LAW FOR ALL

Sunday, September 9, 2012

(1) That the appeal be allowed. (2) That orders 12-20 inclusive of the orders made by Federal Magistrate Dunkley on 23 March 2012 be set aside. (3) That the Full Court makes interim orders in terms of paragraphs 12-19 of the orders made by Federal Magistrate Dunkley on 23 March 2012. (4) That the parenting proceedings be remitted for re-hearing before a Federal Magistrate other than Federal Magistrate Dunkley. (5) That the Court grants to the appellant mother a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant mother in respect of the costs incurred by the appellant mother in relation to the appeal. (6) That the Court grants to the respondent father a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent father in respect of the costs incurred by the respondent father in relation to the appeal. (7) That the Court grants to each party a costs certificate pursuant to the provisions of s 8 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to each party in respect of such part as the Attorney-General considers appropriate of any costs incurred by each party in relation to the new trial granted by these orders. IT IS NOTED: (8) It is requested that the Federal Magistrates Court gives such expedition of the re-hearing of the proceedings as that Court deems appropriate. (9) It would desirable that the re-hearing be heard in the Sydney Registry of the Federal Magistrates Court.

Heaton & Heaton [2012] FamCAFC 139 (31 August 2012)

Last Updated: 7 September 2012

FAMILY COURT OF AUSTRALIA

HEATON & HEATON

[2012] FamCAFC 139

FAMILY LAW – APPEAL – CHILDREN – Relocation.

Family Law Act 1975 (Cth)

MRR v GR [2010] HCA 4; (2010) 240 CLR 461

APPELLANT:

Ms Heaton

RESPONDENT:

Mr Heaton

FILE NUMBER:

NCC

1835

2010

APPEAL NUMBER:

2012

DATE ORDERS MADE:

23 August 2012

DATE REASONS PUBLISHED:

31 August 2012

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Coleman, Ainslie-Wallace & Ryan JJ

HEARING DATE:

23 August 2012

LOWER COURT JURISDICTION:

Federal Magistrates Court of Australia

LOWER COURT JUDGMENT DATE:

23 March 2012

LOWER COURT MNC:

[2012] FMCAfam 244

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Mr Graham

SOLICITOR FOR THE APPELLANT:

Byrnes & Cox Lawyers

COUNSEL FOR THE RESPONDENT:

Mr Batey

SOLICITOR FOR THE RESPONDENT:

Watts McCray Lawyers

ORDERS MADE ON 23 AUGUST 2012

(1) That the appeal be allowed.
(2) That orders 12-20 inclusive of the orders made by Federal Magistrate Dunkley on 23 March 2012 be set aside.
(3) That the Full Court makes interim orders in terms of paragraphs 12-19 of the orders made by Federal Magistrate Dunkley on 23 March 2012.
(4) That the parenting proceedings be remitted for re-hearing before a Federal Magistrate other than Federal Magistrate Dunkley.
(5) That the Court grants to the appellant mother a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant mother in respect of the costs incurred by the appellant mother in relation to the appeal.
(6) That the Court grants to the respondent father a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent father in respect of the costs incurred by the respondent father in relation to the appeal.
(7) That the Court grants to each party a costs certificate pursuant to the provisions of s 8 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to each party in respect of such part as the Attorney-General considers appropriate of any costs incurred by each party in relation to the new trial granted by these orders.

IT IS NOTED:

(8) It is requested that the Federal Magistrates Court gives such expedition of the re-hearing of the proceedings as that Court deems appropriate.
(9) It would desirable that the re-hearing be heard in the Sydney Registry of the Federal Magistrates Court.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Heaton & Heaton has been approved by the Chief Justice pursuant to s 121(9)(g)of the Family Law Act 1975 (Cth).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY

Appeal Number: EA 50 of 2012
File Number: NCC 1835 of 2010

Ms Heaton

Appellant
And

Mr Heaton

Respondent

REASONS FOR JUDGMENT

On 23 August 2012, at the conclusion of the appeal in this matter, we determined that the appeal should succeed and we indicated that view to the parties. It was agreed, in that event, the matter must be re-heard. We made orders to that effect and we indicated that we would deliver our reasons later. These are our reasons.
Ms Heaton (“the mother”) appeals against orders made by Dunkley FM on 23 March 2012 in relation to the two children of her marriage to Mr Heaton (“the father”), E who was born in 2004 and J who was born in 2005.
The mother’s application before the Federal Magistrate was that she and the father have equal shared parental responsibility, that the children live with her and that she be permitted to move with the children to live in Port Macquarie. The mother proposed that the father would spend time with the children in Port Macquarie and in Sydney where he lives.
The father too sought an order for equal shared parental responsibility. He opposed the mother being permitted to relocate with the children. If she was not permitted to relocate the residence of the children, he sought orders that in effect provided for the children to spend equal time with each parent. If the mother was not permitted to relocate the residence of the children but she moved to Port Macquarie, he proposed that the mother spend time with the children each third weekend and at other times. The father would not move to live in Port Macquarie if the mother and children were permitted to relocate. The mother said that if she was not allowed to relocate the residence of the children, she would not move away from them and would remain in Sydney. However, her proposal before the Federal Magistrate was that she be permitted to relocate with the children to Port Macquarie.
His Honour declined to permit the mother to take the children to live in Port Macquarie and ordered that the parties have equal shared parental responsibility for the children and, conditional on the mother living within 15 kilometres of the school at which both children attend, the children live with her and the father on a week about basis. Should the mother not live within that geographical radius, then the children will live with the father and spend time with the mother.

BACKGROUND

We propose to set out some background to the matter to give context to the appeal. It seems to us that there was little contention on factual matters before his Honour.
The parties married in 2000. They separated in 2009 and remained living in the same house. When the matter came before the court, the parties and the children were living under the same roof.
In February 2011 interim orders were made that the parties have equal shared parental responsibility. By application brought in April 2011 the mother sought exclusive occupation of the marital home. That application was dismissed.
The final hearing of the application commenced on 4 July 2011. At the conclusion of the second day, the matter was adjourned part heard to December 2011. To provide for the period of the adjournment, on 7 July 2011 his Honour made an interim order that the children live in the former marital home and the father and mother spend alternate weeks there during the school terms. This situation continued until his Honour made orders and gave reasons for decision in March 2012.
The mother is from Port Macquarie and her family and friends live there. She was living in Port Macquarie when she met the father who was working in that area. The father worked in Port Macquarie until shortly before they married when he took up a position in Sydney. When the parties moved to Sydney they lived in a property which became the marital home.
The mother worked in paid employment after marriage but ceased work after the birth of E. She did not thereafter return to the paid workforce. The father is employed by a bank. It was uncontentious that during the marriage he worked long days, about 12 hours each day. The mother cared for the children.
Both children attend primary school at a local Catholic school. E started there in Kindergarten in 2009 and J in 2011. It was apparently undisputed that each child has friends at school who live around the area.
His Honour said:
1. It was clear from her evidence that she and the husband had agreed to a traditional type parenting arrangement where she would attend to the children’s needs whilst the husband worked and he would provided (sic) assistance mainly on weekends but was involved with the children’s P&C and attended important events at their preschool and later school.
After the interim orders of July 2011 were made the father changed his working arrangements such that in the weeks in which the mother has the care of the children he continues to work his usual 12 hour days and in the weeks in which he has care of the children his work hours are truncated so that he can deliver them to school and collect them after school. During those weeks, the mother returned to Port Macquarie.
The mother’s position was that she wished to move to live in Port Macquarie because she has no family support in Sydney and her immediate and extended family live there. The children have spent time with her family in Port Macquarie and have close relationships with her family. She had been offered employment in Port Macquarie and believed that she could afford to buy a house there. The mother said that she did not think she could afford to house herself in Sydney in the same area in which the parties had lived. She said that if she could not live in Port Macquarie she might be able to afford to buy a house further out in Sydney or perhaps on the Central Coast. During her cross examination she conceded that she might be able to purchase some accommodation “in suburbs adjacent to Parramatta, thereby being in reasonably close proximity (sic) of [the former matrimonial home] and the children’s current school” (at [90]).
There was no dispute that a move to Port Macquarie would put distance between the father and the children. It was estimated that, while it is possible to fly between Sydney and Port Macquarie, to drive takes in the order of 5 hours.
It was undisputed that the children although only in primary school, were doing well and had made friends at school who lived in their local area.
The Federal Magistrate had the benefit of a Family Report.

