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Interest Claim Can Be Acknowledged as a Pre-existing Right or Benefit Only if Stipulated in Employment Contract: Karnataka High Court

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Case Title: THE MANAGEMENT OF NWKRTC v. MANJUNATH

Case No: 107562 OF 2014

Decided on: 5TH DAY OF APRIL, 2024

Quorum: THE HON’BLE MR JUSTICE SHIVASHANKAR AMARANNAVAR

Facts of the case

In this instance, a worker who was fired due to misconduct filed an application under Section 33C(2) of the Industrial Disputes Act to recover unpaid wages, claiming that the order of termination ”as not legally issued. The Court decided that an application under Section 33C(2) is not maintainable without a determination of rights, and that an order granted in violation of Section 33(2)(b) of the Act is void but needs to be challenged to avoid binding the parties. The writ petition was granted and the contested ruling was overturned as a result of the Corporation’s challenge to the Labour court’s order ordering payment to the worker.

Issues

1.Whether Manjunath’s termination appropriate, and did NWKRTC adhere to the correct protocols?

2. Whether Manjunath’s application maintainable under Industrial Disputes Act Section 33C(2)?

3. Whether interest rate should be applied to the money that Manjunath is owed?

4. Whether is it appropriate for the labor court to consider Manjunath’s claim?

Legal Provisions

1. Section 33C(2) of the Industrial Disputes Act, 1947

2. According to Section 33(2)(b) of the ID Act, if the dismissal order is not approved by the relevant body, the worker may demand earnings from the date of dismissal.

Appellant’s Contentions

The appellant argued that as the sum requested had not been decided by a court and the order of dismissal was in effect at the time of filing, the application under Section 33C(2) of the Industrial Disputes Act is not maintainable before the Labour Court. The worker filed a claim for unpaid wages, claiming that the dismissal order was illegal since it had not been approved in accordance with the law. The Co-ordinate Bench determined that the Section 33C(2) application cannot be maintained in the absence of a rights adjudication, since the mere denial of an application does not confer the right to file one. The Labour Court’s ruling was overturned once the writ petition was granted.

Respondent’s Contentions

In order to support the application and argue that the dismissal decision since it was not approved in accordance with the law, the respondent, a worker, filed an application under Section 33C(2) of the Industrial Disputes Act seeking arrears of wages. The respondent emphasized the right to obtain salary arrears and argued that the workman’s claim under Section 33C(2) is maintainable even in the absence of a challenge to the dismissal judgment or an application requesting permission. The need to review Industrial Disputes Act Section 33C(2) was brought up in order to assess whether the workman’s application could be maintained.

Court Analysis and Judgement

The ruling stressed that, as demonstrated in a prior case, an order issued in contravention of Section 33(2)(b) of the Act is null and unlawful but needs to be challenged in order to prevent binding the parties. As an executive process to enforce a right, it was decided that an application under Section 33C(2) of the Act cannot be maintained without a rights adjudication regarding the order of dismissal. The Labour Court’s decision in the case was overturned when the writ petition was granted.

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Inclusion of Companies as Necessary Parties in Minimum Wages Act Offences: Karnataka High Court’s Ruling

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Case Name:  Padpara Patti Syed Basha Aysb v. The Labour Department Government Of Karnataka 

Case No.: Writ Petition No. 14973 Of 2023 (Gm-res) 

Dated: March 26, 2024 

Quorum: Justice S Vishwajith Shetty 

 

FACTS OF THE CASE: 

In a criminal complaint filed before the Court of Judicial Magistrate First Class, Mr. Padpara Patti and Mr. Sameer Sulathana were named as accused parties. The lawsuit claimed that the 1948 Minimum Wages Act’s Section 25, Rules 7, 9, and 21 had been broken. 

In accordance with Articles 226 and 227 of the Indian Constitution, the accused petitioners filed a writ case before the Karnataka High Court. They demanded that the Criminal Complaint’s whole proceedings be cancelled. 

In a writ petition filed under Articles 226 & 227 of the Constitution of India, 1950 read with Section 482 of Cr.P.C., petitioners, who are accused nos. 1 & 2 in a criminal complaint pending before the Court of JMFC-II, Shivamogga, are registered for the offence punishable under Section 25, Rules 7, 9 & 21 of the Minimum Wages Act, 1948. Their prayer is to quash the entire proceedings in the aforementioned criminal complaint.  

