Legal Blog: February 2011

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Sunday, February 27, 2011

Power of 'Pardon' under Article 161 of the Constitution : The Law

Justice Singhvi

The Supreme Court in Narayan Dutt & Ors. v State of Punjab, has examined the scope and powers of a State Governor to pardon an accused under Article 161 of the Constitution. The Hon'ble court while examining various authorities on the issue held as under;

18. Article 161 of the Constitution of India confers on the Governor of a State the right to grant pardons, remissions, reprieves or commute the sentence of any person convicted of any offence against any law relating to a matter to which the executive power of the State extends.

19. The nature and scope of the power of pardon and the extent of judicial review over such power has come up for consideration in a catena of cases and has now virtually crystallised into a rule of law.

20. In Maru Ram & Ors. v. Union of India & Ors. [AIR 1980 SC 2147] Krishna Iyer J, speaking for the Constitution Bench, held that although the power under Articles 72 and 161 were very wide, it could not "run riot". His Lordship held that no legal power can run unruly like John Gilpin on the horse, but "must keep sensibly to a steady course". According to His Lordship, "all public power, including constitutional power, shall never be exercisable arbitrarily or mala fide and, ordinarily, guidelines for fair and equal execution are guarantors of the valid play of power." (para 62 at p. 2170)

21. The Court further observed that "Article 14 is an expression of the egalitarian spirit of the Constitution and is a clear pointer that arbitrariness is anathema under our system. It necessarily follows that the power to pardon, grant of remission and commutation, being of the greatest moment for the liberty of the citizen, cannot be a law unto itself but must be informed by the finer canons of constitutionalism." The Constitution Bench also observed "the Government is not and should not be as free as an individual in selecting the recipients for its largesse. Whatever its activity, the Government is still the Government and will be subject to restraints, inherent in its position in a democratic society. A democratic Government cannot lay down arbitrary and capricious standards for the choice of persons with whom alone it will deal... Every action of the Executive Government must be informed with reason and should be free from arbitrariness... it makes no difference whether the exercise of the power involves affectation of some right or denial of some privilege... From this angle, even the power to pardon, commute or remit is subject to the wholesome creed that guidelines should govern the exercise even of Presidential power." (para 63 at p. 2170-71)

22. The Bench cautioned that political vendetta or party favoritism should not be the basis of exercising such power. It also advised that the government should make rules for its own guidance in the exercise of the pardon power to exclude the vice of discrimination.

23. In conclusion, the Bench observed that considerations for exercise of power under Articles 72/161 "may be myriad and their occasions protean, and are left to the appropriate Government, but no consideration nor occasion can be wholly irrelevant, irrational, discriminatory or mala fide. Only in these rare cases will the court examine the exercise." (para 72 at p. 2175)

24. In the subsequent Constitution Bench decision in Kehar Singh & Anr. v. Union of India & Anr. [AIR 1989 SC 653] on the same question, this Court quoted the United States Supreme Court in Ex Parte Williams Wells, (1854-57) 15 Law Ed 421, on its power to scrutinize the exercise of this power and pointed out that it was to be used "particularly when the circumstances of any case disclosed such uncertainties as made it doubtful if there should have been a conviction of the criminal, or when they are such as to show that there might be a mitigation of the punishment without lessening the obligation of vindicatory justice." The Bench also quoted Chief Justice Taft in Ex parte Philip Grossman, (1924) 267 US 87), wherein the learned Chief Justice opined: "Executive clemency exists to afford relief from undue harshness or evident mistake in the operation or the enforcement of the criminal law. The administration of justice by the Courts is not necessarily always wise or certainly considerate of circumstances which may properly mitigate guilt. To afford a remedy, it has always been thought essential in popular governments, as well as in monarchies, to vest in some other authority than the Courts power to ameliorate or avoid particular criminal judgments..." (para 8 at p. 658)

25. The Bench having regard to the nature of the power of the President under Article 72, stated that the President under Article 72 could scrutinize the evidence on record of a criminal case and come to a different conclusion from that of the court. In doing so, "the President does not amend or modify or supersede the judicial record. The judicial record remains intact, and undisturbed. The President acts in a wholly different plane from that in which the Court acted. He acts under a constitutional power, the nature of which is entirely different from the judicial power and cannot be regarded as an extension of it." The Bench quoted with approval the formulations of Sutherland, J. in U.S. v. Benz, (1930) 75 Law Ed 354, wherein the learned Judge held: "The judicial power and the executive power over sentences are readily distinguishable. To render judgment is a judicial function. To carry the judgment into effect is an executive function. To cut short a sentence by an act of clemency is an exercise of executive power which abridges the enforcement of the judgment, but does not alter it qua a judgment."

26. In Kehar Singh (supra) this Court observed that the order of the President under Article 72 could not be subjected to judicial review on merits except within the strict limitations defined in Maru Ram (supra). Therefore, on the ambit of judicial review, Kehar Singh (supra) concurred with Maru Ram (supra).

27. In Swaran Singh v. State of U.P. & Ors. [AIR 1998 SC 2026], a three-Judge Bench held that "this Court has no power to touch the order passed by the Governor under Article 161 of the Constitution. If such power was exercised arbitrarily, mala fide or in absolute disregard of the finer canons of the constitutionalism, the by-product order cannot get the approval of law and in such cases, the judicial hand must be stretched to it." (para 12 at p. 2028)

28. Again in Satpal & Anr. v. State of Haryana & Ors. [AIR 2000 SC 1702], this Court held that the power of granting pardon under Article 161 was very wide and did not contain any limitation as to the time and occasion on which and the circumstances under which it was to be exercised. Since the power is a constitutional power, it is amenable to judicial review on the following grounds:

a. If the Governor had been found to have exercised the power himself without being advised by the government,

b. If the Governor transgressed his jurisdiction in exercising the said power,

c. If the Governor had passed the order without applying his mind,

d. The order of the Governor was mala fide, or;

e. The order of the Governor was passed on some extraneous considerations.

29. Further, if the Governor was not aware of general considerations such as period of sentence undergone by the convict, his conduct and behaviour while undergoing sentence and other such material considerations, it would make the order of the Governor under Article 161 arbitrary and irrational.

30. The Constitution Bench in Bikas Chatterjee v. Union of India & Ors. [(2004) 7 SCC 634] reiterated the same principles on the extent of judicial review as laid down in Maru Ram (supra) and Satpal (supra).

31. In Epuru Sudhakar & Anr. v. Government of A.P. & Ors. [AIR 2006 SC 3385] this Court observed that it was well settled that the exercise or non-exercise of the power of pardon by the President or Governor was not immune from judicial review and limited judicial review was available in certain cases.

32. Justice Pasayat, delivering the judgment, summed up the ground on which judicial review of an order passed under Articles 72 and 161 could be undertaken. Those grounds are: (a) that the order has been passed without application of mind;

(b) that the order is malafide;

(c) that the order has been passed on extraneous or wholly irrelevant considerations;

(d) that relevant materials have been kept out of consideration;

(e) that the order suffers from arbitrariness.

