Blog Archives - Page 8 of 13

18 Jul

Delhi High Court granted bail to the petitioner who was imprisoned for more than seventy days.

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Title: Prabhakar Reddy vs State of Delhi (Govt. of NCT)

Date of decision: 13th July, 2023

+ BAIL APPLN. 2025/2023

CORAM: HON’BLE MR. JUSTICE AMIT BANSAL

Introduction

The complaint of Mr. Vivek Rana, an authorised representative of DMI Finance Private Limited (hence “complainant company”), which asserted that M/s P dot G Constructions Private Limited violated the law, led to the registration of the current FIR.

Through its directors, who included the petitioner and his wife, [hereinafter “borrower company”], obtained a loan from the complainant business for Rs. 35,000,000/- according to a first-term loan agreement dated August 18, 2015. On January 27, 2017, the parties additionally agreed to a Second Term Loan Agreement, under the provisions of which an additional sum of Rs. 17,00,000 was approved.

The parties signed a Memorandum of Settlement on January 3, 2017, which was exchanged. According to the terms of the agreement, the borrower firm allocated the complaint company the receivables from a number of identified sold units as well as rights to a number of identified unsold flats.

The lawsuit claims that the accused individuals shifted title and control of several residences that were allocated to the complainant without the complainant’s knowledge. Additionally, it is claimed that the loan money was misappropriated and utilised for other projects, resulting in the complainant’s unlawful loss of Rs. 52,000,000.

The borrower company’s forensic audit report, which was acquired from Brahmayya & Co. Chartered Accountants, showed that bank and cash receipts recorded in the internal Cash Relationship Management data of the borrower company were not accounted for in the books of accounts. The inquiry also showed that the defendants personally took the money from the different house buyers and used it for their own or other initiatives. The inquiry revealed that the accused individuals misappropriated the receivables and failed to deposit them in the Escrow Account in violation of the terms and conditions of the assignment agreement with the lenders.

By rulings dated May 26, 2023, and June 2, 2023, respectively, the learned Chief Metropolitan Magistrate and the learned Additional Sessions Judge both rejected the petitioner’s bail requests.

Analysis of the court

The petitioner’s primary domicile is in Chennai, and he solely does business there. The investigating authorities have already taken the petitioner’s passport. The petitioner is therefore unlikely to elude justice. Additionally, the petitioner is no longer a director of the borrower firm, making it less likely that she would tamper with the evidence or sway any witnesses.

When the investigation against the petitioner is already finished and a chargesheet has been filed, granting bail based only on the fact that the petitioner’s wife is the subject of the inquiry is inadmissible. At this point, the Supreme Court’s ruling in Sanjay Chandra v. CBI, (2012) 1 SCC 40 (Refer para 21-22 & 42), may be cited.

It would not be wise to imprison the petitioner indefinitely in light of the extract above, the likelihood that the trial in the matter will take some time, and the assurance given on behalf of the petitioner that he will continue to cooperate in the investigation qua his wife as well. The petitioner has already been detained for seventy days.

Due to the aforementioned factors, this Court determines that the petitioner should be granted bail in the current instance. The petitioner is therefore ordered to be freed in exchange for a personal bond in the amount of Rs. 1,00,000 and one surety in an amount equal to that, subject to the satisfaction of the Trial Court and additionally subject to conditions.

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Written By – Shreyanshu Gupta

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18 Jul

Delhi high Court dismissed the appeal by National Insurance Co. Ltd. challenging the compensation.

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Title: National Insurance Co. Ltd. vs Chitra & Ors.

Date of decision: 13.07.2023

+ MAC.APP. 1056/2016

CORAM: HON’BLE MR. JUSTICE NAVIN CHAWLA

Introduction

Delhi high Court dismissed the appeal by National Insurance Co. Ltd. challenging the compensation granted by the Motor Accidents Claims Tribunal, in MACT Case No.402/2010, titled Chitra v. Mufid Khan & Ors.