A PRELIMINARY MATTER

After setting out the orders sought by each party, his Honour recounted the evidence given by each party and his or her witnesses.
His Honour considered the evidence of the Family Reporter from [151] and following. He said:
1. During cross examination Mr Goodsell confirmed that he had read a paper by Professor Parkinson, Associate Professor Cashmore and Research Fellow Single entitled “The need for reality testing in relocation cases”. He agreed with the proposition put to him that the conclusion of that paper was that “it is not a pretty picture” with respect to the impact on children in the longer term of relocation in being able to maintain a relationship with the long distance parent.
His Honour had earlier noted under the heading “Documents”:
1. Counsel for the father during submissions referred to a published paper “The need for reality resting in relocation cases”. With the parties consent I read and had regard to “The need for reality testing in relocation cases” Family Law Quarterly 4 No 1, pp 1-34 by Professor Patrick Parkinson, Associate Professor Judy Cashmore and Research Fellow Judi Single, notwithstanding the article not becoming an exhibit. The parties knew this to be the course of action to be taken. Counsel for the wife did not oppose this course of action and consented to it.
Although his Honour apparently “had regard” to this article, apart from the reference to it in when dealing with the evidence of the expert, no other reference is made to this article.
While not directly raised as a ground of appeal, his Honour’s consideration of the article as part of deciding the mother’s application to relocate the children’s residence squarely raises a matter of significance. We cannot but help to observe that the course adopted by his Honour, even with the consent of the parties, was erroneous. If his Honour proposed to “have regard” to information as part of his determination of the issues before him, the proper course was to admit the document into evidence. There is no way for this Court to understand what was the import of that document nor how his Honour may have “had regard” to it. It was not evidence and, in our view, until it became evidence, it was unsafe for his Honour to “have regard” to it. That counsel agreed is not to the point. This Court has emphasised the risks in relying on extrinsic material even when, as in this case, the reliance on the material was with the consent of the parties and not in breach of the requirements of procedural fairness.
The mother’s appeal grounds challenge his Honour’s approach to the issue of relocation and his finding that it was in the children’s best interest that they not be moved to Port Macquarie. At least from the title of the document, it seems that it may have been germane to his consideration. How then in those circumstances, he could have “had regard to it” without admitting it into evidence or otherwise refer to it seems to us beset with difficulty.

THE APPEAL

The appellant raised six grounds of appeal that challenge his Honour’s decision, however, in argument it became apparent that the principal complaint concerned his Honour’s reasoning to his ultimate findings. That being the case, there is no need for us to set out the individual grounds or to consider each. The principal ground was made good and resulted in our orders allowing the appeal.
The essence of this challenge is that his Honour failed to follow the “legislative pathway” in considering the mother’s application that she be permitted to move to Port Macquarie with the children and in determining whether that proposed move was in the children’s best interests.
The “legislative pathway” we understand to be a reference to the intellectual and determinative process consistent with the Act.
There was no dispute that his Honour’s reasons did not formally conform to that “pathway”. However, the respondent contended that his Honour’s reasons when read as a whole permitted the inference that he had taken into account and considered all relevant matters. It was further argued that “slavish adherence to the legislative pathway” was not mandatory.
The Federal Magistrate said:
1. Section 61DA(1) requires the Court to apply a presumption that it is in the best interests of the children’s parents to have equal shared parental responsibility for the children. The presumption is rebuttable.
His Honour then found that there was no evidence to rebut that presumption and observed that to make an order for equal shared parental responsibility would be a continuation of previous orders and was sought by both parties. His Honour continued:
1. Section 65DAA then requires the Court to consider whether the children spending equal time with each parent would be in their best interest and consider whether the child spending equal time with each parent is reasonably practicable.
2. The decision in MRR v GR requires an affirmative answer to both considerations and if affirmatively answered, then the Court is to consider making an order for equal time.
3. In determining reasonable practicality, s.65DAA(5) requires the Court to have regard to how far apart the parents live and the parents current and future capacity to implement an arrangement for the child spending equal time, the parents current and future capacity to communicate with each other and resultant difficulties that might arise in implementing such an arrangement, the impact that an arrangement for equal time would have on the children and consider such other matters as the Court considers relevant.
We agree that what his Honour there set out was an accurate statement of the law. However, regrettably his Honour did not approach his task in that way.
His Honour was first required to determine the children’s best interests by reference to the well known “primary” and “additional” factors referred to in s 60CC in the light of the competing proposals of the parents, that is, the father remaining in Sydney and the mother wishing to move with the children to Port Macquarie. Although the mother’s “fall back position” of remaining in Sydney to stay with the children required consideration, we consider that in elevating that concession to the status of a proposal resulted in his Honour’s failure to adequately evaluate her application to relocate and misapplication of the section.
It is only in this way that his Honour could have properly considered all of the relevant factors to come to a determination of the children’s best interests.
His Honour was then obliged to consider the provisions of s 65DAA(1).
As the plurality of the High Court said in MRR v GR [2010] HCA 4; (2010) 240 CLR 461 at page 466:

Section 65DAA(1) is expressed in imperative terms. It obliges the Court to consider both the question whether it is in the best interests of the child to spend equal time with each of the parents (para (a)) and the question whether it is reasonably practicable that the child spend equal time with each of them (para (b)). It is only where both questions are answered in the affirmative that consideration may be given, under para (c), to the making of the order... A determination as a question of fact that it is reasonably practicable that equal time be spent with each parent is a statutory condition which must be fulfilled before the Court has power to make a parenting order of that kind. It is a matter upon which power is conditioned much as it is where a jurisdictional fact must be proved to exist...

Their Honours continued:

His Honour treated the answer to the first mentioned question, whether it was in the best interests of the child to have equal time with each parent, as determinative of whether an order should be made. His Honour did not consider, as he was obliged to do, whether it was reasonably practicable in all the circumstances...

We regretfully conclude that his Honour erred in his determination of the issue of equal shared time. By conflating the disparate issues of “best interests” and “reasonable practicability” the Federal Magistrate’s reasons for judgment do not demonstrate substantive, if not formal, adherence to the legislative pathway. As is apparent from a reading of them, with respect to his Honour, his consideration of each issue was vitiated by its dependence upon conclusions or assumptions with respect to the other issue. His Honour was required to first consider whether equal time was in the children’s best interests pursuant to s 60CC. If he concluded that it was, it was then necessary to consider the parties’ competing proposals and determine whether equal time was reasonably practicable. He did not do this.
These errors are such that the appeal must succeed. As the High Court said in MRR v GR (supra), the determination of both of the questions in s 65DAA(1)provide the source of jurisdictional power to make the order to which the section refers. It is not sufficient to argue that although his Honour’s findings do not follow that “pathway” when read as a whole, inferentially, it may be said that he made the determinations required of him in s 65DAA.
It is unnecessary for us to consider whether, generally, a “slavish” pursuit of the “legislative pathway” is not essential.

I certify that the preceding thirty-nine (39) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court delivered on 31 August 2012.
Associate:
Date: 31 August 2012

Saturday, September 8, 2012

An earthquake with a severity of over 8 in the Richter Scale almost invariably causes damages if not destruction to the buildings and the havoc that it caused in terms of destruction of life and property in large parts of the Gujarat is well known.No credible evidence has been produced by the Appellants to prove that substandard material was used and there were defects in the building in the absence of which we are unable to conclude that there was any deficiency in service on the part of the Respondents. Keeping in view these facts, we agree with the finding of the State Commission that both on the grounds of limitation as also on merits, the complaintdoes not merit consideration. We, therefore, dismiss the First appeal with no order as to costs.

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION

NEW DELHI

FIRST APPEAL NO.268 of 2007

(From the order dated 19.03.2007 in Complaint No.33/2002 of the

State Commission, Gujarat)

Members of the Atulraj

Owner’s Residents’ Association …Appellants

Versus

Rajul R. Shah and Anr. …Respondents

BEFORE:

HON’BLE MR. JUSTICE ASHOK BHAN, PRESIDENT

HON’BLE MRS. VINEETA RAI, MEMBER

For the Appellants : Mr.D.M. Soni, Advocate

For the Respondents : Mr.S.J. Mehta, Advocate

Pronounced on 6^th September, 2012

ORDER

PER VINEETA RAI, MEMBER

This First Appeal has been filed by eight members of Atulraj Owner’s Residents’ Association (hereinafter referred to as the ‘Appellants’) being aggrieved by the order of the State Consumer Disputes Redressal Commission, Gujarat (hereinafter referred to as the ‘State Commission’) which dismissed their complaint against opposite parties Rajul R. Shah and another, Respondents herein.

