The concept of adverse possession contemplates a hostile possession; i.e., a possession which is expressly or impliedly in denial of the title of the true owner. Possession to be adverse must be possession by a person who does not acknowledge the other’s rights but denies them. A person who bases his title on adverse possession must show by clear and unequivocal evidence that his possession was hostile to the real owner and amounted to denial of his title to the property claimed. Adverse possession is commenced in wrong and is aimed against right. A person is said to hold the property adversely to the real owner when that person in denial of the owner’s right excluded him from the enjoyment of his property. Adverse possession is that form of possession or occupancy of land which is inconsistent with the title of the rightful owner and tends to extinguish that person's title. Possession is not held to be adverse if it can be referred to a lawful title. An occupation of reality is inconsistent with the right of the true owner. It is the basic principle of law of adverse possession that (a) it is the temporary and abnormal separation of the property from the title of it when a man holds property innocently against all the world but wrongfully against the true owner; (b), it is possession inconsistent with the title of the true owner, (c) the possession proved must be adequate in continuity, in publicity and in extent to as to show that it is adverse to the true owner; (d) such possession must be peaceful, open and continuous. (e) the possession must be open and hostile enough to be capable of being known by the parties interested in the property though it is not necessary that there should be evidence of the adverse possessor actually informing the real owner of the former's hostile action.

T Anjanappa & Ors vs. Somalingappa & Anr. (2006) 7 SCC 570

The object of the family arrangement is to protect the family from long drawn litigation of perpetual strifes, which mar the unity and solidarity of the family and create hatred and bad blood between the various members of the family. It promotes social justice through wider distribution of wealth. Family therefore has to be construed widely. It is not considered only to people having legal title to the property.

A document which is in the nature of a memorandum of family arrangement and which is filed before the Court for its information for mutation of names, is not compulsorily registrable and therefore can be used in the evidence of the family arrangement and is final and binding on the parties. The Hon’ble Court relied on its earlier decision in case of Kale vs. Dy. Director of Consolidation (1976) 3 SCC 119.

Govt. of A.P. & Ors vs. M. Krishnaveni & Ors 2006 (7) SCC 365

u/s. 138 of the Negotiable Instrument Act not affected by winding up order

The object of winding up of a company by the court is to facilitate the protection and realization of its assets with a view to ensure an equitable distribution thereof among those entitled. Once the court has taken the assets of a company under its control or has passed an order for its being wound up, in the ordinary course, it will not be proper to allow proceedings to be started or continued against the company. Section 446 of the Companies Act is intended to avoid multiplicity of proceedings and to safeguard the assets of a company against wasteful or expensive litigation in regard to matters capable of being determined expeditiously and effectively by the winding up court itself. Though the words ‘legal proceedings’ in section 446 of the Companies Act is wide enough to be taken in criminal proceedings also, such criminal proceedings must be in relation to the assets of the company. Criminal proceedings which are not in respect of the assets of the company but which end in the conviction or acquittal of the accused, cannot be stayed under section 446 of the Companies Act. Proceedings under section 138 of The Negotiable Instruments Act, 1881, is a special Act which overrides the provisions of the Companies Act, 1956, the legal liability contemplated under sec. 446 of the Companies Act does not synchronise with the criminal proceedings under the Negotiable Instruments Act and the personal criminal liability and not the civil liability of the company is enforced under section 138 read with section 142 of the Negotiable Instruments Act. The company and its directors cannot shrink their criminal liability on the ground that the company was already wound up and the official liquidator had taken charge of the affairs of the company.

The company could not escape the criminal liability on the ground that the cheques were returned dishonoured only on account of the freezing of the accounts of the petitioner.

Counter Point Advt. P. Ltd. & Anr vs. Haritha Finance Ltd. & Anr (2006) 133 Comp. Cas 435 (Mad)

Facts

In consideration of the petitioner, a State financial corporation, advancing a loan to an industrial concern, the latter created a first charge by way of a mortgage in the year 1986 on its assets. The borrower having committed default in repayment of loan, the petitioner took possession of the mortgaged property. On account of dues of customs duty of the borrower relating to the years 1991 and 1993 the Customs Dept. sought to detain the securities of the petitioner under rule 230 of the Central Excise Rules, 1944. The petitioner filed a writ petition contending that the customs authorities could not claim priority or a preferential charge on the properties of the borrowers.

Held

The Hon’ble Court held that the petitioner was a secured creditor holding mortgage security in its favour. The claim of the secured creditor had priority over the dues of the Customs Dept. The claim of the customs Dept. could not rank higher than that of the secured creditor. Secondly the mortgage deed was executed in favour of the petitioner in 1986 and 1988. The liability of the Customs Dept. was subsequent to the execution of the mortgage deed. Therefore, the Customs Department could not claim priority over the dues of the petitioner. In the case of secured loan of the Government and other creditors, priority would depend upon precedence of such loan. The security of the corporation being prior in point of time, it being in the nature of mortgage of property, the dues claimed by the corporation would have priority over the dues of the customs.

