SC :Sec.138 and sec.142 (b) of N.I.Act- Delay

Sec.138 and sec.142 (b) of N.I.Act- Delay of 25 days in filing complaint after issuing a hand note – High court quashed the complaint as barred by limitation – Apex court held that since there is no opportunity for explaining delay as the complaint strongly believed that he filed complaint from statutory notice and since the accused not raised this plea during the trial of case and for the fist time raised before High court for quashing, the apex court granted time to file a separate application for condone the delay in the special circumstances of the case but not as precedent authorizing every one from not filing delay condone application = CRIMINAL APPEAL NO. 1684 OF 2014 ARISING OUT OF SPECIAL LEAVE PETITION (CRL) NO. 8924 OF 2013 PAWAN KUMAR RALLI … APPELLANT VERSUS MANINDER SINGH NARULA … RESPONDENT = 2014 -Aug. Part- http://judis.nic.in/supremecourt/filename=41820

AdvMOHAN ⋅ AUGUST 11, 2014 ⋅

FILED UNDER  HIGH COURT

Sec.138 and sec.142 (b) of N.I.Act- Delay of 25 days in filing complaint after issuing a hand note – High court quashed the complaint as barred by limitation – Apex court held that since there is no opportunity for explaining delay as the complaint strongly believed that he filed complaint from statutory notice and since the accused not raised this plea during the trial of case and for the fist time raised before High court for quashing, the apex court granted time to file a separate application for condone the delay in the special circumstances of the case but not as precedent authorizing every one from not filing delay condone application =  

he

had given a loan of Rs.60 lakhs to the respondent in the month of  November,

2011. In discharge of his obligation to the appellant, on 25th April,  2012,

the respondent issued (i) Cheque No. 889953, drawn on  Allahabad  Bank,  for

Rs.30 lakhs; (ii) Cheque No. 545420, drawn on ICICI Bank, for  Rs.20  lakhs;

and (iii) Cheque No. 545409, drawn on ICICI Bank, for  Rs.  10  lakhs.  When

the appellant presented the said cheques in his Bank for  realization,  they

were dishonoured by the respondent’s banker with remarks ‘Stop Payment’.

 The  High

Court expressed the view that the complaint was not filed  within  a  period

of one month after the expiry of 15 days of  receipt  of  the  notice  dated

27th April, 2012 and hence it was barred by limitation under Section  142(b)

of the Act and by the impugned judgment  quashed  the  criminal  proceedings

against the respondent.

(a)   Whether the handwritten note sent by  the  appellant  on  27th  April,

2012 to the respondent could be treated as ‘notice’ or the notice issued  by

the advocate on 24th May, 2012 could only be treated as ‘notice’ within  the

meaning of Section 138 of the Act?

(b)   If there was any delay in filing the Complaint in  the  present  case,

whether such delay could have been condoned by the High Court in  accordance

with the provisions of the Act?

(c)   Whether the High Court was right in quashing the criminal  proceedings

on the ground of limitation or instead of quashing the criminal  proceedings

it ought to have remitted the matter back to the Trial  Court  for  deciding

the issue of limitation?

 It  appears  that

the respondent contested the matter before the Trial Court  and  also  filed

an application  under  Section  91,  Cr.P.C.  warranting  the  appellant  to

produce various documents. He has also moved an  application  under  Section

410, Cr.P.C. seeking transfer of the Complaint to a different Court.  It  is

noteworthy that all through out  the  pendency  of  proceedings  before  the

Trial Court, the respondent did not raise the  issue  of  ‘limitation’.  The

issue was raised for the first time before the High Court  in  Section  482,

Cr.P.C. proceedings.