In their complaint before the State Commission, Appellants had contended that they had purchased flats from the Respondent and during the earthquake that occurred on 26.01.2001, there was heavy damage to these flats because of the unauthorized construction including penthouse, gallery etc. which had been constructed by the Respondents in violation of the sanctioned building plans and had put extra load on the building causing the damage. Further, the material used in the construction was also of inferior quality because of which the foundation of the building itself was very weak and against the stipulated safety norms. Therefore, being aggrieved because of the deficiency in service and the loss caused due of the damage to the building including the fact that during its extensive repairs, Appellants had to stay in rented accommodation, Appellants filed a complaint before the State Commission and requested that the Respondents be directed to pay Rs.16,20,000/- which included Rs.4 lakhs for physical and mental harassment and Rs.10,000/- as litigation costs.

Respondents on being served filed a written rejoinder denying the allegations made in the complaint which was also barred by limitation since it was filed more than 2 years beyond the statutory period of limitation. It was specifically denied that the damage caused to the building in the earthquake was because of any defects or illegal construction as alleged. In fact, the entire construction was done under the guidance of a structural engineer the building plans were also got passed by the Ahmedabad Municipal Corporation. It was further contended that the premises were handed over to the Appellants in 1998 and no complaints were received at that time and till 2001 about any defects or unauthorized constructions. Even the present complaint has been filed by only some of the members of the Association and that too after 4 years to exploit the Respondents.

The State Commission after hearing the parties and on the basis of evidence filed before it dismissed the complaint on grounds of limitation as also on merits. The operative part of the order of the State Commission reads as follows:

“As it transpires from the facts stated that circumstances mentioned though the possession were handed over to the complainants in 1998, till 2001 neither there were any disputes reported nor alleged for any defects in construction. The complainants averred that the defects were not visible prior to but the damage caused in 2001 earthquake, it came to their knowledge that the damage was only because of irregular and substandard construction and therefore, the cause of action had arisen only after the knowledge of damage. Thus, the complaint which was filed on 28.01.2002 is well within the time limit. We are unable to accept this submission keeping in mind the facts, documents and the statement of the complainants. Moreso, because the complainants have not filed any application for condonation of delay or obtained any order from this Commission thereupon. The complainants had sufficient time and opportunities. Thus, the complaint is obviously time barred.

The complainants have admitted that they had obtained possession of the respective flats from the Shivam Non-trading Association and they never complained regarding the substandard work at the time possession or thereafter. Thus, the complaint also suffers from vice of non-joinder of necessary party.

The complainants have not produced any expert opinion as to the cause of damage suffered by them. Nothing is mentioned, either in the complaint, rejoinder or in the documents, whether there was any damage to the flat or not, if so, where and upto what extent and what was the nature of damage even that has not been mentioned in the oral evidence also. The complainants have not produced any documents which could convince this Commission. It is also pertinent to note here that most of the bills do not suggest that whether those bills were relating to the flats in question, whether payment have been made or not and (if made) by whom. The complainants failed to prove their allegations, more particularly relating to sub-standard material and defective construction as there were no evidence worth the name and also the statements of the complainants are suspicious because they have observed silence for the amounts of Rs.1,00,000/- having been paid to them as an earthquake-air by the Government and also did not give effect of the same while claiming in this complaint.

The complaint filed by the members of the Atulraj Owners’ Residents’ Association bears signatures of only 8 members whereas there are 12 members as it appears from the documents……………………It is also not established from the documents that the association of members having resolved with the consent of all the members to file the complaint. Thus, the competence of the said association to file this complaint is definitely not proved and also the alleged losses are not proved.”

Hence, the present First Appeal.

Counsel for both parties made oral submissions. Counsel for Appellants reiterated that the certificate dated 08.02.2001 from the Ahmedabad Municipal Corporation which is on record clearly indicates that a Technical Team headed by a Structural Engineer who inspected the building in question in 2001 reported large cracks in the walls, columns and pillars and that the building could only be occupied by restoration and strengthening clearly confirming the defects and weaknesses in the building. Thus, an Expert found the building defective, a fact which was overlooked by the State Commission. Further, the Respondents had handed over the flats to the Appellants without getting the completion certificate which is a statutory requirement. The State Commission also erred in concluding that the case was time-barred by not appreciating the facts that the complaint could not be made in 1998 because at that time the defects in the building were not visible and became apparent following the earthquake when the building got damaged.

Counsel for the Respondents on the other hand stated that the State Commission had rightly concluded that the case was barred by limitation since it was filed about 4 years after the building had been taken possession of and during this period no complaints whatsoever had been received from any of the Appellants. It is also significant to note that at least 4 of the persons who have been allotted flats had not joined in the present complaint. The earthquake of 2001 was of very severe intensity measuring over 8 on the Richter Scale and several buildings in fact were destroyed in this earthquake. Under the circumstances, the report of the Technical Team cited by the Appellants that large and deep cracks had appeared in the walls and columns does not per se indicate that defective material was used or that there were structural defects in the building. If that had been the case, the entire building would have collapsed. No other evidence has been produced by the Appellants on whom there was onus to do so to prove that defective material was used. Therefore, the First Appeal being misconceived and unjustified does not merit consideration.

We have heard learned Counsel for both parties and have carefully gone through the evidence on record. The fact that the flats were occupied in 1998 and no complaints were made by the Appellants till 2002 i.e. for 4 years is an admitted fact. The Appellants’ contention that they were not aware that substandard material was used till it became exposed and visible following the earthquake was not accepted by the State Commission and we agree that it does not inspire confidence. If indeed there were defects and unauthorized constructions, this would have come to notice soon after the occupation of the premises in 1998. The earthquake in which some damage was caused to this building does not in the absence of any other evidence, indicate that substandard material was used or that there were defects in the building and that it had a weak foundation. An earthquake with a severity of over 8 in the Richter Scale almost invariably causes damages if not destruction to the buildings and the havoc that it caused in terms of destruction of life and property in large parts of the Gujarat is well known. Therefore, the evidence relied upon by the Appellants, namely, the report of the Technical Team of the Ahmedabad Municipal Corporation that some large and deep cracks appeared in the columns in the building by itself is not conclusive proof that this was caused because inferior building material was used or that the building had a weak foundation on which unauthorized constructions were made. We find force in the contention of the Counsel for Respondents that if that were so, the entire building would have collapsed. No credible evidence has been produced by the Appellants to prove that substandard material was used and there were defects in the building in the absence of which we are unable to conclude that there was any deficiency in service on the part of the Respondents. Keeping in view these facts, we agree with the finding of the State Commission that both on the grounds of limitation as also on merits, the complaintdoes not merit consideration. We, therefore, dismiss the First appeal with no order as to costs.

Sd/-

…………..…………………

(ASHOK BHAN J.)

PRESIDENT

Sd/-

………….……………….

(VINEETA RAI)

MEMBER

/sks/

the Limitation Act, 1963 does not apply to criminal proceedings unless there is express and specific provision to that effect. It is also settled law that a criminal offence is considered as a wrong against the State and the Society even though it is committed against an individual. - the final judgment and order dated 13.01.2006 passed by the High Court of Judicature at Allahabad in Government Appeal No. 159 of 1981 whereby the Division Bench of the High Court allowed the appeal filed by the State and set aside the order of acquittal of accused persons dated 08.09.1980 passed by the First Additional Sessions Judge, Etawah in Sessions Trial No. 77 of 1979.In the case on hand, merely because the High Court had taken nearly 25 years to dispose of the appeal, the present appellant cannot be exonerated on the ground of delay. As stated earlier, it is not a case of single murder but due to firing and gunshot, five persons died and one injured. Accordingly, we reject the said contention. 19) In the light of the above discussion, we are unable to accept the reasoning of the trial Court and submissions made by the learned counsel for the appellant. On the other hand, we fully agree with the conclusion arrived at by the High Court. Consequently, the appeal fails and the same is dismissed.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

1 CRIMINAL APPEAL NO. 434 OF 2006

Shyam Babu .... Appellant(s)

Versus

State of U.P. .... Respondent(s)

2

J U D G M E N T

P.Sathasivam,J.

1) This appeal has been preferred against the final judgment and order
dated 13.01.2006 passed by the High Court of Judicature at Allahabad in
Government Appeal No. 159 of 1981 whereby the Division Bench of the High
Court allowed the appeal filed by the State and set aside the order of
acquittal of accused persons dated 08.09.1980 passed by the First
Additional Sessions Judge, Etawah in Sessions Trial No. 77 of 1979.