Facts of the case

The first respondent in this case submitted the aforementioned Claim Petition, claiming that she, her husband, Dharmender, and daughter, Dristi, were travelling back from the home of a relative on October 31, 2010, at around 9:25 p.m., in a two-wheel scooter with the registration number DL 6ST 7734. An HR 55H 5499-registered truck rear-ended the motorcycle. The accident-related injuries to respondent no. 1 were severe, and a 60% impairment with regard to the right lower limb was determined as a result. In actuality, she had her right leg amputated below the knee.

Based on the aforementioned fact, the learned Tribunal determined in the impugned award that the respondent no. 1 in this case suffered injuries in the collision as a result of the truck’s driver’s reckless and careless operation. Regarding the amount of the compensation due to respondent No. 1, the learned Tribunal determined that she had not been able to establish that she was a contributing member of the family. Therefore, in order to determine the income loss, the learned Tribunal granted the compensation using graduate minimum wages. Regarding the respondent number 1’s age, it is undisputed that he or she was 26 years old when the accident occurred. On the question of disability, the learned Tribunal considered 60% of the disability to the whole body for the purpose of calculation of the future loss of income/gratuitous services. It is challenging this head of compensation that the present appeal has been filed.

Analysis of the court

The learned Tribunal’s conclusion that the first respondent, who worked at home, had her right leg amputated below the knee is uncontested. Therefore, such harm would have serious repercussions for a homemaker, especially given the stratum to which respondent No. 1 belongs. It would undoubtedly hinder her capacity to do her housework, hence the contested award, which assigns her a 60% overall impairment, cannot be faulted.

Hon’ble High Court before arriving at the conclusion refers to several judicial precedents as, Arun Kumar Agrawal v. National Insurance Co. Ltd., (2010) 9 SCC 218(refer para 62-63), Jitendra Khimshankar Trivedi v. Kasam Daud Kumbhar, (2015) 4 SCC 237 (refer 10), Raj Kumar v. Ajay Kumar, (2011) 1 SCC 343(refer para 9-14 and para 19).

The Supreme Court has reemphasized that “what is to be seen as emphasised by decision after decision, is the impact of the injury upon the income generating capacity of the victim” in Sidaram v. Divisional Manager, United India Insurance Co. Ltd., (2023) 3 SCC 439. There cannot be a simple formula for blindly using maths to determine the severity of the loss of a limb (a leg or an arm) in connection to the victim’s job, vocation, or company.

Applying the aforementioned guidelines to the facts of the current case, the respondent no. 1’s contribution to the household cannot be questioned just because she was a housewife. She made her own unique contributions to the home. She would be expected to perform physical housekeeping as a homemaker in addition to providing emotional support and other types of assistance to the family members. Her capacity to conduct the strenuous physical task she would have been undertaking otherwise would be seriously hampered by losing her leg. I do not believe that the fact that respondent No. 1 was given money for the installation of an artificial limb justifies reducing the functional impairment.

Particularly in light of the social strata to which respondent no. 1 belongs, where she is expected to physically conduct all housework, respondent no. 1 would not be able to discharge the duties of a homemaker in a proper manner. Her impairment would undoubtedly limit her capacity to carry out these tasks.

The first respondent, CM Appl. No. 7812/2023, has submitted her medical records and prescription, dated 14.02.2023, from NKS Super Specialty Hospital, which recommends changing the prosthesis. It is obvious that the responder no. 1 continues to experience the effects of the accident.

therefore, find no merits in the present appeal. The same is accordingly dismissed.

Written By – Shreyanshu Gupta

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18 Jul

Delhi High Court Dismissed the appeal and upheld the verdict of Customs, Excise and Service Tax Appellate Tribunal (‘the CESTAT’)

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Title: PR. COMMISSIONER, CENTRAL EXCISE AND CGST-DELHI SOUTH

versus

BLACKBERRY INDIA PRIVATE LIMITED

Date of Decision: 12.07.2023

+ SERTA 7/2023 and CM Nos. 34149/202 & 34150/2023

CORAM: HON’BLE MR. JUSTICE VIBHU BAKHRU

HON’BLE MR. JUSTICE AMIT MAHAJAN

Introduction

Delhi high Court Dismissed the petition filed under Section 35G of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994 and upheld the verdict of the CESTAT in order No.ST/A/51150/2022- in Service Tax Appeal No. 50281/2022 Blackberry India Private Limited v. Commissioner of Central Tax / Excise.

