2017 SCC Vol. 5 May 28, 2017 Part 1

Board for Industrial and Financial Reconstruction Regulations, 1987 — Regns. 19(4) and 19(5) — Refusal of registration of reference by Registrar of BIFR: The power of “scrutiny” cannot be understood to be vesting in Registrar and the other administrative authorities like the Secretary and the Chairman of BIFR, the power to adjudicate the question as to whether a company is an industrial company within the meaning of S. 3(e) r/w Ss. 3(f) and 3(n) of SICA. Therefore, refusal of registration by the Registrar and Secretary/Chairman of BIFR on such ground, is non est in law. [Bank of New York Mellon London Branch v. Zenith Infotech Ltd., (2017) 5 SCC 1]

Competition Act, 2002 — Ss. 3 and 2(l) — Anticompetitive agreements — Enterprise/Association of enterprises barred from entering into such agreements i.e. those falling within the ambit of S. 3: The expression “enterprise” may refer to any entity, regardless of its legal status or the way in which it was financed and may include natural as well as legal persons. Any entity, regardless of its form, constitutes an “enterprise” within the meaning of S. 3 of the Act when it engages in economic activity. Economic activity is central to concept of Competition Law. Hence, “enterprise/association of enterprises” must be found to be functionally involved in economic activity in relevant market, regardless of its form. Economic activity, as is generally understood, refers to any activity consisting of offering products in a market regardless of whether the activities are intended to earn a profit. An activity that has an exclusively social function and is based on the principle of solidarity is not likely to be treated as carrying on an economic activity so as to qualify the expressions used in S. 3. “Agreement” or “concerted practice” is the means through which enterprise or association of enterprises or person or association of persons restrict competition. These concepts translate the objective of Competition Law to have economic operators determine their commercial policy independently. Competition Law is aimed at frowning upon the activities of those undertakings (whether natural persons or legal entities) who, while undertaking their economic activities, indulge in practices which effect the competition adversely or take advantage of their dominant position. Hence, entities claiming to be trade unions and acting solely in their capacity as trade unions would be beyond the purview of the Act. However, if even a trade union or its constituent member(s) act in such a way that they take economic decisions in similar or identical businesses to competing businesses in the relevant market, not acting only as a trade union simpliciter, then trade union/its constituent members, would fall within “enterprise/association of enterprises” which attract umbrage of S. 3. In such cases, matter cannot be brushed aside by merely giving it a cloak of trade unionism. [Competition Commission of India v. Coordination Committee of Artistes and technicians of West Bengal Film & Television, (2017) 5 SCC 17]

Electricity Act, 2003 — S. 125 — Appeal to Supreme Court — Limitation: Delay beyond maximum statutory period of 60 days plus 60 days is non-condonable. Electricity Act, 2003 being a special legislation within meaning of S. 29(2) of Limitation Act, prescription with regard to limitation has to have binding effect and the same has to be followed regard being had to its mandatory nature. Hence, delay beyond said 120 days cannot even be condoned under Art. 142 of the Constitution. [ONGC v. Gujarat Energy Transmission Corpn. Ltd., (2017) 5 SCC 42]

Criminal Procedure Code, 1973 — S. 427(1) — Person already undergoing a sentence of imprisonment sentenced on a subsequent conviction to imprisonment: Such subsequent term of imprisonment would normally commence at the expiration of imprisonment to which he was previously sentenced. Only in appropriate cases, considering facts of the case, can court make the sentence run concurrently with an earlier sentence imposed. Investiture of such discretion, presupposes that such discretion be exercised by court on sound judicial principles and not in a mechanical manner. Whether or not the discretion is to be exercised in directing sentences to run concurrently, would depend upon nature of offence/offences and facts and circumstances of each case. [Anil Kumar v. State of Punjab, (2017) 5 SCC 53]