Apex court held that

Thus,  in  our  opinion,  the  handwritten

note dated 27th April,  2012  fulfilled  the  mandatory  requirements  under

clause (b) of proviso to Section 138  and  could  be  said  to  be  a  valid

‘notice’ in the light of this Court’s Judgment in Central Bank  of  India  &

Anr. (supra). Moreover, this document (Annexure P4) stands admitted  by  the

appellant in his cross examination also.  Therefore,  in  our  opinion,  the

High Court has committed no error in considering the handwritten note  dated

27th April, 2012 as ‘notice’ under Section 138 of the Act.

In view of the settled principles of law in  Rakesh  Kumar  Jain,  MSR

Leathers.  Subodh  S.  Salaskar  (supra)  and  in  the  peculiar  facts  and

circumstances of the case, we are of the considered opinion  that  the  High

Court was not right in quashing the complaint  merely  on  the  ground  that

complaint is barred by limitation, that too a plea which was taken  for  the

first time before the High Court. On the other hand, the  High  Court  ought

to have remanded the matter to the Trial Court for  deciding  the  issue  of

limitation.

24.   At the same time,  we  want  to  make  it  very  clear  that  by  this

observation we are not laying down a legal  proposition  that  without  even

filing an application seeking condonation of  delay  at  an  initial  stage,

complainant can be given opportunity at any stage  of  the  proceeding.   As

already discussed by us in the foregoing paragraphs, we  have  come  to  the

irresistible conclusion, to afford an opportunity  for  the  complainant  to

move an application seeking condonation of delay, under the  peculiar  facts

and circumstances of the case.

25.   For all the aforesaid reasons, in order to meet the ends  of  justice,

we exercise our discretion under Article 142 of  the  Constitution  and  set

aside the  impugned  judgment  of  the  High  Court  quashing  the  criminal

proceedings and restore the criminal proceedings  before  the  Trial  Court.

The appellant is permitted to file an application for condonation  of  delay

before the Trial Court and if such an application is filed, the Trial  Court

shall be at liberty to consider the same on its own  merits,  without  being

impressed  upon  by  any  of  the  observations  by  this  Court,  and  pass

appropriate orders.

SC :Writ – Civil Suit by Auction Purchaser – Inter pleader suit by Tenant against the owner

Writ – Civil Suit by Auction Purchaser – Inter pleader suit by Tenant against the owner who purchased the property under court auction sale and also Union of India who claims to be owner under a Grant – who are entitled for rents is the question to be decided – High court held that since there are complicated issues writ not maintainable – with out evicting the auction purchaser due to process of law – Union of India not entitled for any rent from inter pleader suit plaintiff/ tenant and dismissed the writ and decreed the inter pleader suit in second appeal – Apex court held that The subject matter of the inter-pleader suit and the proceedings arising therefrom clearly pertains to the entitlement of the presently contesting parties to receive rent in respect of the property in question. The subject matter of the two proceedings i.e. inter-pleader suit and the appeals arising therefrom and the writ petitions filed by the appellant are, therefore, not directly and substantially the same so as to attract the principle of res judicata enshrined in Section 11 of the Code of Civil Procedure. the High Court had dismissed the Writ Petitions leaving it open for the appellant to avail the remedy of civil suit to get the title to the property adjudicated by a competent civil court, no fault, muchless any infirmity, can be found so as to warrant our interference. Accordingly, the civil appeal will have to be dismissed which we hereby do.The stand of the cantonment authority in the Civil Misc. Writ Petition No.175 of 1969, noted by us, is based on the terms of the old grant issued by the Governor General in Council on 12.09.1836. The legal effect of the terms of the said grant has been dealt with by this Court in Chief Executive Officer Vs. Surendra Kumar Vakil & Ors.[1]and Union of India & Ors. Vs. Kamla Verma[2] and have been understood to be conveying a lease of the building standing on the cantonment land with the power of resumption in the cantonment authority subject to payment of compensation for the cost of the building and not as a lease of the land itself. The above position has been emphasised for being kept in mind while dealing with all possible future litigations concerning the property in question without, of course, expressing any opinion on the merits of the claims/contention of any of the parties.= CIVIL APPEAL NO. 2147 OF 2006 PURSHOTTAM DAS TANDON DEAD BY LRS. … APPELLANT (S) VERSUS MILITARY ESTATE OFFICER & ORS. …RESPONDENT (S) = 2014- Aug. Part – http://judis.nic.in/supremecourt/filename=41825