A writ case was brought by the accused petitioners before the Karnataka High Court, in compliance with Articles 226 and 227 of the Indian Constitution. They requested that all procedures related to the Criminal Complaint be stopped. 

 

CONTENTIONS OF THE PETITIONER: 

The accused petitioners invoked Articles 226 and 227 of the Indian Constitution to file a writ petition before the Karnataka High Court. Their main argument was to dismiss the Criminal Complaint and all of its procedures. They contended that they were no longer in directorship roles at Attica Gold Pvt. Ltd., the involved firm. They further argued that the corporation was not listed in the complaint as an accused party.  

The applicants’ learned counsel claims in court that they are no longer directors of the business. He makes the submission that the Company is not named in the lawsuit as an accused party. The complaint cannot be maintained as a result. He, therefore, pryaed before the court to grant the request. 

 

CONTENTIONS OF THE RESPONDENTS: 

The learned counsel for the respondents alleged that the prayer included in the petition to be rejected by the respondent-state’s learned High Court Government Pleader. Respondent No. 2, a Labour Inspector, has filed a private complaint against the petitioners in this case with the Trial Court.  

He claims to have received a complaint about the nonpayment of minimum wages from the workers of the company Attica Gold Pvt. Ltd. Despite the complainant purportedly serving the accused with a show-cause notice, the accused failed to provide the necessary documentation, address the infractions, or reply to the notice. 

It was vehemently argued that he had filed a private suit with the Trial Court because of these conditions. Following its acknowledgment of the charges reported in the complaint, the Trial Court sent summonses to Accused Nos. 1 and 2, and the case was filed under C.C. No. 104/2022 against the petitioners for the aforementioned violations.  

LEGAL PROVISIONS: 

  • Section 22(C) of the Minimum Wages Act, 1948- Offences by companies: If the person breaking any law under this Act is a company, then everyone who was in charge of the company at the time of the offence and accountable to it for the way the company conducted its business will be considered guilty of the crime and will face appropriate legal action and punishment. With the caveat that if the person can demonstrate that the crime was committed without their knowledge or that they took all reasonable precautions to stop it from being done, they will not be subject to any of the penalties outlined in this Act.  

 

COURT’S ANALYSIS AND JUDGMENT: 

The court declared that a cursory reading of the aforementioned section of the law makes it clear that, in the event that an organisation is the subject of an offence under the Minimum Wages Act, 1948, both the organisation and its managers will be presumed guilty of the offence and subject to legal action and punishment.  

The court further held that the petitioners in this case are being tried in their capacities as Directors of the Attica Gold Pvt. Ltd. company, and it is alleged that they are accountable vicariously on behalf of the company. Therefore, the complaint is not maintainable if the Company is not named as accused in the complaint.  

Further, the court has noted that the only way to impose vicarious liability is through a statutory provision; in other words, a legal fiction must be established in order to achieve this goal. The petitioners in this case are requesting to be prosecuted on the 

the idea that they bear vicariously responsible for the Company’s operations. If it is the case, the Company has to be included as a party, and if the accused is accountable for the Company’s actions, legal fiction has to be made against the Company and the accused.  

At last, the court declared that the Writ petition may be granted. This resulted in the cancellation of the whole criminal case that was pending before the Court of JMFC-II, Shivamogga. The case stemmed from PCR No. 16/2022, which was registered for violations that were punishable under Section 25, Rules 7, 9 & 21 of the Minimum Wages Act, 1948.  

 

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Kingfisher Airlines’ Merger Process Validated: Karnataka high Court Upholds Decision Amidst Allegations

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Case Name: Srividya C G v. Serious Fraud Investigation Office  

Case No.: (WP No. 4380 of 2018) 

Dated: April 15, 2024 

Quorum: Justice Hemant Chandangoudar 

 

FACTS OF THE CASE: 

Under the direction of accused No. 5 (Mr. Vijay Mallya), Kingfisher Airlines Limited (KFAL) was founded in 2004 and is mainly involved in domestic civil aviation. It was created under the Companies Act, 1956. In order to operate internationally, airlines must have a fleet of 20 aircraft and five years of domestic commercial operation under the 5/20 Rules, which were introduced by the Indian government. 

