News Letter for January, 2001 - The Most Comprehensive Portal on Indian laws

Happy New Years to all our subscribers of News Letters, we give hereunder the Important Circulars, Summary of Judgements etc. received by us in the month of December, 2000. If you are not intrested in full news letter, you may select only those subjects in which you are interested by clicking against the relevant subject given below : -

House Property Income – Income from House Property of Society - short fall in collection of members' share of maintenance Expenditure – Not admissible deduction.

The bye-laws of the assessee ( a housing society ) provided that management and maintenance expenses were to be reimbursed by members. The bye-laws did not provide for exempting any member from making reimbursement. Though there was a shortfall of reimbursement by members, the assessee did not take any steps for recovery of such amounts from members. It was held that loss or shortfall of reimbursement on account of administrative or maintenance charges could not be adjustable against house property income of the assessee-society. Vidyasagar Samabay Abasan Samiti Limited v/s CIT – 113 Taxman 35 ( Calcutta )

Business Income - Income from forfeiture of advance on sale of licence – Held Business Income

The amount received by the assessee on account of forfeiture of advance guarantee commission was treated as income from other sources rejecting the assessee’s claim that it was business income. It was held that since subject matter under consideration was undisputedly sale of licence under the Imports and Exports Control Act, 1947 and licence was issued under the Import Control Order, 1955, the Tribunal was justified in holding that amount in question was business income. CIT v/s Banaras House Ltd – 113 Taxman 100 ( Delhi )

Depreciation – Machinery kept in passive use – Entitled to depreciation.

The assessee’s claim of depreciation on cold storage machinery was disallowed on grounds that plant was not put to use during the year. The plant was not used because of poor potato crop. It was held that there is no requirement that assets should be used for whole of the assessment year in question. It was further held that the expression ‘used’ in section 32(1) includes both passive and active use. It was also held that in view of the fact that machinery was kept in good working condition so that it could be used at any moment and also since all expenses relating to cold storage business were allowed, there was no justification to disallow claim of depreciation. CIT v/s Refrigeration & Allied Industries Limited – 113 Taxman 103 ( Delhi )

Company Registered in Sikkim – Income arising in India – Re-assessment valid.

It was held that notice under section 148 could be issued in relation to income stated to have arisen in India even if petitioner was a company registered in Sikkim. Alankar Commercial (P) Limited v/s Assistant Commissioner of Income Tax . 113 Taxman 115 ( SC )

The assessee claimed deduction of certain payments to 2 of its working directors purportedly for their agreeing not to carry on any further business of promotion of companies for 5 years. The Tribunal noted that they were not in a position to promote new companies after revocation of their licences and held that payment was not for agreeing not to carry any similar business but for carrying it on for the assessee company. The Tribunal also held that arrangement between company and its directors was not only non-bonafide but of a collusive nature and disallowed the claim. It was held that since in the above case, not question of law was involved, the Tribunal’s order should not be set aside. CIT v/s BK Khanna & Co Private Limited – 113 Taxman 164 ( Delhi ).

Search & Seizure – Block Assessment - advance for flat booking from 5 persons – sustained only where parties examined

Search conducted under Section 132 resulted in seizure of paper containing details of advances made by 5 persons for flat bookings which were treated by Assessing Officer as income of the assessee-company under section 68. It was held that in view of absence of satisfactory explanation regarding cash deposit in M’s name and his poor means, deposit in his own name was rightly treated as assessee’s income. It was further held that addition to assessee’s income on ground that ‘S’ was not traceable was unjustified and had to be deleted since Assessing Officer made no attempt to issue notice under section 131 or to examine his income tax return which contained his address. It was also held that in view of creditworthiness of ‘P’ whose identity was clearly established and genuineness of transaction in respect of past deposit and assessee having discharged its primary onus with regard to it, its addition to assessee’s income had to be deleted. It was also held that since credit entry in B’s name actually pertained to another company of assessee’s group which was added back in hands of the said company also, its addition in assessee’s hand again was unjustified and, hence, had to be deleted. It was also held that considering financial status of ‘A’ and the fact that his creditworthiness had not been proved, amounts standing in his name were rightly treated as assessee’s income. It was held that in absence of provision for charging surcharge as per Finance Act, insofar as section 113 is concerned, tax specified in section 158 BA, read with section 113, could not be increased by surcharge. ITAT Calcutta Bench ‘C’ Principal Officer, Builcon Towers (P.) Ltd. v/s Assistant Commissioner of Income Tax – 113 Taxman 74

Voluntary Retirement Scheme – Payment under VRS received prior to approval of scheme taxable.