Facts of the case

The respondent (hereinafter referred to as “BlackBerry India”), which provides business auxiliary services, was registered with the Department for the purpose of paying service tax. BlackBerry India had made complaints regarding return of $8,55,34,345 worth of unused CENVAT Credit. The aforementioned Credit was built up as a result of several input services, including security, labour, sponsorship, legal consulting, etc., that BlackBerry India used to provide Business Auxiliary Services as an output service. BlackBerry India stated that its services were outsourced to a client in another country.

The Adjudicating Authority published a Show Cause Notice on January 22, 2020, proposing to reject BlackBerry India’s claim on the grounds that the services BlackBerry India provided looked to be provided in India. BlackBerry India disputed that the services rendered to BlackBerry Singapore were services as an intermediary. The adjudicating authority determined that BlackBerry India’s services were Business Auxiliary Services as defined by Section 65(19) of the Finance Act of 1994 (hereinafter referred to as “the Act”) and that they were taxable services for the time period prior to July 1, 2012. the BlackBerry solution, which includes handheld devices, accessories, software, and other relevant services, had been delivered by BlackBerry India in accordance with the provisions of the aforementioned Agreement. Additionally, BlackBerry India has carried out a number of marketing and promotion tasks as detailed in Schedule A to the Agreement. The adjudicating authority determined that the aforementioned services would come under the 2012 Place of Provision of Services Rules’ definition of intermediate services in Rule 2(f). The Adjudicating Authority said that BlackBerry India served as a middleman while BlackBerry Singapore provided services to its Indian clients.

The Adjudicating Authority determined that Rule 3 of the Export of Service Rules, 2005 applied to the benefit of export services for the time period previous to 1.07.2012, but that this did not apply to services covered under Section 65(105)(zzb) of the Act. BlackBerry India’s claim for CENVAT Credit for the time frame previous to 01.07.2012 was therefore unjustifiable. BlackBerry India filed an appeal with the Appellate Authority after being upset by the Order-in-Original dated 31.08.2020. The Appellate Authority, however, denied the aforementioned appeal since it identified no flaws in the Adjudicating Authority’s original Order-in-Original dated 31.08.2020.

BlackBerry India preferred an appeal before the learned CESTAT. The argument that BlackBerry India was neither an agent nor involved in the planning or facilitation of the delivery of the services in question was recognised by the learned CESTAT. The 2012 Place of Provision of Services Rules’ Rule 2(f) defines an intermediate, and the knowledgeable CESTAT determined that BlackBerry India did not meet this definition. The argument that BlackBerry India was neither an agent nor involved in the planning or facilitation of the delivery of the services in question was recognised by the learned CESTAT. So, according to the 2012 Place of Provision of Services Rules’ Rule 2(f), BlackBerry India was not an intermediate, according to the knowledgeable CESTAT. The learned CESTAT had examined the Agreement and had concluded in favour of the Blackberry India and over-turned the decision of the appellate authority.

Analysis of the court

The hon’ble court held that, an intermediary only arranges or facilitates the provision of services, as is clear from the word. In this instance, the services provided by BlackBerry India to BlackBerry Singapore pursuant to the Agreement were not those that enabled the use of services from another vendor. BlackBerry India was expected to deliver the promotional and marketing services, technical marketing help, and other associated services as an independent service provider. These services were not arranged or made possible by BlackBerry India or any other vendor.

