#Karnataka High Court Archives - Page 3 of 14

19 Oct

Changes in Officeholders Will Not Affect the Company’s Obligation to Repay Cheque Amount: Karnataka High Court

Uncategorized #Karnataka High Court, #StateBankofIndia

Title: Rajiv & Others And State Bank of India C.C.No.3095 of 2021

Date of Decision: October 6, 2023

CORAM: The Hon’ble Mr. Justice M. Nagaprasanna

Introduction

This judgment review pertains to a case where two criminal petitions were filed under Section 482 of the Criminal Procedure Code (Cr.P.C.) to quash the proceedings initiated against the petitioners for offenses punishable under Section 138 of the Negotiable Instruments Act, 1881. The case revolves around the issuance of a cheque as security for a credit facility, which became the subject of dispute after the death of the individual who had signed the cheque.

Facts of the Case

The case involves two separate criminal petitions filed by the accused parties. In the first criminal petition (No.6481 of 2022), accused numbers 3, 4, and 6 filed the petition, while in the second criminal petition (No.7203 of 2022), accused numbers 1, 2, and 5 were the petitioners. The accused parties in both petitions challenged the proceedings initiated against them in Criminal Case No.3095 of 2021.

The dispute centers around M/s. Jamkhandi Sugars Limited, which had sought credit facility from the State Bank of India (the Bank) for its operations related to harvesting and transportation of sugarcane. The credit facility was granted, and a cheque was issued by the Chairman of the company as security for the facility. However, the Chairman passed away, and subsequently, the accused parties took over as office bearers of the company.

The Bank declared the credit facility as a non-performing asset, and when the cheque was presented for realization, it was dishonored due to insufficient funds. A legal notice was sent by the Bank to the accused parties, which led to the filing of a private complaint and the issuance of summons.

Court’s Analysis and Decision

The crux of the case revolved around whether the issuance of the cheque as security, following the death of the Chairman who signed it, was legally valid. The petitioners argued that the presentation of the cheque after the Chairman’s death rendered it invalid, and therefore, the proceedings against them were null and void.

On the other hand, the Bank contended that the accused parties, who were office bearers of the company, were not absolved from liability as they had played a role in the renewal of loan documents, were aware of the cheque issued by the former Chairman, and the company was still in existence.

After considering the arguments from both sides, the Court had to decide whether the proceedings should be quashed. The Court held that the mere death of the Chairman of the company did not automatically absolve the other office bearers from liability. They were responsible for the company’s debts and had actively participated in the transactions.

The Court rejected the petitioners’ arguments and ruled in favor of the Bank, stating that the proceedings would not be quashed. The Court found that the petitioners had a role in the affairs of the company and could not evade liability under Section 138 of the Negotiable Instruments Act.

In conclusion, the Court’s decision upheld the continuation of proceedings against the accused parties, emphasizing that they had a significant role to play in the company’s financial transactions, despite the death of the Chairman.

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Written by- Tarishi Verma

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17 Oct

When a Public Property is Allotted for a Specified Purpose and that Purpose Remains Unaccomplished, the Retention of such Allotment Militates Against the Public Interest: High Court of Karnataka

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Blog #Karnataka High Court

Title: M/S Divyajyothi vidya Kendra v. Karnataka housing board and others

Decided on: 10th October 2023

WRIT APPEAL NO. 873 OF 2023 (GM-RES)

Coram: HON’BLE MR PRASANNA B. VARALE, CHIEF JUSTICE & HON’BLE MR JUSTICE KRISHNA S DIXIT

Introduction

Divyajyothi vidya Kendra’s appeal challenging the cancellation of allotment of the subject land has been dismissed by the Karnataka high court, with a direction to the respondent-Karnataka Housing Board to pass orders determining the quantum of forfeiture and refund of remaining amount to the appellant within a period of four weeks.

Facts of the case

Allotment of a civic amenity site was made vide letter dated 16.12.2003 and the appellant has paid the allotment price of Rs.53,10,293/- along with interest of Rs.7,11,157/-. A conditional sale deed dated 20.10.2005 was executed and registered by the Housing Board on 20.10.2005, subject to the condition that the allottee should construct the school building within a period of 5 years and failure to do so, the allotment would stand rescinded. Due to shortage of funds and unavailability of loans or credit, the structure could not be constructed though BBMP had issued the khata.

Court Analysis and Decision

The division bench declined indulgence in the matter being broadly in agreement with the reasoning of the learned Single Judge and observed that the subject property is a huge civic amenity site. The allotment was for the specified purpose of establishing an educational institution by constructing a building therein within a period of five years which has not happened. The site has remained unutilized for a period of more than two decades after it was allotted to the appellant. As a consequence, the right to education of those who would have studied, if the educational institution was established in the site in terms of stipulation of allotment, has been brutalized. Had the site been allocated to some worthy person, that would have served the public purpose for which it was earmarked.

