In this case, the Supreme Court was considering a
petition under Article 136 of the Constitution of India against a decision of a
Single Judge of the High Court of Judicature at Bombay whereby the High Court
had rejected the objections of the Appellants (under Section 48 of the
Arbitration and Conciliation Act, 1996) to the enforcement of a foreign award
against them.
Inter alia, the Court
noticed that the petition was filed under Article 136 since Section 50 of the
Act did not provide for any appeal against the decision of a Court enforcing
the award, but only one against a decision of the Court refusing enforcement.
It was observed that this was reflective of the legislative policy to not allow
an unsuccessful party in a foreign award, another bite of the cherry viz., another
round of challenge in Courts in India. India being a signatory to the
Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958
(i.e. the New York Convention), the legislature assumed that the foreign award
had been subjected to challenge in an appropriate foreign jurisdiction, and
therefore ought not to be subjected to any other challenge. Therefore, the
foreign award could be shown to be unenforceable in India only on
the limited grounds available in Section 48.
Having found no merit in the challenge by the
Appellants, and having found that the Appellants had sought to make submissions
against the Foreign Award as if in first appeal, and further having noted the
limited jurisdiction under Article 136, the Court dismissed the Appeals with
exemplary costs of Rs. 50 lacs being imposed on the Appellants.
Maruti Suzuki
India Ltd. v. Commissioner of Income Tax, Delhi
[Civil Appeal
No. 11923 of 2018 and connected matters, decided on 7.2.2020]
The question examined by the Supreme Court in this
case was as to whether unutilized MODVAT credit of Excise Duty in favour of an
assessee was allowable as a deduction from taxable income under Section 43B of
the Income Tax Act, 1961 (“I-T Act”).
The principle argument of the assessee was that
unutilized MODVAT credit was as good as excise duty paid under the Central
Excise Act, 1944 (“CE Act”) due to the fact that the assessee paid excise
duties on the raw material used as input in manufacturing.
The assessee also relied on the decision of the
Supreme Court in Eicher Motors Limited and Anr. v. Union of India and Ors.
in support of its submission.
The revenue submitted that deduction under Section
43B of the I-T Act was available only when the amount of tax, cess etc. was due
and payable and the assessee actually paid the same.
The Court held that unutilized MODVAT credit was not
a sum payable by the assessee by way of tax, duty and cess. Further, it was
held that unutilized MODVAT credit was not a sum actually paid by the
assessee.
The decision in Eicher Motorswas
distinguished by holding that the said decision could not be read to mean that
the payment of Excise Duty by the assessee which was a component of sale
invoice purchasing the raw material/ inputs by the assessee, was also payment
of Excise Duty on raw materials/ inputs (sic. finished goods).
The appeal was thus dismissed.
M/s
Dharmaratnakara Rai Bahadur ArcotNarainswamyMudaliarChattram& Other
Charities &Ors. v. M/s Bhaskar Raju & Brothers &Ors.
[Civil Appeal
No. 1599 of 2020 decided on 14.2.2020]
The Supreme Court was called upon to examine the
correctness of a decision of the High Court of Karnataka under Section 11 of
the Arbitration and Conciliation Act, 1996, whereby the High Court had referred
the Appellants on the one hand and the Respondents on the other, to arbitration
on the basis of a lease deed entered into between the parties. It was the
contention of the Appellants that the High Court could not have relied upon the
arbitration clause contained in the lease deed in question on account of the
fact that the same was not duly stamped as required under the Karnataka Stamp
Act. The contention of the Respondent was that the document in question was in
fact an agreement to enter into a lease, and therefore did not require stamp
duty under the Karnataka Stamp Act.
During the course of the proceedings, the High Court
had referred the question as to whether the document was a lease deed, for
determination by the Registrar of the High Court. In spite of having done so,
the High Court proceeded to ignore the report of the Registrar while allowing
the Section 11 application.
The Supreme Court set aside the decision of the High
Court, while relying on its decision in SMS Tea Estates Pvt. Ltd. v.
Chandmari Tea Company Pvt. Ltd. wherein it was held that if an arbitration
clause was contained in a lease deed which was not stamped in accordance with
the requirements of the applicable Stamp Act, the parties thereto could not be
referred to arbitration relying on that clause, notwithstanding that an
objection to that effect was not raised by any party.
Kerala State
Electricity Board Represented by Its Secretary &Anr. v. Principal Sir Syed
Institute for Technical Studies &Anr.
[Civil Appeal
No. 8350 of 2009 and connected appeals, decided on 20.2.2020]
The question involved in this case was as to the
legality of a tariff notification issued by the Kerala State Electricity
Regulatory Commission under Section 62 of the Electricity Act, 2003 whereby
Self Financing Educational Institutions were categorized separately for the
purpose of electricity tariff, than the Government run and Government aided
private educational institutions. The tariff notification had been challenged
before a Ld. Single Judge of the High Court, who had upheld the same, while the
Division Bench had reversed the decision of the Ld. Single Judge and quashed
the notification as being discriminatory.
One of the arguments of the Respondent which had
found favour with the Division Bench of the High Court was that the tariff
notification did not disclose any reason for the differentiation between Self
Financing Educational Institutions and other Institutions. The Division Bench
had held that the Commission performed quasi judicial functions under Section
62 of the Act, and therefore reasons ought to have been given.
It was held by the Supreme Court that the
Commission’s quasi judicial functions did not commence until it was called upon
to carry out an adjudicatory role. It was held that if a tariff proposal was
duly published and no objections were made thereto (as in the present case),
the duty to state reasons for the tariff fixation did not arise. It was held
that in such a situation, the exercise under Section 62 was a quasi-legislative
exercise and a tariff notification without reasons could not be faulted with in
such a situation.
Oil and Natural
Gas Corporation v. Krishan Gopal &Ors.
[Civil Appeal
No. 1878 of 2016 and connected matters, decided on 7.2.2020]
In this case, the Supreme Court was considering the
question of regularization of the Respondents, being the workmen of the
Appellant before the Supreme Court. The Supreme Court was called upon to test
the correctness of the decisions of the High Courts of Andhra Pradesh, Delhi,
Uttarakhand a decision of the Madras High Court dated 29.1.2018 (all in favour
of regularization, and thus impugned by ONGC); and a decision of Madras High
Court dated 20.11.2015 (rejecting the plea for regularization, thus impugned by
the workmen).
The High Courts in favour of regularization had
relied upon the decision of the Supreme Court in Oil and Natural Gas
Corporation v. Petroleum Coal Labour Union to allow the claim for
regularization. ONGC argued before the Supreme Court that the decision in ONGC
v. PCLU was per incuriam for having ignored the previous decisions
of the Supreme Court on the interpretation of Item 10 of Schedule V of the
Industrial Disputes Act, 1947 (“ID Act”).
Upon an analysis of the decision in ONGC v. PCLU,
the Supreme Court concluded that the same ought to be reconsidered on account
of the view taken therein, on an interpretation of Clause (ii) of the Certified
Standing Orders applicable to ONGC.
Mohammed Yusuf
and Ors. v. Raj Kumar &Ors.
[Civil Appeal No.
800 of 2020 decided on 5.2.2020]
The Supreme Court interpreted Sections 17(1)(b) and
(c) and Section 17(2)(vi) of the Registration Act, 1908 to examine whether a
compromise decree which encompassed properties not forming subject matter of
the suit in which the compromise was arrived at, was compulsorily registrable
or not.
In the facts of the case, the Trial Court had held a
compromise decree of 1985 relied upon by the defendant before the Trial Court
as inadmissible in evidence on account of the fact that the same was not
registered. The Trial Court had held the decree to be compulsorily registrable
on account of the fact that it created rights title and interest in immovable
property for the first time. The decision of the Supreme Court in Bhoop Singh
v. Ram Singh Major was relied upon. The High Court further confirmed the
judgment of the Trial Court while holding that since the compromise was arrived
at in a suit wherein the plaintiff sought declaration on a plea of adverse
possession, and since adverse possession could only be used as “a shield and
not a sword” (as held in Gurudwara Sahib v. Gram Panchayat Village Sirthala
and Another), the compromise decree which created rights for the first
time, was compulsorily registrable.
The Supreme Court reversed the decisions of the
Courts below by noticing the plain meaning of the aforesaid provisions of the
Registration Act. It was held that the exception in Section17(2)(vi) [which
provision was an exception to the rule of compulsory registration under Section
17(1)(b) and (c)] was in favour of compromise decrees which covered immovable
properties not covered by the subject matter in the suit. It was held that as
long as the compromise decree only pertained to the subject matter of the suit
in which the compromise was arrived at, the same did not require registration.
In the facts, it was found that the 1985 decree pertained only to the subject
matter in the suit and was therefore non-registrable.
Standard
Chartered Bank v. MSTC Limited
[Civil Appeal
No. 501 of 2020 decided on 21.1.2020]
The question before the Supreme Court was whether an
application for review under Section 22(2)(e) of the Recovery of Debts Due to
Banks & Financial Institutions Act, 1993 (“RDDB Act”) read with Rule 5A of
the Debt Recovery Tribunal (Procedure) Rules, 1993 (“Rules”) of an order passed
by the Debt Recovery Tribunal (“DRT”) was maintainable after expiry of the 30
day period prescribed under Rule 5A.
The argument of the Respondent before the Supreme
Court was that the delay in filing a review application could be condoned in
view of Section 24 of the RDDB Act, which made the Limitation Act, 1963
applicable to the ‘applications’ to the Tribunal under the RDDB Act. It was
submitted that the application for review emanated from the application under
Section 19 of the Act, and once treated as such, the provisions of Section 24
would be squarely applicable. This being the case, power of condonation of
delay under Section 5 of the Limitation Act was also applicable.
The arguments were rejected by the Supreme Court by,
at the outset, relying on the definition of ‘application’ in Section 2(c) to
conclude that an application under Section 22(2)(e) could not be equated with
an application under Section 19, for the purpose of Section 24 of the RDDB Act.
The Court further held that its decision in International Asset
Reconstruction Company of India Limited v. Official Liquidator of Aldrich
Pharmaceuticals Limited and Ors. (which was rendered in the context of
power of condonation of delay in an appeal under Section 30) was squarely
applicable to the present facts, since the said decision clearly held that
Section 24 was exclusively applicable to Applications under Section 19.
Sushil Sethi and
Another v. State of Arunachal Pradesh and Others
[Criminal Appeal
No. 125 of 2020 decided on 31.1.2020]
The decision arose out of an Order of the High Court rejecting the
Appellants’ prayer for quashing of a criminal complaint against them under
Sections 420 and 120B of the Indian Penal Code (“IPC”). The complaints had been
filed by the Respondents against the Appellants alleging that the Appellants
(who were Managing Director and Director of SMPL Infra Limited) had supplied
material of a different specification than as mandated by the Memorandum of Understanding
entered into between the Respondents and SMPL Infra Limited for construction of
a Hydel Power Project. It is noteworthy that the Company itself was not named
as an accused in the complaint.
The petition before the High Court came to be filed by the Appellants
seeking quashing of the complaint inter alia on the ground that the
dispute was purely of a civil, contractual nature.
After examination of various decisions on the subject, the Supreme Court
held that in order to constitute an offence of cheating, specific allegations
and averments must exist which make out fraudulent and dishonest intention of
the accused from the very beginning of the transaction. Further, it was noticed
that in the absence of the Company being made party, allegations were levelled
against the Managing Director and the Director, which was impermissible in the
absence of any provision for imposition of vicarious liability on the Directors
in the IPC.
Other Notable Judgments
C.S. Venkatesh
v. A.S.C. Murthy (D) by LRs and Ors.
[Civil Appeal
No. 8425 of 2009 decided on 7.2.2020]
In this case, the Supreme Court interpreted Section
16(c) of the Specific Relief Act and reiterated the legal position that
‘readiness and willingness’ of the plaintiff in a suit for specific performance
must be inferred from the conduct of the plaintiff prior to and subsequent to
filing of the suit, along with attending circumstances. The Court held that a
mere statement of ‘readiness’ in the plaint will not suffice.
Mukesh Kumar
&Anr. v. State of Uttarakhand and Ors.
[Civil Appeal
No. 1226 of 2020 and connected matters decided on 7.2.2020]
The Supreme Court held in this case that Articles
16(4) and 16(4-A) of the Constitution of India could not be read to confer a
fundamental right in favour of Scheduled Castes and Scheduled Tribes to claim
reservations in matters of promotion. The said Articles were held to be
enabling provisions for the State to exercise the power of reserving
promotional posts, based on its subjective satisfaction as to the necessity of
such reservation, and while maintaining a balance with the efficiency of
administration as mandated under Article 335 of the Constitution. The
subjective satisfaction, it was reiterated, was subject matter of judicial
review, as held by the Supreme Court in Barium Chemicals v. Company Law
Board.
Sobha Hibiscus
Condominium v. Managing Director, M/s Sobha Developers Ltd. &Anr.
[Civil
Appeal No. 1118 of 2016 decided on 14.2.2020]
The Supreme Court dealt with the question as to
whether the Appellant in the case was a ‘recognised consumer association’ in
terms of Section 12(1)(b) of the Consumer Protection Act, 1986, and the
Explanation appended thereto. The Appellant was a mandatorily constituted
association of apartment owners under the Karnataka Apartment Ownership Act,
1972. The Court found that on account of the mandatory nature of incorporation
of the Appellant association, it could not be said to be a ‘voluntary’
association within the meaning of the aforesaid provision. It was held that a
voluntary consumer association would be a body formed by a group of persons
coming together, of their own will and without any pressure or influence from
anyone and without being mandated by any other provisions of law.
APS Forex Services Pvt.
Ltd. v. Shakti International Fashion Linkers &Ors.
[Criminal Appeal no.
271 of 2020 and connected appeals, decided on 14.2.2020]
The Supreme Court reiterated in this case, that once
the accused in a case under Section 138 of the Negotiable Instruments Act, 1881
(“NI Act”) admitted his signature on a dishonoured cheque, there existed a
presumption of the existence of a debt or a liability under Section 139 of the
NI Act. The presumption was a rebuttable presumption, and the accused was thus
called upon to prove that there did not exist such a debt or liability.
The Supreme Court further held that while rebutting
the presumption under Section 139, if the accused has questioned the financial
capability of the complainant, the burden once again shifts to the complainant
to prove his case.
The State of Karnataka
&Anr. v. N. Ganaraj
[Civil Appeal No. 8071
of 2014, decided on 14.2.2020]
Relying on several decisions on the subject, the
Supreme Court reversed the decision of the High Court of Karnataka which had
confirmed the decision of the Karnataka Administrative Tribunal, thereby
interfering with the punishment imposed on the Respondent in disciplinary
proceedings conducted by the Respondent’s Employer, viz., the Appellant. The
Supreme Court reiterated the settled position that the interference by
Constitutional Courts and Administrative Tribunals in findings of the
disciplinary authority was limited only to judicial review of the decision
making process. The view in B.C. Chaturvedi v. Union of India &Ors., that
judicial review is meant to ensure that the individual receives fair treatment
and not to ensure that the conclusion which the authority reaches is
necessarily correct in the eyes of the court, was reiterated.
Assistant Engineer
(D1), Ajmer Vidyut Vitran Nigam Limited &Anr. v. Rahamatullah Khan Alias
Rahamulla
[Civil Appeal No. 1672
of 2020 decided on 18.2.2020]
In this case, the Supreme Court interpreted the
meaning of the words ‘first due’ occurring in Section 56 of the Electricity
Act, 2003. It was held that electricity charges would become ‘first due’ only
after a bill is issued to the consumer, even though the liability to pay may
arise on the consumption of electricity. It was further held that the power to
disconnect electric supply to the consumer under Section 56 could not be
exercised by the distribution licensee beyond the period of two years specified
therein.