KFAL attempted to purchase Deccan Aviation Limited (DAL), which accused No. 10 controlled, despite not fulfilling the necessary standards. Acted No. 5, taking into account KFAL’s current loss of Rs. 1,234 crore and the possible capital gain from the acquisition of DAL, conspired with other accused to manufacture false documents, deceive, and cause loss to violating several sections of the Income Tax Act and the Companies Act, as well as DAL’s shareholders and stakeholders. 

There were three steps to the process: pre-merger, merger, and post-merger. The accused chose to create two non-existent undertakings as part of a fake de-merger during the pre-merger phase in order to satisfy the demerger requirements. A plan of arrangement was submitted during the merger stage in order to de-merge the airline business from KFAL and combine it with DAL in accordance with Sections 391(2) and 394 of the Act, 1956. The faked paperwork was an attempt to evade capital gain taxation. 

Following the merger, KFAL suffered losses; these were held by KFAL and rebranded as Kingfisher Training and Aviation Services Limited (accused No.1) rather than being transferred to the accused No. 2 – Company. This was done in an effort to present the accused No. 2 Company as a successful business in order to obtain more funding.  

Following the merger, KFAL suffered losses. These losses were held by KFAL and rebranded as Kingfisher Training and Aviation Services Limited (accused No.1) rather than being transferred to the accused No. 2 – Company. This was done in an effort to present the accused No. 2 Company as a successful business in order to obtain more funding. 

Accused No. 4: United Breweries (Holding) Ltd., the holding/promoter company of Accused Nos. 1 & 2, was instrumental in the transfer of monies to Accused No. 2 and provided a corporate guarantee in behalf of Accused No. 2. It was represented by its director, Mr. Vijay Mallya.  

Mr. A Harish Bhat, the seventh accused (WP Nos. 3943–3947/2018), One of the main players in the coordination between the valuers for the Share Swap Ratio during the merger and the fraudulent brand valuation for the purpose of securing bank funding based on fictitious predictions was Mr. A Harish Bhat, Treasurer of the UB Group and Director of Accused No. 4 Company. Mr. Ashok Wadhwa is Accused No. 12. The approach to continue the merger process in a dishonest manner was proposed by Mr. Ashok Wadhwa, a director of Accused No. 11 and a chartered accountant. 

 

CONTENTIONS OF THE PETITIONERS: 

The petitioners contended that criminal complaints are not permitted to reopen the merger procedure, which was approved by the Court in accordance with the Companies Act. They contended that issues that have already been decided upon in processes conducted in accordance with the Companies Act ought not to be brought up again unless there is proof of the concealing of important facts. 

The petitioners highlighted that shareholders and creditors are required by law to participate in schemes approved under Section 391 of the Companies Act. The approved plans can only be changed with the approval of the court, notwithstanding the existence of opposing views. 

The Company Court’s responsibility in approving a scheme is supervisory; it makes sure that the law is followed and that no boundaries are crossed. While ensuring that the valuation procedure complies with legal criteria, the court does not serve as an appellate authority. 

Unless there is an obvious breach of the law, courts should not be interrogating the business acumen of parties engaged in schemes. Disparities in valuation should not be the only reason for the court to get involved. 

The appropriate line of action for contesting a fraudulently rendered decision is to file an application with the court that made the decision. Without proof of material facts, criminal complaints cannot be used to reopen cases that have previously been decided in proceedings under the Companies Act. Suppressing the material facts is not acceptable. 

 

CONTENTIONS OF THE RESPONDENTS: 

The responders vehemently argued that the charges against the accused should be brought under the previous Act since the acts were committed under it. As a result, a complaint was made outlining the accused’s violations of the previous Act. Following the repeal of the previous Act, the Companies Act, 2013 was passed and went into force on September 12, 2013. The new Act required the investigation to be carried out, therefore as a result, the investigation. 

The respondents strongly argued that as per the terms of the new Act, the SFIO, a statutory investigation authority, has conducted an investigation, presented a report, and filed the complaint; therefore, the restrictions mentioned in Section 202 of Cr.PC would not apply in this particular case. 

