#LegalPrecedent Archives

22 Apr

“Imposing a penalty greater than the one in force at the time of the commission of the offence has no application”: Supreme Court

Blog, Supreme court #GeneralClausesAct, #HighCourtAppeal, #LegalPrecedent, #MPExciseAct, #RegulatoryCompliance, #RuleSubstitution, #StatutoryInterpretation, #SupremeCourt

Case title: Pernod Ricard India (P) Ltd. v. The State of Madhya Pradesh & Ors.

Case no.: Civil Appeal Nos. 5062-5099 of 2024 Arising out of SLP (C) Nos. 26571-26608 of 2017

Dated on: 19^th April 2024

Quorum: Justice Pamidighantam Sri Narasimha and Justice Aravind Kumar

FACTS OF THE CASE

The appellant is a sub-licensee under the M.P. Excise Act, 1915 for manufacture, import and sale of Foreign Liquor, regulated under the Madhya Pradesh Foreign Liquor Rules, 1996. Sub-licensees importing Foreign Liquor are granted transit permits in which the origin, quality, quantity and point of delivery of the imported liquor are recorded. At the point of destination, the consignment is verified for quality and quantity, and a certificate under Rule 13 is granted. Rule 16 prescribes the permissible limits of loss of liquor in transit due to leakage, evaporation, wastage etc. The purpose and object of this Rule is to prevent illegal diversion of liquor for unlawful sale and also to prevent evasion of excise duty. If the permissible limits of loss of liquor are exceeded, the 1996 Rules prescribe imposition of penalty. Rule 19 providing for penalty that could be imposed during the relevant license period of 2009-2010 was about four times the maximum duty payable on foreign liquor. Facts reveal that no action was initiated during the license year of 2009-2010. On 29.03.2011, Rule 19 was substituted by an amendment.

Despite this amendment, a demand notice dated 22.11.2011 was issued, directing payment of penalty for violations that occurred during the license year of 2009-2010, under the old, more stringent rule. The appellant contested this, arguing that the substituted rule should apply as it was in force when the demand notice was issued.

CONTENTIONS OF THE APPELLANT

Mr. Pratap Venugopal, Ld. Senior Advocate, appearing on behalf of the appellant argued that the effect of substitution is to repeal the existing provision from the statute book in its entirety and to enforce the newly substituted provision. He would further submit that even for incidents which took place when the old Rule was in force, it is the substituted Rule that would be applicable, and therefore, the demand notice dated 22.11.2011 seeking payment of penalties under old Rule is illegal.

In Koteswar Vittal Kamath v. K. Rangappa Baliga & Co., this Court brought out the distinction between supersession of a rule and substitution of a rule, and held that the process of substitution consists of two steps – first, the old rule is repealed, and next, a new rule is brought into existence in its place.

In Zile Singh v. State of Haryana, Court referred to the legislative practice of an amendment by substitution and held that substitution would have the effect of amending the operation of law during the period in which it was in force.

CONTENTIONS OF THE RESPONDENTS

The state authorities argued that the penalty should be imposed according to the rule in force during the license year in question, i.e., the old rule that existed when the violation occurred.

Mr. Saurabh Mishra, learned A.A.G. for the State, came up with an attractive argument that the State of M.P. can continue to apply the repealed Rule for the transaction of 2009-2010 by virtue of specific provisions under the Madhya Pradesh General Clauses Act, 1957.

He brought to our notice Section 10 of the Act which is as follows – Effect of Repeal. Where any Madhya Pradesh Act repeals any enactment then, unless a different intention appears, the repeal shall not – (c) affect any right, privilege, obligation or liability, acquired, accrued or incurred under any enactment so repealed;

LEGAL PROVISIONS

The M.P. Excise Act, 1915, Rule 16. Permissible limits of losses – An allowance shall be made for the actual loss of spirit by leakage, evaporation etc., and of bottled foreign liquor by breakage caused by loading, unloading, handling etc. in transit, at the rate mentioned hereinafter. The total quantity of bottled foreign liquor transported or exported shall be the basis for computation of permissible losses.