2) The facts and circumstances giving rise to this appeal are as under:
(a) Moolu Singh and Kunji were real brothers. Prayag Singh, Pahunchi Lal
and Lalta Prasad were sons of Moolu Singh. Badan Singh and Gaya Prasad
were sons of Kunji. Ratan Singh is the son of Prayag Singh and Nathu Ram
and Rajendra Singh were sons of Pahunchi Lal. Jaswant Singh was the son of
Badan Singh and Ujagar Singh was the son of Gaya Prasad.
(b) On 21.12.1978, at about 9.00 a.m. one Nathu Ram-the Complainant and
his father Pahunchi Lal were ploughing their field situated at Har Balapur
P.S. Bharthana. At that time, the Complainant’s uncle - Gaya Prasad along
with his son Ujagar Singh were sowing their field which was nearer to the
field of the Complainant. At some distance, his uncle - Prayag Singh along
with his son Ratan Singh were also ploughing their field.
(c) There was a water channel passing towards north of their fields and
Mahipal Singh-the accused was irrigating his field through that channel.
Since water was overflowing in the channel and entering into the sowed
field of the Complainant’s uncle-Gaya Prasad, he asked Mahipal Singh to
repair the same. On this issue, an altercation took place between Mahipal
Singh and Gaya Prasad. The accused Mahipal Singh left the place saying
that he would see him.
(d) In the meanwhile, Lalta Prasad, first cousin of Gaya Prasad and his
nephew Jaswant Singh also reached there. At about 11.00 a.m., Nathu Ram
and his father Pahunchi Lal resumed ploughing their field. At that time,
accused Mahipal Singh and his brothers Shyam Babu and Tej Ram armed with
guns, Indal having rifle and Bhabhooti with lathi along with their father
Ramjit with spear and Babu Ram – son of Bhabhooti with countrymade pistol
reached there. Mahipal Singh, standing near Gaya Prasad, told his
associates that he was behaving in an arrogant manner and asked them to
make an assault on him. Thereupon, Shyam Babu and Mahipal Singh fired at
Gaya Prasad with their respective guns thereby causing injuries to him. On
seeing this, Ujagar Singh– son of Gaya Prasad, rushed to save his father
and he also sustained pellet injuries by Tej Ram. At that time, Prayag
Singh, Pahunchi Lal, Lalta Prasad and Jaswant Singh rushed to the scene of
occurrence. Then Ramjit and Bhabhooti shouted that they should also be
killed and immediately Indal fired at Jaswant Singh and Prayag Singh using
rifle and Babu Ram and Mahipal Singh fired at Pahunchi Lal and Lalta Prasad
with country made pistol and gun respectively. All of them fell down in
the field of Badan Singh except Prayag Singh, who received injuries. On
hearing the hue and cry, Rajendra Singh brother of Nathu Ram and several
other persons rushed to the spot and challenged the accused persons. On
seeing them, all the accused persons fled away. Due to fatal injuries,
Ujagar Singh, Jaswant Singh, Gaya Prasad, Pahunchi Lal and Lalta Prasad
died on the spot and Prayag Singh received grievous injuries.
(e) On the same day, i.e., on 21.12.1978, an FIR was lodged by the
Complainant - Nathu Ram, son of Pahunchi Lal, at P.S. Bharthana, Etawah
against the above-mentioned 7 persons under Sections 147, 148, 149, 307 and
302 of the Indian Penal Code, 1860 (in short ‘the IPC’).
(f) On 06.03.1979, after filing of charge sheet, the case was committed
to the Court of Sessions and numbered as Sessions Trial No. 77 of 1979.
The First Additional Sessions Judge, Etawah, by judgment dated 08.09.1980,
acquitted all the 7 accused persons holding that the prosecution has failed
to prove beyond reasonable doubt the guilt of the accused persons in the
case against them.
(g) Being aggrieved, the State filed Government Appeal No. 159 of 1981
before the High Court. Pending appeal in the High Court, 4 accused
persons, viz., Ramjit, Mahipal Singh, Indal and Bhabhooti died due to
natural death and the case against them stood abated.
(h) On 13.01.2006, the High Court allowed the appeal filed by the State
and convicted the remaining 3 accused persons, viz., Shyam Babu, Babu Ram
and Tej Ram under Sections 148, 307 and 302 read with Section 149 of IPC
and sentenced them to undergo rigorous imprisonment under various heads
mentioned above including life sentence and all the sentences were to run
concurrently.
(i) Being aggrieved by the judgment of the High Court, the remaining 3
accused persons preferred an appeal before this Court under Section 379 of
the Code of Criminal Procedure, 1973 (in short ‘the Code’). During the
pendency of the appeal, 2 accused persons, viz., Tej Ram and Babu Ram died
and appeal against them stood abated and only one accused, Shyam Babu is
before this Court facing conviction and sentence.
3) Heard Mr. V.K. Shukla, learned counsel for the appellant-accused and
Mr. Ardhendumauli Kumar Prasad, learned counsel for the respondent-State.
Discussion
4) The incident relates to death of 5 persons and causing injury to 1
person. According to the prosecution, all the 5 persons were shot dead and
one person sustained injuries due to firing by the accused persons. It is
revealed from the post mortem reports and the evidence of the Doctor, who
conducted autopsy on the dead bodies that death was caused due to shock and
hemorrhage as a result of ante mortem injuries about one day ago.
5) On receipt of the complaint, the Investigating Officer rushed to the
spot and collected the blood stained clothes of all the 5 deceased and also
collected the samples of blood stained earth near the place where dead
bodies of all the 5 were lying and the same were sent to Forensic Science
Laboratory (FSL) for opinion which opined that the samples were found to be
containing human blood.
6) After filing of charge-sheet against all the accused, the prosecution
examined several witnesses. Among them, Nathu Ram (PW-1), Prayag Singh,
injured witness (PW-3) and Mukut Singh (PW-6) were the persons who actually
witnessed the occurrence. In other words, PWs-1, 3 and 6 are eye-witnesses
to the occurrence. The trial Judge, after noting certain discrepancies and
their relationship with the deceased persons, disbelieved their version
and, ultimately, acquitted all the accused persons. On the other hand, the
High Court, being the appellate Court, analysed all the materials, more
particularly, the evidence of eye witnesses, medical evidence, FSL Report
etc., and arrived at a categorical conclusion that the prosecution has
established the case against all the accused persons.
7) Inasmuch as 4 accused died during the pendency of the appeal before
the High Court, the High Court convicted the remaining 3 accused, namely,
Shyam Babu, Tej Ram and Babu Ram. Even during the pendency of the present
appeal, 2 accused persons died, namely, Tej Ram and Babu Ram and as on
date, we are concerned with only one accused, namely, Shyam Babu – the
present appellant.
Power of the High Court in an appeal against acquittal :
8) Mr. V.K. Shukla, learned counsel for the appellant, submitted that in
view of the acquittal of the accused persons by the trial Court, the High
Court was not justified in interfering with the decision of the trial Court
and modifying the acquittal into conviction.
9) It is true that it would not be possible for the appellate Court to
interfere with the order of acquittal passed by the trial Court without
rendering specific finding, namely, that the decision of the trial Court is
perverse or unreasonable resulting in miscarriage of justice. At the same
time, it cannot be denied that the appellate Court while entertaining an
appeal against the judgment of acquittal by the trial Court is entitled to
re-appreciate the evidence and come to an independent conclusion. We are
conscious of the fact that in doing so, the appellate Court should consider
every material on record and the reasons given by the trial Court in
support of its order of acquittal and should interfere only on being
satisfied that the view taken by the trial Court is perverse and
unreasonable resulting in miscarriage of justice. We also reiterate that
if two views are possible on a set of evidence, then the appellate Court
need not substitute its own view in preference to the view of the trial
Court which has recorded an order of acquittal.
Reasoning on merits
10) Keeping the above principles in mind, let us consider the evidence
led by the prosecution and the ultimate decision of the High Court. We
have already mentioned that Nathu Ram (PW-1), Prayag Singh (PW-3) and Mukut
Singh (PW-6) have appeared as eye-witnesses to the occurrence. PW-1, son
of deceased Pahunchi Lal, has categorically narrated all the facts of the
occurrence. According to him, at about 9 or 9.30 a.m., on the fateful day,
he and his father were ploughing the field of Badan Singh which they had
taken on ‘batai’ and his uncle Gaya Prasad and his son Ujagar Singh were
sowing crop in their field. He further deposed that his uncle Prayag Singh
and his son Ratan Singh were ploughing their field situated at a distance
of 40-50 footsteps from the field in which they were working. Mahipal
Singh was irrigating his field through water channel abutting the field of
Gaya Prasad and since the water was overflowing and entering into the filed
of Gaya Prasad, he asked Mahipal Singh to repair the same which resulted in
an altercation between them and, thereafter, Mahipal Singh went away saying
that he would teach him a lesson. By that time, Lalta Prasad and Jaswant
Singh also reached there and all of them were sitting in the field of Badan
Singh. He further narrated that at about 11 a.m., when he and his father
resumed ploughing their field, at that time, Shyam Babu (present appellant-
accused) and Tej Ram with guns, Indal with rifle and Bhabhooti with lathi
along with their father Ramjit with spear (ballam) and Babu Ram-son of
Bhabhooti with country made pistol reached there. Mahipal Singh pointing
at Gaya Prasad started shouting that he was speaking much and should be
killed and, immediately thereafter, Shyam Babu and Mahipal Singh fired at
Gaya Prasad using guns. When Ujagar Singh rushed towards his father to
rescue him, he also received pellet injuries by Tej Ram. He further stated
that immediately Pahunchi Lal, Prayag Singh, Lalta Prasad and Jaswant Singh
also rushed to the scene of occurrence and then Ramjit and Bhabhooti
shouted that they should also be killed. Thereafter, Indal and Babu Ram
fired at Jaswant Singh and Pahunchi Lal with their respective weapons. The
accused persons also fired at Lalta Prasad and Prayag Singh with their
weapons. Ramjit and Bhabhooti also gave blows to the injured with their
respective weapons. On sustaining fatal injuries, Pahunchi Lal, Ujagar
Singh, Lalta Prasad, Gaya Prasad and Jaswant Singh died on the spot and
Prayag Singh received firearm injuries at his back. He also stated that
thereafter at about 12.00 noon he went to the police station Bharthana,
Etawah situated at a distance of 8 miles from his village and made a
written complaint about the occurrence.
11) The other eye-witnesses relied on by the prosecution and accepted by
the High Court were Prayag Singh (PW-3) - injured person and Mukut Singh
(PW-6), who corroborated the entire statement of Nathu Ram (PW-1) in all
material aspects.
12) A perusal of the cross-examination of these three eye-witnesses
clearly shows that all of them were subjected to lengthy cross-examination
but as rightly observed by the High Court, nothing tangible could be
brought on record to impair their credibility. We were also taken through
their evidence. We fully concur with the conclusion arrived at by the High
Court and hold that the trial Judge committed an error in discarding the
testimony of all the three eye-witnesses doubting their presence at the
scene of occurrence.
Evidentiary value of related witnesses :
13) Mr. V.K. Shukla, learned counsel for the appellant submitted that
since most of the prosecution witnesses are related to the deceased
persons, the same cannot be relied on. We are unable to accept the said
contention.
14) This Court has repeatedly held that the version of an eye-witness
cannot be discarded by the Court merely on the ground that such eye-witness
happened to be a relative or friend of the deceased. It is also stated
that where the presence of the eye-witnesses is proved to be natural and
their statements are nothing but truthful disclosure of actual facts
leading to the occurrence, it will not be permissible for the Court to
discard the statement of such related or friendly witnesses. To put it
clear, there is no bar in law on examining family members or any other
person as witnesses. In fact, in cases involving family members of both
sides, it is a member of the family or a friend who comes to rescue the
injured. If the statement of witnesses, who are relatives or known to the
parties affected is credible, reliable, trustworthy and corroborated by
other witnesses, there would hardly be any reason for the court to reject
such evidence merely on the ground that the witness was a family member or
an interested witness or a person known to the affected party or friend
etc. These principles have been reiterated in Mano Dutt and Another vs.
State of Uttar Pradesh, (2012) 4 SCC 79 and Dayal Singh and Others vs.
State of Uttaranchal, 2012 (7) Scale 165.
15) In the case on hand, Nathu Ram (PW-1) is closely related to all the
deceased as he is the son of the deceased Pahunchi Lal and nephew of
deceased Lalta Prasad. It is also true that Prayag Singh (PW-3), the
injured witness, is the real brother of the deceased Pahunchi Lal and Lalta
Prasad. Mukut Singh (PW-6) has also admitted in his cross-examination that
he has some land in joint khata with the victims but their testimony cannot
be discarded on the ground of relationship alone as they appeared to be
honest and truthful witnesses and their testimony has not been impaired in
their cross-examination. We have already referred to the lengthy cross-
examination of all these persons and nothing has come out to impair their
credibility. We have also observed that among these three eye-witnesses,
PW-3 is an injured witness and his evidence stands on higher pedestal.
There is no reason to either disbelieve his version or his presence at the
place of occurrence. On the other hand, we agree with their statement and
hold that the High Court was justified on relying upon their evidence.