When a public property is allotted for a specified purpose and that purpose remains unaccomplished, the retention of such allotment militates against the public interest. Where such a purpose has constitutional flavor like the one catering to the educational needs of society, this proposition assumes imperative character. If leniency is shown in matters of breach, that would be tantamount to placing premium on illegality & would be a case of misplaced sympathy too. The petitioner is a society registered under the provisions of the Karnataka Registration of Societies Act, 1960 and it claims to run educational institutions. Permitting such entities to retain allotment of the site despite breach of the statutory conditions, would lay a bad precedent which has abundant abuse potential.

The appeal being devoid of merits was rejected and the Respondent-Board is directed to comply with the order concerning determination of quantum of forfeiture and refund of amount, as directed by the Single Judge. Accordingly the society would deliver the possession of the property in an ‘as is where is’ position to the Board, which should take back the possession within four weeks.

Written by- K R Bhuvanashri

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31 Aug

Calculation of Land’s Market Value under 1894 Act to Follow Right to Fair Compensation Act When Award is Passed After its Enactment: Karnataka High Court

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Case Title: M/s Deco Equipments Pvt Ltd AND The State of Karnataka & others.

Case No: WRIT PETITION No.33180 OF 2016

Date of Order: 29-08-2023

CORAM: HON’BLE JUSTICE S Sunil Dutt Yadav

INTRODUCTION

The Karnataka High Court has clarified that if the award for land acquisition under Section 4(1) of the Land Acquisition Act 1894 is issued after the enactment of the Right to Fair Compensation and Transparency in Land Acquisition Rehabilitation and Resettlement Act 2013, the market value of the acquired land should be assessed according to the guidelines outlined in Section 26 of the 2013 Act.

FACTS

In this case, a single bench of S Sunil Dutt Yadav considered a petition filed by M/s Deco Equipments Pvt Ltd. The petitioner challenged the validity of an Award dated 20.01.2016 passed by the Land Acquisition Officer of Mysore District. The case revolved around the acquisition of land and determination of compensation under the Land Acquisition Act, 1894.

The acquisition process began with a Preliminary Notification issued on 15.03.2008, followed by a Final Notification on 05.06.2009 under Sections 4(1), 6, and 17(1) of the 1894 Act. The petitioner contested the validity of these notifications, and after some legal proceedings, the matter was remitted for fresh consideration. During the course of the proceedings, the 2013 Act came into effect.

The petitioner ultimately sought compensation under the provisions of the 2013 Act. The Special Land Acquisition Officer passed an Award determining compensation based on the sale consideration from a Sale Deed dated 21.04.2007 and using norms outlined in the Gazette Notification dated 04.07.2013.

The key legal issue was whether the proceedings initiated under the 1894 Act could be subjected to the compensation determination provisions of the 2013 Act, especially considering the changes introduced by Section 24(1)(a) of the 2013 Act.

COURT’S ANALYSIS

The bench examined the relevant provisions, specifically focusing on Section 24(1)(a) of the 2013 Act. It noted that if no award had been made under Section 11 of the 1894 Act, the compensation determination provisions of the 2013 Act would apply. In this context, the court concluded that even when acquisition proceedings were initiated under the 1894 Act but the award was being sought after the 2013 Act came into force, the compensation determination provisions of the 2013 Act would be applicable.

The court observed that the petitioner had settled for compensation under the 2013 Act during the proceedings, even though they had initially challenged the validity of the acquisition proceedings. Consequently, the court allowed the petition and directed the Land Acquisition Officer to pass a fresh Award. The compensation was to be recalculated in accordance with the principles discussed in the judgment, and the officer was instructed to adhere to the guidelines of Section 26 and other applicable rules under the 2013 Act.

In essence, the court’s decision highlighted the applicability of the compensation determination provisions of the 2013 Act in cases where the award was sought after the 2013 Act came into force, even if the acquisition proceedings were initiated under the 1894 Act.

Written by- Shreya Sharma

31 Aug

Karnataka High Court Validates Job Notification with Quotas Under Article 371J, Ensuring Fairness for Both Local and Non-Local Applicants

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Case Title: Naveen Kumar H N & Others AND State of Karnataka & Others

Case No: WRIT PETITION NO. 4979 OF 2023 (S-RES) C/W WRIT PETITION NO. 6588 OF 2023

Date of order: 03.08.2023

CORAM: HON’BLE JUSTICE N S SANJAY GOWDA

INTRODUCTION

Karnataka High Court Affirms Validity of 01.02.2023 Government Circular Regarding Reservation Application under Article 371J for Kalyana Karnataka Region”

FACTS

In 2020, the Karnataka Power Transmission Corporation Limited (KPTCL) issued a recruitment notification for the positions of Assistant Engineers (Electrical) and Junior Engineers. The notification included provisions related to the recruitment of local candidates from the Kalyana Karnataka Region, in accordance with Article 371J of the Indian Constitution. This article aimed to ensure development and provide incentives for education and employment in the underdeveloped Hyderabad-Karnataka region.