ADV Mohan AUGUST 14, 2014 ⋅

FILED UNDER  UNION OF INDIA, WRIT PETITION

Writ  – Civil Suit by Auction Purchaser – Inter pleader suit by Tenant against the owner who purchased the property under court auction sale and also Union of India who claims to be owner under a Grant  – who are entitled for rents is the question to be decided – High court held that since there are complicated issues writ not maintainable – with out evicting the auction purchaser due to process of law – Union of India not entitled for any rent from inter pleader suit plaintiff/ tenant and dismissed the writ and decreed the inter pleader suit in second appeal – Apex court held that The  subject  matter  of the  inter-pleader  suit  and  the  proceedings  arising  therefrom  clearly pertains to the entitlement of the presently contesting parties  to  receive

rent in respect of the property in question. The subject matter of the two proceedings i.e. inter-pleader suit  and  the appeals arising therefrom and the writ  petitions  filed  by  the  appellant

are, therefore, not directly and substantially the same  so  as  to  attract the principle of res judicata enshrined in Section 11 of the Code  of  Civil Procedure.  the High Court had  dismissed  the Writ Petitions leaving it open for the appellant  to  avail  the  remedy  of civil suit to get the title to  the  property  adjudicated  by  a  competent civil court, no fault, muchless  any  infirmity,  can  be  found  so  as  to warrant our interference.  Accordingly, the civil appeal  will  have  to  be

dismissed which we hereby do.The stand of the cantonment authority in the Civil Misc.  Writ

Petition No.175 of 1969, noted by us, is based  on  the  terms  of  the  old grant issued by the Governor General in Council on  12.09.1836.   The  legal effect of the terms of the said grant has been dealt with by this  Court  in Chief Executive Officer Vs. Surendra  Kumar  Vakil  &  Ors.[1]and  Union  of India & Ors. Vs. Kamla Verma[2] and have been understood to be  conveying  a

lease of the building standing on the cantonment  land  with  the  power  of resumption in the cantonment authority subject to  payment  of  compensation for the cost of the building and not as a lease of the land itself. The above position has been emphasised for being kept  in  mind  while

dealing with all possible future  litigations  concerning  the  property  in question without, of course, expressing any opinion on  the  merits  of  the claims/contention of any of the parties.=

 

The suit property  is  Bungalow  No.  29,  Chaitham  Lines,  Allahabad

covered by Survey No. 143, Old Cantonment, Allahabad.  There is  no  dispute

that late  Lala  Manohar  Lal  grandfather  of  the  present  appellant  had

purchased the said property for a sum of Rs. 2900/- in a Court auction  held

on 25.11.1848.  The auction sale was confirmed by the Court  on  27.12.1848.

The possession of  the  property  of  the  predecessors-in-interest  of  the

appellant and thereafter of the appellant is not in dispute.=

The Union of India issued a  resumption  notice  dated  26.12.1968  in

respect of the property in question.  The appellant instituted  Civil  Misc.