Only surviving accused – effect :
16) Finally, Mr. V.K. Shukla pointed out that inasmuch as the present
appellant alone is the remaining accused since out of 7, other 6 accused
persons died due to natural death, he may be exonerated from the conviction
and sentence. In view of the clinching evidence led by the prosecution, we
are unable to accept his submission. We should not forget that due to
gruesome incident, 5 persons lost their lives and one person sustained
injuries. It is also brought in evidence that Shyam Babu, appellant herein
and Tej Ram used guns and the third one Babu Ram used country made pistol
for the said diabolical act of shooting. It is undisputed fact that 5
persons died and 1 person sustained injuries by use of such weapons. Even
otherwise, the present appellant along with others was convicted by the
High Court under Sections 148, 307 & 302 read with Section 149 IPC, hence
he cannot be exonerated. Taking note of all these aspects and considering
the gruesome murders, there is no reason to exonerate the present sole
appellant-accused merely because the other co-accused died due to natural
death.
Delay in disposal of appeal
17) It was argued by the learned counsel for the appellant that
considering the fact that though the appeal was filed before the High Court
at Allahabad in the year 1981, the same was disposed of by the High Court
only on 13.01.2006, i.e., after a gap of 25 years and, the sole appellant
be discharged from the commission of offence on the ground of delay. We
are unable to accept the said contention. This Court, in a series of
decisions, held that the Limitation Act, 1963 does not apply to criminal
proceedings unless there is express and specific provision to that effect.
It is also settled law that a criminal offence is considered as a wrong
against the State and the Society even though it is committed against an
individual. After considering various decisions including the decision of
the Constitution Bench of this Court in Abdul Rehman Antulay vs. R.S.
Nayak, (1992) 1 SCC 225 and Kartar Singh vs. State of Punjab (1994) 3 SCC
569 and a decision rendered by seven learned Judges of this Court in P.
Ramachandra Rao vs. State of Karnataka (2002) 4 SCC 578, recently on
17.08.2012, a Bench of two Judges of this Court in Ranjan Dwivedi etc. vs.
C.B.I., Through the Director General (Writ Petition (Crl.) No. 200 of 2001)
rejected similar argument based on delay either at the stage of trial or
thereafter.
18) In the case on hand, merely because the High Court had taken nearly
25 years to dispose of the appeal, the present appellant cannot be
exonerated on the ground of delay. As stated earlier, it is not a case of
single murder but due to firing and gunshot, five persons died and one
injured. Accordingly, we reject the said contention.
19) In the light of the above discussion, we are unable to accept the
reasoning of the trial Court and submissions made by the learned counsel
for the appellant. On the other hand, we fully agree with the conclusion
arrived at by the High Court. Consequently, the appeal fails and the same
is dismissed.

………….…………………………J.

(P. SATHASIVAM)

………….…………………………J.

(DR. B.S.CHAUHAN)
NEW DELHI;
SEPTEMBER 7, 2012.

| | | |

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2

whether the goods manufactured by the appellant are liable to be taxed as ‘Parts of Television Receivers’ falling under Tariff Entry 8529 of the Central Excise Tariff contained in the First Schedule to the Central Excise Tariff Act, 1985 (in short ‘the Tariff’) or as ‘Television Receivers’ under Tariff Entry 8528 of the Tariff, for the year 1989-90. -how the goods transported by them shall not be covered by the Rule, especially as a complete or finished article, ‘presented unassembled or disassembled’. The terminology of the Rule is wide enough to cover the goods transported by the appellant, and we are not convinced that the processes required to be carried out at the satellite units are so vital to the manufacture of the Television Receivers so as to render the goods transported by the appellant lacking the ‘essential character’ of Television Receivers. Rule 2(a) of the Rules for Interpretation has been couched in wide terms, and in terms of this Rule, it is our view that the goods produced by the appellant do in fact possess the essential character of Television Receivers.The appellant had also raised the plea of double-taxation; however, in our view once the question of classification of the goods transported by the appellant has been answered in the above manner, it is not open to us to grant the appellant any relief on this ground alone. Further, it is always open to the satellite units of the appellant to avail input tax credit on the duty paid by the appellant on the goods transported by them. 32. In view of the facts stated hereinabove, we are of the view that the Tribunal did not commit any error while passing the impugned order and, therefore, the appeal is dismissed with no order as to costs.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 4427 OF 2003

M/S Salora International Ltd. Appellant

Vs.

