Indian Law Watch October 2022 Updates

Indian Law Watch October 2022 updates is a collection of important cases and judgements that appeared in media in the month of October 2022

Executive Engineer (R and B) vs. Gokul Chandra Kanungo, Civil Appeal No. 8990 of 2017

A bench comprising of Justices BR Gavai and BV Nagarathna invoked the special powers under Article 142 of the Constitution to reduce the interest awarded in a case, wherein due to the delay lead to an increase in the interest amount. The Court held that no interest would be payable for the period on which there were lapses on the part of the award holder. The court further held that the Arbitration and Conciliation Act casts a duty upon the arbitral tribunal to give reasons as to how it deems the rate of interest to be reasonable.

Lalankumar Singh vs. State of Maharashtra, Criminal Appeal No. 1757 of 2022

The SC held that while deciding whether a prima facie case can be made, the magistrate has to record the reason for the same in the order. A bench comprising of Justices BR Gavai and CT Ravikumar, while dealing with a case related to the liability of the director of a company under the Drugs and Cosmetics Act, 1940 made the following observations: Firstly, while deciding whether a prima facie case against the accused can be made, the Magistrate is required to apply his mind as to whether the sufficient ground for proceeding exists in the case and the formation of such an opinion is required to be stated in the order itself. The order is liable to be set aside if no reasons are given therein while concluding that there is a prima facie case against the accused. Secondly, merely reproducing the words of the section without a clear statement of fact as to how and in what manner a director of the company was responsible for the conduct of the business of the company, would not ipso facto make the director vicariously liable.

Vijay Rajmohan vs. State, SLP(Criminal) 1568 of 2022

The Supreme Court held that the period of three months (extendable by one more month for legal consultation) under Section 19 of the Prevention of Corruption Act for the Appointing Authority to decide upon a request for sanction is mandatory. However, the bench comprising of Justices BR Gavai and PS Narasimha noted that the consequence of non-compliance with this mandatory requirement shall not be quashing of the criminal proceeding for that very reason. The court added that upon expiry of the three months and the additional one-month period, the aggrieved party, be it the complainant, accused or victim, would be entitled to approach the concerned writ court and seek appropriate remedies, including directions for action on the request for sanction and the corrective measure on accountability that the sanctioning authority bears.

Dashrathbhai Trikambhai Patel vs. Hitesh Mahendrabhai Patel, Criminal Appeal No. 1497 of 2022

The SC held that to bring home an offence of dishonour of cheque under S. 138 of the Negotiable Instruments Act 1881, the cheque that is dishonoured must represent a legally enforceable debt on the date of maturity or presentation. The bench comprising of Justices DY Chandrachud and Hima Kohli, further explained that if the drawer of the cheque pays a part or whole of the sum between the period when the cheque is drawn and when it is encashed upon maturity, it must be endorsed on the cheque as prescribed in Section 56 of the Act. Therefore, the cheque endorsed with the payment made may be used to negotiate the balance, if any.

Checkmate Services Pvt. Ltd. vs. Commissioner of Income Tax-I, Civil Appeal No. 2833 of 2016

The Supreme Court explained the difference between the employers’ contribution and employees’ contribution required to be deposited by the employer observing that the former is the employer’s liability is to be paid out of its income whereas the latter is deemed an income, by definition, since it is the deduction from the employees’ income and held in trust by the employer. The bench of CJI UU Lalit, Justices S. Ravindra Bhat and Sudhanshu Dhulia, further observed that the non-obstante clause under Section 43B of the Income Tax Act or anything contained in that provision would not absolve the assessee from its liability to deposit the employee’s contribution on or before the due date as a condition for the deduction.

Mariano Anto Bruno vs. Inspector of Police, Criminal Appeal No. 1628 of 2022

The Supreme Court while hearing an appeal under Section 306 IPC, abetment to suicide, observed that in cases of alleged abetment of suicide, there must be proof of direct or indirect acts of incitement to the commission of suicide. Merely on the allegation of harassment without there being any positive action proximate to the time of occurrence on the part of the accused which led or compelled the person to commit suicide, a conviction in terms of Section 306 IPC is not sustainable.

Daivasigamani vs. S. Sambandan, Civil Appeal No. 9006 of 2011

The SC while hearing an appeal for specific performance of a contract, observed that the period of limitation had started running from the date the respondent noticed that the performance was refused by the appellant and not from the date of the execution of the agreement in question. Further, it was stated by the court that it cannot be gainsaid said that even though time is not considered as the essence of the contract in the case of immovable property and that the suit could be filed within three years as provided in Article 54 of the Limitation Act, the respondent – plaintiff had to perform his part of the contract within the reasonable time having regard to the term of the agreement prescribing the time limit.

Devendra Nath Singh vs. State of Bihar, Criminal Appeal No. 1768 of 2022

The SC commented on the power of the High Court under Section 482 and 173(8) of the Code of Criminal Procedure wherein the court observed that in an appropriate case, where the High Court feels that the investigation is not in the proper direction and to do complete justice where the facts of the case so demand, the inherent powers under Section 482 CrPC could be exercised to direct further investigation or even reinvestigation. Further, the provisions of Section 173(8) CrPC do not limit or affect such powers of the High Court to pass an order under Section 482 CrPC for further investigation or reinvestigation, if the High Court is satisfied that such a course is necessary to secure the ends of justice. However, while exercising such powers, the High Court cannot issue directions to be impinging upon the power and jurisdiction of other authorities.

Mahesh Govindji Trivedi vs. Bakul Maganlal Vyas, Civil Appeal No. 7203 of 2022

The SC observed that according to Order VIII Rule 6A Code of Civil Procedure that there is no bar in taking on record a counter-claim filed long after filing of the written statement but before framing of issues. In this case, the counter-claim in question was filed nearly 13 years after the filing of the written statement. The single Judge of the Bombay High Court dealing with the trial of the suit in question had accepted the notice of motion moved by the defendant-appellant so as to take the belatedly filed counter-claim on record. However, the Division Bench of the High Court later set aside the said order and remitted the matter for consideration afresh, essentially on the ground that the plaintiffs were not afforded adequate opportunity to file a reply and to contest the said notice of motion. The SC in response to this noted that the counter-claim in question could not have been removed out of consideration merely because it was presented after a long time since after filing of the written statement as there is no bar for taking the belatedly filed counter-claim on record, as long as it is filed before framing of issues.

Meena Devi vs Nunu Chand Mahto @ Nemchand Mahto, SLP(Civil) 5345 of 2019

The SC while dealing with a Motor Vehicles accident case observed that in such cases There is no restriction that the Tribunal/Court cannot award compensation exceeding the amount so claimed. The bench comprising of Justices Sanjiv Khanna and JK Maheshwari observed that the Tribunal/Court ought to award ‘just’ compensation which is reasonable in the facts relying upon the evidence produced on record. Therefore, less valuation, if any, made in the Claim Petition would not impede awarding just compensation exceeding the claimed amount. In this case, the court enhanced the amount of compensation to 5,00,000 when the Claim Petition filed under Sections 140, 166 read with Section 171 of the Motor Vehicles Act, 1988 was to seek compensation to the tune of Rs. 2,00,000/-.

Bengal Secretariat Cooperative Land Mortgage Bank and Housing Society Ltd. vs. Aloke Kumar, SLP(Civil) No. 506 of 2020

In an appeal filed by a cooperative society challenging an order of the Calcutta High Court, the SC dwelled upon the role of cooperative societies and their governing act or rules. In this case, the plea was filed by a single member of the general body for the execution of an arbitral award secured by a member against the decision of the society to demolish and redevelop its administrative office building. In the HC decision, the plea was held maintainable. However, the SC observed that merely because one single member in minority disapproves of the decision, that cannot be the basis to negate the decision of the General Body, unless it is shown that the decision was the product of fraud or misrepresentation or was opposed to some statutory prohibition. Further, it is not open to the Court to sit over the said wisdom of the General Body as an Appellate Authority.

Hero Motocorp Ltd vs Union of India, Civil Appeal no. 7405 of 2022

The Supreme Court observed that the doctrine of promissory estoppel would not apply against the exercise of legislative powers of the State. In this case, the High Court of Delhi, dismissed writ petitions filed by Hero Motocorp and Sun Pharma Laboratories Ltd. who claimed 100% budgetary support in lieu of the pre-existing 100% outright excise duty exemption for ten years from the date of the commencement of commercial production, as provided for by the said O.M. of 2003 issued by the Government of India. The main issue raised was whether, despite a subsequent statute specifically providing for rescinding the benefits granted under an earlier statute, the Union Government can be compelled to stand by the representation made by it through the earlier notification.? In other words, the issue was whether the doctrine of promissory estoppel could operate against a statute. The court observed that though the appellants’ claim based on promissory estoppel is without substance, the claim is not wholly without any substance. They do have a legitimate expectation that their claim deserves due consideration. Therefore the bench permitted the appellants to make representations to the respective State Governments as well as to the GST Council.

Manoj Kumar Tiwari vs Manish Sisodia, Criminal Appeal No. 1791 of 2022

The Supreme Court observed that a minister or public servant (a person covered by Section 199(2)) can file a private complaint alleging defamation and need not follow the special procedure prescribed by Section 199(2) & (4) CrPC. Section 199(2) provides a special remedy for the procedure when the offence of defamation is alleged to have been committed against a person who at the time of the commission of the offence was a minister or public servant. Further, the bench comprising Justices S. Abdul Nazeer and V. Ramasubramanian elaborated upon this by stating that the special procedure is in addition to and not in derogation of the right that a public servant always has as an individual. He never lost his right merely because he became a public servant and merely because of the allegations related to the official discharge of his duties.

Manusha Sreekumar vs United India Insurance Co. Ltd, Civil Appeal No. 7593 of 2022

The Supreme Court observed that ‘minimum wages notification’ can be considered to determine the notional income of the deceased in motor accident claim cases. In this case, the deceased, a fish vendor cum driver, was earning approximately Rs. 25,000 per month. However, the tribunal calculated his income as around Rs. 17,500 and awarded damages to the tune of Rs. 32,39,000. Later, the HC observed that the maximum monthly income that could have been reckoned is Rs. 10,000/- and therefore substantially reduced the compensation granted by the Tribunal to Rs. 19,70,000/-. The SC observed that Schedule B­ Category III of the Kerala Fair Wages Act classifies a driver as a “Skilled worker” wherein a ‘driver’ in Kerala earned a minimum of Rs. 15,600 in 2015. therefore, the Court held that the High Court could not be cognizant of the statutory mandate prescribing minimum wages for a skilled worker like a ‘driver’, and thus, erred in fixing the income of the Deceased at Rs.10,000.

M/s New Noble Education Society Vs The Chief Commissioner of Income-tax, Civil Appeal No. 3795 of 2014

In this case, the SC answered a critical question, whether an institution claiming exemption u/s 10(23C) has to exist solely for education or it can have income from other sources as well as connected issues. The three judges bench approved the decision of the Andhra Pradesh High Court which had dismissed the appeal of the petitioner herein by holding that the institution should solely exist for the medical or education as the case may be and if there are other objects as per the constitution document then the institution will not be eligible for approval under the relevant provisions. Further, the court observed that Section 10(23C) which is pari materia to Section 11(4A) as per which a business activity incidental to the attainment of main objects was alright and this was interpreted to mean with examples in the judgement. The court, therefore, held that when an institution allows conferences, seminars etc to be held and attended by outsiders, then the same will not be covered within the ambit of this exclusion. A similar example was given as to that of hostel being allowed to non-students.