It is also pertinent to make reference to the Central Board of Indirect Taxes and Customs’ circular from the 20.09.2021. Although the aforementioned Circular was issued in relation to the Goods and Services Tax, it notes that the definition of “intermediary” in Section 2(13) of the Integrated Goods and Services Tax Act, 2017, was taken from Rule 2(f) of the Place of Provision of Services Rules, 2012, and provides an explanation of the concept in question.

The Circular makes it clear that BlackBerry India cannot be regarded as an intermediary with regard to the services it provides under the Agreement. The Court had also considered a similar question albeit in the context of refund of input tax credit under the Integrated Goods and Services Tax Act, 2017 in M/s Ernst and Young Limited v. Additional Commissioner, CGST Appeals-II, Delhi and Anr.: W.P.(C) 8600/2022, decided on 23.03.2023 and M/s Ohmi Industries Asia Private Limited v. Assistant Commissioner, CGST: W.P.(C) 6838/2022, decided on 29.03.2023. In our opinion, the aforementioned rulings completely address the dispute that the Revenue is attempting to bring up in this appeal.

The Adjudicating Authority was clearly wrong to conclude that the services covered by Section 165(105)(zzb) of the Act were not included in the definition of export of taxable services under Rule 3(1) of the Export of Service Rules, 2005. The learned CESTAT has correctly decided that all services are under the purview of Export of Taxable Services, with the exception of those explicitly stated in Rule 3(1) of the Export of Services Rules, 2005. Clearly, the adjudicating authority misinterpreted the aforementioned rule.

In light of the foregoing, we determine that the current petition does not raise any significant legal issues. Therefore, the current appeal is denied.

Written By – Shreyanshu Gupta

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18 Jul

Delhi High Court dismissed the petition seeking over-rule of the judgement of trial court.

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Title: YASHODA THAKORE versus KUCHIPUDI DANCE CENTRE AND ORS

Decision on: 12.07.23

+ CM(M)-IPD 10/2023 & CM APPL. 27785/2023

CORAM: HON’BLE MR. JUSTICE C.HARI SHANKAR

Introduction

Delhi High Court dismissed the petition seeking over-rule of the judgement of trial court, under article 227 of the constitution of India

Facts of the case

A well-known and reputable dancer named Swapnasundari filed CS (Comm) 671/2021 before the learned District Judge (Commercial Court) (hereinafter referred to as “the learned Commercial Court”) against one of her students named Yashoda Thakore, who had given a dance performance in St. Petersburg, Russia, in the months of January 2012 and 2013. Swapnasundari argued that the aforementioned dance piece was her original work, over which she owned the copyright, and that Ms. Thakore had violated her copyright by performing the dance piece for a profit without her consent or authorization.

The petitioner filed an application with the learned Trial Court pursuant to Order VII Rule 10 of the Code of Civil Procedure, 1908 (CPC), arguing that the lawsuit was defective for lack of territorial jurisdiction and requesting that the respondents return the lawsuit so that it can be filed with a court that has the authority to hear the case.

The aforementioned application was turned down by the learned District Judge (Commercial Court) (“the learned Commercial Court”) in an order dated April 28, 2023. The petitioner has challenged this decision by this current petition, which was filed in accordance with Article 227 of the Indian Constitution.

Analysis of the court

A reading of the impugned order dated 28 April 2023, of the learned Commercial Court, reveals that the learned Commercial Court has essentially proceeded on the basis of the principles enunciated by the Division Bench of this Court in Ultra Home Construction Pvt. Ltd. v. Purushottam Kumar Choubey.

learned the petitioner’s attorney does not contest the decision in Ultra Home Construction relevance to the current case. However, he argues that the decision in Ultra Home Construction4 is per incuriam because it violates the explanation to Section 6 of the Commercial Courts Act, 2015, which it omits to mention and which, in his view, must be given a strict interpretation in accordance with a catena of relevant authorities. He also cited the Supreme Court’s decision in Solidaire India Ltd. v. Fairgrowth Financial Services Ltd. After hearing the petitioner, I’m sorry I can’t support his claim.

