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Interpretation
of beneficial Circulars
Held
The Hon’ble Apex Court relying on the decision of Commissioner of
Central Excise vs. Mysore Electricals Inds. Ltd. (2007) 204 ELT 517
held that beneficial circulars has to be applied retrospectively
while an oppressive circular has to be applied prospectively.
Thus when the circular is against the assessee, they have rightly to
claim enforcement of the same prospectively.
Suchitra Components Ltd. vs. Commissioner of Central Excise (2007) 8
RC 204 (SC
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Interpretation of Document : Lease or licence
Facts
One ‘CB’ was given licence to stay in the suit premises by the
plaintiff. The plaintiff needed the premises as ‘CB’ had revoked the
terms of the licence.
‘CB’ had executed a writing in favour of plaintiff wherein he had
admitted that the property in suit belongs to the plaintiff, and he
was already occupying under same grace shown by the plaintiffs. The
said document does not contain any term of payment of rent or
licence fee or compensation for use and occupation as a tenant. It
does not say that the property would not be relet nor possession
would be parted with. It also does no say that the agreement between
the parties would be renewable on expiry of the first writing at the
instance of the person in possession or in case of vacation, the
person in possession would be required to issue one month’s notice
in writing.
The issue before the court relates to relationship between the
party.
Held
A bare perusal and understanding of the document would make it clear
that ‘CB’ was admitting the fact that he was already in possession
of the property for many years, the possession was under the grace
of the owner and from the date of the document, he was to continue
in possession as a licensee. The document further says that as and
when the owner demands possession, he would deliver back the
possession.
To challenge a writing executed by a person, such person has to file
a suit within a period of three years. If the suit is not filed
within a period of three years then the right to challenge the
correctness, validity and genuineness of the document would be lost.
For 14 long years, if ‘CB’ did not challenge the said writing then
any person who succeeds him would not be allowed to challenge the
said writing, because successor does not get any right, wider or
larger than what the deceased had. In the present case, the deceased
according to his own writing, accepted his status of licensee and if
during his life he did not challenge his status then any person
succeeding him would not be allowed to say that the writing would
mean something else.
The Hon’ble Court relying on the decision of Quadrat Ullah vs.
Municipal Board (AIR 1974 SC 396) observed that there would be no
simple litmus test to distinguish a lease as defined in sec. 105 of
Transfer of Property Act from a licensee as defined in sec. 52
Easement Act, but the character of the transaction turns on the
operative intent of the parties.
In other words if an interest in immovable property, entitling
the transferees to enjoyment, is created, it is a ‘lease’; if
permission to use land without right to exclusive possession is
alone granted, a ‘licence’ is the legal result.
The Court further observed that obtaining of an electricity licence
or to run a factory in the licensed premises would again not be
decisive to come to the conclusion that the transaction between the
parties was of a lease in the given set of circumstances. A licensee
may be entitled to obtain electricity connection, water connection
and other facilities. After all, licensee also enjoys the
possession, he uses and occupancies the premises and to derive
better benefit have better use, if he takes certain steps for proper
and appropriate enjoyment then it cannot be said that the
transaction which was originally a licence between the parties is to
be held to be a transaction of lease. Running of a factory on the
premises would again not decide the issue, that would simply show
that the appellants or their predecessors in title were in exclusive
possession of the property.
Exclusive possession is not the sole criteria to come to the
conclusion that the transaction between the parties is that of a
licensee. It means that the fact of
exclusive possession is to be considered in its true perspective but
it is not to be taken as exclusive and absolute fact to hold that
such transaction is a lease transaction.
The court held that the relationship between the parties was that of
licensor and licensee.
Gujriben Wd/d Chimanlal Bhukhandas &
Ors vs. Kantilal Uttamram Chevli AIR 2007 Gujarat 18
Precedent : Judicial discipline requires that judgment rendered
by a co-ordinate Bench should be followed by another co-ordinate
Bench
Held
Judicial discipline requires that co-ordinate bench judgement and
observations are binding on another bench of co-ordinate
jurisdiction and cannot be ignored unless they are per in curiam.
It is well settled that if a Bench of co-ordinate jurisdiction
disagrees with another Bench of co-ordinate jurisdiction whether on
the basis of different arguments or otherwise, on a question of law,
it is appropriate that the matter be referred to a larger bench for
resolution of the issue rather than to leave two conflicting
judgments to operate creating confusion.
The Hon’ble Court observed that there should be certainly of law
further judicial decorum and judicial procedure must be respected at
all costs.
Ashok Organics Inds. Ltd. vs. Dena Bank & Ors. (2007) 135 Comp. Cas
203 (Bom)
Professional misconduct : Any negligence in performance of duties or
errors of judgment in discharging of such duties cannot constitute
misconduct unless ill-motive is established
Facts
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The Council of the Institute of Chartered Accountants of India had
found the respondent, a member of the said Institute guilty of
certain misconduct which was found to have been committed by him by
the Disciplinary Committee of the said Council.