33. Justice Kapadia (as His Lordship then was) in his concurring opinion, observed that "granting of pardon is in no sense an overturning of a judgment of conviction, but rather it is an Executive action that mitigates or set aside the punishment for a crime. It eliminates the effect of conviction without addressing the defendant's guilt or innocence. The controlling factor in determining whether the exercise of prerogative power is subject to judicial review is not its source but its subject-matter." (para 64 at p. 3402)

34. His Lordship further added that "the exercise of power depends upon the facts and circumstances of each case and the necessity or justification for exercise of that power has to be judged from case to case... Rule of law should be the overarching constitutional justification for judicial review." (para 65, 67 at p. 3402)

35. In that case, an order of remission had been passed, inter alia, on an inference that the accused was not involved in the murder, was falsely implicated and false witnesses had been produced. This Court held such reasons to be irrelevant and held that the order of remission was bad.

36. From the abovementioned judicial decisions it is clear that there is limited scope of judicial review on the exercise of power by the Governor under Article 161.

Representation through Counsel in Criminal Cases : The Law Examined

The Bench comprising Justice Markandey Katju and Justice Gyan Sudha Mishra in Md. Sukur Ali v. State of Assam, have examined an important constitutional and legal question whether in a criminal case if the counsel for the accused does not appear, for whatever reasons, should the case be decided in the absence of the counsel against the accused, or the Court should appoint an amicus curiae to defend the accused ? The Bench observed as under;

Mr. Nariman, learned senior counsel, pointed out that earlier the counsel for the appellant-accused was Mr. A.S. Choudhury but the appellant changed his counsel and appointed Mr. B. Sinha in the year 2007 as his new counsel, and this fact is corroborated by affidavit. Unfortunately, the name of Mr. Sinha as counsel for the appellant was not shown in the cause list when the case was listed and the name of the former counsel Mr. Choudhury was shown. In these circumstances, Mr. Sinha who was engaged by the appellant as his new counsel did not appear. We are of the opinion that even assuming that the counsel for the accused does not appear because of the counsel's negligence or deliberately, even then the Court should not decide a criminal case against the accused in the absence of his counsel since an accused in a criminal case should not suffer for the fault of his counsel and in such a situation the Court should appoint another counsel as amicus curiae to defend the accused. This is because liberty of a person is the most important feature of our Constitution. Article 21 which guarantees protection of life and personal liberty is the most important fundamental right of the fundamental rights guaranteed by the Constitution. Article 21 can be said to be the 'heart and soul' of the fundamental rights.

In our opinion, a criminal case should not be decided against the accused in the absence of a counsel. We are fortified in the view we are taking by a decision of the US Supreme Court in Powell Vs. Alabama, 287 US 45 (1932), in which it was observed :-

"What, then, does a hearing include? Historically and in practice, in our own country at least, it has always included the right to the aid of counsel when desired and provided by the party asserting the right. The right to be heard would be, in many cases, of little avail if it did not comprehend the right to be heard by counsel. Even the intelligent and educated layman has small and sometimes no skill in the science of law. If charged with crime, he is incapable, generally, of determining for himself whether the indictment is good or bad. He is unfamiliar with the rules of evidence. Left without the aid of counsel he may be put on trial without a proper charge, and convicted upon incompetent evidence, or evidence irrelevant to the issue or otherwise inadmissible. He lacks both the skill and knowledge adequately to prepare his defense, even though he have a perfect one. He requires the guiding hand of counsel at every step in the proceedings against him. Without it, though he be not guilty, he faces the danger of conviction because he does not know how to establish his innocence. If that be true of men of intelligence, how much more true is it of the ignorant and illiterate, or those of feeble intellect. If in any case, civil or criminal, a State or federal court were arbitrarily to refuse to hear a party by counsel, employed by and appearing for him, it reasonably may not be doubted that such a refusal would be a denial of a hearing, and, therefore, of due process in the constitutional sense".

The above decision of the US Supreme Court was cited with approval by this Court in A.S. Mohammed Rafi Vs. State of Tamil Nadu & Ors., AIR 2011 Supreme Court 308, vide para 24.

A similar view which we are taking here was also taken by this Court in Man Singh & Anr. Vs. State of Madhya Pradesh (2008) 9 SCC 542, and in Bapu Limbaji Kamble Vs. State of Maharashtra, (2005) 11 SC 412.

In this connection we may also refer to Articles 21 and 22(1) of the Constitution. Articles 21 and Articles 22(1) are as under :

"Article 21. Protection of life and personal liberty. - No person shall be deprived of his life or personal liberty except according to procedure established by law".

Article 22(1). Protection against arrest and detention in certain cases. - (1) No person who is arrested shall be detained in custody without being informed, as soon as may be, of the grounds for such arrest nor shall he be denied the right to consult, and to be defended by, a legal practitioner of his choice."

In Maneka Gandhi vs. Union of India AIR 1978 SC 597, it has been held by a Constitution Bench of this Court that the procedure for depriving a person of his life or liberty should be fair, reasonable and just. We are of the opinion that it is not fair or just that a criminal case should be decided against an accused in the absence of a counsel. It is only a lawyer who is conversant with law who can properly defend an accused in a criminal case. Hence, in our opinion, if a criminal case (whether a trial or appeal/revision) is decided against an accused in the absence of a counsel, there will be violation of Article 21 of the Constitution.

The right to appear through counsel has existed in England for over three centuries. In ancient Rome there were great lawyers e,g, Cicero, Scaevola, Crassus, etc. who defended the accused. In fact the higher the human race has progressed in civilization, the clearer and stronger has that right appeared, and the more firmly has it been held and asserted. Even in the Nuremberg trials the Nazi war criminals, responsible for killing millions of persons, were yet provided counsel. Therefore when we say that the accused should be provided counsel we are not bringing into existence a new principle but simply recognizing what already existed and which civilized people have long enjoyed.

Apart from the above, we agree with the eminent jurist Seervai who has said in his "Constitutional Law of India', Third Edition, Vol. I, Pg. 857:-

"The right to be defended by counsel does not appear to have been stressed, and was clearly not considered in any detail in Ajaib Singh's case (1953) SCR 254. But the right of a person accused of an offence, or against whom any proceedings were taken under the Cr.P.C. is a valuable right which was recognized by Section 340 Cr.P.C. Article 22 (1) on its language makes that right a constitutional right, and unless there are compelling reasons, Article 22 (1) ought not to be cut down by judicial construction........ It is submitted that Article 22 (1) makes the statutory right under Section 340 Cr.P.C. a Constitutional right in respect of criminal or quasi-criminal proceedings." We are fully in agreement with Mr. Seervai regarding his above observations. The Founding Fathers of our Constitution were themselves freedom fighters who had seen civil liberties of our people trampled under foreign rule, and who had themselves been incarcerated for long period under the formula `Na vakeel, na daleel, na appeal' (No lawyer, no hearing, no appeal). Many of them were lawyers by profession, and knew the importance of counsel, particularly in criminal cases. It was for this reason that they provided for assistance by counsel under Article 22 (1), and that provision must be given the widest construction to effectuate the intention of the Founding Fathers.

