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16 May

Supreme Court Quashes Criminal Proceedings in Benami Land Transactions and Establishes Legal Precedents for Government Employees Engaging in Similar Transactions

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Supreme Court Quashes Criminal Proceedings in Benami Land Transactions and Establishes Legal Precedents for Government Employees Engaging in Similar Transactions

Case Name: C Subbiah @ Kadambur jayaraj & Ors v. The Superintendent of Police & Ors

Case No.: SLP (Criminal) No(s). 8990 of 2019

Dated: May 15, 2024

Quorum: Justice B R Gavai and Justice Sandeep Mehta

FACTS OF THE CASE:

The complainant filed a complaint at the Court of Learned Judicial Magistrate No. II, Kovilpatti, claiming among other things that he was a graduate of the MD programme with an M.Sc. On October 8, 2007, he was hired as a government instructor. The claimant had been making his living from the real estate sector for the previous sixteen years prior to being assigned as a Government teacher.

The complainant making the complaint was acquainted with Kannabiran, also known as “A-3,” who held a managerial position at the Kovilpatti branch of the State Bank of India (SBI). The complainant met A. Vijaya (hence referred to as “A-2”) and Subbiah @ Kadambur Jeyaraj (hereinafter referred to as “A1”) while working in the real estate industry.

The complaint was introduced to Chandrasekar (henceforth referred to as “A-4”), his son Pandiyaraj (henceforth referred to as “A-6”), his wife S. Pandiyammal (henceforth referred to as “A-5”), and his brother—all of whom were involved in the real estate industry—through A-1 and A-2.

Additionally, the plaintiff was duped into thinking that smaller plots would be acquired from the larger pieces of land so be cut up and sold to various people, which would regularly demand the seller’s personal presence, and given that the complainant was a teacher, hence he would experience difficulties if the land lots were to be put on file under his name.

As the appellants in this case, A 1–12 filed CRL.O.P.(MD) No. 3846 of 2013 to challenge the FIR and the charge sheet before the Madras High Court, Madurai Bench. The appeal by special leave is being challenged in this appeal, and the learned single judge of the Madras High Court dismissed the petition that the appellants had filed in their ruling of April 23, 2018.

LEGAL PROVISIONS:

Section 420 IPC- Cheating and dishonestly inducing delivery of property.— If someone deceives someone by cheating and then dishonestly persuades them to give up property to someone else, create, alter, or destroy a valuable security in whole or in part, or create something signed or sealed that has the potential to be turned into a valuable security, they will be subject to a fine and up to seven years of imprisonment of a similar kind.
Section 120(B) of IPC- Any individual involved in a criminal conspiracy that is not related to a criminal conspiracy to commit an act listed above faces a maximum sentence of six months in either type of jail, a fine, or both.

CONTENTIONS OF THE APPELLANTS:

The learned counsel for the appellants fiercely and strongly argued that the charges listed in the charge sheet and the formal complaint are not sufficient to establish the offences claimed, even if they are accepted as genuine on the face of the record. A continuation of the proceedings in accordance with the charge sheet filed against the accused appellants would amount to a flagrant abuse of the legal process, he argued, given the acknowledged facts as stated in the complaint, which indicates that any disagreement between the parties is solely civil in nature.

The charge sheet makes it very evident that although the complainant received some of the selling proceeds from the land deals, he did not receive the full amount that was due to him. He further argued that since the complainant was a teacher employed by the government and was not permitted to engage in real estate transactions, he made the investments through the accused appellants in this case at his own risk.

He further said that when the profit-sharing component of the land deals failed to satisfy the complainant, he felt that the criminal legal system had been abused in order to bring a baseless case against the accused appellants.

The argument put forth by the knowledgeable senior attorney was that there is absolutely nothing in the case file that indicates the accused appellants intended to deceive the complainant at the outset of the transactions.