A new circular issued in 2022 reversed the previous circulars and changed the recruitment process. This new circular stated that local candidates from the Kalyana Karnataka Region should be considered first for recruitment against non-local cadre positions. If unsuccessful in securing these positions, their candidature should then be considered for local cadre posts. Non-local cadre applicants challenged this, arguing that altering the selection process after candidates had exercised their options was against established legal principles.

COURT’S ANALYSIS

Justice N S Sanjay Gowda highlighted that the main objective of introducing special provisions in the Hyderabad-Karnataka region was to acknowledge its underdevelopment and provide incentives for education and employment. The judge ruled in favor of the state’s circular, stating that it aligned with the constitutional intent of Article 371J.

The court noted that while Article 371J aimed to provide local candidates with reserved posts, it did not intend to restrict them from applying for other positions in the state. It held that the state government could not limit the right of local candidates to apply for non-local cadre positions by mandating option exercises.

The court emphasized that candidates choosing non-local cadre posts might have reduced chances of employment compared to candidates from more developed regions. It found that issuing separate notifications for local and non-local cadre positions better aligned with constitutional intent.

Addressing the argument of changing rules midway, the court highlighted that essential eligibility and selection criteria remained consistent throughout the recruitment process. It aimed to uphold opportunities for both local and non-local candidates without adversely affecting either.

The judgment acknowledged that the reversal of decisions by the State Government had caused the present confusion and issued specific directions to address the situation. These directions included allowing local candidates to opt for the local cadre and ensuring vacancies arising from this choice were offered to non-local candidates on the basis of merit.

In conclusion, the court dismissed the petitions while affirming the state’s circular and providing directions to ensure fairness in recruitment while considering the constitutional intent behind Article 371J.

Written by- Shreya Sharma

30 Aug

Karnataka High Court Rules RTI Allows Employees To Obtain Colleague’s Service Records For Service Legal Proceedings

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Case Title: A S MALLIKARJUNASWAMY, AND STATE INFORMATION COMMISSIONER & others.

Case No: WRIT PETITION NO. 23695 OF 2022

Date of Order: 22-08-2023

CORAM : HON’BLE JUSTICE KRISHNA S DIXIT

INTRODUCTION

The decision made by the State Information Commissioner to dismiss the application of a college professor who was inquiring about his colleague’s service record details has been overturned by the Karnataka High Court.

FACTS

In this case, a college professor named A S Mallikarjunaswamy filed a petition in the Karnataka High Court after his application under the Right to Information Act, 2005 (RTI Act) was rejected by the State Information Commissioner. The Commissioner had rejected his RTI application based on the provisions of Section 8(1)(j) of the RTI Act. Section 8(1)(j) states that there is no obligation to provide information that relates to personal information, the disclosure of which has no relationship to any public activity or interest, or which would invade an individual’s privacy, unless there is a larger public interest that justifies the disclosure.

Mallikarjunaswamy’s RTI application sought service record details of his colleague. He argued that he needed this information to address his grievances related to his own service, such as matters of confirmation, seniority, promotion, etc. He contended that the information he was seeking was essential for him to structure his claims in service law matters

COURT’S ANALYSIS

Justice Krishna S Dixit of the Karnataka High Court allowed Mallikarjunaswamy’s petition and set aside the decision of the State Information Commissioner. The court emphasized that the petitioner was not a stranger to the institution in question; he was a lecturer who had been working there for years. The court noted that in matters of service grievances, especially those related to confirmation, seniority, and promotion, employees need access to full service particulars of their colleagues working under the same employer.

The court ruled that the rejection of Mallikarjunaswamy’s RTI application under Section 8(1)(j) was not applicable in this case. It stated that denying him the information he had requested would effectively deny him the opportunity to avail benefits under a specific Government Order that prescribed parameters for granting relaxation of service conditions related to reservation.

As a result, the court directed the Principal of Marimallapas PU College in Mysuru to provide the service particulars of the individuals mentioned in Mallikarjunaswamy’s RTI application, along with copies of relevant records, within a period of three weeks. The court also imposed a penalty for non-compliance, stating that for each day of delay beyond the given period, the respondent would have to pay Rs. 1,000 to the petitioner. Additionally, the Principal was ordered to pay a cost of Rs. 5,000 towards expenses.

In essence, the court’s decision emphasized the importance of providing relevant service details to employees within the same institution for the proper resolution of service-related grievances, and it underlined that the denial of such information must be carefully weighed against the larger public interest and the individual’s rights.

Written by- Shreya Sharma

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