In this connection, we may also refer to the ringing speech of Rt. Hon. Srinivasa Sastri, speaking in the Imperial Legislative Council, at the introduction of the Rowlatt Bill, Feb 7, 1919 (the Rowlatt Act prohibited counsels to appear for the accused in cases under the Act):-

"When Government undertakes a repressive policy, the innocent are not safe. Men like me would not be considered innocent. The innocent then is he who forswears politics, who takes no part in the public movements of the times, who retires into his house, mumbles his prayers, pays his taxes, and salaams all the government officials all round. The man who interferes in politics, the man who goes about collecting money for any public purpose, the man who addresses a public meeting, then becomes a suspect. I am always on the borderland and I, therefore, for personal reasons, if for nothing else, undertake to say that the possession, in the hands of the Executive, of powers of this drastic nature will not hurt only the wicked. It will hurt the good as well as the bad, and there will be such a lowering of public spirit, there will be such a lowering of the political tone in the country, that all your talk of responsible government will be mere mockery...

"Much better that a few rascals should walk abroad than that the honest man should be obliged for fear of the law of the land to remain shut up in his house, to refrain from the activities which it is in his nature to indulge in, to abstain from all political and public work merely because there is a dreadful law in the land." In Gideon vs Wainwright, 372 US 335 (1963) Mr. Justice Hugo Black of the US Supreme Court delivering the unanimous judgment of the Court observed:- "Lawyers in criminal courts are necessities, not luxuries"

In Brewer vs William, 430 US 387 (1977) Mr Justice Stewart delivering the opinion of the US Supreme Court observed;-

"The pressures on state executive and judicial officers charged with the administration of the criminal law are great. But it is precisely the predictability of those pressures that makes imperative a resolute loyalty to the guarantees that the Constitution extends to us all. "  

For the reasons stated above, we allow this Appeal, set aside the impugned judgment of the High Court and remand the matter to the High Court for a fresh decision after hearing Mr. Sinha, the new learned counsel for the appellant in the High Court, or any other counsel which has been engaged by the appellant, or in the absence of these, an amicus curiae being a lawyer practising on the criminal side.

The case shall be heard by a Bench of Judges other than those who passed the impugned judgment. The Order dated 24.01.2011 passed by this Court granting bail to the appellant shall continue till the appeal is decided by the High Court.

We reiterate that in the absence of a counsel, for whatever reasons, the case should not be decided forthwith against the accused but in such a situation the Court should appoint a counsel who is practicing on the criminal side as amicus curiae and decide the case after fixing another date and hearing him.

If on the next date of hearing the counsel, who ought to have appeared on the previous date but did not appear, now appears, but cannot show sufficient cause for his non-appearance on the earlier date, then he will be precluded from appearing and arguing the case on behalf of the accused. But, in such a situation, it is open to the accused to either engage another counsel or the Court may proceed with the hearing of the case by the counsel appointed as amicus curiae.

Friday, February 25, 2011

Delhi HC Denies Bail to Vishal Yadav in Nitish Katara Murder

The Delhi High Court today denied bail to Vishal Yadav, nephew of former Member of Parliament D P Yadav and a co-accused in the Nitish Katara murder case. 

Vishal is serving a life sentence for killing Nitish Katara, son of an Indian Administrative Service (IAS) officer. 

In June 2009, he was sentenced to life imprisonment for Katara's murder. 

Amrender Sharan, counsel for Yadav, submitted before the bench that his conduct during an interim bail earlier was good and therefore he should be given regular bail. 

Hearing the plea, the High Court bench of Justices B D Ahmed and Manmohan Singh ordered the petition be dismissed saying 'we cannot judge a person within four-five days'.

'His conduct might be good at the time of interim bail but it doesn't prove that same will be in nearby future,' said Justice Ahmed. 

Vishal and his cousin Vikas Yadav killed Nitish Katara on the night of February 17, 2002, after abducting him from a marriage party in Ghaziabad as they were opposed to Nitish's relationship with Bharti, Vikas's sister.

Delhi High Court on Complimentary Match Passes

Source : Times of India

The Delhi High Court on Wednesday directed the Delhi & District Cricket Association (DDCA) to issue only 10,000 complimentary passes for each of the four World Cup cricket matches to be played at the 41,000-capacity Ferozeshah Kotla stadium. 

Justice Sunil Gaur said: "DDCA should not issue more than 10,000 complimentary passes in each of the matches been played on different dates in Delhi. Remaining passes for tomorrow's (Thursday) match should be made online by evening for general public who want to book it," the court clarified while hearing a case filed by Jai Karan Singh, one of DDCA's oldest members, who had challenged the "arbitrary ways" of the association's executive committee in issuing complimentary tickets and sought a ceiling on it. 

"A total of 3,000 passes should be kept at the stadium gate so that match viewers can buy from there on the day of match also," Justice Gaur directed, adding that in future DDCA should sell 30,000 tickets online and at general outlets throughout Delhi. 

"Five thousand tickets should be sent to various banks in Delhi so that the cricket lovers can buy them there," the order says, adding the tickets of all rates should be available online. 

Singh had contended that the executive committee members issued free passes "at their whim and fancy for getting personal benefits not connected with the promotion of game of cricket". They said selling these tickets at a time when the cricket association was already running at a loss could have generated major revenue. 

In its reply, the executive committee denied issuing free passes and said it was only in response to certain "firm commitments". 

The committee also defended giving free tickets to officials of the Delhi government, Municipal Corporation of Delhi, traffic police and other civic agencies, saying they had to be "rewarded" in some way for their cooperation and support in holding the matches. 

The case will come up for hearing on April 28. 

The Kotla will host four matches during the World Cup: South Africa vs West Indies (Feb 24), West Indies vs Netherlands (Feb 28), Kenya vs Canada (Mar 7) and India vs Netherlands (March 9).

Thursday, February 24, 2011

Obligation of Person Enjoying Benefit of Non-Gratuitous Act : The Law

Justice Jain
Justice V.K. Jain of the Delhi High Court has examined the law relating to the Obligation of a person enjoying benefit of non-gratuitous act as contemplated under S. 70 of the Indian Contract Act, in M/S. S.N.Nandy & Co. vs M/S. Nicco Corporation Ltd. While enunciating the law on the subject, the Court held as under;

17. Assuming, however, that the extra works claimed by the plaintiff were not authorized by the defendant and, therefore, the defendant is under no contractual obligation to pay for those works, the plaintiff is entitled to get reasonable payment for these works in view of the provisions contained in Section 70 of the Contract Act, 1872, which reads as under:-

"70. Obligation of person enjoying benefit of non-gratuitous act. Where a person lawfully does anything for another person, or delivers anything to him not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered."

18. A bare perusal of the above referred Section would show that three conditions need to be fulfilled before benefit of this provision can be invoked by a person. The first condition is that the claimant should either lawfully do something for another person or deliver something to him. The second condition is that while doing or delivering something, the claimant must not be acting gratuitously and thirdly, the person for whom something is done or to whom something is delivered must enjoy the thing done for or delivered to him as the case may be.