Commissioner of Central Excise, New Delhi Respondent

J U D G M E N T

ANIL R. DAVE, J

1. The challenge in this appeal is to an order dated 1st April, 2003
passed by the Customs, Excise and Gold (Control) Appellate Tribunal at New
Delhi (in short ‘The Tribunal’) in E/APPEAL No. 1553/02-B whereby the
Tribunal has dismissed the appeal filed by the appellant herein and upheld
the Order-in-Appeal passed by the Commissioner (Appeals).

2. The issue under consideration in this appeal is whether the goods
manufactured by the appellant are liable to be taxed as ‘Parts of
Television Receivers’ falling under Tariff Entry 8529 of the Central Excise
Tariff contained in the First Schedule to the Central Excise Tariff Act,
1985 (in short ‘the Tariff’) or as ‘Television Receivers’ under Tariff
Entry 8528 of the Tariff, for the year 1989-90.

3. The appellant is a manufacturer of various components of
television sets. The components are manufactured at its factory at Delhi.
Thereafter, the said components are assembled in the same factory for the
purpose of testing of each component and for checking the working of each
television set. Thereafter the television sets so assembled are
disassembled and then transported as parts to various satellite units of
the appellant company at different places. In these satellite units, the
separate components are re-assembled and, as per the appellant, some
further processes are carried out in order to make those sets marketable.
The issue is whether such components, which are manufactured at and
transported from the factory of the appellant at Delhi are liable to be
assessed as ‘Television Receivers’ or as ‘Parts of Television Receivers’.

4. The appellant was issued a show-cause notice dated 21.3.1990 by
the Assistant Collector, New Delhi, whereby it was asked to show-cause as
to why the goods manufactured by the appellant were not liable to be
classified under sub-heading 8528.00 of the Tariff as ‘Television
Receivers’, rather than under Entry 8529.00, as ‘parts’ of the same. The
appellant replied to the show-cause notice that the goods/components as
transported from its factory did not possess the essential characteristics
of finished Television Receivers as required by Rule 2(a) of the Rules for
Interpretation of the Tariff (in short the ‘Rules for Interpretation’), and
also detailed the various further processes required to be performed on
those goods for them to be considered as complete Television Receivers.
These contentions of the appellant appear to have been accepted as no
further action was taken by the Revenue until the year 1993.

5. Thereafter, the Collector of Central Excise, exercising his power
under Section 35E(2) of the Central Excise and Salt Act, 1944 vide order
dated 18.02.1994 directed the Assistant-Collector to file an appeal before
the Collector, Central Excise (Appeals) for setting aside the approval
granted to the classification of the goods of the appellant. The Collector
(Appeals) by order dated 21/22.07.1994 dismissed the appeal filed by the
Department.

6. Against the aforestated order, the Department preferred an appeal
before the Tribunal. The Tribunal by its order dated 18.02.2000 remanded
the matter to the Collector (Appeals), on finding that the earlier order of
the Collector (Appeals) was a non-speaking order and violative of the
principles of natural justice. Consequently, the Collector (Appeals) in the
remand proceedings decided the issue in favour of the Department vide order
dated 26.06.2002. Against this, the appellant filed an appeal before the
Tribunal, wherein the order impugned herein was passed. By the impugned
order, the Tribunal has accepted the contentions of the Department and held
the goods manufactured by the appellant liable to be classified under
Tariff Entry 8528 as ‘Television Receivers’ rather than under Tariff Entry
8529 as ‘parts’ thereof.

7. At the outset, recourse may be had to the respective Tariff
Entries during the relevant period:

“8528.00 – Television Receivers (including video monitors and video
projectors), whether or not incorporating radio broadcast receivers or
sound or video recording or reproducing apparatus.

8529.00 – Parts suitable for use solely or principally with the
apparatus of heading Nos. 85.25 to 85.28.”

8. Rules 1 & 2 of the Rules for the Interpretation of Excise Tariff
framed under Section 2 of the Act read as under:

“1. The titles of Sections and Chapters are provided for ease of
reference only; for legal purposes, classification shall be determined
according to the terms of the headings and any relative Section or
Chapter Notes and, provided such headings or Notes do not otherwise
require, according to the provisions hereinafter contained.

2. (a) Any reference in a heading to goods shall be taken to include a
reference to those goods incomplete or unfinished, provided that, the
incomplete or unfinished goods have the essential character of the
complete or finished goods. It shall also be taken to include a
reference to those goods complete or finished (or falling to be
classified as complete or finished by virtue of this rule), removed
unassembled or disassembled.”

9. Mr. Dushyant Dave, learned senior counsel appearing for the appellant
contended that the aforestated Rules of the Rules for Interpretation may
not be taken recourse to in the instant case, as there exists a clear
stipulation to the contrary in the Section Notes to Section XVI of the
Tariff, where the headings involved herein are located. Note 2 of the
Section Notes to Section XVI is as follows:

“2. Subject to Note 1 to this Section, Note 1 to Chapter 84 and to
Note 1 to Chapter 85, parts of machines (not being parts of the
articles of heading No. 84.84, 85.44, 85.45, 85.46 or 85.47) are to
be classified according to the following rules :

a. parts which are goods included in any of the headings of Chapter
84 or Chapter 85 (other than headings 84.85 and 85.48) are in all
cases to be classified in their respective headings;”

10. He further submitted that the classification of the goods
manufactured by the appellant was not correct. According to him, as per
the sound principle of classification and more particularly as per the
provisions of interpretative Rule 1, the goods ought to have been
classified under Tariff Entry 8529 because the appellant had manufactured
only parts of Television Receivers. He submitted that invocation of Rule
2(a) of the Rules for Interpretation was not justified because looking to
the facts of the case, the provisions of Rule 1 of the Rules for
Interpretation would apply because of the specific head for ‘parts of
Television Receiver’, being Tariff Head 8529.00.

11. The learned senior counsel cited the decision of this Court in
Commissioner of Customs Vs. M/S Sony India Ltd. [(2008) 13 SCC 145],
wherein a case involving analogous headings as those in this case in the
Schedule to the Customs Tariff Act, the goods imported by the assessee
therein were held to be ‘parts of Television Receivers’, and further
interpretative Rule 2(a) was held to be inapplicable to such goods. He
further contended that as the goods transported by the appellant were
substantially in the same position and condition as those transported by
the assessee in the above case, the ratio in the said decision would be
applicable to this case also.

12. In the written submissions submitted on behalf of the appellant, it
was stated that keeping in mind the law laid down by this Court in Union of
India vs. Tara Chand Gupta [(1971) 1 SCC 486], the goods manufactured by
the appellant ought to have been classified under Tariff Entry 8529.00 and
an effort was made to compare the facts of the said case with the present
one by submitting that in the case referred to hereinabove, parts of
scooter, in completely knocked down condition, were treated as parts of the
scooter and not scooter itself.

13. He further submitted that the Rule 1 of the Rules for Interpretation
clearly denotes that the title of Sections and Chapters are provided for
ease of reference only but for legal purposes, the classification should be
determined according to the terms of the headings, and as the appellant had
manufactured only parts of Television Receivers, the Revenue ought not to
have classified the goods manufactured by the appellant as ‘Television
Receivers’ under a different head instead of as ‘parts’ of the same.

14. In addition to these contentions, he also contended that if the goods
manufactured by it are held to be Television Receivers covered by Tariff
Entry 8528 mentioned above, it would lead to double-taxation as the
satellite units, where such goods are finally assembled into Television
Receivers, are in fact paying excise duty on the assembled goods under the
above Tariff Entry 8528.

15. On the other hand, on behalf of the revenue, Mr. P.P. Malhotra,
learned Additional Solicitor General justified the judgment delivered by
the Tribunal. He tried to narrate the facts which lead the Revenue to
classify the goods manufactured by the appellant as complete television for
the reasons, some of which are as follows:

a. The appellant was assembling manufactured parts of TV sets and
operating TV sets so as to check whether the entire set was
complete and operative and then the TV sets were being
disassembled;

b. The appellant was giving the same serial number on the chassis as
well as the sub assemblies of the TV sets;

c. The matching of the said chassis and sub-assemblies was done at the
factory of the appellant itself;

d. The packing material and literature were supplied by the appellant
along with the disassembled parts.

….etc.

16. He further contended that the goods produced and temporarily
assembled by the appellant, being essentially/substantially complete
Television Receivers in a disassembled state, would necessarily have to be
classified as such, owing to Rule 2(a) of the Rules for Interpretation. It
was a simple contention of the Revenue that the appellant had chosen to
disassemble the television sets as parts before transporting them in order
to avail the lower duty payable on such parts.

17. We have heard the learned counsel and considered the facts of the
case. We have also gone through the judgments cited by the learned counsel
and upon doing so, we are of the view that the Tribunal did not commit any
error while passing the impugned order.