The M.P. Excise Act, 1915, Rule 19 providing for Penalty that could be imposed during the relevant license period of 2009-2010 was about four times the maximum duty payable on foreign liquor.

licensee shall be liable to pay penalty at a rate exceeding three times but not exceeding four times the maximum duty payable on foreign liquor at that time.

Rule 19 was substituted by an amendment. The relevant portion of substituted provision is as follows: Licensee shall be liable to pay penalty at a rate not exceeding the duty payable on foreign liquor at that time.

ISSUE –

Applicability of the relevant rule for imposition of penalty: Whether it is the rule that existed when the violation occurred during the license period of 2009-10 or the rule that was substituted in 2011 when proceedings for penalty were initiated.
Whether the substituted rule can be given retrospective effect.
Interpretation of statutory provisions regarding repeal and substitution.

COURT’S ANALYSIS AND JUDGEMENT

The Supreme Court accepted the appellant’s contention that the substituted rule should apply to pending proceedings. It determined that the purpose of the amendment was to achieve a proper balance between the offense and penalty. Therefore, the Court directed that the substituted rule alone would apply to pending proceedings.

The Court rejected the arguments of both the single judge and the Division Bench of the High Court. It clarified that the substituted penalty only mitigated the severity of the law by reducing the penalty, and therefore, the bar of imposing a penalty greater than the one in force at the time of the offense did not apply. The Court emphasized the importance of a plain and simple understanding of laws and their processes, in line with their purpose and objectives.

“PRIME LEGAL is a full-service law firm that has won a National Award and has more than 20 years of experience in an array of sectors and practice areas. Prime legal fall into a category of best law firm, best lawyer, best family lawyer, best divorce lawyer, best divorce law firm, best criminal lawyer, best criminal law firm, best consumer lawyer, best civil lawyer.”

Judgement Reviewed by – Chiraag K A

Click here to view Judgement

19 Apr

“Delay should not be excused as a matter of generosity” Supreme Court Rejects Govt’s Time Barred Suit

Prime Legal

Blog, Supreme court #BreachOfLease, #DelayCondonation, #LegalAnalysis, #LegalPrecedent, #propertydispute, #SufficientCause 1

Case title: Union of India & Anr. v. Jahangir Byramji Jeejeebhoy

Case no.: Civil Appeal No. of 2024 (arising out of S.L.P. (Civil) No. 21096 of 2019)

Dated on: 3^rd April 2024

Quorum: Justice Aniruddha Bose and Justice J.B. Pardiwala

FACTS OF THE CASE

In the annals of legal battles, the saga of delays often takes center stage. The case at hand, emanating from an order by a learned single Judge of the High Court of Judicature at Bombay, bears testament to the perennial struggle between the imperatives of justice and the rigidity of timelines. Let’s delve into the intricate web of facts, submissions, issues, and judicial pronouncements that define this legal saga.

The genesis of the dispute lies in a lease agreement dated 09.03.1951, wherein the respondent leased a property to the appellants. Subsequently, due to alleged breaches by the appellants, the respondent filed a suit for possession and arrears of rent in 1981. The trial court decreed the suit in 1987, which was subsequently affirmed in appellate proceedings in 1992. The appellants then approached the High Court in 1993, seeking relief under Article 227 of the Constitution.

However, due to non-prosecution, the petition was dismissed in 2006. Despite subsequent execution proceedings initiated by the respondent in 2013, the appellants only moved to restore the petition in 2019, citing a delay of 12 years and 158 days. The High Court, in its order dated 09.07.2019, declined to condone the delay, prompting the present appeal before the Supreme Court.

CONTENTIONS OF THE APPELLANT

The learned Attorney General, representing the appellants, argued vehemently for condonation of the delay. He underscored the significance of the suit property being within Pune Cantonment, asserted as Union-owned land. The delay, according to him, should not prejudice the government’s rights over the land.

CONTENTIONS OF THE RESPONDENTS

In opposition, Mr. Sudhanshu Chaudhari, the learned senior counsel for the respondent, contended that the High Court’s decision was legally sound. He emphasized the lack of sufficient cause presented by the appellants to justify the lengthy delay in seeking restoration.