The Hon’ble Court referring to the decision of Apex Court in the case of Dena Bank vs. Shikhabhai Prabhudas Parekh & Co. (2000(5) SCC 694) observed that the Crown’s preferential right to recovery of debts over other creditors in confined to ordinary or unsecured creditors. The common law of England or the principles of equity or good conscience (as applicable to India) do not accord to the Crown a preferential right for recovery of its debts over a mortgagee or pledgee of goods of a secured creditor. It is only in cases where the Crown’s right and that of the subject meet at one and the same time that the Crown is in general preferred. Where the right of the subject is complete and perfect before that of the King commences, the rule does not apply.

Sicom Ltd. vs. UOI & Ors. (2006) 133 Comp Cas 610 (Bom)

Facts

During search operations conducted by the officers of the Enforcement Directorate cash belonging to the petitioner was seized and confiscated. Penalty was also levied which the petitioner paid. The petitioner succeeded in the appeals before the High Court. The Petitioner sought refund of the sum confiscated and the penalty but the Enforcement Directorate did not respond. The petitioner filed a writ petition upon which the court directed the Directorate to consider the petitioner’s representation for refund of the amount seized along with interest. The petitioner made a claim for interest on the refundable amount which was refused in the absence of statutory provision in the Foreign Exchange Regulation Act, 1973, for payment of interest. On a writ petition.

Held

There was no bar imposed upon the courts to grant interest on amounts which have been wrongfully and without any authority of law withheld from a citizen. Absence of provisions cannot prevent the court from exercising its jurisdiction and powers under Article 226 of the Constitution of India to do justice to the parties and pass an order in equity. The Hon’ble Court relied on decision of apex court in case of Sandvik Asia Ltd. vs. CIT (2006) 280 ITR 643 (SC)

S. Parameswaran vs. UOI & Anr. (2006) 133 Comp Cas 568 (Mad.)

Facts

The truck owned by the appellant and insured with the respondent insurance company met with an accident and a claim petition was filed by the claimants before the Motor Accidents Claims Tribunal. The Tribunal awarded compensation with interest holding that the accident took place due to rash and negligent driving of the driver and that the appellant owner had not committed any breach of the terms and conditions of the insurance policy and that the insurance company was liable to make the payment of the compensation amount to the claimants as insurer of the truck. The owner of the truck, had contended that he had taken adequate care to verify the genuineness of the licence held by the driver and that there was no evidence that the appellant, who had employed the driver, had knowledge that the driver was not holding a valid driving licence. He had not only checked his driving licence, but also tested his driving and been satisfied that the driver was fully competent and conversant with driving. On appeal by the insurance company, the High Court modified the order to the effect that the insurance company would be entitled to recover the amount from the owner of the offending truck on the ground that the appellant had contravened the terms and conditions of the insurance policy as the licence was not genuine.

Held

The Hon’ble Apex Court held that where the owner had satisfied himself that the driver had a licence and was driving competently there would be no breach of section 149(2)(a)(ii) of the Motor Vehicles Act, 1988. The appellant owner had not only seen and examined the driving licence produced by the driver but also taken the test of the driving of the driver and found that the driver was competent to drive the vehicle and thereafter appointed him as driver of the vehicle in question. Thus, there could be no breach of section 149(2)(a)(ii) and the insurance company would not then be absolved of its liability.

To prove breach of the condition in the policy as to disqualification of the driver or invalid driving licence of the driver, the insurance company has to prove that the insured, namely the owner of the vehicle, was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the policy regarding use of vehicles by a duly licensed driver or one who was not disqualified to drive at the relevant point of time.

Lal Chand vs. Oriental Insurance Co. Ltd. (2006) 133 Comp Cas 343 (SC)

After the dividend is declared by the company on its share a debt immediately becomes payable to each shareholder in respect of his share of the dividend. Even winding up proceeding can be initiated against the company.

SBI Mutual Fund vs. Vikas WSP Ltd. (2006) 133 Comp Cas 542 (P&H)

In terms of order 3 Rule 1 of the CPC, a litigant is represented by an advocate. A concession made by such an advocate is binding on the party whom he represents. A person may have a legal right but if the same is waived, enforcement thereof cannot be insisted.

However this is subject to exception if a concession is made on a question of law. A wrong concession on legal question may not be binding upon his client.

BSNL & Ors vs. Subash Chandra Kanchan & Anr (2006) 8 SCC 275.