It was further argued that in this particular case, the officer was authorised by the central government to submit a complaint with the special court. Therefore, the need to record the public servant’s statement and carry out the investigation envisioned under Section 202, sub-clause 1, does not exist because the complaint was lodged by a public worker who was lawfully authorised by the central government. As such, the petitioners’ argument that the process of issuing the order is invalid because it does not follow the procedure for an inquiry as specified by Section 202 of the CRPC is baseless. 

The plan was approved by the necessary majority of unsecured creditors. Deccan Aviation Ltd. subsequently filed Company Petition in 2008. Via an affidavit, the Regional Director of the Ministry of Corporate Affairs, Southern Region, Chennai, submitted objections to each and every petition with the Registrar of Companies, Bengaluru. 

The Assistant Solicitor General of India, speaking on behalf of the Registrar of Companies, limited objections to just three, despite the affidavit raising six to seven concerns. The objections were centred around the valuation figures of Rs. 69 crore for the sale of Deccan’s charter services operation to DCL. Concerning the confusion created by the firms’ names, the Assistant Solicitor General further suggested that Sections 21 and 23 of the firms Act be followed.  

It was rather vehemently contended that the fact that United Breweries Ltd. failed to obtain Central Government approval before to purchasing shares was also pointed out as a violation of Section 108A of the Act. 

 

LEGAL PROVISIONS: 

  • Section 391 of the Companies Act, 1956: This clause ensures single-window clearance by acting as a comprehensive code for schemes of arrangement. Even if creditors and stockholders disagree or object, the schemes approved under Section 391 are legally binding on them. 
  • Section 212 of the Companies Act, 2013: The inquiry conducted by the Serious Fraud Investigation Office (SFIO) into a company’s operations is covered in this section. By virtue of the Companies Act, the SFIO is empowered to look into and prosecute fraud cases. 
  • Section 212(3) of the Companies Act, 2013: According to this clause, the Central Government’s investigation has to be finished in a certain amount of time. There could be consequences for bail and other legal actions if the inquiry is not finished in the allotted time frame. 
  • Section 36: Punishment for Fraudulently Inducing Persons to Invest Money: The deceptive acts that are intended to persuade people to invest money in a corporation are covered in this section. Anybody who gains a loan, incentive, or benefit from a business, its officer, representative, or another individual by making a false statement or using a fake document may be held accountable. 
  • Section 448: Punishment for False Statement: According to Section 448 of the Companies Act of 2013, anyone who provides a false appearance of title or obligation to any person or obtains a loan, reward, or benefit of any kind from a company, company officer, representative, or other person through the use of a false statement or document will be subject to legal action. 
  • Section 447: Punishment for Fraud: Regarding the operations of a corporation or any corporate body, fraud is defined in Section 447. In order to deceive, obtain unfair advantage, or do harm, it encompasses any act, omission, hiding of facts, or abuse of position carried out by one individual or in collusion with others. 

 

COURT’S ANALYSIS AND JUDGMENT: 

The court noted that unless the amending Act specifically or implicitly states differently, procedural adjustments are typically assumed to be retroactive. Unless the amending act specifically states otherwise, modifications to the trial forum are usually regarded as procedural and are assumed to be retrospective.  

The statute loses its retroactive effect if a new forum is exclusively open to claims brought after it was established. On the other hand, the normal rule is to make it retrospective if no such restriction is clearly expressed.  

The court additionally noted that if the new Act specifically permits such continuity and if the repealing Act does not indicate a contradictory purpose, the competence of a Special Court established under a new Act to try charges under a repealed Act may be preserved.  

The court noted that the Act, 1956 was purportedly violated in the charges. Following the Act of 2013, the petitioner’s allegations of offences were the subject of an investigation. A First Class Magistrate presided over the trial of the offence punishable under Section 68 of the Act, 2013. In order to exercise its authority under Section 212 of the Act of 2013, the SFIO carried out an inquiry.  

The court further observed that According to Section 435, the Special Court is limited to trying cases involving offences under this Act (i.e., the Act, 2013) and not the Act, 1956, which carry a sentence of two years or more in jail. Regarding the other violations punishable by the Act of 1956 or acts punishable by prior company law that carry a sentence of less than two years in prison.  

The Act of 2013 and its associated offences are the only ones for which the Special Court created under Section 435 has jurisdiction; the Act of 1956 and its associated offences are not covered by this jurisdiction.  