Furthermore, the accused appellants would not be found guilty of a criminal breach of trust because the complainant’s accusation concerns a disproportionate sharing of profits from land dealings that he entered into with their knowledge.

CONTENTIONS OF THE RESPONDENTS:

The arguments put forward by the learned counsel for the appellants were sharply and passionately rejected by the learned counsel for the respondent complaint as well as the learned Standing Counsel representing the State.

It was argued that the accused appellants deceitfully persuaded the complainant to make large investments in real estate transactions by gaining his trust through the use of phrases like “honey quoted.” The accused repeatedly assured the complainant that he would receive his rightful portion of the profits or the plots from the lands, as the case may be, which would be bought in the accused’s name because the complainant was not permitted to engage in such transactions as a government teacher.

The complainant committed large sums of money in land agreements, putting total faith in the accused appellants’ guarantees, after falling for their enticements. Nevertheless, the accused appellants broke their word and conned the complainant by not providing him with the necessary number of plots that would have been in line with his investment.

According to their argument, the fact that the complainant has already used a civil remedy for the same complaints does not automatically bar him from using the criminal court’s jurisdiction to hold the accused appellants accountable for their fraudulent acts. This is because the allegations made in the complaint are equivalent to both criminal and civil offences, allowing for the continuation of parallel legal proceedings.

COURT’S ANALYSIS AND JUDGMENT:

The court said that it was evident from the complaint that none of the allegations therein could support a finding that the accused appellants’ goal was to deceive the complainant right from the beginning of the transactions. Without a doubt, the accused appellants gave the complainant some plots and a portion of the profits from the land deals, but there is a disagreement over how much profit was made and whether the complainant’s share of the profits was fully satisfied in relation to his investments.

The court held that, at most, the complainant may use these accusations as justification to file a civil lawsuit against the accused appellants. However, Section 4 of the Benami Act prohibits such a remedy, as was previously mentioned.

With regard to the accused appellants, the court was firmly of the opinion that the accepted allegations included in the complaint and charge sheet did not establish the requisite elements of the offences punishable under Section 406 and Section 420 IPC. There is no denying that by abusing the criminal justice system, a civil issue has been given a criminal prosecution colour by means of accusations of fraud and criminal breach of confidence.

At the risk of repetition, it should be emphasised once more that the complainant was not permitted to sue the accused appellants for the identical set of facts and claims that form the basis of the criminal proceedings due to the explicit bar stated in Section 4 of the Benami Act.

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Judgment reviewed by Riddhi S Bhora.

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9 May

Supreme Court Affirms Hindu Marriage as a Sacred ‘Samskara’ and Sacrament, Not Merely an Occasion for Entertainment, Feasting, or Financial Exchange

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Case Title: Dolly Rani v. Manish Kumar Chanchal

Case No.: Transfer Petition (C) No(S). 2043/2023

Dated on: April 19, 2024

Quorum: Hon’ble Justice B.V. Nagarathna and Hon’ble Justice Augustine George Masih

Facts of the Case:

The case involves a transfer petition filed by the petitioner-wife, seeking to transfer a divorce petition filed by the respondent-husband from Muzaffarpur, Bihar to Ranchi, Jharkhand. The petitioner-wife and respondent-husband, both were trained commercial pilots, claimed to have married on 07.07.2021 but never performed customary Hindu marriage rites. Instead, they obtained certificates of marriage from a registered entity. The court ruled that the marriage was not valid under Hindu Marriage Act, declaring the marriage certificates null and void. Subsequently, all legal cases between the parties were quashed, and the transfer petition was allowed.

Issues framed by the Court:

Whether the marriage between the petitioner and respondent is valid under Hindu law?
Whether the certificates issued regarding the marriage hold legal significance?
Whether the registration of the marriage under the Uttar Pradesh Marriage Registration Rules, 2017 is valid?
Whether the parties have acquired the status of husband and wife?
Whether the cases filed by the parties against each other should be quashed?
Whether the joint application filed under Article 142 of the Constitution of India should be allowed.