Urban Land (Ceiling and Regulation) Act, 1976 — Ss. 6(1), 10(1), (2), (3), (5) & (6) — Appeal before Tribunal against orders declaring excess land by competent authority that were upheld by Tribunal in earlier litigation: G and M, daughters of BB (who died intestate in 1947) challenged proceedings issued under ULC Act declaring suit property as excess land after 8 yrs after said declaration and Tribunal reopened proceedings and held that G and M are entitled to one unit of land out of land owned by their father and set aside ULC proceedings. In civil appeal, Supreme Court held that Tribunal could not have reopened proceedings which had already terminated before it. [State of Gujarat v. Maliben Nathubhai, (2017) 5 SCC 57]

Civil Procedure Code, 1908 — Or. 21 R. 1(3) — Permission for withdrawal of suit with liberty to file fresh suit — When can be granted: The power to allow withdrawal of suit is discretionary, and the principle under Or. 23 R. 1(3) CPC is founded on public policy to prevent institution of suit again and again on the same cause of action. Further, suit may be withdrawn with permission to bring a fresh suit only when court is satisfied that the suit must fail for reason of some formal defect or that there are other sufficient grounds for allowing the plaintiff to institute a fresh suit. [V. Rajendran v. Annasamy Pandian, (2017) 5 SCC 63]

U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 (13 of 1972) — Ss. 3(a), 3(g) and 12 — Devolution of tenancy on death of original tenant: The definition of “family” in S. 3(g) and its reference in S. 12 of the 1972 Act is not relevant for determination of question as to who would become tenant on death of original tenant. It is the word “heir” used in S. 3(a) of the 1972 Act which is relevant for said determination. Since the word “heir” is not defined in U.P. Rent Act, 1972, the said word has to be given the same meaning as would be applicable to the general law of succession. [Durga Prasad v. Narayan Ramchandaani, (2017) 5 SCC 69]

Motor Vehicles Act, 1988 — S. 166 — Compensation — Determination — Permanent disability — Proof of income: 45 year old house painter doing daily work/piece-rated work made self-estimation of earning around Rs 15,000 to Rs 16,500 and no other evidence of income was available on record, it was held that for a casual worker, who goes from house to house and place to place doing his painting work it is difficult to get any evidence, since there is no employer. He does his daily work, sometimes piece-rated work as well, that is why he made a moderate self-estimation of his income of Rs 15,000 to Rs 16,500. [Shivakumar M. v. Bengaluru Metropolitan Transport Corpn., (2017) 5 SCC 79]

Motor Vehicles Act, 1988 — Ss. 166 and 168 — Compensation — Determination of — Permanent disability: Injured 29 yrs old claimant driver by profession had to remain hospitalised for four months and a leg had to be amputated and Courts below reduced disability of 90% as certified by doctor to 60% on ground that despite amputation of his left leg, remaining body of appellant was healthy. Condoning delay, held, with amputated leg appellant cannot pursue his livelihood as a driver or daily-wage labourer and accepting doctor’s certificate appellant held to have sustained a 90% permanent disability. [Lal Singh Marabi v. National Insurance Co. Ltd., (2017) 5 SCC 82]

Government Grants, Largesse, Public Property and Premises — Resumption — Non-compliance with statutory requirements/conditions of allotment/directions of State Government, such as non-execution of lease deed by allottee: IDCO (the allotter) is a statutory authority and as per Act concerned it can act only on the basis of written lease deed and the execution of lease deed is necessary, and it is in public interest to prevent unauthorized leasing out of property on its behalf. Further, lease is required to be executed in a prescribed format in the shape of formal document which is sine qua non and in the absence thereof, it would not be permissible to hold that relationship of lessor and lessee came into being. [Orissa Industrial Infrastructure Development Corpn. v. Mesco Kalinga Steel Ltd., (2017) 5 SCC 86]