Writ Petition No. 175 of 1969 before the  Allahabad  High  Court  contending

that the property was purchased by  his  predecessors-in-interest   and  had

fallen to his share in a family settlement.  The Union of  India  sought  to

resist the claim of the appellant by asserting that the land  on  which  the

property stood was the subject of old grant dated 12.09.1836 issued  by  the

Governor General in Council under which a right of resumption was vested  in

the Union.  It was further contended on behalf of the Union  of  India  that

under the clauses of the aforesaid grant it was  only   the  building  which

was conveyed to the predecessors of the appellant and the same could  always

be resumed subject to payment of compensation to be assessed on the cost  of

the building.  It appears that the Union of India had  also  asserted  that,

in any event, under the terms of  the  old  grant  title  to  the  land  had

remained with the Union and  was  not  and  in  fact  could  not  have  been

transferred to the predecessors-in-interest of the appellant.=

 Around this time the appellant instituted Civil Suit No. 147  of  1971

in the Court of the Additional District Judge,  Allahabad  seeking  eviction

of Allahabad Polytechnic and Harijan Sewak Sangh who were  the  tenants  and

sub-tenants in the property.  The Union of  India  served  notice  upon  the

aforesaid two occupants of the property demanding rent claiming  to  be  the

owner thereof.  Allahabad Polytechnic,  therefore,  filed  an  inter-pleader

suit No. 161 of 1973 in the Court of the Civil Judge,  Allahabad  impleading

the appellant and the Union of India as Defendants 1 and 2 in the suit.   In

the said suit it was prayed that the defendants may inter-plead so that  the

right to collect rent of the property in dispute could  be  determined.   In

Second Appeal No.2866 arising out of the aforesaid suit, the decree  of  the

learned trial court that the appellant  and  not  the  Union  of  India  was

entitled to receive rent was  affirmed.   The  said  decree  was,  in  turn,

affirmed by this Court on 22.02.1984  by  dismissal  of  the  special  leave

petition filed by the Union of India.=

A reading of the judgment dated 27.11.1981  passed  in  Second  Appeal

No. 2866 of 1978 clearly indicates that while deciding  on  the  entitlement

of the appellant to receive rent in respect of the property the  High  Court

had held that without taking recourse to  legal  proceedings  to  evict  the

appellants from the  property,  the  Union  of  India  could  not  have  the

demanded rent in respect thereof.

In fact, in the aforesaid judgment  dated

27.11.1981 passed in Second Appeal No.2866 of 1978 it was  clearly  observed

that :

“The Union of India should first have taken  proceedings  for  ejectment  of

the appellant and then alone after success  in  the  ejectment  suit  should

have been a demand for rent and without that the appellant’s right  to  rent

could not be disturbed.  This also leads to the conclusion that  it  is  the

appellant to whom the rent is payable by the  Allahabad  Polytechnic  unless

the appellant is evicted by due process of law.”

14.   From the above, it is abundantly clear that the  issue  of  title  was

kept open in the proceedings of the Second Appeal.  The  subject  matter  of

the  inter-pleader  suit  and  the  proceedings  arising  therefrom  clearly

pertains to the entitlement of the presently contesting parties  to  receive

rent in respect of the property in question.  On  the  other  hand,  in  the

writ petitions, the appellant, claiming ownership, had sought  mutation,  as

a owner, in  the  cantonment  records  and  also  the  permission  to  raise

construction, a right flowing from the incidence of ownership of  the  land.

The subject matter of the two proceedings i.e. inter-pleader suit  and  the

appeals arising therefrom and the writ  petitions  filed  by  the  appellant

are, therefore, not directly and substantially the same  so  as  to  attract

the principle of res judicata enshrined in Section 11 of the Code  of  Civil

Procedure.  Certainty of the above principle would not require us  to  trace

the elaborate case law readily available on the subject.

15.   Having regard to the nature of the dispute and the highly  contentious

issue raised, if in view of the earlier order  dated  06.07.1970  passed  in

Civil Misc. Writ Petition No.175 of 1969, the High Court had  dismissed  the

Writ Petitions leaving it open for the appellant  to  avail  the  remedy  of

civil suit to get the title to  the  property  adjudicated  by  a  competent

civil court, no fault, muchless  any  infirmity,  can  be  found  so  as  to

warrant our interference.  Accordingly, the civil appeal  will  have  to  be

dismissed which we hereby do.