The appellant took Voluntary Retirement on 23 July 1992 under VRS introduced by his employer and received certain amounts as retirement benefits. The employer applied for approval of the aforesaid scheme on 3 November 1993 and it was approved operative from 16 November 1993. It was held that the appellant’s retirement and consequential payments received by him were not under an approved scheme and that he was not entitled to exemption u/s 10 (10C). Jodhraj Singh v/s Union of India - 113 Taxman 199 ( Delhi )

Royalty – Mere passing of information regarding design of machine is not transfer of any right for exclusive use – Held not Royalty.

The assessee company entered into an agreement with a foreign company for purchase of 3 steam generating units and auxiliaries. The contract covered design, manufacture, supply of imported equipment, supervision of erection, testing and commissioning, utilizing his own personnel and providing a special engineer during the guarantee period. It was held that mere passing of information concerning design of machine which is tailor made to meet requirements of a buyer by itself does not amount to transfer of any right of exclusive user, so as to render payment being therefor being regarded as royalty. It was further held that amount paid as part of total contract price towards design and engineering supplied by foreign company was not royalty for the purpose of section 9 (1) (vi) / (vii). CIT v/s Nayveli Lignite Corporation Limited - 113 Taxman 206 ( Madras )

Tax Deduction at Source – order passed by Labour Court not to deduct TDS from VRS payments to workmen bad in law

The respondent-workmen opted for Voluntary Retirement in accordance with a VRS scheme introduced by the petitioner company. Their request was accepted and tax was deducted at source from payments due under the scheme. On application u/s 33 C (3 ) of the Industrial Disputes Act, the Labour Court held that tax deducted at source was bad and directed the petitioner company to pay the amount of TDS to workmen. It was held that the respondent-workmen could make claim for refund of income tax before the Income Tax Department and order passed by the Labour Court was unjustified and liable to be set aside. Management of ITC Ltd v/s Presiding Officer, Labour Court - 113 Taxman 213 ( Pat )

Business Expenditure – Company acquired by Govt. – Expenses incurred in maintaining office pending decision by Supreme Court - Admissible

The acquisition of the assessee–electric company by the State government was challenged as invalid and appeals were pending in the Supreme Court. The assessee maintained establishment and paid salaries and other expenses. It was held that it could be termed as an indication of the assessee’s intention to resume business if opportunity arose in the event of Supreme Court holding in its favour and thus it would be wrong to regard expenses incurred as unconnected with its business. CIT v/s Vellore Electric Corporation Limited - 113 Taxman 236 (Madras)

Interest – Interest debited to P&L A/c. and remaining unpaid to Financial Institutions inadmissible u/s. 43-B.

The assessee company borrowed funds from financial institutions and during the relevant accounting period, debited the amount of interest payable to financial institutions on accrual basis , to its profit and loss account, which was also filed along with return. It was held that it was not the duty of the assessing officer to find out whether as per agreement, interest was payable during the previous year. Further, it was held that as the interest was not paid during the previous year, assessee was disentitled to deduction thereof u/s 43 B. It was also held that explanation 2 to section 43 B is with regard to only clause a of section 43 B and is inapplicable to other clauses in that section. CIT v/s Sitara Textiles Limited - 113 Taxman 241 ( High Court of Kerala )

Income from Other Sources – Income from hoarding is income from other sources and not income from House Property.

