MONTHLY REPORT FOR JUNE, 2009

CHIEF ADVISER

Pradeep K. Mittal B.Com., LL.B., FCS, pkm171@yahoo.com

Advocate--9811044365

Central Council Member The Institute of Company Secretaries of India

Sh C M Bindal, -9414962454 FCS

Company Secretary in Practice – JAIPUR

CONTRIBUTION FOR – SEBI LAWS

E-mail : cmbindal@yahoo.com,

bindalcm@yahoo.com __________________________________________________________________ Sh. Rakesh Garg –9810216270 FCA

Practicing Chartered Accountant

CONTRIBUTION FOR - SALES TAX & VAT

E-mail: sahaigarg@hotmail.com ___________________________________________________________ Sh Himanshu Goyal – 9899566764 Chartered Accountants

M/s Ved Jain & Associates

CONTRIBUTION FOR – INCOME TAX

E-mail: goyalhimanshu@hotmail.com ___________________________________________________________ Sh. Pradeep kumar Aggarwal - 9811300732 Practicing Chartered Accountant

CONTRIBUTION FOR - Vedic Astrology

E-mail: peekay161@yahoo.com

_____________________________________________________________ HONORARY ASSOCIATES

Dr. Sanjeev Kumar M.Com. LL.B., Ph.D, PGDPIRL, FICWA, FCS

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SEB/SECURITIES LAWS BY SHRI C.M.BINDAL - 9414962454

NOTIFICATIONS/CIRCULARS/REGULATIONS/RULES:

� Listing Agreement- In order to enforce disclosures, bring more transparency in governance of a listed company, clauses 5A, 16, 19, 20A and 35 in the Listing Agreement have been amended. Circular No. CFD/DIL/LA/1/2009/ 24/04 dated 24th April, 2009.

� Portfolio Manager- Compliance with regulation 16(8). It has been decided that those portfolio managers, who have not complied with the regulation by 10th May, 2009, shall immediately stop undertaking new clients till the time they become fully compliant with the said regulation. IMD/PMS/2/2009/11/05 dated 11th May, 2009.

� Listing Agreement – Simplified regulatory framework for issuance and listing of non-convertible debt securities. SEBI/IMD/BOND/1/2009/11/05 dated 11th May, 2009.

LEGAL CASES

� NIRMA INDUSTRIES LTD. V. SEBI (2009) 90 CLA 40 (SAT): Wherever any rules/regulations contain exceptions, as referred to in clauses (b) to (d) of sub-section (1) of regulation 27 (Takeover code), they have to be construed very strictly, because that is a well established rule of interpretation. The specific circumstances under which the public offer could be withdrawn are mentioned in clauses (b) and (c) which are followed by clause (d) containing

general words being a residuary clause, attracting the rule of ejusdem generic, which means that the words of clause (d) have to be construed as limited to things or circumstances of the same kind as those specified in the preceding clauses (b) and (c) which would make it impossible for the acquirer to go through with the public offer. A restricted meaning has to be assigned to the exceptions, because, if a liberal meaning is assigned, not only will the objects of the Takeover code get frustrated but the public shareholders will be deprived of their rights there under to exit from the target company. Therefore, the SEBI Board was justified in declining request of the petitioners for withdrawal from the open offer. [SEBI (Substantial Acquisition of Shares and

Takeovers) Regulations, 1997].

� RASHIMA VERMA V. SEBI (2009) 90 CLA 171 (DEL.): It is the duty of the complainant to allege and make out all the ingredients of the offence before calling upon the court to proceed against the accused. Where summons have been issued by the magistrate

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mechanically, without taking care of requirements of law, and without even a prima facie case being made out against the petitioner-director, who is neither a person responsible for the business of the company, nor is there any averment against him, in respect of offence of the company, the complaint against the petitioner is not maintainable. [SEBI ACT, 1992, ss. 24 and 27 read with regulations 5(1), 68 73 and 74 of SEBI (Collective Investment Schemes) Regulations 1999 and section 204 of Code of Criminal Procedure 1973].

