LawforAll

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Wednesday, September 30, 2015

Sanction is necessary as the alleged offence is said to be done while exercising their official duties - No offence is also made out against the accused - proceedings are labile to be quashed= The above decisions reiterate the well-settled principles that while exercising inherent jurisdiction under Section 482 Cr.P.C., it is not for the High Court to appreciate the evidence and its truthfulness or sufficiency inasmuch as it is the function of the trial court. High Court’s inherent powers, be it, civil or criminal matters, is designed to achieve a salutary public purpose and that a court proceeding ought not to be permitted to degenerate into a weapon of harassment or persecution. If the averments in the complaint do not constitute an offence, the court would be justified in quashing the proceedings in the interest of justice. 24. Second appellant-Dr. S.V. Joshi was the Associate Director. Third appellant Dr. G. Sunderarajan was the Director of ARCI and both of them were acting in their official capacity. Appellants No. 2 and 3 neither acted in their personal capacity nor stood to receive any personal monetary benefits from the transfer of said technology. Appellants No.2 and 3 were representatives of ARCI which is a grant-in-aid research and development institute under the Ministry of Science and Technology, Government of India and hence previous sanction as mandated under Section 197 Cr.P.C. must have been obtained before proceeding against them as their act was only in discharge of their official duties. In this regard, our attention was drawn to a communication from Ministry of Science and Technology indicating that for initiating criminal proceeding against appellants No. 2 and 3, permission is required and the said communication reads as under: “ ….. They have both been appointed by the Government of India and are governed by all rules and regulations of the Government of India…. It is further stated that we have examined all the actions taken by Dr. G. Sundararajan and S.V. Joshi in relation to the activities pertaining to the Technology Transfer Agreement dated 18/06/1999 between ARCI and M/s Nimra Cerglass, Hyderabad and are of firm view that these actions were taken by the above officers while discharging their official duty in good faith and in the best interest of ARCI. Therefore, for initiating criminal proceeding against Dr. G. Sundararajan and Dr. S.V.Joshi, Government of India permission is required.” The alleged acts of the appellants No. 2 and 3 were committed while acting in discharge of their official duties, sanction from the competent authority was necessary before initiating the criminal prosecution against them. Since we have held that from the averments in the complaint, the essential ingredients of dishonest intention is not made out, we are not inclined to further elaborate upon this point. 25. As per the terms of the technology transfer agreement, ARCI has to conduct performance guarantee tests and in those tests when ARCI was unsuccessful in achieving the targeted specifications, ARCI cannot be said to have acted with dishonest intention to cheat the respondent. Appellants- ARCI is a structure of Scientists, Team Leader and Associate Director and it is the team leader who actually executes the project, the job of Associate Director and Director is to monitor/review progress of the project. Appellants No.2 and 3 who were the Associate Director and Director of ARCI respectively were only monitoring the progress of the project cannot be said to have committed the offence of cheating. In the facts of the present case, in our view, the allegations in the complaint do not constitute the offence alleged and continuation of the criminal proceeding is not just and proper and in the interest of the justice, the same is liable to be quashed. 26. In the result, the impugned order is set aside and this appeal is allowed. The criminal proceedings against appellants No.1 to 3 in CC No. 840 of 2008 on the file of II Metropolitan Magistrate at Cyberabad, is quashed.

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                                                                REPORTABLE                         IN THE SUPREME COURT OF INDIA      ...