In Oriental Aroma Chemical Industries Limited v. Gujarat Industrial Development Corporation, (2010) 5 SCC 459, SC rejected the application for condonation of delay of 4 years in filing an application to set aside an ex-parte decree on the ground that the explanation offered for condonation of delay is found to be not satisfied.

In Postmaster General and others v. Living Media India Limited, (2012) 3 SCC 563, while dismissing the application for condonation of delay of 427 days in filing the Special Leave Petition, held that condonation of delay is not an exception and it should not be used as an anticipated benefit for the government departments.

In that case, SC held that unless the Department has reasonable and acceptable reason for the delay and there was bona fide effort, there is no need to accept the usual explanation that the file was kept pending for several months/years due to considerable degree of procedural red tape in the process cannot be accepted.

LEGAL PROVISIONS

Article 227 of Constitution of India, Power of superintendence over all courts by the High Court, Every High Court shall have superintendence over all courts and tribunals throughout the territories in relation to which it exercises jurisdiction.

ISSUE –

Whether the delay of 12 years and 158 days in filing the restoration application warrants condonation.
Whether the appellants have presented sufficient cause to justify the delay.
Whether the High Court erred in its decision to decline condonation.

COURT’S ANALYSIS AND JUDGEMENT

Upon meticulous examination of the submissions and pertinent legal precedents, the Supreme Court embarked on a rigorous analysis. The Court acknowledged the suggestion made by the High Court regarding the possibility of restoration if possession of the property were relinquished, a proposition the appellants declined. It emphasized the significance of diligence in litigation and the sanctity of limitation periods.

Referring to established legal principles, the Court underscored that condonation of delay is not an automatic entitlement. It stressed the need for parties to demonstrate sufficient cause, highlighting the lack thereof in the present case. The Court disapproved of the appellants’ casual approach towards litigation and their failure to proffer a compelling rationale for the delay.

Drawing parallels from prior judgments, the Court reiterated that the law of limitation is founded on principles of equity and public policy, serving to maintain certainty and prevent undue prejudice. It cautioned against leniency in condoning delays, particularly in the absence of bona fide efforts or justifiable reasons.

Ultimately, the Court upheld the High Court’s decision, refusing to intervene in the absence of compelling grounds to condone the delay. It emphasized the paramountcy of adherence to legal timelines and the imperative of balancing justice with procedural rigor.

In the realm of legal proceedings, time is of the essence, and the case law discussed serves as a stark reminder of the consequences of delay. Upholding the sanctity of limitation periods, the Supreme Court’s judgment underscores the need for parties to approach litigation with diligence and foresight, lest they risk forfeiture of their rights. As legal battles unfold, the scales of justice remain finely calibrated, weighing the merits of each case against the imperative of timely recourse to legal remedies.

Judgement Reviewed by – Chiraag K A

Click here to View Judgement

15 Apr

“Supreme Court Rules Out Easement by Necessity in Presence of Alternative Property Access”

Prime Legal

Blog, Supreme court #CaseLaw, #CivilAppeal, #EasementaryRights, #LandOwnership, #LegalDispute, #LegalPrecedent, #LegalProceedings, #propertydispute, #propertylaw, #SupremeCourt

Case title: Manisha Mahendra Gala & Ors. V. Shalini Bhagwan Avatramani & Ors.

Case no.: Civil Appeal No. 9643 Of 2010

Dated on: 10^th April 2024

Quorum: Justice Pankaj Mithal and Justice Prashant Kumar Mishra

FACTS OF THE CASE

In the legal realm, disputes often arise over property rights, particularly when it comes to access and usage of shared pathways or roads. The case of Manisha Mahendra Gala & Ors. vs. Shalini Bhagwan Avatramani & Ors., hereafter referred to as the Gala case, delves into the intricacies of easementary rights over a 20ft. wide road situated on land owned by the respondents, the Ramani family. The Supreme Court of India, through its judgment dated April 10, 2024, provided a detailed analysis of the facts, submissions, issues, and the ultimate legal decision.