� SOHEL MALIK V. SEBI (2009) 90 CLA 184 (SAT): It is the acquisition of voting rights that triggers the provisions regarding public announcement and public offer contained in the Regulations. Sub-regulation (1) of regulation 11 is in complete harmony with sub-regulation (2) of regulation 14, which deals with the timing of the public announcement of offer in the case of securities which confer voting rights on the acquirer only upon conversion or exercise of option, as the case may be. Where the warrants had a lock-in period, and could be converted to shares to the appellant, after exercise of option by him, by the Board of directors of the targeted company would be clearly on preferential basis. The Regulations are triggered only with the acquisition of

voting rights that does not take place when the warrants are issued by the targeted company but with the actual allotment of shares after exercise of option for conversion by the appellant. Therefore, the reference date for computing the offer price would be the date of the meeting of the Board of directors when the shares were actually allotted. [SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, regns. 11(1), 14(2) and 46 and section 15T].

� YOGESH BABULAL MEHTA V. SEBI (2009) 90 SCL 130 (SAT): Appellant broker executed trades on behalf of his clients (respondent Nos. 3 to 6) at an average price of Rs. 268.48 per

share and deposited the amount accordingly. BSE, later on, fixed standard rate at Rs. 217 per share. Appellant made a representation to SEBI for directing BSE to release the amount of difference between Rs. 268.48 and Rs. 217 per share. Vide order dated 15th June, 1999, SEBI directed BSE to release the difference to the appellant. However, respondent Nos. 3 to 6 had already obtained order from SEBI on 16th May, 1998 for release of difference amount. Since the appellant was not heard before passing the order dated 16th May, 1998, and the two orders are contradictory, both the orders are set aside and the mater is remanded to SEBI to pass a fresh order in accordance with law. [SEBI (Prohibition of Fraudulent and Unfair Trade Practices

Relating to Securities Market) Regulations, 1995, regn. 4].

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� N.E. ELECTRONICS LTD. V. SEBI (2009) 90 SCL 247 (SAT): Appellant a major shareholder of a company issued unusual advertisements to attract investors’ interest. Investigation by SEBI revealed that the advertisements were false and misleading. Prior to issuance of advertisements, appellant had transferred shares to P, a stock-broker, and others with intention to offload them in the market after such advertisement creates artificial demand for the shares. Appellant’s plea that shares were transferred to P by way of security against loan granted by P to the appellant cannot be

accepted. P, being a stockbroker cannot be expected to advance loans. Impugned order restraining the appellant from accessing the securities market and from buying and selling or otherwise dealing with or associating with securities market for two years sustained. [SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995, regns. 3, 4(b), 5 & 6].

INCOME TAX – BY SH.HIMANSHU GOYAL - 9899566764

� P.S. Kapur Vs. Assistant Commissioner of Income-Tax [2009]

29 SOT 587 (JP.): Section 43(5) of the Income-tax Act, 1961 –

Speculative transaction – Whether insertion of clause (d) in

proviso to section 43(5) vide Finance Bill, 2005, with effect from

1.4.2006 is clarificatory in nature and, therefore, it has

retrospective operation – Held, yes.

� MARICO INDUSTRIES LTD. VS. Assistant Commissioner of

Income-Tax [2009] 312 ITR (AT) 259(Mumbai) : Revision –

Jurisdiction of Commissioner – Doctrine of merger – Order of

Assessing Officer merging with order of Commissioner (Appeals) –

Commissioner has no power to assume jurisdiction in respect of

matters covered in appeal – Issues not taken in appeal –

Commissioner has jurisdiction to revise – Income-Tax Act, 1961,

s. 263. Expln. (c).

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� Commissioner of Income- Tax Vs. Woodward

Governor India P. Ltd. [2009] 312 ITR 254 (SC) : Business

Expenditure – Mercantile System of Accounting – Loan taken for

revenue purposes – Additional liability arising out of fluctuation in

rate of exchange - Allowable in year of increase in rate – Income –

Tax Act, 1961, ss. 28,29,37,145.

o Depreciation – Actual cost – Imported assets acquired in

foreign currency – Fluctuation in rate of exchange –

Adjustment can be made at each date of balance-sheet

pending actual payment – Income-Tax Act, 1961, ss.

32,43,43A(Before substitution w.e.f.2003)

� Mimosa Investment Co. Vs. ITO (2009) 28 SOT 470(Mum.):

Section 271(1)(c) – When Assessing Officer recalculates total

income in accordance with law and such total income is different

from that calculated by the assessee, there is no concealment of

particulars of income or furnishing of inaccurate particulars of

income or deemed concealment in accordance with Explanation 1

to Section 271(1).