Income Tax Act, 1961 — S. 45 r/w S. 2(14) — Gain from sale of assets of a dissolved firm, though as a going concern — Consideration of, as capital gain (and not capital receipt) in the hands of the original partners: The partnership firm stood dissolved on 6-12-1987 in terms of partnership deed but the winding-up court passed an order permitting the group of partners to continue the business as an interim arrangement till the completion of winding-up proceedings. Subsequently, the assets of the firm were put to sale in accordance with Cl. 16 of the partnership deed, though as a going concern; and outgoing partners (assessees herein) received their net share of the value of the assets of the firm out of the amount received by way of sale of the assets of the firm as per the partnership deed. It was held that the firm, after dissolution did not carry on business as an existing firm and a few ex-partners with controlling interest were allowed to continue the business activity in the interregnum as a stopgap arrangement. Further, the firm did not file income tax returns after the date of dissolution and it was this AOP which was filing the returns and getting the same assessed in that capacity and paying the income tax thereupon. Further, in the orders passed by the High Court from time to time, the firm had always been described as “the dissolved partnership firm”. Thus, the assets which were sold ultimately on 20-11-1994 were of a dissolved partnership firm, though as a going concern. Further, once the asset of the firm that was sold is held to be the “capital asset”, gain therefrom is to be treated as capital gain in the hands of the original partners within the meaning of S. 45 of the Act. [Vatsala Shenoy v. CIT, (2017) 5 SCC 104]

Civil Procedure Code, 1908 — Ss. 100, 54 and Or. 20 R. 18 — Substantial question(s) of law — Whether involved: Having regard to nature of controversy and issues involved regarding inheritance and ownership based on interpretation of documents (exhibits), questions concerned did constitute substantial questions of law. [Sk. Bhikan v. Mehamoodabee, (2017) 5 SCC 127]

Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 — Generally: Position reviewed in different States, regarding implementation of the Act in respect of UGC, and various directions passed. [Sunanda Bhandare Foundation v. Union of India, (2017) 5 SCC 131]

Service Law — Judiciary — Retirement/Superannuation: As there were serious allegations of misconduct made against R-1, who was at the relevant point of time a District and Sessions Judge in the Bihar Higher Judicial Services was compulsorily retired in exercise of the powers vested with the Government on the recommendation made to that effect with the High Court of Judicature at Patna. The High Court, in terms of the impugned judgment, quashed the order of compulsory retirement. Supreme Court held that appellant High Court (on Administrative Side) is duty-bound to take appropriate disciplinary action against R-1 and he cannot be compulsorily retired with all retiral benefits. At the same time, officer who is to be retired on grounds of misconduct is entitled to claim that due process of law be followed. [High Court of Judicature at Patna v. Ajay Kumar Srivastava, (2017) 5 SCC 138]

Telegraph Act, 1885 — Ss. 10, 15 and 16 — Laying of electrical transmission lines by licensee/deemed licensee under Electricity Act, 2003: Telegraph Act, 1885 provides for unobstructed access to lay down telegraph lines by telegraph authority. Power Grid Corpn., being Central transmission utility (CTU), is deemed licensee under S. 14 of 2003 Act and also treated as authority under 1885 Act. By virtue of S. 164 of 2003 Act, Power Grid Corpn. acquires all powers which are vested in a telegraph authority under 1885 Act including power to eliminate any obstruction in laying down of power transmission lines. As Power Grid Corpn. is given powers of telegraph authority, Rule 3 of 2006 Rules requiring prior consent of owner or occupier of building or land for construction of transmission towers or laying transmission lines ceases to apply in case of Power Grid Corpn. [Power Grid Corporation of India Ltd. v. Century Textiles & Industries Ltd., (2017) 5 SCC 143]

Constitution of India — Arts. 136 and 226 — Infructuous litigation — Subsequent events — Consideration of: As cause of action no longer subsisting by virtue of subsequent events having direct bearing over controversy involved in the case, hence, appeal disposed of as infructuous. [Dinshaw Rusi Mehta v. State Of Maharashtra, (2017) 5 SCC 157]

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