Invocation of Section 70 of the Contract Act was disputed by learned counsel for the defendant on the ground that the plaintiff has not pleaded essential requirement of the Section. In support of his contention that pleading ingredients of Section 70 is a pre-condition for its invocation, the learned counsel for the defendant has referred to Kotah Match Factory Kotah v. State of Rajasthan, AIR 1970 Rajasthan 118, Hansraj Gupta & Co. v. Union of India, AIR 1973 SC 2724, Union of India v. Sita Ram Jaiswal, AIR 1977 SC 329 and Devi Sahai Palliwal v. Union of India and another, AIR 1977 SC 2082.

19. In Kotah Match Factory (supra), the Rajasthan High Court noted that the plaintiff did not raise the plea for compensation under Section 70 of the Contract Act nor was any issue framed, nor were the parties given an opportunity to lead any evidence on the point. It was found that the case of the appellant before the Court was based upon an agreement. It was held that since the parties had not gone on trial on the question of compensation under Section 70 of the Contract Act, if the benefit of the aforesaid provision is allowed at this stage, it would amount to taking the opposite party by surprise. In Hansraj Gupta & Co.(supra), the Supreme Court was of the view that the conditions for the applicability of the Section 70 must at least be set out in the pleadings and proved. In Sita Ram Jaiswal (supra), the Supreme Court, inter alia, observed as under:-

"6. The three ingredients to support the cause of action under Section 70 of the Indian Contract Act are these: First, the goods to be delivered lawfully or anything has to be done for another person lawfully. Second, the thing done or the goods delivered is so done or delivered "not intending to do so gratuitously." Third, the person to whom the goods are delivered "enjoys the benefit thereof." It is only when the three ingredients are pleaded in the plaint that a cause of action is constituted under Section 70 of the Indian Contract Act. If any plaintiff pleads the three ingredients and proves the three features the defendant is then bound to make compensation in respect of or to restore the things so done or delivered."

In Devi Sahai Palliwal (supra), the Supreme Court found that there was no allegation in the plaint to support any pleading in proceeding under Section 70 of the Indian Contract Act. Relying upon its earlier decision in Sitaram Jaiswal (supra), it was held that in the absence of proper pleadings under Section 70 of the Indian Contract Act, the plaint should not be entertained.

20. The learned counsel for the plaintiff on the other hand has referred to State of West Bengal v. M/s B.K. Mondal and Sons, AIR 1962 SC 779, V.R. Subramanyam v. B. Thayappa and others, 3 SCR 663 and Food Corporation of India & Others v. Vikas Majdoor Kamdas Sahkari Mandli Ltd., 2007 (13) Scale 126. In the case of B.K. Mondal and Sons (supra), the Supreme Court, after reiterating the three conditions, which need to be satisfied before invoking Section 70 of the Contract Act, was of the view that when these conditions are satisfied, Section 70 imposes upon the person for whom something is done or to whom something is delivered, the liability to make compensation in respect of or restore the thing done for or delivered to him. During the course of the judgment, the Court, inter alia, observed as under:-

"14 .If a person delivers something to another it would be open to the latter person to refuse to accept the thing or to return it; in that case S. 70 would not come into operation. Similarly, if a person does something for another it would be open to the latter person not to accept what has been done by the former; in that case again S. 70 would not apply. In other words, the person said to be made liable under S. 70 always has the option not to accept the thing or to return it. It is only where he voluntarily accepts the thing or enjoys the work done that the liability under S. 70 arises. Taking the facts in the case before us, after the respondent constructed the warehouse, for instance, it was open to the appellant to refuse to accept the said warehouse and to have the benefit of it. It could have called upon the respondent to demolish the said warehouse and take away the materials used by it in constructing it; but, if the appellant accepted the said warehouse and used it and enjoyed its benefit then different considerations come into play and S. 70 can be invoked. Section 70 occurs in Chapter V which deals with certain relations resembling those created by contract. In other words, this chapter does not deal with the rights or liabilities accruing from the contract. It deals with the rights and liabilities accruing from relations which resemble those created by contract .Therefore, in cases falling under S. 70 the person doing something for another or delivering something to another cannot sue for the specific performance of the contract nor ask for damages for the breach of the contract for the simple reason that there is no contract between him and the other person for whom he does something or to whom be delivers something. All that Section 70 provides is that if the goods delivered are accepted or the work done is voluntarily enjoyed then the liability to pay compensation for the enjoyment of the said goods or the acceptance of the said work arises. Thus, where a claim for compensation is made by one person against another under S. 70, it is not on the basis of any subsisting contract between the parties, it is on the basis of the fact that something was done by the party for another and the said work so done has been voluntarily accepted by the other party. That broadly stated is the effect of the conditions prescribed by S. 70."

21. In V.R. Subramanyam (supra), the Court reiteratd the settled proposition of law that if a party of a contract rendered service to other not intending to do so gratuitously and another person had obtained some benefit, the former is entitled to compensation for the value of the services rendered by him. It was further held that even if a person has failed to prove an express agreement in this regard , the Court may still award him compensation under Section 70 of the Contract Act and such a decree for compensation would be under the statute and not under a contract.

22. In Food Corporation of India (supra), the Supreme Court, inter alia, observed as under:-

"12 ..A person who does work or who supplies goods under a contract, if no price is fixed, is entitled to be paid a reasonable sum for his labour and the goods supplied. If the work is outside the contract, the terms of the contract can have no application; and the contractor is entitled to be paid a reasonable price for such work as was done by him.

13. If a party to a contract has done additional construction for another not intending to do it gratuitously and such other has obtained benefit, the former is entitled to compensation for the additional work not covered by the contract. If an oral agreement is pleaded, which is not proved, he will be entitled to compensation under Section 70. Payment under this section can also be claimed for work done beyond the terms of the contract, when the benefit of the work has been availed of by the defendant."

Petition Seeking Ban on 'Emotional Atyachaar' : Delhi HC issues Notice

Source : Indlaw

Delhi High Court today issued notices to the Chairman of UTV and the team of reality show 'Emotional Atyachaar' on a petition which sought ban on the programme, contending it infringes privacy of an individual. 

A bench comprising Chief Justice Dipak Misra and Justice Sanjeev Khanna also issued notices to Ministries of Information and Broadcasting and of Home Affairs, asking them to file reply within four weeks. 

Petitioner Ujala Tiwari also sought a stay on telecast of what he described as vulgar content of the programme, arguing it is promoting homosexuality. 

He said telecast of the serial violates the Right to Privacy of an individual as many real life scenes showing intimate moments are telecast without consent of participants, the petitioner said. 

The petitioner has also sought cancellation of the licence of the channel and to ban the programme as its content is 'vulgar and is encouraging immoral acts’, the petitioner said. 

It is not only sending a wrong message to the society, but is abetting wrong doing, he added.