Legal Provisions:

Section 7 of Hindu Marriage Act, 1955: It outlines the rituals and ceremonies for the solemnization of a Hindu marriage.

Section 8 of the Hindu Marriage Act: Deals with the registration of marriages. It provides that the State Govt. can make rules for registering marriages.

Contentions of the Appellant:

The appellant argued that there was no valid marriage between the parties according to Hindu Marriage Act, as the requisite ceremonies for a Hindu marriage were not performed. It was also alleged that there was a demand for dowry made by the respondent’s family, which led to differences between the parties. The appellant filed a petition for divorce under Section 13(1) (ia) of the Hindu Marriage Act, claiming that there was a valid marriage. However, the appellant contended that there was no valid marriage, so the divorce petition was based on false grounds.

Further, the appellant and the respondent agreed to file a joint application under Article 142 of the Constitution of India, seeking certain reliefs, including a declaration that the marriage was not valid and quashing of various cases filed by both parties against each other.

Therefore, the main contention of the appellant was that there was no valid marriage between the parties, and therefore, the divorce petition and other cases filed by the respondent should be quashed.

Contentions of the Respondent:

The main contention of the respondent was that, although the marriage between the petitioner and respondent lacked compliance with the requisites of Hindu marriage ceremonies, it was registered before the Registrar of Marriages. As a result, the respondent argued that despite the absence of traditional Hindu marriage rites, the registration deliberated legitimacy to their marital status, justifying the filing of the divorce petition.

Court’s Analysis and Judgment:

The SC, in its analysis to this case, addressed the transfer petition filed by the petitioner-wife seeking the transfer of a divorce petition to another jurisdiction. The court further noted that the parties, although claiming to be married, did not necessarily fulfil the requirements for a valid Hindu marriage under Section 7 of the Hindu Marriage Act, 1955. Despite obtaining certificates of marriage, the court found that no proper marriage ceremonies were conducted, rendering the certificates null and void.

The court emphasized the sacred and sacramental nature of Hindu marriage, highlighting the importance of solemnizing the marriage with due ceremonies. It criticized the trend of couples seeking registration of marriages without fulfilling the essential rituals, cautioning against trivializing the institution of marriage.

Based on its analysis, the court declared that the marriage between the parties was not valid under Hindu law. Thus, the certificates of marriage were declared null and void, and the parties were deemed to have never attained the status of husband and wife. As a result, the divorce petition, maintenance case, and criminal case filed by the parties were quashed. In its judgment, the court allowed the application filed under Article 142 of the Constitution, granting the relief sought by the parties. The transfer petition was disposed of, and any pending applications were also disposed of accordingly.

Judgement Reviewed By- Shramana Sengupta

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6 May

Cost Of Air Conditioning Services Provided In Schools Have To Be Borne By Parents: Delhi High Court

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Cost Of Air Conditioning Services Provided In Schools Have To Be Borne By Parents: Delhi High Court

Case title: Manish Goel vs Government of NCT Delhi & ORS.

Case no.: W.P.(C) NO. 6151 OF 2024 & CM APPL. 25614/2024

Dated on: 02nd May 2024

Quorum: Justice Hon’ble The Acting Chief Justice Manmohan and Justice Hon’ble Mr. Justice Manmeet Pritam Singh Arora

FACTS OF THE CASE
The Petitioner, Goel was studying in Class IX in the school. A Public Interest Litigation (PIL) has been flied seeking a direction to respondent No. 3 Directorate of Education (DoE) of GNCTD to ensure that Respondent No.5 Maharaja Agarsain Public School, a Cambridge International School does not realise a sum of Rs.2,000/- per month in lieu of providing the services of air conditioning to the students in the classroom.

