In this week’s review of Court Judgments, we look at Delhi High Court dismissal of plea for retrospective action of Senior Citizens Act, Supreme Court’s relief to a company whose accounts were frozen due to an unrelated case, Madras Court decision making Paytm liable for an fraudulent transaction, Bombay High Court’s observation regarding adjustment of amnesty amount against dues without notice and Orissa High Court’s initiative to acquit an accused even though he has not filed for an appeal.
Delhi HC: Dismissed a plea regarding retrospective application of Senior Citizens Act that renders property transfer as void in certain situations.
A division bench of Delhi High Court consisting of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad dismissed a plea seeking the retrospective effect of Section 23 of the Maintenance and Welfare of Parents and Senior Citizens Act, 2007, which specifies certain circumstances in which transfer of property by an elderly person will be void.
In the case, Chiranjeet Singh Ahluwalia vs. Union of India, a plea was moved by Chiranjeet Singh Ahluwalia challenging the validity of the provision by contending that its application is restricted to the gifts of property made by a senior citizen after the commencement of the legislation and not before, which came into force in 2008.
Section 23 of the Senior Citizens Act states that:
It was the case of the petitioner that the words ‘after the commencement of the Act’ must be taken away or struck down from section 23 and it should be given retrospective effect. The submission further states that the senior citizens who have gifted their properties to their children or others, are not being maintained and thus, the Act must read in a manner to permit the senior citizens to revoke gifts made by them prior to the commencement of the Act.
The Delhi High Court referred to an earlier case in Kerala High Court, Human Rights and Social Welfare Forum Represented through its Chairman Dr. Vijeesh C Thilak vs. Union of India, wherein it was noted that the vested rights of the donor are not to be given a retrospective operation even though the objective of the act is to provide for measures for welfare of senior citizens.
Delhi High Court dismissed the plea and said that the legislature did not intend that Section 23 be read retrospectively and that it does not find the case fit for exercising the writ jurisdiction under Article 226 of the Constitution of India.
Supreme Court: Company’s bank account can’t be frozen for criminal investigation against unrelated party.
In the case, M/s. Jermyn Capital LLC Dubai vs. Central Bureau of Investigation & Ors, Supreme Court set aside a freeze order and subsequent bank guarantee imposed on a foreign institutional investor company, as the freeze action was taken on the basis of a criminal case pending against a person who had no connection with the company.
The freeze order was an extension to the freeze order in relation to the investigation of allegations against one of the accused persons in the 2001 Stockbroker Scam.
M/s. Jermyn Capital LLC Dubai is a Foreign Institutional Investor and was permitted by SEBI to buy and sell shares and securities in the Indian Stock Exchange. Due to certain litigations, it stopped trading in the Indian market in 2006. However, there were shares and money in its ICICI Bank account.
A freeze order under 102 CrPC was imposed on the company in October 2006 and was followed by another in 2010. The orders were on the grounds of the necessity of investigation of an alleged crime. The first freeze order allowed the company to sell its shares, convert them to cash and repatriate them. However, the second freeze order incapacitated the company to repatriate the money to the account (Rs. 38.5 crores).
The company moved to the Supreme Court, which granted it the liberty to approach a trial court to release the amount. The trial court has permitted the repatriation of the said amount, but it was on the basis of a Bank guarantee of an equivalent amount.
The company approached the Gujarat High Court, which also agreed with the trial court and the imposition of the Bank guarantee.
Looking into the details of the case, the Supreme Court noted that the Trial court and the High Court have solely imposed the Bank Guarantee based on the ongoing criminal proceedings against Dharmesh Doshi. However, the Supreme Court found that there was no relation between the appellant company and Dharmesh Dosi. Furthermore, the company was neither named as an accuser in the FIR nor was it charge-sheeted. The court set aside the condition imposed upon the appellant to furnish a bank guarantee by the Courts below and allowed permitted to withdraw the amount along with 4% simple interest, which shall be payable from 08 May 2006 till the date of actual payment.
Madras HC: Holds Paytm liable for unauthorised debit from customers account.
Madras High Court held Paytm liable for fraudulent unauthorised transactions on the Paytm account of a Postgraduate medical student.
As per the case details, Dr. R Pavithra has lost around 3 lakh rupees from her account due to unauthorised transactions on Paytm. She approached the court after the City Union Bank failed to reverse the loss suffered by her and instead allegedly attempted to shift the blame on her.
The court heard in detail the submission of the City Union Bank, Paytm and the Reserve Bank of India, and held that the payments bank i.e., Paytm was liable for the transactions and not the petitioner’s bank.
It noted that while the customers are encouraged to use payment applications, they do not get redressal in case of fraudulent transactions and the institutions keep on shifting the blame. Although as per the circular dealing with Customer liability in case of Unauthorised Electronic Payment Transactions through Paypointz Wallet, the customer needs to report within 7 days, the court noted that the customer has in this case promptly reported to the bank. It noted that there was no way customers who have known how the fraud was committed.
It noted that Paytm has failed to establish the liability of the customer within 90 days as required by RBI circulars and hence, must pay the amount irrespective of whether the negligence was on the part of the customer.
Bombay HC: Department adjusting the refund amount under amnesty scheme without notice violates principles of natural justice.
In the case, TML Business Services Ltd vs. The Deputy Commissioner of State Tax, the Bombay High Court has held that the action of the department in adjusting a refund due to the petitioner from an Amnesty scheme, without prior notice is a disregard to the well-established principles of natural justice.
In this case, the petitioner is a limited company engaged in procuring vehicles from Tata Motors Limited. The petitioner was earlier known as TML Distribution Limited. As per an order passed by NCLT, all assets of TML distribution ltd were transferred to TML Business Services Ltd.
The petitioner was registered under MVAT Act, 2002 and CST Act, 1956. The assessing officer raised an Assessment Order to the extent of Rs. 17.76 crores including tax & interest. After an appeal was filed by the petitioner, this was reduced to Rs. 14.1 crores.
In March 2019, the Government of Maharashtra introduced an amnesty scheme providing for the settlement of arrears of tax, interest, penalty, late fee, etc upon payment of a part. An application was made by the petitioner under this Amnesty scheme for settlement of dues and paid Rs. 8.46 crores.
A refund order was received stating that Rs. 10.69 crores due to them would be adjusted towards the amount of tax for the next assessment year. The contention of the petitioner was that it was not open to the respondents i.e., Deputy Commissioner of State Tax, to adjust the refund amount against the liability. This action has denied the petitioner the refund amount.
The court noted that the defect notice and the refund notice only had one day gap, and this would not provide for the petitioner to have sufficient opportunity to seek redressal from the department.
Orissa HC: High Court can acquit a convict even in absence of appeal to prevent continuity of manifest injustice.
A Division Bench of Orissa High Court consisting of Justice Debabrata Dash and Justice Sanjeeb Kumar Panigraphi held that even if a person, who was convicted by the trial court, does not prefer to appeal against his conviction, the High Court can still invoke its power under Section 482 & 401 of Code of Criminal Procedure to acquit him of charges which cannot be sustained based on available evidence.
In this case, the appellant Shiva @ Gurucharan Singh faced trial with another accused Duna Singh and two others – Beta and Dasmat Marndi. He along with Duna Singh was convicted for the commission of offence under Sections 302/34 and 120(B) of IPC while the other two were acquitted.
Being aggrieved by the sentence, Shiva filed an instant appeal before the High Court while Duna Singh did not prefer to file any. The bench noted that the finding of the Trial court that the prosecution has established the charges beyond reasonable is not sustainable and hence, the judgment of conviction and order of sentence is liable to be set aside.
However, now the question before the bench is about one of those convicted who has not filed an appeal while the co-accused who has appealed is cleared of the charges as the prosecution failed to establish its case beyond a reasonable doubt.
The court relied on earlier cases Parbati Devi vs. The State, Harinath vs. State of UP, and also on Nirmal Pasi and Anr vs. State of Bihar. Based on these earlier judgments, it concluded that the judgment of conviction and order of sentence passed by the trial court against another accused, Duna, to be set aside even though he has not appealed.