The dispute revolves around a 20ft. wide road located on Survey No.57 Hissa No.13A/1, presently owned by the Ramani family. The appellants, Gala family, claimed easementary rights over this road for access to their property, Survey No. 48 Hissa No.15. The Gala family argued that they had been using the road for many years and that their access to their land depended solely on this pathway. The case stemmed from two separate suits: Suit No.14 of 1994 filed by Joki Woler Ruzer (later succeeded by Mahendra Gala and then the Gala family) for declaration of easementary rights, and Suit No.7 of 1996 filed by the Ramani family to declare the Gala family’s lack of rights over the road.

CONTENTIONS OF THE APPELLANT

The appellants, represented by senior counsel Shri Huzefa Ahmadi, contended that the Gala family’s usage of the road for many years granted them easementary rights. They also argued that the Sale Deed dated 17.09.1994, transferring land to Mahendra Gala, acknowledged their right of way over the road.

CONTENTIONS OF THE RESPONDENTS

On the other hand, the respondents, represented by counsel Shri Devansh Anoop Mohta, disputed the Gala family’s claims, asserting that they had no legal right to the road.

ISSUE –

Whether the appellants have acquired easementary rights over the disputed road.
Whether the findings of the lower courts were valid and justifiable.
Whether the Sale Deed dated 17.09.1994 conferred easementary rights.

COURT’S ANALYSIS AND JUDGEMENT

The Court analyzed the evidence presented and legal precedents. It concluded that the appellants failed to establish uninterrupted use of the road for over 20 years, a requirement for acquiring easementary rights by prescription. The Sale Deed did not confer such rights, as the appellants’ predecessors did not possess them. Additionally, the Court rejected the argument of easementary rights by necessity, as there was an alternative access route available. It upheld the decisions of the lower courts, dismissing the appellants’ appeals.

The Supreme Court dismissed the appeals, ruling that the appellants had not acquired easementary rights over the disputed road. The judgement reaffirmed the principle that factual findings of lower courts can be reviewed by appellate courts, and highlighted the importance of clear evidence in establishing legal rights.

Judgement Reviewed by – Chiraag K A

Click the Link to View Judgement

15 Apr

“Kerala High Court Directs Closure of Schools Without Playgrounds and Extra-Curricular Activities”

Prime Legal

Blog, Kerala HC #ChildDevelopment, #EducationalReform, #EducationalStandards, #ExtraCurricularActivities, #keralahc, #keralahighcourt, #LegalPrecedent, #PlaygroundDirective, #SchoolClosure

Case title: Prakash N v. G.W.L.P. (Government Welfare Lower Primary) School & Ors.

Case no.: WP(C) No. 19170 of 2014

Order on: 11^th April 2024

Quorum: Justice P.V.Kunhikrishnan

FACTS OF THE CASE

The petitioners, Prakash N and Rajani R, represented the Parent Teachers Association and the Managing Committee Member of the Government Welfare Lower Primary School, Thevayoor South, Pathanamthitta. They filed a writ petition seeking to restrain respondents 2 and 3 from constructing a water tank in the school ground without obtaining permission from the school authorities or higher authorities. The petitioners provided photographic evidence of ongoing construction activities in the playground of the school.

The court directed the State Government to formulate norms/guidelines within four months regarding the extent of playground necessary in each category of schools and the facilities required in school playgrounds. It also mandated that educational authorities ensure compliance and take stringent action, including closure of schools not adhering to these norms.

CONTENTIONS OF THE APPELLANT

The appellants, represented by their advocates, argued for the necessity of obtaining permission for construction within the school compound and emphasized the importance of preserving the playground space for educational and recreational activities.

CONTENTIONS OF THE RESPONDENTS

The respondents, represented by various government bodies and officials, argued against the petition, contesting the need for prior permission for the construction and presenting their justifications for the proposed water tank.

ISSUE –

Whether construction activities within the school compound require prior permission from educational authorities.
The significance of playgrounds in educational institutions and the legal obligations regarding their maintenance.

COURT’S ANALYSIS AND JUDGEMENT

The court emphasized the vital role of playgrounds in schools, highlighting their importance for holistic child development and educational enhancement. It referenced relevant provisions in the Kerala Education Rules (KER) and the Right of Children to Free and Compulsory Education Act, noting the absence of specific guidelines regarding playground size and facilities.