Wednesday, February 23, 2011

No Unauthorised Broadcast of ICC World Cup Matches : Delhi High Court

Justice Gita Mittal
Source : Indlaw

The Delhi High Court today restrained around 144 cable operators across the country from telecasting the ongoing cricket World Cup as they were unauthorisedly accessing signals of ESPN Software India Pvt Ltd (ESIPL) and showing it to the viewer. 

Justice Gita Mittal said that after this order, anyone found showing the telecast of cricket match will be prosecuted under the contempt of court. 

'Anyone showing the broadcast of ICC Cricket World Cup 2011 through any unauthorised means or any other channel will be held for contempt of court and liable for prosecution.' Justice Mittal said. 

The court was hearing a petition filed by ESIPL, the company seeking an order to restrain cable operators from unauthorisedly broadcasting the tournament. 

The ICC Cricket World Cup, being co-hosted by India, Sri Lanka and Bangladesh, is being telecast on ESPN, STAR Sports and STAR Cricket channels from February 19 to April 2. 

The Court directed the cable operators to file status report within a week and gave permission to ESIPL to take action against all other cable operators not party to the suit but unauthorisedly utilising the feed of ESPN, STAR Sports and STAR Cricket without licence. 

ESIPL, in its petition, urged the court to ban the 144 cable operators from accessing signals of the cricket matches without taking a licence from the company. 

The court restrained the 144 cable operators from transmitting and/or telecasting in any manner whatsoever without licence from ESS (ESPN STAR Sports) the telecast of ICC Cricket World Cup 2011. 

The court also restrained the other cable operators who have not been named in the petition and issued injunction against unnamed cable operators indulging in the illegal telecast and directed the police to render assistance to ESIPL to enforce the court order.

Tuesday, February 22, 2011

IIT Bound to Provide Copy of ORS to Candidates under Right to Information Act

Justice Muralidhar
The Delhi High Court in Indian Institute of Technology, Delhi v. Naveen Talwar, has held that IIT cannot deny a copy of the Optical Response Sheet to its students, and the applicants statutory rights under the Right to Information Act, 2005 cannot be curtailed. While affirming the Central Information Commission's order, the High Court, inter alia, held;

9. This Court is not impressed with the above submission. The defence the Petitioner may have had, if a notice had been issued to it by the CIC, has been considered by this Court in the present proceedings. This Court finds, for the reasons explained hereinafter, that there is no legal justification for the Petitioners refusal to provide each of the Respondents a photocopy of the concerned ORS.

10. It is next submitted that under Section 8 (1) (e) of the RTI Act, there is a fiduciary relationship that the Petitioner shares with the evaluators and therefore a photocopy of the ORS cannot be disclosed. Reliance is placed on the decision by the Full Bench of the CIC rendered on 23rd April 2007 in Rakesh Kumar Singh v. Harish Chander.

11. In the first place given the fact that admittedly the evaluation of the ORS is carried out through a computerized process and not manually, the question of there being a fiduciary relationship between the IIT and the evaluators does not arise. Secondly, a perusal of the decision of the CIC in Rakesh Kumar Singh v. Harish Chander shows that a distinction was drawn by the CIC between the OMR sheets and conventional answer sheets. The evaluation of the ORS is done by a computerized process. The non-ORS answer sheets are evaluated by physical marking. It was observed in para 41 that where OMR (or ORS) sheets are used, as in the present cases, the disclosure of evaluated answer sheets was "unlikely to render the system unworkable and as such the evaluated answer sheets in such cases will be disclosed and made available under the Right to Information Act unless the providing of such answer sheets would involve an infringement of copyright as provided for under Section 9 of the Right to Information Act."

12. Irrespective of the decision dated 23rd April 2007 of the CIC in Rakesh Kumar Singh v. Harish Chander, which in any event is not binding on this Court, it is obvious that the evaluation of the ORS/ORM sheets is through a computerized process and no prejudice can be caused to the IIT by providing a candidate a photocopy of the concerned ORS. This is not information being sought by a third party but by the candidate himself or herself. The disclosure of such photocopy of the ORS will not compromise the identity of the evaluator, since the evaluation is done through a computerized process. There is no question of defence under Section 8 (1) (e) of the RTI Act being invoked by the IIT to deny copy of such OMR sheets/ORS to the candidate.

13. It is then urged by Mr. Mitra that if the impugned orders of the CIC are sustained it would open a "floodgate" of such applications by other candidates as a result of which the entire JEE and GATE system would "collapse". The above apprehension is exaggerated. If IIT is confident that both the JEE and GATE are fool proof, it should have no difficulty providing a candidate a copy of his or her ORS. It enhances transparency. It appears unlikely that the each and every candidate would want photocopies of the ORS.

14. It is then submitted that evaluation done of the ORS by the Petitioner is final and no request can be entertained for re-evaluation of marks. Reliance is placed on the order dated 2nd July 2010 passed by the learned Single Judge of this Court in Writ Petition (Civil) No. 3807 of 2010 [Adha Srujana v. Union of India]. This Court finds that the question as far as the present case is concerned is not about the request of the Respondents for re-evaluation or re-totalling of the marks obtained by them in the JEE 2010 or GATE 2010. Notwithstanding the disclosure of the ORS to the Respondent, IIT would be within its rights to decline a request from either of them for re-evaluation or re-totalling in terms of the conditions already set out in the information brochure. The decision dated 2nd July 2010 by this Court in W.P. (C) No. 3807 of 2010 has no application to the present case.

15. The right of a candidate, sitting for JEE or GATE, to obtain information under the RTI Act is a statutory one. It cannot be said to have been waived by such candidate only because of a clause in the information brochure for the JEE or GATE. In other words, a candidate does not lose his or her right under the RTI Act only because he or she has agreed to sit for JEE or GATE. The condition in the brochure that no photocopy of the ORS sheet will be provided, is subject to the RTI Act. It cannot override the RTI Act.

16 of 21 SC Judges are on the Boards of Big Corporates: Former HC Judge

Source : Indlaw

Former Bombay High Court Judge B G Kolse-Patil today alleged that 16 of 21 Supreme Court judges are on the boards of big corporates like Tata, Birla and Ambanis. 

Addressing a news conference at Vasantrao Kale College of Journalism here, Mr Patil said neither judiciary nor administration can provide relief to common man and alleged that people in judiciary are members of corporate sector. 

He cited an instance of a case before Supreme Court bench pertaining to the dispute between Ambani brothers. When the Delhi High Court passed an order saying that the apex court judges should declare their assets, the Judges on the bench of Ambani case were shareholders of Reliance Group of companies and after the passing of the order, the Judges recused themselves from the case, he said. 

Mr Kolse-Patil also criticised Prime Minister Manmohan Singh and charged that he is the most dishonest Prime Minister. 

He said about 100 crore people are living below the poverty line, while the Prime Minister keeps talking about the country's economic growth. 

He argued that the country was far away from socialism. The word has become 'untouchable' as people in power do not dare to remove this word from the constitution, he pointed.

Monday, February 21, 2011

Death for Kasab Confirmed : Bombay HC dismisses Kasab Appeal

Source : Indlaw

Nearly two years and three months after the deadly 26/11 Mumbai terror attacks that left 166 dead and 280 injured, the Bombay High Court today confirmed the death sentence of Pakistani fidayeen Ajmal Amir Kasab and upheld the acquittal of two other accused in the case, Lashkar-e-Toiba operatives Fahim Ansari and Sabauddin Ahmed. 