The assessee permitted some companies to display their boards on top of the assessee’s building for advertisement purposes. It was held that income therefrom could not be taken as income from house property on the grounds that the hoardings were part of the building and that such income was assessable as income from other sources. Mukerjee Estate Private Limited v/s CIT - 113 Taxman 313 ( Calcutta )

Royalty – Interest on delayed payment of royalty to Forest Dept. held admissible

The assessee, a forest contractor took on lease certain forest from the government for which it was required to pay royalty to the forest department. The assessee’s claim for deduction of interest on delayed payment of royalty was disallowed by the assessing officer on the grounds that it was in nature of penalty and no provision was made in the accounts. It was held that the law is well settled that if any expenditure incurred by the assessee is compensatory in nature, deduction has to be allowed u/s 37 (1). CIT v/s New Alpine Forest - 113 Taxman 316 ( Jammu & Kashmir )

It was held that unabsorbed losses of earlier years have to be set off before considering claim of deduction u/s 80 P. CIT v/s Chaltan Vibhag Udyog Sahakari Mandali Limited -113 Taxman 321 ( Gujarat )

The assessee had entered into an agreement for obtaining certain books, technical books and designs, etc and later agreement was amended to allow it to retain all technical data, design and documentation. It was held that in view of the finding, that no new unit was brought into existence, payment made towards royalty to collaborators was allowable as revenue expenditure since advantage or benefit acquired was only for running existing business. CIT v/s Power Build Limited - 113 Taxman 327 ( Gujarat )

Interest u/s 234-A and 234-B is leviable

Interest u/s 234-A and 234-B is leviable on the basis of returned income and not on assessed income

Penalty u/s 276 E r/w 269T is not leviable on repayment of loan in cash as loan is not covered by the prohibition contained in sec. 269 T

Advance Tax : Penalty cancelled where estimate of income though was lower than annual income but was based on honest belief on the basis of law as understood at that time.

Advance Tax : Estimate was based on books of account and no intentional distortion was involved. The burden of proof is on revenue to prove estimate was false. Penalty not leviable

Agricultural Income : Share of Loss from URF Cannot be Set off against other agricultural income for the purpose of computing agricultural income for rate purposes

FIRM : Karta is partner in firm representing HUF – Interest paid to HUF for money deposited with the firm is disallowable u/s 40 (b)

Change in Method of Accounting : Penal interest charged on overdue installments from debtors was so far being accounted on mercantile basis – Assesses adopted cash system in subsequent years for penal interest alone – Not permissible – penal interest taxable on accrual basis

Accrual of Income : Assesses receives commission from principals for rendering services – Amounts received on execution of work but shown as advances and shown as income when bills are passed by principals – Amounts to be treated as income in the year of receipt

Real Income : Amounts were advanced by assesse against hundis dt 1-6-83 and coaccepted by banks - Debtor Co. went in to liquidation and bank disowned hundis – No interest accrued after 1-6-83

Acquisition of Immovable property u/s 269EE : proceedings invalid where valuation of property was done after issue of notice and there was no proof of publication of notice in official Gazette.

ITAT : Memorandum of Appeal was sent by assesses by Regd. Post to ITAT but acknowledgement was not received – Fresh appeal was filed with request for condonation of delay – Reasonable cause for delay and appeal cannot be dismissed as time – barred.

Assessment : Claim for deduction of Conveyance and additional Conveyance allowance cannot be disallowed u/s 143 (1) (a)

Firm held dissolved on death of partner, as there was no provision in the partnership deed that firm need not be dissolved on death of partner. Firm was continued with son of the deceased partner. Two assesment are to be made

Notice under proviso to Sec 143 (2) must be served on assesses within a period of 12 months from the end of the month in which return was filed

Irregularity in exercise of jurisdiction like omission on the part of Assessing officer to confront the assesses with evidence collected could not result in annulment of entire assessment proceedings

Computation of total income and tax payable need not be done in same sheet of paper. Assessment order is valid where form ITNS 150 showing tax calculation is signed by AO along with assessment order

In the case of recovery proceedings against the Firm, attachment and sale of property of partner is valid

Lease money obtained from letting one imported rotary press on hire is income from other sources and not income from business

Proviso & Explanation under Sector 43-B introduced by finance Act 1989 is clarificatory and retrospective. Sales Tax actually paid before filing of return could not be disallowed.