CONTENTIONS OF THE APPELLANT
The petitioner’s learned counsel submits that the obligation to provide an air-conditioning facility to the students rests with the school management and this facility should be provided by the school from its own funds and resources. He states that of his levy of his charge on the students is contrary to Rule 154 of Delhi School Education Rules,1973 (DSE Rules). He states that though the availability of the facility is not denied, however the petitioner disputes that he has any liability to bear the said costs.

CONTENTIONS OF THE RESPONDENTS
The respondent counsel submitted that the respondents are examining the issue. He states that complaints have been received and respondents have called for an action taken report. He states that respondents have issued a show cause notice to respondents No.5 school on the complaints received. As apprised by learned counsel for respondents, the DoE is seized of the matter and awaiting the action taken reports.

LEGAL PROVISIONS

Rule 154 of Delhi School Education Rules,1973 (DSE Rules): Ban on the levy of unauthorised Fees or Funds.
Article 226 of Indian Constitution: Any citizen or organisation can move to High court for a Public Interest/cause by filing a petition.

COURT’S ANALYSIS AND JUDGEMENT
The Delhi High court has observed that the cost of air conditioning Services provided to children in schools have to be borne by the parents. Court stated that the air conditioning facility is no different from other charges such as lab and smart class fee levied by the school. The DoE took a stand that the authorities are examining the issue in question and action taken report has been called on the complaint received. The court was informed that Maharaja Agrasain school has been issued a show cause notice on the complaints. It observed that the parents while selecting the school have to be mindful of the facilities and cost of facilities provided to the children and the financial burden for providing facilities cannot be fastened on the school management alone. A presumption that the said charges have been raised after apprising the DoE of the fee and charge schedule. In the view of the admission of the petitioner that the facility of air conditioning is being provided to the students in the classroom, prima facie, there is no irregularity in the charge levied by the school. The court dismissed the petition observing that it was not maintainable. It noted that the fee receipt issued by the school for the session 2023-24 duly records the entry of charges for air conditioner. We are therefore, not inclined to entertain the present PIL and the same dismissed.

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4 May

“GOVERNMENT EMPLOYEE, CAN’T CLAIM HRA WHILE SHARING RENT FREE ACCOMMODATION ALLOTTED TO HIS FATHER, A RETIRED GOVERNMENT SERVANT: SUPREME COURT”

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“GOVERNMENT EMPLOYEE, CAN’T CLAIM HRA WHILE SHARING RENT FREE ACCOMMODATION ALLOTTED TO HIS FATHER, A RETIRED GOVERNMENT SERVANT: SUPREME COURT”

Case title: R.K Munshi v/s Union Territory of Jammu & Kashmir And Ors
Case no.: SLP (CIVIL) NO. 43 OF 2022
Dated on: 02nd May 2024
Quorum: Justice Hon’ble Mr. Justice Sandeep Mehta and Justice Hon’ble Mr. B.R. Gavai

FACTS OF THE CASE
The appellant was working as an telecom inspector in Jammu and Kashmir, he was issued a recovery notice under Rule 6(h) of the Jammu and Kashmir civil Services (House Rent Allowance and City Compensation Allowance) Rules, 1992 due to a complaint of availing government accommodation while drawing HRA. Appellant failed to prove that the quarter in question was not under his occupation/possession, recovery notice was challenged in writ court and Letters Patent Appeal unsuccessful. Appellant’s counsel argued that the quarter was allotted in the name of his father, a Retd. Deputy superintendent of police, and he occasionally shared the accommodation. Appellant was asked to deposit Rs.3,96,814/- as unauthorized HRA drawn.
The director police, telecom communicated about recovery of outstanding rentals due to unauthorized HRA drawls by the appellant the High court’s dismissal of the writ petition and appeal did not consider all relevant clauses of rule 6(h) of Rules of 1992, the court only focused only one part of the rule while overlooking the part that was in favour of the appellant.