18. The main question that arises for consideration in this case is that
of the applicability or otherwise of Rule 2(a) of the Rules for
Interpretation to the goods of the Appellant, and the effect of Section
Note 2 to Section XVI of the Tariff, reproduced above, on the applicability
of such provision.

19. On the question of the applicability of the Rules for Interpretation
vis-à-vis the Section Notes and Chapter Notes in the Tariff Schedule, the
rule laid down by this Court in Commissioner of Central Excise, Nagpur Vs.
Simplex Mills Co. Ltd. (2005) 3 SCC 51 may be seen to be applicable in this
case. In that decision, a three judge bench had the following to say on the
subject:

“The rules for the interpretation of the Schedule to the Central
Excise Tariff Act, 1985 have been framed pursuant to the powers
under Section 2 of that Act. According to Rule 1 titles of
Sections and Chapters in the Schedule are provided for ease of
reference only. But for legal purposes, classification "shall be
determined according to the terms of the headings and any relevant
section or Chapter Notes". If neither the heading nor the notes
suffice to clarify the scope of a heading, then it must be
construed according to the other following provisions contained in
the Rules. Rule-I gives primacy to the Section and Chapter Notes
along with terms of the headings. They should be first applied. If
no clear picture emerges then only can one resort to the subsequent
rules.”

20. Therefore, as clearly specified by the above rule, resort must first
be had only to the particular tariff entries, along with the relevant
Section and Chapter Notes, to see whether a clear picture emerges. It is
only in the absence of such a picture emerging, that recourse can be made
to the Rules for Interpretation.

21. In the matter at hand, the entire case of the Revenue is based on an
application of Rule 2(a) of the Rules for Interpretation to the goods
produced by the appellant, however, the applicability of this Rule cannot
be established unless the classification is first tested against the
relevant Section and Chapter Notes. In this case, the relevant Section Note
is Section Note 2 to Section XVI of the Tariff, as reproduced above. The
same may be reproduced again here for the purpose of a closer examination:

“2. Subject to Note 1 to this Section, Note 1 to Chapter 84 and to
Note 1 to Chapter 85, parts of machines (not being parts of the
articles of heading 84.84, 85.44, 85.45, 85.46 or 85.47) are to be
classified according to the following rules :

a. parts which are goods included in any of the headings of Chapter
84 or 85 (other than headings 84.85 and 85.48) are in all cases
to be classified in their respective headings;

b. …” [Emphasis added]

22. As can be seen from the above, the clear stipulation contained in
Section Note 2 is to the effect that ‘parts’ of goods mentioned in the
Chapters specified therein, shall in all cases be classified in their
respective heading. In that light, the fundamental enquiry in this case
must be that of whether the goods produced by the appellant may be said to
be covered by the above Section Note.

23. In view of the above mentioned Section Note, the question that arises
here is whether the goods produced by the appellant can be described as
‘parts’ under the goods included in any of the headings of Chapter 84 or
85. In this respect, it is the contention of the appellant that the goods
produced by them shall inevitably have to be considered as ‘parts’, as they
are unable to receive a picture, which is said to be a fundamental
requirement for a good to be considered as a ‘Television Receiver’. At the
first sight, one may find force in this contention. As the test in Section
Note 2 is simply that of whether the goods in question are ‘parts’, it may
be convincingly said that as the goods transported by the appellant are
incapable of functioning as ‘Television Receivers’, they shall have to be
considered to be ‘parts’ thereof.

24. However, on closer scrutiny of the unique facts of this case,
it is our view, the goods of the appellant may not be said to be ‘parts’ as
per Section Note 2 to Section XVI of the Tariff. The appellant not only
used to assemble all parts of the Television Receivers and make complete
television sets, but the said Television Receivers were also operated in
the manufacturing unit of the appellant and thoroughly checked and only
upon it being confirmed that the Television Receivers were complete in all
respects, they were disassembled and along with relevant material and
individual serial numbers, sent to the various satellite units. Once the
Television Receivers are assembled or are made completely finished goods,
the manufacturing process is over and we are not concerned as to what
happens subsequently. Whether they are sent to the satellite units of the
appellant in its complete form or in a disassembled form is irrelevant.

25. Looking to the facts of the case, it is not in dispute that complete
Television was manufactured by the appellant and therefore, in our opinion,
the Revenue had rightly classified the goods- product as complete
Television set even though it was subsequently disassembled.

26. It is seen from the material on record, that at the time of the parts
of the TV set being transported from the factory of the appellant, the
parts manufactured by it are already identified as distinct units. As it
can be seen from the affidavit of the Revenue, which has not been
controverted by the appellant, the parts manufactured by it are matched and
numbered within the factory itself, and also assembled together to receive
pictures for the purpose of testing and quality control. The consequence of
this is that the goods assembled at the satellite units would be
identifiably the same as those assembled together by the appellant in its
factory for the purpose of testing, as all such parts are already numbered
and matched. This element of identifiability shall take the goods
manufactured by the appellant away from being classified as ‘parts’, and
they will be classified as identifiable Television Receivers. The fact that
the packing material for the products is also manufactured and transported
by the appellant further lends credence to this conclusion.

27. The facts in the case of Sony India Ltd. (supra) may be distinguished
in this respect. In that case, the assessee had imported different parts of
television sets in 94 different consignments. The said parts were imported
separately in bulk, and thereafter, the process of matching, numbering and
assembling was carried out once they were in the possession of the
assessee. Therefore, it may be seen that what the assessee had imported in
that case were merely various parts which could not yet be identified and
distinguished as individual Television Receivers such as the parts
transported by the appellant in this case. The said decision is, therefore,
distinguishable on facts.

28. For further clarification, it may also be stated that if the
appellant had been in the practice of simply manufacturing and transporting
parts of Television Receivers in bulk, while leaving the matching and
numbering functions to be done at the satellite units, then it could have
availed the benefit of Section Note 2, because in such a case, there would
not have been any production of identifiable television sets such as in the
present case.

29. Once the question of applicability of Section Note 2 to Section XVI
of the Tariff is answered in the above manner, i.e. in the negative, there
may be seen to be no bar to the application of Rule 2 of the Rules for
Interpretation to the goods transported by the appellant. Consequently, the
only question that remains is with respect to whether such goods shall fall
foul of the said Rule.

30. In this regard, despite the attempts of the appellant to establish
otherwise, we are unable to see how the goods transported by them shall not
be covered by the Rule, especially as a complete or finished article,
‘presented unassembled or disassembled’. The terminology of the Rule is
wide enough to cover the goods transported by the appellant, and we are not
convinced that the processes required to be carried out at the satellite
units are so vital to the manufacture of the Television Receivers so as to
render the goods transported by the appellant lacking the ‘essential
character’ of Television Receivers. Rule 2(a) of the Rules for
Interpretation has been couched in wide terms, and in terms of this Rule,
it is our view that the goods produced by the appellant do in fact possess
the essential character of Television Receivers.

31. The appellant had also raised the plea of double-taxation; however,
in our view once the question of classification of the goods transported by
the appellant has been answered in the above manner, it is not open to us
to grant the appellant any relief on this ground alone. Further, it is
always open to the satellite units of the appellant to avail input tax
credit on the duty paid by the appellant on the goods transported by them.

32. In view of the facts stated hereinabove, we are of the view that the
Tribunal did not commit any error while passing the impugned order and,
therefore, the appeal is dismissed with no order as to costs.

…….………………………J

(D.K. JAIN)

……….……………………J

(ANIL R. DAVE)

NEW DELHI

SEPTEMBER 07, 2012

Friday, September 7, 2012

"The assignment of a promissory note by the payee is a part of the "cause of action" within the meaning of S.20 (c), C.P.C. and the assignee can sue on it in the Court having jurisdiction where the assignment took place:

THE HONOURABLE SRI JUSTICE N.R.L.NAGESWARA RAO

SECOND APPEAL NO.598 OF 2011

24-08-2012

M.R.Venu

Smt.Veluchuri Lakshmi and others

Counsel for the Appellant : Sri K.G.Krishna Murthy

Counsel for the Respondent: Sri Ravi Cheemalapati

<Gist :

>Head Note:

? Cases referred:
1.AIR 2005 A.P. 37
2.AIR 1958 A.P. 451
3.1969 An.W.R. 222
4.AIR 1966 A.P. 334
5. 2010 (5) ALT 96 (D.B)
6.AIR 1917 MADRAS 221

JUDGMENT:-

The unsuccessful defendant in O.S.No.119 of 1994 on the file of the Court
of Senior Civil Judge, Vizianagaram is the appellant herein.