� Commissioner of Income Tax Vs. Contimeters Electrical (P)

Ltd. (2009) 22 DTR(Del) 158 : Revision – Validity – Revision on

issue not mentioned in show- cause notice- Not permissible –

Commr. of Customs Vs. Toyo Engg. India Ltd. (2006) 7 SSC 592

applied

� Chandi Ram Vs. Commissioner of Income-Tax [2009]312 ITR

139(P & H) : Capital Gains – Charge of Tax – Compulsory

Acquisition of Property – Enhancement of Compensation –

Dispute Regarding Enhancement – Amount Assessable only in

year of final award – Income – Tax, 1961, s. 45(5)(b).

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� Honda Siel Power Production Ltd. Vs.

Commissioner of Income Tax (2009) 22 DTR (Del)(Trib) 164 :

Revision – Erroneous and prejudicial order – AO taking a possible

view – AO allowed assesses’s claim under s. 80HHC without

reducing the profit by the deduction already allowed under s. 80-

IB –CIT passed order under s. 263 directing the AO to computer

deduction under s. 80HHC by reducing from profit the amount of

deduction already allowed under under s. 80-IB –Not correct –

View taken by the AO in allowing deduction under s. 80HHC

without reducing from the profit the amount of deduction already

allowed under s. 80-IB was a possible view - Moreover, in his

order CIT himself has mentioned certain decisions of the CIT(A) in

some cases deciding the issue n favour of the assessee but the

CIT chose to disagree with the said view – This itself makes it

clear that the issue was debatable one – Therefore, the order

passed by the AO cannot be treated as erroneous and the order

passed by the CIT under s. 263 directing the AO to compute

deduction under s. 80HHC by reducing from profit the amount of

deduction already allowed under s. 80-IB is set aside – followed.

� Commissioner of Income Tax Vs. Varinder Agro Chemicals

Ltd. (2009) 22 DTR (P&H) 127 : Business expenditure – Capital

or revenue expenditure – Expenditure on computer software –

There is nothing to show that the software used by the assessee is

of enduring nature and will not become outdated – Therefore,

expenditure on computer software rightly allowed as revenue

expenditure – No substantial question of law arises.

� Citizen Co-operative Bank Ltd. Vs. Additional Commissioner

of Income Tax (2009) 122 TTJ (Del) 281 : Deduction under s.

80P(2)(a)(i) – Business of banking - Income from banking

business of co-operative bank – Income of co-operative bank from

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banking business with members as also non-

members is allowable deduction under s. 80P(2)(a)(i) – Condition

of business with members was attached with regard to providing

credit facilities only – This condition was also fulfilled because

before any loan was disbursed to any person, the borrower had to

become member of the assessee bank – Further, assessee was

functioning under the control and supervision of RBI and as per

license granted by RBI, which allowed lending of money both to

members as also non-members.

� Commissioner of Income Tax Vs. Jyoti Prabha Society (2009)

22 DTR (Uttarakhand) 53 : Charitable trust – Exemption under

s. 11 – Income from letting out building – Assessee charitable

society registered under s. 12A could not be denied exemption

under s. 11 on the ground that its activity of letting out building

to other society to run educational institution did not constitute

charitable purpose because such rental income was again being

utilized for imparting education by maintaining and constructing

new buildings for same purpose.

� Arya Global Connect Ltd. Vs. Assisstant Commissioner of

Income Tax (2009) 122 TTJ (Mumbai) 300 : Business income –

Business loss – Obsolete stock written off – Complete details and

break-up of obsolete items and value thereof furnished by the

assessee – Also, method followed by the assessee was the same as

in past – Therefore, AO was not justified in disallowing the claim

of write off without pointing out as to how the write off was not

correct or bona fide – IAC Vs. Consolidated Pneumatic Tool Co.