Following the Supreme Court’s ruling in Indian Performing Rights Society Ltd. v. Sanjay Dalia, the Division Bench of this Court has unequivocally held in Ultra Home Construction that Section 62 of the Copyright Act provides an additional forum for institution of a suit alleging copyright infringement, over and above the forum which, by operation of Section 20 of the CPC, would have jurisdiction in the matter. (The relevant para referred from Ultra Home Construction were para 13 to para 22 and para 52.)

Therefore, it is abundantly clear that the non obstante clause, with which Section 62 of the Copyright Act commences, allows a plaintiff to bring a lawsuit where she or he resides or works for pay, in addition to the venue for institution of the suit as contemplated by Section 20 of the CPC. This is supported by both Indian Performing Rights Society6 and Ultra Home Construction4. The sole restriction on this entitlement is that the lawsuit must be filed in the location where the plaintiff’s primary place of employment is located, not in some other remote location where the plaintiff may also maintain a secondary office. This caveat has no application in the present case, on facts.

Therefore, it is impossible to interpret Section 6 of the Commercial Courts Act as a clause that precludes the application of Section 62 of the Copyright Act. When combined with Sections 16 to 20 of the CPC, Section 6 of the Commercial Courts Act operates in a separate domain. That area is unique and different from the area covered by Section 62 of the Copyright Act, as stated by the Supreme Court in Indian Performing Rights Society and the Division Bench of this Court in Ultra Home Construction. Both cases make it clear that a plaintiff desiring to file a lawsuit for copyright infringement may do so within the Court’s territorial jurisdiction or under Section 62 of the Copyright Act or under Section 16 to 20 of the CPC.

The plea, of petitioner, that Ultra Home Construction is per incuriam is, therefore, completely bereft of merit.

Now that the Supreme Court’s ruling in Solidaire has been brought up, it is clear that the disagreement in that case is fundamentally different from the conflict that emerges in the current case in both contour and complexion. In that instance, the Court was concerned with a scenario in which there were two statutes, each of which was determined to be a special legislation, granting jurisdiction over the same cause of action to two distinct Courts. The Special Court (Trial of Offences Relating to Transactions and Securities) Act, 1992, and the Sick Industrial Companies (Special Provisions) Act, 1985, were found to be in conflict with one another on the issue of territorial jurisdiction, which is a significant finding in the aforementioned decision.

There is undoubtedly no contradiction between Section 62 of the Copyright Act and Sections 16 to 20 of the CPC in light of the Division Bench’s decision in Ultra Home Construction. They complement one another, and neither service displaces the other. Therefore, the petitioner cannot benefit from the ruling in Solidaire.

Petitioner has openly stated that the matter would have been decided by Ultra Home Construction’s ruling had it not been for his claim that it violates Section 6 of the Commercial Courts Act. In light of the aforementioned, the learned Commercial Court’s decision to rule as it did cannot be said to have been factually, legally, or jurisdictionally incorrect.

Because of this, the challenged order does not warrant interference within the narrow scope of this Court’s authority granted by Article 227 of the Indian Constitution. As a result, the petition is denied in part.

Written by – Shreyanshu Gupta

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14 Jul

Delhi High Court Dismissed the petition seeking injunction against the encashment of the subject bank guarantee

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Title: SAURABH METALS PVT. LTD vs UOI & Ors.

Date of Decision: 12.07.2023

+ W.P.(C) 8456/2023 & CM APPLs. 32233-32234/2023

CORAM: HON’BLE MR. JUSTICE PRATEEK JALAN

Introduction

Delhi High court Dismissed the writ petition seeking injunction against the encashment of the bank guarantee as It is well settled that an injunction against invocation of an unconditional bank guarantee can be granted only in egregious cases of fraud or special equities, giving rise to irretrievable injury.