02. The suit was one filed for recovery of a sum of Rs.70,800/- alleging that
the defendant has borrowed a sum of Rs.50,000/- on 06-09-1992 and executed a
promissory note in favour of one Laxmi Narsu who in turn transferred the
promissory note on 06-11-1993 for consideration in favour of the first
plaintiff at Srungavarapu Kota.

03. The defendant claimed that he did not borrow any amount from the original
holder Laxmi Narsu who is an employee of I.O.B at Chittoor. The defendant
obtained some loan from IOB, Chittoor and at that time the original holder
obtained signatures on blank papers and the suit promissory note might have been
fabricated. The suit is, therefore, not maintainable. He also pleaded that the
court at Vizianagaram has no jurisdiction to try the case.

04. After considering the evidence on record, the trial court has decreed the
suit and in an appeal the District Judge, Vizianagaram in A.S.No.95 of 2004 has
dismissed the appeal. Aggrieved by the concurrent judgments of the Courts
below, the present Second Appeal is sought to be filed.

05. The Second Appeal has been admitted on the following substantial questions
of law.
1. Whether the suit was properly instituted in the Court of the Senior Civil
Judge at Vizianagaram and whether the plaintiff is a holder in due course?
2. Whether the judgments of the Courts below are not proper as the Courts have
no jurisdiction to entertain the suits?

06. So far as the execution of the promissory note is concerned, there is a
dispute and the defendant has come up with a theory of contributing signatures
on blank papers. But, however, the evidence of PWs.1 and 2 clearly goes to show
that the transaction of lending money is true and PW.2 supports the above
version. His acquaintance with the original holder of the promissory note is
not in dispute. PW.2 is the scribe of the promissory note and is also the scribe
of the indorsement of transfer. This evidence has been accepted by the Court
below and, therefore, in view of the above circumstances, the question of non-
execution of the promissory note by the defendant cannot be accepted and it is a
question of fact appreciated by the Courts below, which does not call for any
interference.

07. However, the thrust of the argument of the counsel for the appellant is
that the transfer indorsement for consideration does not create jurisdiction to
the Court at Srungavarapu Kota as no transaction has taken place except the
alleged transfer and as the defendant resides at Chittoor and following the
decision reported in S.S.V.Prasad v. Y. Suresh Kumar1 the suit should have been
dismissed. No doubt, in the above decision, it was held that a transfer
endorsement does not create jurisdiction to the Court. The learned Judge has
taken into consideration the provisions of Section 20 C.P.C and took into
consideration the provisions of the Negotiable Instruments Act, 1881. Evidently,
according to the learned Judge, the provisions of Sections 68 to 70 of N.I Act
prescribes the place of presentation and if no place is agreed between the
parties, it should be the place where the defendant resides or carries on
business. Evidently, Sections 68 to 70 of N.I.Act deals with presentation of the
negotiable instrument claiming the amount. None of those sections refer to the
jurisdiction of a Court where the suit has to be filed. Presentation of a
negotiable instrument for honouring or dishonouring is quite different from the
institution of a suit for recovery of the amount due under the negotiable
instrument. Therefore, the purport under Sections 68 to 70 of the N.I Act
cannot be imported to consider the cause of action under Section 20 of C.P.C
which mandates the procedure for filing of the suits. Having considered the
scope of Section 20(C) of C.P.C, ultimately, the learned Judge found that cause
of action in the larger context has two components, viz., (a) existence of a
duty in the defendant towards the plaintiff and its breach; and (b) the damage
or loss arising out of that breach. Therefore, the scope of cause of action
evidently is from a bundle of facts. It does not start with the right of the
defendant and it starts with the right of the plaintiff in instituting a suit.
In this connection, it is useful to refer to a Division Bench decision of this
Court reported in N.Narayana Murthy v. G.Ganga Raju2 wherein it was held as
under
"Cause of action is a bundle of essential facts which the plaintiff has to prove
in order to sustain his action. This connotes that both the right to sue and
cause of action are the same and the cause of action is synonymous with the
right to sue."

08. The above judgment clearly lays down that a cause of action starts with
the right to sue and it is evidently vested with the plaintiff. In the decision
relied on by the counsel for the appellant in S.S.V.Prasad (1st supra) the
learned Judge has referred to the judgment of this Court reported in
P.S.Kothandarama Gupta v. Sidamsetty Vasant Kumar3, but, differed with the
learned Judge in holding that Section 70 of the N.I Act does not lay the place
of suing. In this connection, the judgment reported in Radhakrishnamurthy v.
Chandrasekhara Rao4 also deals with the situation of this nature and it was
held that a transfer of assignment on promissory note creates cause of action
within whose jurisdiction the transferor endorsement has taken place.
Therefore, the opinion of the two earlier single Judges of this Court is in
favour of holding that the cause of action is created by virtue of the transfer
of the promissory note at a place where it was transferred and particularly for
consideration.

09. It is to be noted that exception to Section 64 of the N.I.Act is as
follows:-
"Exception:-- Where a promissory note is payable on demand and is not
payable at a specified place, no presentment is necessary in order to charge the
maker thereof."
Therefore, the above provision makes it clear that a presentation of the
promissory note is not necessary and when presentation is not necessary, the
provisions of Sections 68 to 70 of N.I.Act can have no application.
Consequently, the jurisdiction has to be decided only under Section.20 C.P.C.

10. It is to be noted that this Court is a Court established by merger of
Andhra High Court and Hyderabad High Court. Andhra High Court being one carved
out of Madras High Court, which is a Court of record, all its decisions prior to
establishment of Andhra High Court are binding on High Court of Andhra Pradesh,
subject of course to other rules of doctrine of precedent. [vide decision
reported in Lakshminagar Housing Welfare Association Vs. Syed Sami @ Syed
Samiuddin(5)].

11. In this connection, it is useful to refer to the decision of a Division
Bench of Madras High Court reported in Manepalli Magamma and others v. Manepalli
Sathi Raju6 which was referred by the learned single Judge in Radhakrishnamurthy
(4th supra) with whom the learned Judge differed in the decision 1st
supra. Exactly, the similar question arose before the Division Bench of Madras
High Court and the question was whether assignee of a promissory note can sue in
the Court having jurisdiction where his assignment was made. Ultimately, it was
found that assignment is part of cause of action under Section 20 (c ) and
further it was held as under:-
"The expression within 'cause of action', in Section 20 C.P.C must be read with
reference to the suit instituted by the plaintiff; it means plaintiff's cause of
action, and not the cause of action on the documents, sued on irrespective of
the rights of the plaintiff under it, in other words, the cause of action as it
existed when the right to sue on the note arose for the first time."
"The assignment of a promissory note by the payee is a part of the "cause of
action" within the meaning of S.20 (c), C.P.C. and the assignee can sue on it in
the Court having jurisdiction where the assignment took place: Read Vs.Brown [
(1989) 22 Q B D 128."

12. It is to be noted under Section 48 of the N.I.Act a promissory note is
negotiable by the holder by endorsement and delivery thereof. There is not of
much difference with reference to an "assignment" or a "transfer of a promissory
note". They only create the right of the person in whom the endorsement or
assignment was made to recover the money against the executant.

13. In-fact, it was also held in the above decision that the above
interpretation may cause inconvenience to the defendant in particular cases,
but, it cannot be a factor. In-fact, the learned Judge in the decision relied
on by the appellant in S.S.V. Prasad (1st supra) referred to the inconvenience
of the defendants in para 33 opining that if the interpretation of right to sue
is given, it will result in disastrous consequences and the defendant will be
subjected to face litigation with a person who is a stranger to him and at a
place where he is neither resident nor undertaken any activity, if the suit is
filed on the strength of a promissory note said to have been endorsed by the
holder. In view of the judgment of the Division Bench which is binding and
which has been relied on by the other two single Judges, it is to be held that
jurisdiction of the Court to entertain the suit at Srungavarapu Kota on the
basis of the transfer for consideration cannot be doubted. Therefore, the
appeal is liable to be dismissed.
Accordingly, the Second Appeal is dismissed. No costs. Miscellaneous
petitions pending, if any, in this Second Appeal shall stand closed.
_______________________
N.R.L. NAGESWARA RAO,J
24-08-2012

LAW FOR ALL

LawforAll

advocatemmmohan

Just for legal information but not form as legal opinion

Sunday, September 9, 2012

Heaton & Heaton [2012] FamCAFC 139 (31 August 2012)

Saturday, September 8, 2012

Friday, September 7, 2012

"The assignment of a promissory note by the payee is a part of the "cause of action" within the meaning of S.20 (c), C.P.C. and the assignee can sue on it in the Court having jurisdiction where the assignment took place: