2019 SCC Vol. 9 October 21, 2019 Part 1

Armed Forces — Discharge — Exoneration in summary court-martial — Effect: Exoneration in summary court martial is no bar for initiation of discharge proceedings. In this case, since appellant did not possess requisite educational qualifications, he could not be continued in service and was rightly discharged in exercise of power under R. 13(3) Item 3 Table III of Army Rules. [Surendra Singh Yadav v. Chief Record Officer, (2019) 9 SCC 140]

Central Excise Act, 1944 — Ss. 4 and 11-AB: Dharmada i.e. a charitable donation taken from customers at the time of selling goods is not included in assessable value of the goods. [CCE v. JSW Steel Ltd., (2019) 9 SCC 130]

Central Excise Act, 1944 — Ss. 4, 4(3)(d) and 11-AB: Dharmada i.e. a charitable donation taken from customers at the time of selling goods is not included in assessable value of the goods. If an amount is paid at the time of the sale transaction for a purpose other than the price of the goods, it cannot form part of the transaction value. For the reason that such payment is not for the transaction of sale i.e. for the transfer of goods and any payment made alongside such a transaction cannot be treated as consideration for the goods. [D.J. Malpani v. CCE, (2019) 9 SCC 120]

Citizenship (Registration of Citizens and Issue of National Identity Cards) Rules, 2003 — R. 4-A and Sch. Cls. 2 and 3: After completion of exercise for preparation of NRC as per special procedure under the Rules, for preparation of National Register of Citizens (NRC) in State of Assam, fresh exercise on certain other parameters, held, not desirable. However, prayer of State Coordinator with regard to maintenance of security of NRC data on lines similar to security regime provided by AADHAR, accepted and directions issued accordingly. Manner in which inclusions and exclusions in updated NRC should be made available and published, specified. As regards validity of orders passed by Tribunal declaring persons to be of Indian origin or foreigners, decision of High Court should govern same. NRC shall be updated subject to decision of Constitution Bench wherein effect of Ss. 3(1)(a) and (b) of Citizenship Act, 1955 is pending consideration. [Assam Public Works v. Union of India, (2019) 9 SCC 70]

Consumer Protection — Consumer/Consumer Dispute/Locus Standi — Transaction with State or its Instrumentalities: Statutory dues/statutory fees levied by a statutory authority in lieu of service provided is amenable to Consumer Forum’s jurisdiction when there is a “deficiency in service” when statutory obligation/exaction does not amount to sovereign function, and there is no statutory exemption or immunity nor alternative forum provided for by statute. Though overinclusivity needs to be cautioned against, and Consumer Forums would need to satisfy themselves as to ingredients under Consumer Protection Act, before exercising their jurisdiction. It was also clarified that challenge to vires of a rule prescribing statutory dues/fees cannot be raised before Consumer Forum, and can only be agitated before High Court or Supreme Court. [Punjab Urban Planning & Development Authority v. Vidya Chetal, (2019) 9 SCC 83]

Courts, Tribunals and Judiciary — Judiciary — Judicial misconduct/ corruption/offences — Dismissal when warranted and proper: In this case, it was proved that appellant judicial officer consequent to his proximate relationship with lady lawyer passed certain judicial orders in favour of her clients including her mother and brother, hence, it was held that since appellant did not live up to expectations of integrity, behaviour and probity expected of him, no leniency can be shown. Besides, passing favourable orders because of proximity with lady lawyer is a kind of gratification which is impermissible. [Shrirang Yadavrao Waghmare v. State of Maharashtra, (2019) 9 SCC 144]

Criminal Procedure Code, 1973 — S. 438 — Power under, to grant anticipatory bail — Object: Refusal to grant anticipatory bail does not amount to denial of rights conferred upon applicant under Art. 21 of the Constitution. Though object of S. 438 CrPC is to safeguard personal liberty of an individual, a delicate balance is required to be established between the two rights i.e. safeguarding personal liberty of an individual and societal interest, and that (ii) grant of anticipatory bail, particularly in economic offences hampers the effective investigation in case, held, power to grant anticipatory bail being an extraordinary power, has to be exercised sparingly, more so, in cases of economic offences. Such bail must be granted only in exceptional cases after application of mind in relation to nature and gravity of accusation, possibility of applicant fleeing justice and other factors. Power to be invoked where the case alleged is frivolous or groundless. As regards money-laundering offences (as involved herein), further held, such offences involving several stages require a systematic and analysed investigation. Success in such investigation would elude if the accused knows that he is protected by a pre-arrest bail order. Exercising power to grant anticipatory bail in money-laundering cases would be to scuttle the statutory power of arrest enshrined in the relevant statute with sufficient safeguards. [P. Chidambaram v. Directorate of Enforcement, (2019) 9 SCC 24]

High Court Judges (Salaries and Conditions of Service) Act, 1954 — Ss. 14 & 2(1)(g), Sch. I Pt. I Rr. 2 & 7 and Pt. III — Acting Chief Justice of High Court whether entitled to pensionary benefits applicable to retired Chief Justice of High Court: In this case petitioner retired as acting Chief Justice after putting in 14 months of service in that capacity. While determining that whether he was entitled to pensionary benefits applicable to retired Chief Justice of High Court, the Supreme Court held that for computing pension for those 14 months, his pension shall be counted as Chief Justice i.e. Rs 1,21,575 p.a. and for rest of completed years of service his pension is to be computed as Judge of High Court. [K. Sreedhar Rao v. Union of India, (2019) 9 SCC 111]