In a 1,208-page order, a division bench comprising Justices Ranjana Desai and Ranjit More confirmed the death sentence this morning. 

Earlier, Additional Sessions Judge ML Tahilayani (currently Principal Sessions Judge), who presided over the trial of the November 26-29, 2008 terror attacks, awarded death sentence to Kasab on May 6 last year. 

The trial court had sentenced Kasab to death on five counts besides several life imprisonment sentences and other sentences. 

The court had also acquitted Ansari and Ahmed for want of evidence. 

’The appeal of Kasab has been dismissed and the death sentence has been upheld,’ the bench said in its order after nearly four months of hearing. 

’This is, indeed, a rarest of rare cases involving uncommon and unprecedented crime for which sentence of life imprisonment is inadequate,’ the bench said. 

’We feel that we would never be as confident as we are today in confirming the death sentence,’ the bench said, justifying the capital punishment awarded to Kasab. 

Kasab, however, has one month’s time to appeal in the Supreme Court. 

’We would inform him about the judgement and he has to take a further decision,’ his court-appointed lawyer Farhana Shah said. 

Maharashtra government’s counsel Ujjwal Nikam said, ‘It is victory of truth. He deserves only death penalty.’ 

‘The punishment must befit the crime. The punishment must reflect public abhorrence of the crime. The rights of the victims must also be kept in mind. Examined in the light of the settled principles and after drawing the balance sheet, we are of the considered opinion that in this case, the lone mitigating circumstance i.e. young age of Kasab must recede in the background. Even after according maximum weightage to the age factor, we feel that there is no alternative but to confirm the death sentence,’ the bench noted. 

It said, ‘In any case, in our short interaction with Kasab through video conferencing, we observed his demeanour. He did not appear to be repentant at all. He was perfectly sane. He was in proper frame of mind.’

CCI says “All izz Well” with Pre payment Penalty

By Zerick Dastur, Senior Associate of J. Sagar & Associates, Advocates & Solicitors

After nearly eighteen months from the date of notification of the substantive provisions of the Competition Act (Act) pertaining to anti competitive agreements and abuse of dominance by business enterprises, the Competition Commission has issued a comprehensive final order, after a thorough investigation by the Director General, the investigating authority under the Act. The order deals with issues involving the alleged anti-competitive agreements entered into and abuse of dominant position by banks while charging prepayment charge (PPC) on home loans. PPC currently ranges between 1-4 percent for most banks. The levy and the rate of such PPC is discretional. However, CCI, by a majority order of 4-2, has held that the practice of charging PPC is not violative of the provisions of the Act. Interestingly, the Chairman of the Commission recused himself in the case. It has been observed that owing to the extremely fragmented market shares of the banks in the area of home loans where no individual bank has a market share of more than 17 percent, the provisions relating to abuse of dominant position would not apply.

It is pertinent to note that the Director General had, in his report to the Commission stated that the practice of the banks levying PPC amounted to an agreement for the limiting or controlling the market, that levy of PPC made the exit for a borrower expensive and hence violated the provisions of the Act. The report further stated that the practice acted as a deterrent for borrowers seeking shift to other banks in order to avail the best prevailing interest rate offered by those banks.

The order serves as an authoritative interpretation on a number of issues under a law which is in its nascent stage. One of the issues which came up for determination before the Commission was the extent and scope of the term “agreement” which is a prerequisite in order to determine whether there was any violation. It was observed that for an agreement to exist there has to be an act in the nature of an arrangement, understanding or action in concert including existence of an identifiable practice or decision taken by an association of enterprises or persons. It was held in this case, the existence of any “agreement” between the banks cannot be conjectured or even circumstantially adduced as the practice of levying PPC was based upon individual discretion of each bank. The Commission noted that the practice of charging prepayment penalty cannot be said to be a concerted decision of all the banks as all of them had not started charging prepayment penalty at one point of time. Further, there was no evidence to suggest that that the banks had formed any internal or discrete association for the purpose of charging prepayment penalty. Thus, congruence of action, which is an integral part of any agreement, was not established. Whereas it has been found that some banks are imposing PPC, there is no evidence to establish that this practice is a result of some action in concert or emerges from a collusive decision but levying of such PPC has a reasonable economic justification.

Having said that, CCI seems to have raised the “bar” for proving the existence of an agreement and for it to qualify as anti competitive. It is true that in almost all countries, including India (even under the erstwhile MRTP Act), more evidence is required than just parallel behavior to support a prosecution for entering into an anti competitive agreement. US and European courts have adopted a “parallelism plus” approach, which requires the existence of “plus factors” beyond merely parallel behavior by firms in order to prove that the firms have indulged in anti competitive behavior. Having said that, normally there is no express agreement that is entered into by entities engaging in anti competitive conduct but the practice is usually in the form of a tacit understanding. Existence of such arrangements is usually proved by circumstantial evidence, and by setting up and proving a chain of events leading to a common understanding or plan. The underlying issue is what, at the minimum, constitutes that “meeting of the minds” which must be directly or circumstantially established to prove that there is a restrictive effect on competition. It can be argued that, the Commission should have given more importance to the meetings of the Indian Banks Association (IBA) where the decision to charge PPC was taken and should have scrupulously analyzed the actions of the banks to show how the common approach deliberated in meetings of IBA was actually implemented. Further, the perusal of the internal circulars of these banks may lead to a conclusion that the main purpose to introduce PPC was to dissuade the borrowers from shifting to other banks. Whether, the Commission should have attached more importance to such circumstances in arriving at the conclusion in its order remains a moot point.

Considering the fact that the informant did not present any views after the Director General presented its investigation report, it seems unlikely that he would pursue the matter before the appellate tribunal. However, the Act provides that “any person” who is aggrieved by the order of the Commission may appeal to the appellate tribunal. Hence, any consumer who may be aggrieved by the order may take recourse to the tribunal. The same remains to be seen, but as it stands the banks are free to charge PPC as has been done hitherto.

Zerick Dastur is a Senior Associate of J. Sagar & Associates, Advocates & Solicitors. He is a part of the Firms Competition Law practice and specializes in Corporate, Commercial & Securities Law.

Sunday, February 20, 2011

Women's Right in Property & Amendment of Hindu Succession Act : Whether Any Retrospective Effect?

Justice P. Nandrajog
Delhi High Court
Justice Pradeep Nandrajog of the Delhi High Court, in Smt. Mukesh & Ors. v. Shri Bharat Singh & Ors. had the occasion to examine the question whether the Amending Act of 2005 in the Hindu Succession Act, 1956 would apply retrospectively and effect succession prior to its enactment. While answering the question in the negative, the Hon'ble court held as under;

5. Section 4 of the Hindu Succession Act, 1956 as originally enacted read as under:

4. Over-riding effect of Act.-(1) Save as otherwise expressly provided in this Act,-

(a) any text, rule or interpretation of Hindu law or any custom or usage as part of that law in force immediately before the commencement of this Act shall cease to have effect with respect to any matter for which provision is made in this Act;

(b) any other law in force immediately before the commencement of this Act shall cease to apply to Hindus in so far as it is inconsistent with any of the provisions contained in this Act.