The jurisdiction of the Special Court is restricted to the Companies Act, 2013, as opposed to the proviso to Section 435(1), which states that all other offences shall be tried, as the case may be, by the Magistrate to try any offence under this Act or under any previous Company Law. That is because the Special Court was established specifically to try offences under the Act, 2013, and as such, its jurisdiction cannot be extended retroactively to try offences under the Act, 1956.  

As per the court’s observation, any individual who satisfies the specified requirements may be subject to prosecution under Section 68 of the Act, 1956. It does not expressly state that just the company’s directors or officers will be covered by the provisions. This clause imposes liability on anybody who willfully and deliberately misleads others by making false claims, projections, or assertions or by hiding important information in order to persuade them to purchase shares or debentures.  

As a result, it covers everyone engaged in these kinds of fraudulent actions, regardless of their status within the organisation, and it can also cover those who work for the organisation as professionals. The term “Any Person” refers to professionals working for the company and cannot be limited to “Officer who is in default,” as that term is defined in section 5 of the Act, 1956.  

the court decided that following the aforementioned discussion, it became clear that the learned judge of the special court, which was created in accordance with the Companies Act of 2013, lacked legal jurisdiction in taking the reconnaissance. It is also not possible to reexamine the question of whether fraud tainted the merger process by starting a criminal investigation because this court had already approved the scheme of arrangement. Consequently, it would be an abuse of the judicial system to permit the criminal procedures to continue. 

 

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Limitation is an inherent aspect of the arbitrable point, observes Karnataka High Court in a construction case

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Case Name: Shivaraj Kamshetty v. The Managing Director, Karnataka State Agricultural Marketing Board & Ors 

Case No.: CIVIL MISC PETITION NO.200003 OF 2022 

Dated: April 19,2024 

Quorum: Hon’ble Justice C. M. Joshi 

 

FACTS OF THE CASE: 

Under Section 11 of the Arbitration and Conciliation Act, 1966, a petition has been submitted in order to appoint an arbitrator to mediate the disagreement that has arisen between the petitioner and the respondents. The responders had requested proposals for the work of building a building at Kalaburagi, and the petitioner claims he is a reputable Class-I Contractor with over 35 years of expertise.  

On August 22, 2011, the petitioner and the respondents entered into an agreement after the petitioner’s bid was accepted by the respondents. A sum of Rs. 109.00 lakhs was agreed upon to be paid for the completion of the work. In accordance with the specifications and drawings provided in the agreement, the petitioner successfully finished the contracted task.  

The respondents granted approval on March 25, 2014, for the petitioner to finish the excess work that was assigned to him. The total amount of work completed was Rs. 1,22,16,239/-as a result of additional work that was also approved by the responders on May 7, 2015. The respondents had a delay in responding to the final bill, which was submitted to them on September 28, 2015, as a result of their approval of the additional work. 

On March 25, 2014, the respondents gave the petitioner permission to complete the extra work that had been given to him. Because of additional work that was also allowed by the respondents on May 7, 2015, the total amount of work accomplished was Rs. 1,22,16,239/-. Due to their acceptance of the additional work, the responders took longer than expected to respond to the final bill, which was delivered to them on September 28, 2015. 

The petitioner had corresponded with the respondents on multiple occasions between 2011 and 2017, disputing various points, including the computation of the dues and the 10% margin of profit. In the end, the petitioner served a legal notice on May 16, 2020, demanding payment of Rs. 2,53,22,934/-, to which the respondents replied on June 16, 2020. 

The petitioner requested that the respondents designate a single arbitrator in accordance with Clause 4 of the Special Conditions of Contract Read With Clause 24 of the General Conditions of Contract. Since the respondents refused to agree to the arbitrator’s appointment, the petitioner was forced to file an application with this court pursuant to Section 11 of the Arbitration and Conciliation Act.  

CONTENTIONS OF THE PETITIONER: 

The petitioners’ counsel argued that Shivaraj Kamshetty was aboard a bus from Mangaluru to Udupi on December 27, 2009. Shivaraj’s bus was involved in a collision with another bus (registration number KA-01-F-8534) that was driven carelessly and rashly close to Pavanje village. Shivaraj suffered severe injuries as a result, and A.J. Hospital admitted him. 

The petitioner argues that the respondents had requested bids for the construction of a building at Kalaburagi, and he is a reputable Class-I Contractor with over 35 years of experience.  

In addition, the petitioner claims to be a businessman who makes Rs. 90,000 a month and that the accident prevented him from making money from his venture. He has also filed a claim suit under Section 166 of the Motor Vehicles Act, 1988, requesting payment to the owner and insurance company of the offending vehicle in the amount of Rs. 40,000,000. 

 

CONTENTIONS OF THE RESPONDENT: 

Speaking on behalf of the respondents, the learned attorney argued that the arbitration proceedings were unenforceable due to the petitioner’s claim being time-barred. He argues that even after the respondents had taken into account all of the petitioner’s arguments, the petitioner had made false accusations against them. As a result, the petition had no validity and could be rejected.  

It was contended by the respondents that the arbitrator has authority over the limiting question. The argument put forth was that the arbitrator ought to determine whether the claims are precluded by limitation.  

The ruling in a high court decision, which determined that the question of limitation is a combination of factual and legal inquiry, was cited by the respondents. As such, the arbitral tribunal ought to make that decision. Respondents stressed that Section 11 of the Arbitration and Conciliation Act (A&C Act) permits the court to reject arbitration only in cases where the claims are clearly barred by statute of limitations. 

 

 

LEGAL PROVISIONS: 

  • Section 100 of Karnataka Agricultural Produce Marketing (Regulation and Development) Act, 1966. Subject to the restrictions imposed by this Act or any other enactment, the Board will function as a body corporate with perpetual succession, a common seal, and the ability to sue or be sued in its corporate name. It will also be able to acquire, hold, and dispose of moveable and immovable property, enter into contracts, and carry out any other necessary, appropriate, or expedient actions for the purposes for which it was established. 
  • Sections 111 & 112 of the K.A.P.M (R&D) Act, 1966. The major responsibilities of the Board are listed in these sections. Educating people about controlled marketing, supporting market committees that are struggling financially, encouraging the grading and standardisation of agricultural products, and enhancing infrastructure for the transportation and sale of agricultural products are a few of these duties. 

 

COURT’S ANALYSIS AND JUDGMENT: 

The court determined that, in light of Clause-24 of the General Conditions of Contract, an arbitrator must be appointed to hear the disagreement that has arisen between the parties under these circumstances.  

In response to a request from this Court, all parties have agreed that Smt. Premavathi M. Manogoli, District Judge (Retd.), Plot No. 56, Teachers Colony, Near Jhanayogashram, Vijayapura, should be appointed as the only arbiter. 

The court held that the petition was allowed. The court noted that although the respondents contested the arbitration clause due to the claim’s limitation, they did not contest the existence of the arbitration agreement. According to this ruling, the arbitrator has the authority to decide the limitation problem since it is an integral part of the arbitrable point. 

The Supreme Court had previously ruled that the question of limitation is a mixed factual and legal matter that must be decided by an arbitral panel. The court relied on this ruling; The court also made it clear that Section 11 of the A&C Act permits it to reject arbitration only in cases where the claims are fundamentally precluded by statute. 

 

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Political parties’ manifestoes do not constitute corrupt practices under Section 123, says Karnataka High Court

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Case Name: Sri Shahanka J Sreedhara v. Sri B.Z. Zameer Ahmed Khan 

Case No.: EP No. 15 of 2023 

Dated: April 25, 2024 

Quorum: Hon’ble Justice M.I. Arun 

 

FACTS OF THE CASE: 

According to the case’s facts, the petitioner, a voter in the Chamarajpet Assembly Constituency, has contested the choice of that constituency’s victorious candidate for the Karnataka State Legislature in 2023.  

As per the case circumstances, the petitioner, who is a voter in the Chamarajpet Assembly Constituency, has challenged the selection of the winning candidate for the Karnataka State Legislature in 2023 from within that constituency. 

Shashanka J Sreedhara, a voter from the Chamrajpet Assembly Constituency, filed the election petition. In the Karnataka State Legislature elections of 2023, he objected to the choice of B Z Zameer Ahmed Khan, the victorious candidate, who was standing in the same constituency. 