The court cited precedents and affiliation rules of educational boards like CBSE and CISCE, which clearly stipulate requirements for playground size and amenities. It expressed concern over the lack of similar regulations in Kerala’s education laws.

Consequently, the court directed the State Government to formulate norms/guidelines specifying the extent of playgrounds required for different types of schools and the facilities they should contain. It mandated strict enforcement, including potential school closures for non-compliance.

The judgment underscores the importance of playgrounds in educational institutions and calls for regulatory measures to ensure their proper maintenance and availability for students’ physical and recreational activities. It sets a precedent for the government to enact specific guidelines in line with educational standards and best practices.

Judgement Reviewed by – Chiraag K A

Click the Link to View Judgement

12 Apr

The High Court should not entertain a petition under Article 226 of the Constitution particularly when an alternative statutory remedy is available : SC

Prime Legal

Blog, Supreme court #Article226, #ConstitutionalPetition, #HighCourtJurisdiction, #LegalPrecedent, #StatutoryRemedies 1

Case title: PHR Invent Educational Society v. UCO Bank and Ors

Case no.: Civil Appeal No. ….. of 2024 (Arising out of SLP(C) No. 8867 of 2022)

Order on: 10^th April 2024

Quorum: Justice B.R. Gavai, Justice Rajesh Bindal and Justice Sandeep Mehta

FACTS OF THE CASE

The case revolves around a loan availed by the borrower (Dr. M.V. Ramana Rao) from UCO Bank, for which four properties were mortgaged as collateral security. Due to default in repayment, the bank initiated proceedings under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).

The Bank issued an Auction Sale Notice for the scheduled properties. The borrower challenged this through a securitization application before the Debts Recovery Tribunal (DRT).

Meanwhile, the auction was conducted, and the appellant emerged as the highest bidder. Despite interim orders from the DRT, the borrower failed to comply with payment obligations. Eventually, the sale was confirmed in favor of the appellant.

CONTENTIONS OF THE APPELLANT

The appellant argued against the High Court entertaining the borrower’s writ petition, citing settled law on alternative remedies under the SARFAESI Act. They emphasized the borrower’s conduct, including non-compliance with payment obligations and the finality of the sale in favor of the appellant.

Shri Basant, learned Senior Counsel appearing for the appellant-auction purchaser relied on the judgments of this Court in the cases of,

United Bank of India v. Satyawati Tondon and Other:

The High Court overlooked the settled law that it will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person and that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions.

The Court further held that though the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, still it is difficult to fathom any reason why the High Court should entertain a petition filed under Article 226 of the Constitution.

CONTENTIONS OF THE RESPONDENTS

UCO Bank and others argued for the dismissal of the borrower’s writ petition, emphasizing the availability of statutory remedies under the DRT Act and SARFAESI Act. They highlighted the borrower’s failure to comply with payment obligations and the finality of the confirmed sale.

ISSUE –

Whether the High Court erred in entertaining the borrower’s writ petition despite the availability of alternative remedies under the SARFAESI Act.
Whether the borrower’s conduct disentitles them to equitable relief.

COURT’S ANALYSIS AND JUDGEMENT

The court reiterated settled law that the High Court should not entertain petitions under Article 226 of the Constitution when effective alternative remedies are available. It emphasized the finality of the confirmed sale and the extinguishment of the borrower’s right of redemption. The court found no exceptional circumstances warranting the High Court’s interference. It held that the High Court erred in entertaining and allowing the borrower’s petition and dismissed the same.

The court, while recognizing the High Court’s wide powers under Article 226, stressed the importance of exhausting alternative remedies, especially in matters involving recovery of dues. The judgment upheld the finality of the confirmed sale and the borrower’s failure to avail statutory remedies, ultimately dismissing the borrower’s writ petition.

This case underscores the significance of adhering to statutory procedures and exhausting alternative remedies before seeking recourse through writ jurisdiction, particularly in matters concerning financial obligations and recovery actions.

Judgement Reviewed by – Chiraag K A

Click Here to view Judgement

1 2