Insolvency and Bankruptcy Code, 2016 — S. 7 — Applicability of bar of limitation vis-à-vis S. 7 application filed by a financial, where the recovery certificate against the debtor was issued more than three years prior to the date of filing of the application: In this case, a default of Rs 6.7 crores was found as against R-2. R-2 was declared an NPA on 23-12-1999 and ultimately, a Recovery Certificate dated 24-12-2001 was issued for this amount. A S. 7 petition was filed by R-1 on 21-7-2017 before NCLT claiming that this amount together with interest, which kept ticking from 1998, was payable. It was held by the Supreme Court that when the recovery certificate dated 24-12-2001 was issued, this certificate injured effectively and completely the appellant’s rights, as a result of which limitation would have begun ticking. Thus, the claim was held to be time-barred. [Vashdeo R. Bhojwani v. Abhyudaya Coop. Bank Ltd., (2019) 9 SCC 158]

Penal Code, 1860 — Ss. 304-B and 498-A — Dowry death by burning, and cruelty: In this case, conviction of appellant-accused (parents-in-law of deceased victim), was upheld by High Court under Ss. 304-B and 498-A IPC. Demands for dowry and ill-treatment/cruelty on failure to meet said demands, was established. Death was on account of burn injuries suffered by deceased which injuries were caused by use of kerosene, stood proved. Presumption under S. 113-B, Evidence Act, was also not rebutted, hence, conviction of appellants was confirmed. [Jagdish Chand v. State of Haryana, (2019) 9 SCC 138]

Penal Code, 1860 — Ss. 405 and 415 — Criminal breach of trust and cheating: Law recognises difference between simple payment/investment of money and entrustment of money or property. Mere breach of promise, agreement or contract does not, ipso facto, constitute offence of criminal breach of trust under S. 405 without there being clear case of entrustment. In context of contracts distinction between mere breach of contract and cheating would depend upon fraudulent inducement and mens rea. For sustaining these charges, existence of fraudulent or dishonest intention right at the beginning of transaction with mens rea must be shown. Breach of contractual obligations which are accompanied by fraudulent, dishonest or deceptive inducements resulting in involuntary and inefficient transfer stand criminalised under S. 415 IPC. [Satishchandra Ratanlal Shah v. State of Gujarat, (2019) 9 SCC 148]

Representation of the People Act, 1951 — Ss. 33-A(2) and 125-A (as inserted in 2002) — Disclosure of information: Disclosure of information in candidate’s affidavit regarding pending criminal case(s), held, now includes information as to case(s) in which only cognizance has been taken, over and above disclosure of information as to case(s) in which charge-sheet has been filed. Candidate bound to disclose, in affidavit filed under S. 33-A(2) while delivering nomination paper, case(s) pending against him in which cognizance has been taken by court in terms of Entry 5(ii) of Form 26 of the Conduct of Elections Rules, 1961, apart from case(s) in which charge-sheet has been filed and other information as required to be furnished. [Satish Ukey v. Devendra Gangadharrao Fadnavis, (2019) 9 SCC 1]

Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act, 1989 — Ss. 18-A and 3(2)(ii) — High Court Registry’s refusal to register anticipatory bail petitions in SC/ST atrocity matters: The act of numbering/registering a petition is purely administrative. Objections taken by High Court Registry on maintainability require judicial application of mind by utilising appropriate judicial standard. Moreover, S. 18-A of SC/ST Act itself indicates application of judicial mind. [P. Surendran v. State, (2019) 9 SCC 154]

Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 — Ss. 13, 14, 17 and 35 [Prior to insertion of S. 17(4-A) vide Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Act, 2016 (44 of 2016) w.e.f 1-9-2016] — Leasehold/Tenancy rights over secured asset: Tenant on basis of unregistered/oral tenancy agreement is not entitled to possession of secured asset for more than period prescribed under S. 107 of TP Act in case of tenancy under general law, or as prescribed under Rent Act concerned, if Rent Act Tenancy is established on facts. Benefit of Rent Act against SARFAESI Act proceedings is not available to a tenant-at-sufferance i.e. a tenant who comes into possession of land by lawful title, but who holds on to it, wrongfully, after termination of the lease or expiry of lease by efflux of time. [Bajarang Shyamsunder Agarwal v. Central Bank of India, (2019) 9 SCC 94]

Specific Relief Act, 1963 — S. 16(c) — Readiness and willingness to perform — Non-establishment of — Financial capacity of vendee whether established: In this case, husband of appellant, was as an employee of a company in occupation of residential suit premises on monthly rent and appellant claimed to have entered into an agreement of purchase of said property for a total sum of Rs 50 lakhs and had paid a sum of Rs 1 lakh to the respondent defendant vendors while respondents denied the claim of appellant to seek specific performance of the agreement. Sole document relied upon by appellant to prove her readiness and willingness was the approval of loan by bank and such approval was subject to two conditions viz. furnishing of income tax documents of appellant and the property documents. It was held that the appellant had not produced any income tax record or bank statement in support of her plea of financial capacity so as to be ready and willing to perform contract and the mere fact that bank had assessed the financial capacity of appellant while granting loan earlier in respect of another property was not sufficient to discharge of proof of financial capacity to hold that appellant was ready and willing to perform her part of the contract. Hence, in this case, order of High Court declining discretionary relief for specific performance, was upheld. [Ritu Saxena v. J.S. Grover, (2019) 9 SCC 132]