The basis for the challenge in the current election petition is that the five guarantees made by the Indian National Congress (INC) party in its manifesto—namely, (i) “Gruha Jyothi”—200 units of free electricity to every house; (ii) “Gruha Lakshmi”—Rs. 2,000/-per month to every woman head of the family; (iii) “Anna Bhagya”—10 kilogrammes of food grain per person in a BPL family per month; (iv) “Yuva Nidhi”—Rs. 3000/-per month for two years to unemployed graduates and Rs. 1,500/-per month for two years to unemployed diploma holders; (v) “Shakthi”—free travel to all women throughout the state in regular KSRTC/BMTC buses—amount to corrupt practices and for that reason  

The petitioners’ primary argument was that the promises stated in the party’s platform, the Indian National Congress (INC), amounted to unethical behaviour. They attempted to overturn the respondent’s election as the INC’s victorious candidate.  

 

CONTENTIONS OF THE PETITIONER: 
The primary argument put out by the petitioners was that the promises stated in the party’s manifesto, the Indian National Congress (INC), amounted to illegal activity. As the respondent was an INC candidate who won, they attempted to nullify the election of the respondent.  

The petitioners’ main point of contention was that the promises made by the Indian National Congress (INC) in its platform amounted to unlawful conduct. Since the respondent was an INC candidate who emerged victorious, they endeavoured to void the respondent’s election.  

First and foremost, the petitioners contended that the promises made by the Indian National Congress (INC) in its platform amounted to unlawful action. They made an effort to overturn the respondent’s election because they were an INC candidate who was elected.  

 

CONTENTIONS OF THE RESPONDENT: 

The respondent argued that the petitioner had neither named the respondent candidate or levelled any specific accusations of corrupt behaviour. Instead, the Indian National Congress (INC) party’s manifesto was the centre of attention. 

The reply contended that the INC’s manifesto promises are a matter of policy and are not to be classified as corrupt practices. As stated by the reply, the manifesto’s pledges were a component of social welfare measures; their financial feasibility is a different story. 

The respondents said that the petitioner acknowledged during the arguments that the respondent had not been personally accused of engaging in any corrupt activities. But according to the petitioner, the INC’s manifesto was questionable, and its promised programmes would bankrupt the State Treasury and could not be put into action. 

In response, the respondent said that it is the responsibility of other parties to show how the execution of these plans would affect the public treasury. Essentially, the respondent stressed that Section 123 of the Representation of Peoples Act does not apply to political party policy announcements, even if they contain promises or guarantees, because they are not considered corrupt acts. In the end, the court supported this position, acknowledging the significance of voters making educated choices. 

 

LEGAL PROVISIONS:  

  • Section 123 of the Representation of Peoples Act. Under “bribery,” any present, offer, or promise made to any individual with the intention of directly or indirectly encouraging gratification from a candidate, his agent, or any other person with the approval of the candidate or his election agent, to any person whatsoever, is considered to be the decision of a candidate to run in an election, whether to run or not, and whether to withdraw. 

 

  • Order 7 Rule 11 of the Code of Civil Procedure (CPC). In accordance with this rule, the respondent submitted a request to have the election petition dismissed. Based on this rule, the respondent’s opposition to the petition was taken into consideration by the court. 

 

COURT’S ANALYSIS AND JUDGMENT:  

According to the court, a party’s announcement about the policies they plan to put into place cannot be regarded as corrupt behaviour under Section 123 of the Representation of Peoples Act.  

The court highlighted that voters should discuss whether or not the promises made by the INC party in its manifesto are reasonable and whether they have the impact of giving out freebies or placating a particular segment of society. Under the RP Act, the same cannot be regarded as a corrupt activity. 

Regarding specific corrupt activities, the petitioner did not level any personal accusations against the respondent candidate. Rather, the promises made in the manifesto were the main focus.  

The promises made in the INC manifesto were viewed by the court as social welfare measures. It is up to others to explain how the execution of these plans will affect the state treasury, even though their financial sustainability is a different matter. As per Section 123 of the Representation of Peoples Act, the court acknowledged that policy pronouncements made by political parties are not equivalent to corrupt acts, even if they contain promises or guarantees. The statement underscored the significance of informed voter decision-making in assessing policy pronouncements of this nature. 

In conclusion, the court recognised that knowledge is crucial when it comes to voters making decisions and that political parties’ policy statements shouldn’t be mistaken for corrupt activities under the RP Act.  

 

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Judgment reviewed by Riddhi S Bhora 

 

Click to view judgment.

 

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