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The Disciplinary Committe had enquired into the irregularities
and deficiencies in securities and bank transactions committed by
the respondent and submitted its report holding the respondent
guilty of professional misconduct in respect of following charges:
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Auditors had failed to report the discrepancies arising out of
crediting investment in Govt. securities purchased by UCO Bank own
account in to broker’s account and the consequential effect on
maintenances of SLR.
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Auditors had failed to report transfer of securities from brokers SGL A/c to Bank SGL A/c without purchase documents.
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Auditors had failed to comply with the requirement of SAP-4
issued by ICAI.
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Auditors had failed to report funding of broker Harshad Mehta by
UCO Bank through issue of bank receipts and caused loss due to the
such funding.
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The auditors had failed to report to management as regard lax
internal control of UCO Bank in procedural irregularities in
securities transactions.
The Council recommended to the High Court that the name of the
respondent be removed from the register of Members for a period of
one year.
Held
The Hon’ble Calcutta High Court observed that the basic allegations
against the respondent auditor were failure to report the transfer
of securities from Brokers A/c to Banks SGL A/c, failure to report
several irregularities in the transactions relating to investments
of the bank and also not to report the wrong credit investment to
brokers A/c. However, it was never alleged that the respondent
auditor was wilfully and deliberately negligent in the conduct of
his professional duties or failed to act honestly.
The Hon’ble Court relying on the decision in the case of S.
Ganesan vs. A.K. Joscelyne AIR 1957 Calcutta 33
held that failure to rise to the expected level of efficiency in
discharging professional duties cannot be regarded as misconduct
treating such failure as negligent act in the conduct of the
professional duties.
The Court held that in the present case, admittedly, it has not been
alleged that the respondent auditor failed to act honestly and
therefore, it was difficult to hold that the said auditor is guilty
of any misconduct. Further it was difficult to hold that lack of
efficiency or attainment of expected standards while discharging
professional duty would automatically constitute misconduct.
Misconduct arises from ill-motive and mere acts of negligence,
innocent mistake or errors of judgment do not constitute the
misconduct. Even if there is any negligence in performance of duties
or errors of judgment in discharging of such duties, the same cannot
constitute misconduct unless ill motive in the aforesaid acts are
established.
In view of the above the Hon’ble High Court rejected the
recommendation of the Council.
Council of the Institute of Chartered Accountants of India vs.
Somnath Basu AIR 2007 Calcutta 29
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Delay in pronouncement of Judgments Guidelines framed by Court
Held
In order to avoid inordinate and unexplained delay in pronouncement
of the Judgment or order the Hon’ble Bombay High Court at Goa framed
the following Guidelines and directions which is as under:
“These directions shall apply to the following
judicial/quasi-judicial authorities/bodies exercising jurisdiction
in State of Goa.
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All Civil Courts and Criminal Courts;
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District and Sessions Courts;
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Administrative Tribunal of Goa;
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Industrial Tribunal;
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Labour Courts;
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Courts constituted under the Consumer Protection Act; viz. District
Forum and State Commission;
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All other judicial/quasi-judicial authorities exercising such
function under the State Local Acts.
All the courts/authorities are referred to as “Court” in these
directions.
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All Courts should arrange their roaster in such a manner that
they should be able to deliver judgment/order in any matter at the sonest
possible.
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Where final arguments are heard in a matter, judgment should be
pronounced within a period of three months from the date of conclusion of the
arguments.
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In Miscellaneous Application and/or all other matters, order shall
not be delayed beyond a period of two months from the date of conclusion of
arguments.
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Whenever judgment/order is reserved, the judgment/order when
delivered should bear the date on which the judgment/order was
reserved and date on which it is delivered.
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Directions contained in clauses 4 and 5 above shall be subject to
any statutory provisions, if any, providing for a different period such as
Consumer Protection Regulations, 2005; wherein consumer Forum is required to
pass the order invariably within fifteen days of the conclusion of the arguments
as per clause 7 thereof.
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Any judicial officer, failing to comply with directions at Sr.
Nos. 4 and/or 5 above shall report to the Registrar, High Court of
Bombay at Goa every such matter where there is a failure with
reasons for non delivery of such order/judgment. The same will form
part of their personal file.
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In case of Government officers discharging
judicial/quasi-judicial functions, such report shall be made to the
Chief Secretary of Goa and the same will form part of their personal
records.
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The Judicial officers concerned shall also be liable for
disciplinary action by the High Court and the State Government as the case may
be, for their persistent failure to comply with these directions.
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It is common knowledge that most of the quasi-judicial authorities
communicate the decision to the parties after reserving the order. This practice
should be discontinued forthwith. Every judgment/order should be pronounced in
open Court after notifying the parties the date of the order
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Once the judgment/order is pronounced, the certified copy should
be made available to the parties, if applied for, not later than 7
days and not later than 2 days if the copy is applied for on urgent
basis.
.
Pradeep K. R. Sangodker vs. State of Goa & Anr. 2007 (1) AIR Bom R
80 – AIR 2007 (NOC) 413 (Bom)
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