16.   Before parting, we deem  it  necessary  to  mention  that  though  the

litigation between the parties in the present case has  been  going  on  for

nearly five decades there is some lack of clarity whether  it  is  title  to

Bungalow No.29, Chaitham Lines, Allahabad or is it title to  the  land  over

which the said property is located that has  been  the  bone  of  contention

between the parties over this great expanse of time.  Though the  resumption

notice dated 26.12.1968 leading to Civil Misc.  Writ  Petition  No.  175  of

1969 was in respect of the bungalow, the subsequent claim of the  appellants

seem to be to the land itself in view of the reliefs  sought  in  the  Civil

Misc. Writ Petition  No.  13353  of  1992  and  Civil  Misc.  Writ  Petition

No.28558 of 2002.  The same, as noticed, were instituted after rejection  of

the appellant’s claims made in the application/representations filed  before

the cantonment authority for reliefs that were based on claims of  ownership

of the land.  The stand of the cantonment authority in the Civil Misc.  Writ

Petition No.175 of 1969, noted by us, is based  on  the  terms  of  the  old

grant issued by the Governor General in Council on  12.09.1836.   The  legal

effect of the terms of the said grant has been dealt with by this  Court  in

Chief Executive Officer Vs. Surendra  Kumar  Vakil  &  Ors.[1]and  Union  of

India & Ors. Vs. Kamla Verma[2] and have been understood to be  conveying  a

lease of the building standing on the cantonment  land  with  the  power  of

resumption in the cantonment authority subject to  payment  of  compensation

for the cost of the building and not as a lease of the land itself.

17.   The above position has been emphasised for being kept  in  mind  while

dealing with all possible future  litigations  concerning  the  property  in

question without, of course, expressing any opinion on  the  merits  of  the

claims/contention of any of the parties.

From jail, Roy finds golden suitors for hotels abroad

 BS Reporter  |  New Delhi  

August 15, 2014 Last Updated at 00:59 IST

MoUs inked at 50% higher value, lawyers tell SC; court gives 15 days more for deal talks

Within a week of moving to his make-shift office in Tihar jailhere, Sahara group chief Subrata Roy seems to have achieved what his men could not in months. The 66-year-old tycoon has convinced several suitors to sign preliminary agreements to buy the group's prime hotel properties in New York and London.

Some of the potential buyers were valuing these assets at prices substantially higher than indicated earlier, the group's lawyers told the Supreme Court on Thursday, and sought a 15-day extension for Roy's jail-office set-up. The court granted this but made it clear that there would be no further extensions of this arrangement.

The extension implies Roy can operate out of his jail-office till September 9 and arrange the amount required to be paid for his interim bail.

The court had in March said that Roy and two group directors could get interim bail, provided the group deposited Rs 5,000 crore in cash and another Rs 5,000 crore in the form of bank guarantees. Of the required sum, Sahara has so far paid Rs 3,117 crore. The group's dues, according to market regulator Securities and Exchange Board of India (Sebi), have touched Rs 39,000 crore.

The apex court had ordered two group firms - Sahara India Real Estate Corp and Sahara Housing Invest - to refund sums raised from 29.6 million investors with a 15 per cent interest. The group is trying to raise this amount by selling assets, mostly real estate and hospitality-sector properties, as the court has refused to accept its claims of having directly refunded most investors.

On the block are the group's stakes in London's Grosvenor House Hotel and New York's Plaza and Dream Downtown hotels. According to earlier submissions in the court, based on international valuers JLL and CBRE, Sahara's stakes in these assets were valued at around $1.72 billion (around Rs 10,500 crore at an exchange rate of Rs 61 a dollar). Grosvenor House was valued at $879 million (Rs 5,361 crore), the Plaza holding was worth $592 million (Rs 3,611 crore) and the Dream Downtown stake was valued at $252 million (Rs 1,537 crore). The total of these comes to $1.72 billion. But Sahara lawyer S Ganesh on Thursday told the court that some buyers had now valued these assets at $2.58 billion, nearly 50 per cent higher.

If indeed the valuation has seen such an increase, this could enable the group to meet the bail requirements even without an outright sale of these properties. The group had indicated in the past that it might try to come up with some mortgage arrangements.

In a statement issued after the hearing, Sahara advocate Gautam Awasthi said: "By utilising the facilities made available to the detenues, a considerable progress has been made in relation to negotiations on the three foreign properties and for furnishing the bank guarantee. Appreciating the progress made, the Supreme Court allowed an extension of 15 working days starting August 20 to facilitate fruition of the continuing negotiations. The jail authorities have also appreciated the discipline and conduct of Saharas in using the facilities in a constructive manner."

Awasthi added the three applicants "will effectively negotiate with prospective purchasers of the foreign properties and for furnishing the bank guarantee towards compliance of the Supreme Court order".

Media reports had suggested Pune-based billionaire Cyrus Poonawalla and US-based Madison Capital Holdings were interested in these properties. However, Poonawalla said in a statement on Thursday: "Getting a partner that is valuing the Grosvenor House more than what we valued is not possible. We did not hear back from them after our conversation almost a month ago. They did not even approach us to see if we were interested in increasing our bid. As for us, we were interested in a particular asset, that too for its location and history. All the best to Sahara." Poonawalla was ready to pay up to £550 million (around Rs 5,500 crore), according to these reports. The group also has to meet its commitments towards Bank of China, which will have precedence over the claims of the market regulator.

BREAKTHROUGH?
Value of Sahara stake in key hotels abroad*

Grosvenor House, London
$879 million

The Plaza, New York
$592 million

The Dream Downtown, New York $252 million
Total
$1.72 billion

Total valuation
** according to Sahara: $2.58bn
Difference: $860 mn (50%)

* According to international valuers’ report filed in court
** According to the Sahara lawyer’s statement

Criminal action can be initiated against wilful defaulters

Live Mint15 Aug 14

 Kingfisher Airlines Ltd is back in the news. According to reports, lenders to Kingfisher Airlines are likely to issue a wilful defaulter notice to the beleaguered airline after a scheduled meeting of the lenders’ consortium, over the next one week. If the airline is indeed declared a wilful defaulter, it would lose access to any further bank funding as per existing norms.

Who is a wilful defaulter?

When you take a loan from a bank or a non-banking finance company, you have an obligation to repay the loan. Due to various reasons, many borrowers default on their loan repayment. Individuals, or companies, who fail to repay the loan are called wilful defaulters under the following circumstances. If you are financially capable of repaying the loan and yet fail to repay; if you use the loan amount for other purposes than what you had availed it for; if you use the money for illegal purposes; if you sell the property that you have kept as security with the lender for availing the loan. Remember that you will be termed as a wilful defaulter only if it is proved that your action was intentional, deliberate and calculated.

Apart from these factors, the minimum outstanding amount should be Rs.25 lakh or more. Defaults below Rs.25 lakh are not reported to the central bank. A person or a company is termed a wilful defaulter based on the track record.

What is its impact?

Once a financial institution determines that you are a wilful defaulter, it will send a notice in this regard to you. The Reserve Bank of India (RBI) states that the borrower should be given reasonable time, say, 15 days, to respond to the notice via a grievance redressal committee. The committee should also give a hearing if the borrower wants to clarify her stand. Only after considering the committee’s view is a person or a company finally declared a wilful defaulter.

Once that happens, you will not be able to access any kind of services or facilities from any financial institution for a new venture for five years. You will also be barred from participating in the capital market. To prevent access to capital markets, a copy of the list of wilful defaulters is sent to the Securities and Exchange Board of India by the RBI and the Credit Information Bureau (India) Ltd.

Wherever there is a consortium or multiple lending, financial institutions inform all the stakeholders as well. Criminal action against wilful defaulters under the existing legislations can be initiated by financial institutions under the provisions of sections 403 and 415 of the Indian Penal Code (IPC), 1860.