2. For the removal of doubts it is hereby declared that nothing contained in this Act shall be deemed to affect the provision of any law for the time being in force providing for the prevention of fragmentation of agricultural holdings or for the fixation of ceilings or for the devolution of tenancy rights in respect of such holdings.

6. Section 50 of the Delhi Land Reforms Act, 1954 reads as under:

50. General order of succession from males.- Subject to the provisions of Section 48 and 52, when a Bhumidar or Asami being a male dies, his interest in his holding shall devolve in accordance with the order of the succession given below:

(a) male lineal descendants in the male line of the descent:

Provided that no member of this class shall inherit if any male descendant between him and the deceased is alive:

Provided further that the son or sons of a predeceased son howsoever low shall inherit the share which would have devolved upon the deceased if he had been then alive;

(b) widow;

(c) father;

(d) mother, being a widow;

(e) step mother, being a widow;

(f) father's father;

(g) father's mother, being a widow;

(h) widow of a male lineal descendant in the male line of descent;

(i) brother being the son of same father as the deceased;

(j) unmarried sister;

(k) brother's son, the brother having been son of the same father as the deceased;

(l) father's father's son;

(m) brother's son's son;

(n) father's father's son's son;

(o) daughter's son.

7. Due to Sub-section 2 to Section 4 of the Hindu Succession Act, 1956 the rule of succession stipulated under the Hindu Succession Act, 1956 was subject to any law for the time being in force relating to agricultural holdings. Thus, if succession to an agricultural holding was stipulated in any local law applicable to an agricultural holding, provisions thereof would apply relating to devolution of interest in a holding. The effect of deletion of Sub-section 2 to Section 4 of the Hindu Succession Act, 1956 due to the promulgation of the Hindu Succession (Amendment) Act, 2005 is that with effect from the date when the Amending Act was promulgated succession would be as per the Hindu Succession Act, 1956.

8. Prima facie, the Amending Act of 2005 cannot be read retrospectively as the Amending Act has not been given a retrospective operation. Meaning thereby, successions which had taken place prior to the promulgation of the Amendment Act of 2005 cannot be disturbed.

9. Section 3 of the Amending Act has substituted the existing Section 6 of the Hindu Succession Act. One gets a clue of the legislative intent when one looks at Sub-Section 3 of Section 6, as amended. It stipulates that where a Hindu dies after the commencement of the Hindu Succession (Amendment) Act, 2005 his interest in the property of a joint family governed by Mitakshara Law shall devolve by testamentary or intestate succession and not by survivorship. A daughter is given a share equal to that of a son.

10. In respect of the co-parcenery property the right of a daughter to receive a share equal to that of a son applies only if the death of male Hindu is after commencement of the Amendment Act, 2005.

11. Thus, the prima facie view recorded by the learned Trial Judge is correct.

Scope and Nature of S. 11 of the Arbitration & Conciliation Act, 1996

Justice Thakur
The Supreme Court in Alva Aluminium Ltd. Bangkok versus Gabriel India Limited has examined the nature and scope of enquiry under S. 11 of the Arbitration & Conciliation Act, 1996. While referring to a large number of judgments on the aspect, the Supreme Court held as under;

There is a long line of decisions of this Court in which this Court has examined the nature and the scope of the enquiry and the jurisdiction of the Chief Justice or his designate while dealing with petitions under Section 11 of the Arbitration and Conciliation Act, 1996. References to all those decisions is unnecessary for the question that falls for determination here, stands concluded by two recent decisions of this Court which alone should suffice for the present.

In National Insurance Co. Ltd. v. Boghara Polyfab (P) Ltd. 2009 (1) SCC 267, this Court examined the provisions of Section 11 of the Act and categorized the issues that may arise for determination in a petition under Section 11 before the Chief Justice or his designate and the approach to be adopted qua the same. The Court said: "22.1. The issues (first category) which the Chief Justice/his designate will have to decide are:

(a) Whether the party making the application has approached the appropriate High Court. 

(b) Whether there is an arbitration agreement and whether the party who has applied under Section 11 of the Act, is a party to such an agreement.

22.2. The issues (second category) which the Chief Justice/his designate may choose to decide (or leave them to the decision of the Arbitral Tribunal) are:

(a) Whether the claim is a dead (long-barred) claim or a live claim.

(b) Whether the parties have concluded the contract/transaction by recording satisfaction of their mutual rights and obligation or by receiving the final payment without objection. 22.3. The issues (third category) which the Chief Justice/his designate should leave exclusively to the Arbitral Tribunal are: (i) Whether a claim made falls within the arbitration clause (as for example, a matter which is reserved for final decision of a departmental authority and excepted or excluded from arbitration).

(ii) Merits or any claim involved in the arbitration."

The question whether there is an arbitration agreement and whether the party who has applied under Section 11 of the Act is a party to such an agreement in terms of the above decision falls in category (1) and has, therefore, to be decided by the Chief Justice or his designate. The above decision was followed in A.P. Tourism Development Corpn. Ltd. v. Pampa Hotels Ltd. 2010 (5) SCC 425 where also one of the questions that fell for determination was whether existence or validity of the arbitration agreement is a matter to be decided by the Chief Justice/designate while considering a petition under Section 11 of the Act or the same has to be decided by the Arbitrator. Relying upon the decision of this Court in SBP & Co. v. Patel Engg. Ltd. 2005 (8) SCC 618 and National Insurance Co. Ltd. v. Boghara Polyfab (P) Ltd. 2009 (1) SCC 267, this Court held that the question had to be decided by the Chief Justice or his designate. The Court observed:

"It is held in SBP & Co. v. Patel Engg. Ltd.and National Insurance Co. Ltd. v. Boghara Polyfab (P) Ltd. that the question whether there is an arbitration agreement and whether the party who has applied under Section 11 of the Act, is a party to such an agreement, is an issue which is to be decided by the Chief Justice or his designate under Section 11 of the Act before appointing an arbitrator. Therefore there can be no doubt that the issue ought to have been decided by the learned designate of the Chief Justice and could not have been left to the arbitrator. .................................................................... On account of the prospective overruling direction in SBP, any appointment of an arbitrator under Section 11 of the Act made prior to 26-10-2005 has to be treated as valid and all objections including the existence or validity of the arbitration agreement, have to be decided by the arbitrator under Section 16 of the Act. The legal position enunciated in the judgment in SBP will govern only the applications to be filed under Section 11 of the Act from 26-10- 2005 as also the applications under Section 11(6) of the Act pending as on 26-10-2005 (where the arbitrator was not yet appointed)."