Charitable Trust : Payments made to interested persons not entitled to exemption

Charitable Trust : Exemption cannot be denied solely on the ground that trust carries on business

Charitable Trust : Object need be beneficial to section of the public and not necessarily only to public at large. Meaning of object of general public utility is satisfied where charitable trust was for benefit of staff of 16 institutes

TDS: Persons holding L-13 & L 13A licences in liquore business are not ‘buyers’ for the purpose of sec 206C & tax cannot be collected at source from them

WT : Where motor Cars and trucks were used by assesse for business purposes, cars are includible in net wealth

Penalty u/s 271-B : Audit Report abtained after specified date and filed with return submitted u/s 139 (4) – Penalty u/s 271 B cannot be levied prior to amendment in 1995

Investment Allowances : Assessee engaged in business of processing data with Computers. End products after data processing are new articles & entitled to Investment allowance

TDS: Rule 36 – A specifies the IT authority before whom TDS returns are to be filed – Notification giving excessive authority to Asst. CIT Considered excessive delegation of power and ordered to be modified

WT : Commercial bldg. regarded as house for the purpose of sec 5 (I) (iv) – Bldg. is owned by firm. Partner is entitled to exemption in respect of his share

80 HHC : carried forward losses are not to be set off for computing profit u/s 80HHC – Sec 80 HHC is not controlled by Sec AB

Transfer : Assets of firm are owned by partners – unequal distribution of assets o dissolution of firm No transfer of property and consequently no GIFT

Notice u/s 133 issued by the A.O requiring information not valid where there are no pending proceedings and approval of CIT / DG not taken

Precedence : ITAT in earlier years held that income earned by foreign co from consultancy services rendered to Indian co not taxable and R. A. rejected. ITO’s order assessing same income is without jurisdiction

Concealment Penalty : not justified where requisite satisfaction by the AO reg. concealment of income or furnishing of inaccurate particulars had not been arrived at

Reassessement : proceedings on ground of internal Audit party’s information that commission paid is excessive – not valid

Recovery of penalty from Guarantor not permissible where the surety bond executed by guarantor was only for Income Tax and Wealth Tax and Gift Tax liabilities. Tax and penalty are different

Firm : Accounting period was from 12.11.77 to 30.8.78 and minor admitted to partnership attained majority on 9.8.78. New partnership Deed executed only on 14.8.78. Firm is not entitled to registration

High Court : Grant of approval to order compulsory audit was given in Lunknow approval to pass order u/s/142 (2A) was granted by CIT Kanpur. Cause of action arose on passing of order and not on grant of approval Allahabad high court has no jurisdiction to hear writ

Compulsory Acquisition of land : Right to enhanced competition and interest does not accrue when amount awarded is disputed by Govt. in appeal. Not taxable till settlement of dispute.

Power of ITO : Transfer of property to defraud revenue - ITO cannot declare the transfer void but file a suit to have transaction declared void

Revision : CIT has powers to revise orders of A.O dropping reassessment proceedings

Trade Mark : Difference between assignment and user of trademark is revenue receipt

It was held that while sanctioning a scheme of amalgamation, the High Court cannot exercise jurisdiction of an appellate court and interfere with wishes of the requisite number of shareholders only because valuation figure arrived at by valuer for purposes of share exchange ratio could have been different, had some other method been used for valuation. It was further held that the Court should interfere only if it finds that the scheme, even if sanctioned by a majority is unconscionable, unfair or illegal. It was further held that where scheme of amalgamation had been sanctioned at the meeting shareholders of the company by the requisite majority and after considering objections of appellants and after a single judge had thought it fit to sanction the scheme of amalgamation, no interference would be warranted with order passed by the single judge, especially when the appellants could not point out any illegality or irregularity committed by the single judge. Kiritbhai Hiralal Patel v/s Arvind Intex Limited – 28 SCL 130 ( Guj )

The petitioner, together with contesting shareholders, was holding 14.02 % equity shares of the respondent company. The company has been advising members from time to time through circulars / letters of present activities and future expansion programmes. The Managing Director, through circular, requested all shareholders to bring additional capital to expand activities of company. In a Board meeting held on 15-4-1995, it was decided and recorded that rights offer at 1:3 basis was to be made to all members, but none except 2 accepted the rights offer. Thereafter, the board of directors empowered the managing director to approach members of public for raising capital. Accordingly , additional capital was raised and shares were allotted to them including the third respondent who was also co-opted as director. The petitioner had attended all meetings and received all letters and circulars. However, he alleged oppression and mismanagement on account of allotment of shares to the third respondent. It was held that on facts, it could not be said that allotment of shares was in contravention of section 81 and there was no infirmity in the appointment of the third respondent as director of the company as well as in conduct of AGMs amounting to oppression and mismanagement of affairs of the company. V Shanmugasundaram v/s Emerald Automobiles - 28 SCL 195 ( The Company Law Board, Principal Bench, Chennai )

On an application u/s section 235 made by petitioner, the authorized representative of the respondent company made an offer to purchase shares purportedly allotted to the petitioner and petitioner agreed to the suggestion made by the respondent. Accordingly, the CLB passed an order directing the respondents to purchase shares so allotted to the petitioner at par within a period of 6 months. The respondents however did not comply with the terms of the aforesaid order. It was held that order passed by CLB on basis of compromise between parties was a valid order and as such consent terms recorded therein, not complied by the respondents, could be executed in terms of provisions of section 634 A of the Companies Act, 1956. It was further held that even though the provisions of the Code of Civil Procedure are not applicable to the proceedings before the CLB, yet the principles enunciated therein could be appropriately adopted to meet the ends of justice. TNK Govindaraju Chettiar and Co Limited v/s Kuki Leather Private Limited – 28 SCL 267 ( Company Law Board, Prinicipal Bench, Chennai )

The appellant acquired certain shares of company M from company G, constituting 5.8 % of the paid-up equity share capital. The appellant failed to report the acquisition within the prescribed time to SEBI and to the concerned stock exchange as required under the takeover code. It was held that since company G was not a promoter of company M, transaction in question could not be said to be a transaction between the promoters and as such no penalty was leviable. Amol J Shah v/s SEBI – 28 SCL 217 ( Securities Appellate Tribunal, Mumbai )

The RBI has allowed authorized dealers to provide foreign exchange facilities for transactions included in Schedule II to the Foreign Exchange Management (Current Account Transactions) Rules,2000 provided the applicant has secured the approval from the Ministry /Department of Government of India indicated against the transaction.

The Government of India has since amended the Foreign Exchange Management (Current Account Transactions) Rules,2000 vide its Notification No.G.S.R. 663(E) dated 9^th August,2000. Accordingly in the Foreign Exchange Management (Current Account Transactions)Rules, 2000 in Schedule II at Series No. 2 the following may be substituted :

"Advertisement abroad by any State Government or its PSUs"

"Ministry of Finance, Department of Economic Affairs."

The appellant was apprehended at a bus stand and search of gunny bag in his possession resulted in seizure of Indian currency. In a statement, the appellant admitted the seized amount and also about compensatory payments having been made. Search at his residence resulted in seizure of certain chits. He also admitted having made a payment of Rs. 10,000 to M who admitted having received the same from a non-resident. It was held that since despite full opportunity, the appellant had not been able to prove that seized amount had come into his possession in any manner other than what had been mentioned in his statement, he could be held guilty of contravention of Section 9 (1) (b). It was further held that mere retraction of statement would be no avail unless true position, if it was otherwise than as in retracted statement, was brought forth to show that earlier statement could not have been true. Akula Rajanna v/s Director of Enforcement – 113 Taxman 176 ( FERAB )

The appellant allegedly received payment from non-resident person as his remuneration for services rendered. Since the said payment was received on his behalf and not on behalf of any other person, it was held that there would be no contravention of provisions of section 9(1)(b), warranting levy of penalty. It was held that in absence of evidence of basic ingredient of charge that appellant held or owned foreign exchange outside India, finding of Adjudicating Officer that he failed to surrender said foreign exchange in India and charge of contravention of provisions of section 14 would be unsustainable. Shakti Kapoor v/s Directorate of Enforcement – 113 Taxman 183 ( FERAB )

The respondent CA certified wrong FOB value of export in terms of Import and Export Policy. It was held that failure of the CA to exercise skill, care and caution while making wrong verification amounted to gross negligence. It was further held that having regard to the fact that the respondent had communicated said mistake to exporter involved but only failed to inform authorities concerned, he was acting bona fide and, therefore, word of caution to be more careful would suffice instead of reprimanding him. Institute Of Chartered Accountants Of India v/s B.L. Khanna 113 Taxman 170 ( Delhi )

The respondent, while holding certificate of practice, was allegedly in full time salaried employment without the Institute’s permission and had enrolled and issued certificate of training to articled clerks. It was held that in view of the facts and circumstance of the given case, an admission of allegation against him, professional misconduct under clause clause ( i) of Part II of the Second Schedule of the Chartered Accountants Act, 1949 was clearly established and therefore recommendation of Council of ICAI for removal of his name from Register of Members for 1 year was to be accepted. Council of ICAI v/s AP Gupta - 113 Taxman 224 ( Delhi )

The Institute of Chartered Accountants of India has issued an exposure draft of the proposed accounting standard on related party disclosures. Transparency in related party transactions is of utmost significance for establishing fair and ethical business practices. Hence the necessity of such a standard is being felt.

It was held that section 536 ( 2 ) of the Companies Act does not lay down any bar or prohibition preventing the company from making payments or even disposing of property. It was further held that there would be failure u/s 138 of the NIA if company or its directors do not make payment only on grounds that petition for winding up has been presented. It was further held that subsequent order of winding up would have no effect on criminal case against the company and its directors for offence u/s section 138 of the NIA once offence is deemed to have been committed prior to such order being passed. Stephen Aranha v/s Jindal Leasefin Limited – 28 SCL 170 ( Delhi )

It was held that the provision of section 138 of the NIA undisputedly provides that the person liable criminally for bouncing of cheques will be one who has drawn and issued the cheque. It was further held that where cheque was issued by an employee of the petitioner company and not by and behalf of the petitioner company, criminal proceedings against the petitioner company would be unsustainable. Janachaitaniya Housing Private Limited v/s Smt P Surya Kumari – 28 SCL 175 ( AP )

It was held that in cases arising under section 11 (6), if opposite party has not made an appointment of arbitrator within 30 days of demand, right to make appointment is not forfeited but continues, but an appointment has to be made before first party files application under section 11 (6) seeking appointment of an arbitrator. It was further held that where respondent made appointment of arbitrator beyond 30 days from date of demand, but before the appellant filed application u/s 11 (6), appointment by respondent would be valid and it would be wrong to hold that the right of appointment was forfeited after expiry of 30 days from date of demand. Datar Switchgears Limited v/s Tata Finance Limited. – 28 SCL 99 ( SC )

Vide notification number SO 990 ( E) dated 6/11/2000 issued by the Department of Revenue, the Government has remitted the stamp duty payable on bonds in the nature of promissory notes, described as Gold Deposit Certificates and bonds under the Gold Deposit Scheme, 1999 to be issued by RBI and their subsequent transfer from one holder to another.

Supreme Court

Advocate Act - Returns of Client's Record - No Professional can withhold clients' records.

An Advocate has no lien on the files entrusted to him by the client. Files containing copies of the records, perhaps some original documents cannot be equated with the "goods" referred to in the Section 171 of the Contract Act. There is no scope for converting the case files into money nor can be sold to any third party. In the case of litigation papers in the hands of Advocate, there is neither delivery of goods nor any contract that they shall be returned or otherwise disposed off.

If a client does not want to continue the engagement of a particular advocate, it would be a professional requirement consistent with the dignity of the profession that he should return the brief to the client. It is true to hold that such obligation is not only a legal duty but a moral imperative. As such refusal to return the files to the client when the client demanded the same amounts to professional misconduct under Section 35 of the Advocate Act and the Advocate is liable to be punished for such misconduct.

It was observed that the case in a Court / Tribunal is far important for all concerned than the right of the legal practitioner for his remuneration in respect of the services rendered for espousing the cause on behalf of the litigant.

The Advocate has a duty to return the files / papers / documents on being discharged. The litigant too has a right to have the files returned to him, more so when the remaining part of the case has to be fought in the Court.

No professional can be given the right to withhold the returnable records relating to the work done by him with his client’s matter on the strength of any claim for unpaid remuneration. The professional has got the alternative to resort to other legal remedies for such unpaid remuneration. R.D. Saksena v/s. Balaram Prasad Sharma AIR 2000 SC 2912.

Illegal Construction - Affected neighbour can maintain a suit for perpetual injuctions.

A duty to conform to the Municipal Rules is the duty not only of the Municipal Corporation or local bodies but also of fellow citizens. A neighbour has got a right to approach the Civil Court to seek remedy against the construction done in violation of plan and rules resulting in invasion of right of light, air and proving unnecessary mental injury to him, provided he has to establish infraction of the law or the Municipal law.

The local body framed the scheme for the benefit of the residents of the local authority. A neighbour who is thus affected by an illegal construction has got aright to maintain a suit for perpetual injunction. Fatima Jogo vs. Village Panchayat of Merces AIR Bombay

Municipal Law - Gujarat High Court - Unauthorised Construction

(Officers of local body can't regularise the unauthorised construction by leying penalty)

for construction can be made only after the approval is granted by the local authority. It is a bounden duty of such local authority and its officers not to permit any unauthorised construction. The permission for construction has to be granted only after being satisfied about the constrcution as envisaged in bye-laws, rules and regulations. No one is entitled to construct the house/structures according to his own will and wish ignoring the provision of building bye-laws rules and regulations, otherwise to take necessary steps to stop the work if commenced, but, not completed and if it is completed for the removal of such an illegal and unauthorised construction.

When a question of construction comes before the court, it is for the court to examine the intention of the legislature as expressed must be given effect to and must be expressed by the court in the language of the section or permission.

The Officer of the local body cannot regularise the unauthorised construction by charging fees / penalty, the powers which are not vested by the law. Such act would be illegal, contrary to law and would amount to defeating the provisions of law. Mohd. Yunus Khan v/s. AMC Municipal Commissioner.

Exports Order - CPC - Supreme Court

Code of Civil Procedure - Ex-parte order - Final order to be passed within 30 days.

The Court is empowered to pass an ex-parte ad-interim injunction in the case of urgency without notice to other side also. A person who has obtained an order ex-parte, must deliver to the other side, copy of the application, copy of the documents, copy of order and to file an affidavit on the next date, an affidavit stating that he has delivered the copy of the order. If the person fails to comply with the same, cannot be permitted to advantage of non-compliance of the provisions and he must suffer the consequences and the risk,

if the order of the court is not obeyed by the other side. A disobedient beneficiary of an order cannot be bound to complain against any disobedience alleged against another party.

The aggrieved person has got the right to move either before the same court or the appropriate court for vacating and/or modification of the ex-parte order.

Rule 3A of order 39 lay down statutory obligation upon the court to pass final order on the application within a period of 30 days unless the court has got adequate reasons to bypass the period and to record such reasons in writing. Non observance of statutory obligation entitled the aggrieved party to challenge the said order in the Court of Appeal, in spite of the fact of pending of application for grant or vacation of temporary injunction. In such an event, for the purpose of appeal the ex-parte order shall be deemed to be the final order passed on the application for temporary injunction as on the date of expiry of thirty days mentioned in the rule. A. Venkatasubbiah Naidu v/s. S. Chellappan AIR 2000 SC 3032.

The husband is liable to pay maintenance to a divorced wife under Section 3(a) of the Muslim Women (protection of right on Divorce) Act, 1986, within iddat period. The husband has to make reasonable and fair provision for the divorced wife within the iddat period which should take care of her for the rest of her life or till she incurs any disability under the Muslim Women Act. While finalising the amount, certain points have to be taken care of viz. need of the divorced women, the standard of life enjoyed by during her marriage, the means of her husband, status etc. If the husband is not able to make the payment in lump sum, on the application of the husband, the court shall consider the application for giving the amount in instalments. Till then the husband may be directed to pay monthly payment even beyond the iddat period 2000 MLJ (3) 555 (Full Bench).

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