Whether there is a dispute and whether there is necessary to appoint arbitrator - invoking Bank Guarantee without intimation and without justifiable cause is a good ground to say that there is a dispute= by invoking the bank guarantee without any justifiable reason and without giving any prior intimation to the petitioner company, the respondent company committed breach of the terms of the contract =I am of the view, that there is a dispute between the parties which requires to be resolved by an Arbitrator under the provisions of the Act. 11. There is no dispute to the effect that there is a clause with regard to arbitration in the contract which had been entered into between the parties on 24.12.2007. The arbitration clause incorporated in the contract reads as under: “33.0 Arbitration. 33.1 Where any dispute is not resolved as provided for in the preceding clause 32.1 then such dispute shall be referred to and settled by arbitration under and in accordance with the provisions of the rules applicable in land of Law. The Award shall be final and binding upon the Supplier and Purchaser. The place of arbitration shall be Paris. 33.2 During settlement of disputes and arbitration proceedings, unless otherwise agreed in writing both Supplier and Purchaser shall be obliged to carry out their respective obligations under the Contract.” 12. As there was a dispute with regard to quality of material supplied, some letters were exchanged between the parties and the representatives of both the parties had also met for the purpose of resolving their disputes but unfortunately, the disputes with regard to quality of the material supplied could not be resolved and ultimately the respondent company had to invoke the bank guarantee. 13. In the aforestated circumstances, it cannot be said that there is no dispute between the parties and therefore, in my opinion, an Arbitrator is required to be appointed as per the provisions of Section 11(6) of the Act. 14. In view of the aforestated circumstances, Mr. Justice A.P. Shah, former Chief Justice of High Court of Delhi, having his office at F-15, Hauz Khas Enclave, New Delhi-110016, is appointed as an arbitrator and the place of arbitration shall be Delhi. Remuneration to be paid shall be fixed by the learned Arbitrator. The parties to the litigation have agreed to the above appointment and they have also agreed that they would request the learned Arbitrator to complete the arbitral proceedings preferably within six months and they shall extend their cooperation to the learned Arbitrator so that the proceedings can be concluded at an early date. 15. Intimation of this order be forwarded to the learned Sole Arbitrator by the Registry of this Court. The Arbitration Petition is allowed in the aforesaid terms.No Costs.

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                                                   NON-REPORTABLE                         IN THE SUPREME COURT OF INDIA                ...

Whether, for the purposes of Wealth Tax Act (hereinafter referred to as the 'Act'), the market value of the vacant land belonging to the assessee should be taken at the price which is the maximum compensation payable to the assessee under the Urban Land Ceiling Act, 1962? = When the asset is under the clutches of the Ceiling Act and in respect of the said asset/vacant land, the Competent Authority under the Ceiling Act had already determined the maximum compensation of Rs.2 lakhs, how much price such a property would Government and is awaiting notification under Section 10 of the Act for fetch if sold in the open market? We have to keep in mind what a reasonably assumed buyer would pay for such a property if he were to buy the same. Such a property which is going to be taken over by the this purpose, would not fetch more than Rs.2 lakhs as the assumed buyer knows that the moment this property is taken over by the Government, he will receive the compensation of Rs.2 lakhs only. We are not oblivious of those categories of buyers who may buy “disputed properties” by taking risks with the hope that legal proceedings may ultimately be decided in favour of the assessee and in such a eventuality they are going to get much higher value. However, as stated above, hypothetical presumptions of such sales are to be discarded as we have to keep in mind the conduct of a reasonable person and “ordinary way” of the presumptuous sale. When such a presumed buyer is not going to offer more than Rs.2 lakhs, obvious answer is that the estimated price which such asset would fetch if sold in the open market on the valuation date(s) would not be more than Rs.2 lakhs. Having said so, one aspect needs to be pointed out, which was missed by the Commissioner (Appeals) and the Tribunal as well while deciding the case in favour of the assessee. The compensation of Rs.2 lakhs is in respect of only the “excess land” which is covered by Sections 3 and 4 of the Ceiling Act. The total vacant land for the purpose of Wealth Tax Act is not only excess land but other part of the land which would have remained with the assessee in any case. Therefore, the valuation of the excess land, which is the subject matter of Ceiling Act, would be Rs.2 lakhs. To that market value of the remaining land will have to be added for the purpose of arriving at the valuation for payment of Wealth Tax. The question formulated is answered in the aforesaid manner. In the result, the appeals succeed and are hereby allowed. There shall, however, be no order as to costs.

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                                                                  REPORTABLE                         IN THE SUPREME COURT OF INDIA     ...