It is in the light of above pronouncements, unnecessary to delve any further on this issue. It is clear that once the existence of the arbitration agreement itself is questioned by any party to the proceeding initiated under Section 11 of the Act, the same will have to be decided by the Chief Justice/designate as the case may be. That is because existence of an arbitration agreement is a jurisdictional fact which will have to be addressed while making an order on a petition under Section 11 of the Act. The position may be different where arbitration proceedings are initiated before a nominated arbitral Tribunal but the opposite party appears to dispute the existence of the arbitration agreement. In any such situation the Arbitral Tribunal can itself decide the issue in exercise of its powers under Section 16(1) of the Act which reads as under:

"Jurisdiction of arbitral tribunals 16.Competence of arbitral tribunal to rule on its jurisdiction.- (1) The arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement, and for that purpose, -

(a) an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract; and

(b) a decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause." So also the parties may without approaching the Chief Justice refer the matters in dispute to the nominated Tribunal including the question whether there exists an arbitration agreement. In any such case also the Arbitral Tribunal can determine the existence of the arbitration agreement. Suffice it to say that the power available to the Arbitral Tribunal under Section 16 of the Act does not imply that the issue can be or ought to be left to be determined by the Arbitral Tribunal even in cases where one of the parties has filed a petition under Section 11 of the Act and the other party opposes the making of a reference on the ground that there exists no arbitration agreement between them. It is quite evident that the question whether or not an arbitration agreement exists between the parties will have to be answered for it is only if the answer to that question is in the affirmative that the Chief Justice or his designate can pass an order of reference of the disputes for adjudication. Question No. (1) is answered accordingly.

SC to Examine Corruption Allegations against Justice Balakrishnan

Source : Indlaw

The Supreme Court today decided to examine the allegations of corruption against former Chief Justice K G Balakrishnan.

A bench comprising Chief Justice S H Kapadia and Justices K S Radhakrishnan and Swatanter Kumar directed Attorney General G E Vahanvati to inform the Court within two weeks about the status of complaint pending with the Union Home Ministry. 

A complaint was filed in May, 2010 to Vice-President Mohammad Hamid Ansari against Justice Balakrishnan, who is presently National Human Rights Commission (NHRC) Chairman. Dr Ansari referred the complaint to the Home Ministry for verification and investigation into the allegations. 

The apex court issued the directions on a petition filed by Manohar Lal Sharma, an advocate, seeking a probe into the allegations of corruption. 

Justice Balakrishnan has been in the dock following the allegations of acquisition of huge assets by his close relatives including his son-in-law PV Sreenijan and brother K G Bhaskaran. 

Recently, a Supreme Court clerk who was in the staff of Justice Balakrishnan was also came under the scanner for purchasing a property worth Rs 50 lakh when he was getting a salary of Rs 10,000 to 15,000 per month. 

Justice Balakrishnan, however, denied the charges and has been resisting the demand for his resignation from the post of the head of NHRC

Wednesday, February 16, 2011

Cause of Action and Limitation to File a Petition under Section 397/398 of Companies Act, 1956

Guest Post : V.Durga Rao, Advocate.

No lis lies when there is no live claim or the cause of action and it is settled legal principle. The requirement of having a live claim for seeking relief is also been highlighted by the Hon’ble Apex Court while dealing with the scope of powers of Chief Justice under section 11 of Arbitration and Conciliation Act, 1996. Again, there were many judgments under SARFAESI Act, 2002 on the issue of cause of action despite the specific provision in the Act that the borrower can approach the Debt Recovery Tribunal under section 17 of the SARFAESI Act, 2002 if he has any grievance at the Bank’s action. Thus, the issue of cause of action and law of limitation is very significant in any lis. Section 397/398 of the Companies Act, 1956 provides a remedy to the minority shareholders or the shareholders qualifying under section 399 to approach the Company Law Board and the Company Law Board has wide powers in passing orders in order to put an end to the matters complained of or in order to regulate the affairs of the Company. While section 399 of Companies Act, 1956 deals with the issue of qualification, section 397/398 itself speaks about ‘cause of action’ and the issue of limitation. Dealing with the issue of ‘cause of action’ and law of limitation under section 397/398 of Companies Act, 1956 is infact very complicated. It is settled that a minority shareholders can question the harsh and burdensome acts of the majority in the Company. It is also settled that the oppression or the mismanagement sought to be alleged should be a continuous one if the minority should approach the Company Law Board under section 397/398 of the Companies Act, 1956. In fact, the issue of ‘cause of action’ and law of limitation can not be separated while dealing with the law under section 397/398 of the Companies Act, 1956 and the issue of limitation has little significance. The provisions of law of limitation will have no application to a petition under section 397/398 of Companies Act, 1956. Its all depends upon the facts and circumstances of the Case.

There are different views as to how section 397/398 of Companies Act, 1956 is to be interpreted when it comes providing a remedy to the minority shareholders. There is a view that unless there exists act which is harsh and burdensome in the company against the minority, minority is not entitled for any relief under section 397/398 of Companies Act, 1956. There is another view that even if there is no oppression or mismanagement in the Company in stricto senso, the Company Law Board can still pass appropriate orders under section 402 of the Act in order to regulate the affairs of the Company and in order to put and end to the matters complained of. It is also settled that there can not be any hard and fast rule while entertaining and passing appropriate orders in a petition by the minority against the majority under section 397/398 of Companies Act, 1956. Going by the precedents and the complications in corporate affairs, it can be understood that an order of the Company Law Board under section 397/398 of the Companies Act, 1956 should be reasonable, towards the object of the chapter, in adherence to the principles of natural justice. This is a very complicated proceeding and it acts as a sharp weapon in the hands of minority shareholders to protect their interests and also the provisions of the chapter can conveniently be misused with ulterior motive. Thus, the Company Law Board carries a greater responsibility while entertain petitions under section 397/398 of Companies Act, 1956. Coming back to the issue of ‘cause of action’ and the issues of limitation, the Hon’ble High Court of Delhi, in Surinder Singh Bindra Vs. Hindustan Fasteners (P) Limited, was pleased to observe as follows:

“(12) These can be looked into if they form part of a continuous process continuing up to the date of petition showing that the affairs of a company are being conducted in a manner stipulated in Ss. 397 and 398 of the Act. This, in fact, is the requirement of these provisions. Further, if the acts complained of form part of the same transaction constituting oppression or mismanagement these acts can also be looked into even if they occurred three years prior to the institution of the petition. Same will be the case if the conduct arising from even a single wrongful act in a given case is such that its effect will be a continuous course of oppression or mismanagement though the wrongful act occurred three years earlier to the date of filing of the petition. It is something akin to the terminology 'continuing cause of action'. Whether events complained of form part of continuous acts or not or form part of the same transaction constituting oppression of mismanagement or effect of a particular wrongful act is continuous course of oppression or mismanagement or the wrongful act is stale or is an isolated event, would all be different questions to determine. To this extent, therefore, the preliminary objection regarding maintainability of the present petition on the ground of limitation is overruled. This exercise about the applicability of the provisions of the Limitation Act, 1963 to the application under Ss. 397 and 398 of the Act, would now appear to be academic as after the Companies (Amendment) Act, 1988, applications under these sections lie before the Company Law Board.” 
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