated a “input” so as to entitle the assessee to take the cenvat credit of duty paid on purchase of such “Tatoo”. Perfetti Van Melle India (P) Ltd Vs. CCE 2009(235) ELT 850 (Tri).

At the stage of appeal before the Tribunal, new ground has been raised

and new materials has been filed alongwith the Appeal, could be permitted to be placed if absolutely necessary for the fair trial of the appeal. The matter remanded to the Adjudicating Authority to consider the “new materials” placed. Innosoft Technology Ltd Vs. CCE 2009(235) ELT 870 (Tri).

SERVICE TAX - BY SHRI P K MITTAL

If the property in goods does not pass on to the buyer till delivery, the assessee would be entitled to take Cenvat Credit of Service Tax on outward freight has been treated as input services during the relevant period. Ambuja Cements Ltd Vs. UOI 2009(14) STR 3 (P&H).

If though there is no specific provision enabling the authority to reduce

the quantum of penalty, yet he would have power to reduce the penalty in the light of the peculiar facts of the case to apply discretion and reduce the quantum of penalty. CCE Vs. Vishwanath 2009(14)STR 9 (Karnataka).

If the Excise Duty has been fastened on a company and the duty has

not been paid, then such duty cannot be recovered from the Joint Venture company in which defaulting company is holding shares as a equity as Joint Venture partner. CCE Vs. Sandvik Asia Ltd 2009 (14)STR 11 (Guj).

Where there is a separate contract for providing C&F Agent services

and separate contract for providing transportation charges, the Service

Tax payable on the “transportation charges” cannot be clubbed with C&F Agent Services. Aksh Optifibers Ltd Vs. CCE, Jaipur 2009(14) STR 15 (Tri).

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The Service Tax on the 100% value of the amount cannot be recovered in respect of activities providing re-treating of tyres as 70% constitute the value of goods/materials used for providing services and remaining 30% could be held to be value of services provided by the assessee. PLA Tyres Works Vs. CCE 2009(14) STR 32 (Tri).

Where the provisions of any act confer no power to the Court or confer

power to the Court to grant condonation of delay upto a particular period, the Court cannot, in its exercise of inherent power, cannot condone the delay beyond the period so prescribed in filing an appeal – so held by Division Bench of Bombay High Court. CCE Vs. Shruti Colarants Ltd. 2009 (13) STR 358.

If the seized documents have not been returned and were sought to be

used by the Department against the assessee and the assessee has

been called upon to file Reply to the Show Cause Notice, The Adjudicating Authority is not legally competent to test the defence as to whether the same is genuine or false or untrue. The legal defect of not supply of documents cannot be cured even at the appellate stage and the order-in-original, confirming demand of duty and penalty, being in violation of principle of natural justice, is liable to be quashed. Steel Fittings MFG Co.Ltd. Vs. CCE 2009 (13) STR 439.

A Sick Industrial Company, whose reference is pending before BIFR, is

entitled to protection of Section 22 of SICA provided the demand or duty pertains to the period prior to the date of Registration so held by the Division Bench of Gujarat High Court. Navpad Textile Industries Ltd. Vs. Union of India 2009 (13) STR 460 Gujarat.

Every Tribunal and Court has inherent power to set-aside and/or recall

the ex-parte order even if the same is passed on consideration of merit, if it is shown that the party was unable to appear for no fault of his own and the ex-parte order is liable to be recalled. Yamuna Bardana Traders Vs. CCE 2009 (13) STR Page 462. Punjab & Haryana High Court.

COMPANY ACT AND MARTP ACT -- BY SHRI P K MITTAL

Failure to pay the accrued interest or statutory interest on the principal sum payable by the debtor, could be equated with debt and, therefore, winding up petition would be maintainable for recovery of only interest – so held by Supreme Court. Vijaya Industries Vs. NATL Technologies Ltd. 2009 (89) CLA 7 SC.

The Company Court under the Companies Act,1956 is not entitled to

adjudicate about the legality or otherwise of the proceedings initiated

by the Customs Department under the Customs Act. In case the proceedings are defective, the aggrieved party is entitled to challenge the same before the adjudicatory or the appellate authority prescribed

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under the Customs Act and not before the Company Court under the Companies Act. Superintendent of Custom Vs. Shree Vishnu Priya Industries Ltd., 2009 (89) CLA page 24 Andhra DB.

In case the Bank has classified an account as NPA and has initiated

action U/s 13(2) opf the Securitization Act, such classification cannot be challenged by way of writ petition before the High Court but the legal and proper remedy is to challenge the same by way of petition before Debt Recovery Tribunal in a proceedings U/s 17 (1) of Securitization Act. Core Ceramics Ltd Vs. Union of India 2009 (89) CLA 37 Bombay High Court..

In case a Scheme of Compromise has been devised by the creditors

(scheme not being oppressive or unreasonable) and being in the interest of employees, workmen, suppliers, and other person concerned , the Scheme of Compromise is liable to be sanctioned U/s 391 and the same has been approved by 80% of the total value of the creditors. Modern Denim Ltd. 2009 (89) CLA 49 (Rajasthan).

When the matter concerning violation of SEBI Takeover Code and SEBI

Insider Trading Regulations are being examined and looked into by SEBI, it would be pre-mature on the part of CLB to order for rectification of Register of Member on the very same ground and also to pass a verdict on the issue of violation of Takeover Code or Regulation. Zandu Pharmaceuticals Works Ltd. Vs. Devkumar Baidya 2009 (89) CLA 65 CLB.

Where one of the joint venture partner has filed a criminal complaint

against the other joint venture partner and the relationship between the two groups is highly strained and explosive and, therefore, are difficult to be harmonious hence to bring an end to the oppression of mis-management, it is better one of the group part company by disposing off their shares. C.G.Holdings Pvt.Ltd. Vs. Cheran Enterprises Pvt.Ltd. 2009(89) CLA 101 CLB.

CORPORATE CRIMINAL LAWS -- BY SHRI P K MITTAL

In case a criminal proceedings have been initiated either with malafide intention or maliciously instituted with ulterior motive for wrecking vengeance on the accused persons, the said criminal proceedings are liable to be quashed by way of petition U/s 482 of Cr.P.C. by the High Court – so held by Supreme Court. Mahindra & Mahindra Financial Services Ltgd. Vs. Rajiv Dubey 2009 (1) SCC 706.

Even if the offence is not compoundable within the scope of Section 320

of Cr.P.C., the High Court may, in view of the compromise having been arrived at between the parties, yet, quash the proceedings on a petition under Section 482 of Cr PC so that both the parties can live peacefully without having to suffer the litigation filed against each other –so held by Supreme Court. Putta Swamy Vs. State of Karnataka 2009 (1) SCC 711.

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In a proceedings U/s 138 of NI Act, the offence U/s 138 of NI Act would

be complete not by mere issuance of notice but by receipt of notice by the notice and non payment of amount within 15 days so given in the notice – so held by Supreme Court. Herman Electronics Pvt.Ltd. Vs. National Panasonic India Pvt. Ltd. 2009 (1) SCC 720 SC

The High Court on a petition U/s 482 of Cr.P.C. for quashing of

criminal complaint, if the allegation set out in the complaint do not constitute offence and for that purpose, the High Court need not meticulously analyze the case pending before the Trial Court to find out as to whether the case would end in conviction or acquittal. The complaint is quashable only when it does not makes out absolutely clear cut case. U.P. Pollution Control Board Vs. DR. B.K.Modi 2009 (2) SCC 147.

Non-working independent director cannot be held liable for disohonour

of cheque issued by the Company unless their role is clearly defined and specified in the complaint U/s 138 of the NI Act and merely writing in the compklaint under Section 138 of NI Act, that “The Accused is Director and also is incharge and responsible for day to-day affairs of the Company” is not enough. Manish Kant Agrawal Vs. NAFED 2009 (156) DLT 415.

CIVIL AND ARBITARTION LAWS - BY SHRI P K MITTAL

If a copy of the Award passed by the Arbitrator, has been sent under an envelope at the correct address with requisite postal stamp and sought to be delivered by the Postman and on one day the addressee is not available and on the second day the addressee on seeing the envelope refusing to receive, it would amount to service of envelope upon the addressee – so held by Supreme Court. Kailash Rani Dey Vs. Rakesh

Bala Aneja 2009 (1) SCC 732.

In case a Public Authority is required to pass an Judgment or Order in terms of any provisions of Law within the stipulated time and if the order is not passed within the prescribed time limit, it would not nullify or vitiate the said order. MPSEB Vs. S.K.Yadav 2009 (2) SCC 50 SC.

When a party with-held the original documents deliberately and did not

place the same on the record of the case despite the fact that the same was in their possession, subsequently the party cannot be allowed to lead secondary evidence U/s 65 of Evidence Act so held by Delhi High Court. Ashok Kumar Garg Vs. Anil Kumar Gupta 2009 (157) DLT 95.

While considering the application seeking condonation of delay in initiating the legal proceedings, the conduct of the party to prosecute the legal remedy is very important and the number of days’ and of on merits, the party has a strong case, the delay is liable to be condoned irrespective of number of days delay so held by Delhi High Court. Jagat Singh Vs. Hoshiari Devi 2009 (157) DLT 90.

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In a Suit for specific performance in respect of immovable property, the

Court fees would be payable at a value/consideration shown in the Agreement to Sell, of which specific performance has been sought so held by Delhi High Court. Taranjit Kaur Vs. G.S.Bhatia 2009 (156) DLT 654.

If any judgment or order is obtained by fraud, it cannot be said to be

judgment or order in law and the same is liable to be recalled and set-aside. The judgment/decree or order by first Court or by appellate court by a final Court i.e. Supreme Court has to be treated as nullity in law by every court, superior or inferior, and it can be challenged in any Court at anytime, in appeal, revision, writ or even in collateral proceedings so held by Supreme Court and the word “Fraud” is wide so as include even withholding of important document- so held by Supreme Court. Eastend Apartments Cooperative Group Housing Society Vs. DDA 2009 (157) DLT 272.

If one of the terms and conditions in the invoice is about the rate of

interest payable in case of delayed payment, the said condition would constitute a binding agreement between the parties and the party shall be liable to that rate of interest. Voltas Limited Vs. Union of India 2009 (156) DLT 122.

The Sale Deed of an immovable property executed in violation of interim

order of injunction, would not be illegal or void. Any sale deed executed during the pendency of suit for specific performance would be governed by doctrine of lis-pendens as enunciated U/s 52 of Transfer of Property Act and would adversely effect the right of the subsequent purchaser of the said immoveable property – so purchased during the pendancy of the suit for specific performance. A.K.Chatterjee Vs. Ashok kr Chatterjee 2009(156) DLT 477.

CONSUMER PEORTECTION LAWS -- BY SHRI P K MITTAL

The medical practitioner cannot be held liable for negligence because of error of judgment, mis-adventure and would only be liable if there is a gross negligence in discharge of professional duties and his conduct is substantially below the standard of reasonably competent practitioner – so held by Supreme Court. Martin Vs. Mohd. Isfaq 2009 (157) DLT 391 SC.

Against the Order of State Commission, an Appeal/revision lie before

the National Commission and the aggrieved party is not entitled to file petition U/s 227 of the Constitution of India before the High Court seeking to quash the order of State Commission just because the same

is not in accordance with law, although, on merit, the party may have strong case in their favour. The remedy under article 227 of the

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Constitution of India would be available only if the Petitioner was left with no other remedy as prescribed under the law so held by Delhi High Court. Cox &Kings India Ltd. Vs. Raj Kumar Mittal 2009 (156) DLT 467.

INDUSTRIAL & LABOUR LAWS -- BY SHRI P K MITTAL

In case the Industrial Court makes an ex-parte Award, the parties are entitled to move an application under Order 9 Rule 13 CPC, the Industrial Court is competent to set-aside the ex-parte award despite the fact that Award has been published provided the party was prevented by sufficient cause from appearing. R.M. Tripathi Vs. L.H.Patel 2009 (2) SCC 81.

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