CONTENTIONS OF THE APPELLANT
Learned counsel for appellant submits that indisputable, the quarter in question had been allotted in the name of appellant’s father who was a Retd. Dy SP. The appellant occasionally shared the official accommodation allotted to his father. Later appellant counsel urged that the High Court glossed over the relevant clauses of Rule 69(h) of Rules of 1992 while dismissing the writ petition as well as the appeal flied by the appellant. The pertinent contention raised by the learned counsel was that had the High Court considered the provisions contained in Rule6(h)(iv), the recovery notice could not have been sustained.
Later he submits that the appellant cannot be charged HRA on account of occasional shared residence in the said quarter. The implored the court to set aside the impugned orders and the recovery notice.

CONTENTIONS OF THE RESPONDENTS

Submission by the Respondents, has argued that the fervently opposed the submissions advanced by the Learned counsel for appellant. He urged that indisputably, the appellant enjoyed residence in the Government quarter allotted to his father and thus by virtue of Rule 6(h)(i) and (ii) reproduced supra, he was not entitled to claim HRA. He thus, submitted that the impugned recovery notice is justified in the eyes of law. We have given our thoughtful consideration to the submissions advanced at bar and have gone through the material available on record.

LEGAL PROVISIONS

Section 6(h) of Rules of Jammu and Kashmir civil Services (House Rent Allowance and City Compensation Allowance) Rules, 1992.
Rule 6(h) of Rules of 1992: A government employee shall not be entitled to HRA (House Rent Allowance)

COURT’S ANALYSIS AND JUDGEMENT

The appellant’s father, a retired Deputy Superintendent of Police and a displaced Kashmiri pandit, was allotted quarter No 6-A. Rule 6(h) of Rules of 1992 outlines conditions for House Rent Allowance, including restrictions on entitlement if sharing accommodation or residing in government-allotted quarters. Under Rule 6(h), a government employee is not entitled to House Rent Allowance if residing in accommodation allotted to parents, son, or daughter by the government. The rule also restricts entitlement if the employee’s spouse has been allotted accommodation at the same station, regardless of whether they reside together or separately. In cases where multiple family members who are government employees share accommodation allotted to another government servant, House Rent Allowance is admissible to only one of them as chosen. The appellant’s father retired in 1993 and is not entitled to claim HRA post-retirement. Quarter No.6-A was allotted to the appellant’s father as a displaced Kashmiri pandit and retired government servant. Being retired, the appellant’s father is not entitled to receive HRA. The court has considered the submissions made and reviewed the available record. The appellant, being a Government employee, was not entitled to claim HRA while sharing rent-free accommodation allotted to his father, a retired Government servant. Rule 6(h)(iv) cited by the appellant does not apply to the current situation. Rule 6(h)(i) and 6(h)(ii) cited by the High Court in rejecting the challenge to the recovery notice cover the controversy. Hence the appeal is dismissed ass devoid of force no order as to costs is issued. Pending applications (s) if any, stand disposed of.
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Judgement Reviewed by – HARIRAGHAVA JP

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3 May

Government of Rajasthan has jurisdiction to levy stamp duty on Insurance Policies: Supreme Court

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Case Title: Life Insurance Corporation of India v. The State of Rajasthan and Ors.

Case no.: Civil Appeal No. 3391 of 2011

Dated on: 30th April 2024

Quorum: Hon’ble Mr. Justice PS Narasimha and Hon’ble Justice Mr. Aravind Kumar

FACTS OF THE CASE

The appellant issued various insurance policies within the state of Rajasthan between 1993-94 and 2001-02. As per the prevailing law relating to stamp duty, the appellant was required to affix stamps by paying stamp duty on the policies of insurances issued by it in accordance with the Indian stamp duty Act, 1899, as adapted to the state of Rajasthan by the 1952 Act. On 19.08.1991, the appellant wrote to the collector, Jaipur regarding the non- availability of ‘’Agents Licensee fee stamps”. On 07.10.1991, the Treasury officer, Jaipur replied that ‘’ India Insurance Stamps ‘’ are the property of the central government and their supply and distribution is non related to their department. On 15.04.2004 and 06.05.2004, the Inspector General (Registration and Stamps) Rajasthan, issued a letter to the appellant to deposit a sum of Rs. 1.19 crores for causing loss of revenue to the state government as it had purchased insurance stamps between 1993-94 and 2001-02 from the state of Maharashtra for insurance policies that were issued within the state of Rajasthan.