Facts of the case

The petitioner is a small business that has been authorised under the Micro, Small and Medium Enterprises [“MSME”] Development Act of 2006 to operate. It took part in the aforementioned tender and received a letter of acceptance dated 17.11.2021 from the Ministry of Railways, Government of India, announcing that it had won the tender. The letter of acceptance stated that the delivery term would be “D+30 weeks,” where “D” stands for the date of the Development Order. Undisputedly, the Development Order in this instance was issued on December 29, 2021, and the 30-week term that followed would end on July 26, 2022.

In the writ case, the petitioner claims that it was due to the expenditure necessary to manufacture the axles in accordance with the conditions of the aforementioned contract, technical requirements in the bid. The petitioner stated that it had not previously provided axles and that it had previously been in the forging industry. The size of the investment necessary to manufacture axles, particularly in relation to the necessary heat treatment facility, was unknown to the petitioner, and such information was not also included in the bidding document. She claims that the petitioner was unable to devote the necessary amount of resources. In reality, the petitioner visited the Indian Railways wheel and axle facility in Bangalore in June 2022 and was shocked by its size and the machinery needed for the production process. This led to a request that the Development Order be revoked by the Ministry of Railways.

The present writ suit was brought in an effort to overturn a letter given by the Ministry of Railways, Government of India, on June 8, 2023, in which that agency announced its intention to forfeit and encash a performance bank guarantee for the amount of $25.20 lakhs that had been provided on November 30, 2021. The petitioner filed the performance bank guarantee in support of a bid for the delivery of 1000 Box N/BG Axles in accordance with the requirements listed in the tender papers.

Analysis of the case

High court held that At this time, there is no way to prevent the performance bank guarantee from being invoked. The petition includes a copy of the bank guarantee dated 30.11.2021. It is unconditional, and the petitioner’s banker has agreed to pay the respondent’s claimed sum upon demand regardless of any disagreements the petitioner may have. It is generally established that only extreme instances of fraud or unusual circumstances that result in irreparable harm are eligible for an injunction against the use of an unconditional bank guarantee. For illustration, the Supreme Court’s ruling in Standard Chartered Bank vs. Heavy Engineering Corporation Ltd. may be cited.

Regarding performance security, clause 2(iv) of the Scheme stipulates that the initial delivery term or completion period must fall within the range of 19.02.2020 and 31.03.2022. Admittedly, the current situation does not fit under these restrictions. Therefore, in my opinion, the Government of India’s argument in its message of May 22, 2023, cannot be criticised.

The High Court first believed that the petitioner’s reliance on paragraph 2(v) of the scheme was unwarranted. The aforementioned provision is applicable in situations where bid security is forfeited, such as when earnest money is deducted or a tender is disqualified. In this instance, the bank guarantee in question was filed in accordance with Clause 13 of the “Instructions to Tenderers” and was intended to assure contract execution. The Instructions to Tenderers’ Clause 11 makes it clear that no earnest money deposit was necessary. As a result, the matter is covered by paragraph 2(iv) of the Scheme, which deals with “performance security,” rather than paragraph 2(v).

In the absence of the petitioner being able to benefit from the Scheme, the court does not find any evidence of fraud or unusual circumstances that would support a restraining order against the use of the bank guarantee. According to the petitioner, it was not aware of the infrastructure needed to fulfil its contractual duties. According to the writ petition, the petitioner only made a tender for the supply of 1000 axles since a quote for less than 50% of the amount provided was deemed unresponsive.

At least for now, the court was unwilling to believe that a contracting party, even an MSME, can be released from its contractual responsibilities on this basis. Before taking part in a tender, a party must ascertain for itself that it is capable of carrying out a contract. In fact, the respondent has called my attention to a communication from the petitioner dated 03.07.2021, in which the petitioner declares that it has reviewed the pertinent specifications, is aware of the kinds of stores needed, and agrees to provide the stores in accordance with the specifications.

Given this situation, the court does not believe there is sufficient justification to enjoin the encashment of the subject bank guarantee in the current proceedings under Article 226 of the Constitution. As a result, the petition is denied, and the interim order from June 13, 2023 is revoked. All open applications have been closed.

Written By – Shreyanshu Gupta

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