The additional collector (stamps), Jaipur issued a show- cause notice on 16.09.2004, under section 37(5) of the Rajasthan stamp Act, 1998 for payment of the amount and directed to appellant to deposit the amount. It was held that the correspondence between the appellant and the department pertained to agents fee not Indian insurance stamps. And similar ordered passed to the against the appellant. The appellant filed a writ petition challenging the order of the additional collector, which came to be dismissed by the high court single bench on the ground that the appellant has an alternative efficacious remedy of filing a revision under section 65 of Rajasthan stamp Act.

CONTENTIONS OF THE APPELLANT

The learned ASG, his submission was that on the basis of Entry 91 of List I, Entry 63 of List II and Entry 44 of List III, the state of Rajasthan does not have the legislative competence to impose and collect stamp duty on insurance policies as the same falls under the union List.

The learned ASG, his submission was that show-cause notice and the proceedings are under the 1998 Act, which does not provided for imposition of stamp duty by the sate on policies of insurance. And even if the 1952 Act applies, the appellant had no option but to purchase the stamps from Maharashtra due to their admitted unavailability and in view of section 3A (4) of the 1952 Act.

CONTENTIONS OF THE RESPONDENTS

Submission by the Respondents, has argued that the state has the power to impose and collect stamp duty on insurance policies under Entry 44 of List III. He argued that while the power to prescribe the rate of such duty falls within the exclusive domain of the parliament, the power to collect and impose the duty and to frame a charging provision lies with the parliament and the state legislatures under Entry 44 of the concurrent List which is a sui generis provision. And also he submits that the 1952 Act applies since the period of levy is for policies issued between 1993-94 act applies between 1993-94 to 2001-02 which prior to the 1988 Act coming into force on 27.05.2004.

LEGAL PROVISIONS

Article 246 of the Constitution of India, 1950: Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in the seventh schedule of the Constitution of India,1950.

Section 2 of the Rajasthan Stamp Law (Adaptation) Act, 1952: It applies to the State of Rajasthan subject to certain adaptations that are contained in section 3.

ISSUES

Whether the 1952 Act or the 1998 Act applies to the facts of the present cases?
Whether the state government has the legislative competence to impose and collect stamp duty on policies of insurance as per entry 91 of list I read with entry 44 of list III?
Whether the 1952 Act requires the purchase of insurance stamps from and payment of stamp duty to the Rajasthan government for insurance policies issued within the state?
Whether, in the facts of the present case, the appellant is liable to pay stamp duty?

COURT’S ANALYSIS AND JUDGEMENT

The apex court agreed with the High Court’s view that stamp duty should be levied in accordance with the law in force on the date of execution of the instrument. However, the court held that under Entry 44in List III, parliament and the state legislatures have concurrent powers to legislative on stamps duties (other than fees or charges levied by the judicial seal) but do not extend to stamp duty. In view of the facts and circumstance of the current case, the bench decided that that state government should not demand and collect stamp duty as per the series of orders passes in 2004, therefore court made it clear that the state of Rajasthan has the power to levy and collect stamp duty on insurance policies under Entry 44 of Schedule III, though such duty has to be levied at the rate prescribed by parliamentary legislation under Article 246 of the constitution of India.

The Supreme court upheld the power and jurisdiction of the state of Rajasthan to levy and collect stamp duty on insurance policies issued in the state and rejected the life insurance corporation’s contention of lack of legislative competence. Hence dismiss the appeals and affirm the judgement of the high court and parties shall bear their own costs.

Judgement Reviewed by – HARIRAGHAVA JP

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