(India) Ltd. (1986) 15 ITD 564(Bom) and ; Pepperi + Fuchs (India)

Ltd. Vs. Dy. CIT (2006) 6 SOT 10 (Del) relied on

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� Travancore Cements Ltd. Vs. Assistant

Commissioner of Income-tax [2009] 179 TAXMAN 117(KER.) :

Section 147, read with section 148, of the Income – tax Act, 1961

– Income escaping assessment – Non-disclosure of primary facts –

Assessment years 2000-01 and 2001-02 – Whether Assessing

Officer gets jurisdiction under section 147 to assess or reassess

income which has excaped assessment only after sub-section (2)

of section 148 is complied with, i.e`., when reasons for issuing

such notice have been recorded – Held, yes- Whether when

proceedings under section 147 have been initiated in respect of

one item of income for which Assessing Officer had already

recorded reasons, it is necessary for him to record reasons for

assessing or reassessing any other items of income which are

totally unconnected with proceedings already initiated – Held, yes

– Whether in reassessment proceedings, Assessing Officer can

make any fishing enquiry in concluded matters unconnected with

issue on basis of which proceedings under section 147 have been

initiated – Held, no

CENTRAL EXCISE LAWS - BY SHRI P K MITTAL � The different MRP has been indicated on Air-conditioner valid for

different areas, is permissible under Section 4A of Central Excise Act to be taken as assessable value for such areas. CCE Vs. Godrej Appliances Ltd 2009(237)ELT 341 Tri.

� The Agreement which contained price variation clause, the

assessee upon upward revision of prices, paying higher duty and on lowering of price, the assessee is seeking refund as per Agreement and assessment shall be treated as provisional. Refunds arising out of down revision of prices after clearance of price, principle of unjust enrichment shall not apply. ECE Industries Ltd Vs. CCE 2009(237) ELT 428 (Tri).

� The goods were found kept in drums clearly shows that all process of manufacture were complete and goods were lying ready for dispatch and there is no evidence led by the Department to show assessee wishes to clear without payment of duty

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clandestinely or intentional evasion of duty and, therefore, no penalty is leviable. CCE Vs. Kaizen Organic (P) Ltd 2009(237) ELT 430 (Tri).

SERVICE TAX - BY SHRI P K MITTAL � The Hon’ble Delhi High Court in the case of Home Solution Retail

India Ltd. Vs. Union of India & Ors. 2009(158) DLT 722 Delhi has

held that no service tax is payable on renting of immovable property as super structure. However, if any, additional facilities like Air-conditioner, Office furniture, office equipments, other facilities have been rented out along with immoveable property, then in that event, then only to the extent of value of such facilities shall be liable to service tax in view of the fact that the service tax is a value added tax.

� The Bombay High Court has set aside an order passed by the

ITAT (directed the ITAT to re-hear afresh) only on the ground that there was a delay of four months after conclusion of hearing in

passing the final judgment – without giving any reason for delay. Further held that the final judgment should be speaking one and merely observing that findings of the lower authorities do not call for any interference is not enough. Shivsagar Veg. Restaurant Vs. Asstt Commissioner of Income Tax 2009(13)STR 11 (Bom HC).

� The refund of Cenvat Credit on input services such as general

insurance, export clearances, courier, export freight, technical services and clearing charges in respect of export consignments is clearly permissible to the assessee. CCE Vs. IJ Muthu Foods (P) Ltd 2009(13) STR 37 (Tri).

� The paint used for protecting plant is eligible as input for availing Cenvat Credit. The electrodes used in the factory is eligible for Cenvat Credit. The computer used to monitor equipment involved in manufacturing process and material movement, would be eligible as “capital goods” for availing Cenvat credit. Ruchi Health Foods Ltd. Vs. CCE 2009 (13) STR 330 (Tri).

� The defects in invoices which are used for availing Cenvat Credit

are rectifiable. The Cenvat Credit cannot be disallowed merely on the basis that some information is missing from the invoice. Philips Electronics India Ltd. Vs. CCE 2009(14) STR 209.

� In case the Show Cause Notice has to be issued either for short levy or non-levy, provision of law, as prevailing at the time of initiation of proceedings, would be attracted, although some

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different provision of law were applicable during the period for which, the Show Cause Notice has been issued for short levy or non-levy. Aneja Property Dealers Vs. CCE 2009 (13) STR 266 (Tribunal).

� The Tripartite Agreement envisaging first party i.e. appellant as

property developer, second party contractor and the third party i.e. flat purchaser. It was held that development includes

construction of residential complex and the contention of the

appellant that there is only sale of property undertaken is liable to be rejected. Since the Service Tax along with interest was paid before issuance of SCN – penalty not liable leviable because of doubt on the issue of liability and also due to interpretation of legal provision involved. Rohan Builders Limited Vs. CCE 2009(13) STR 56 (Tri).

� The Corporate Advisory and Due Diligence services provided

pertaining to acquisition of shares of a listed company provided by appellant clearly falls within the “Management Consultant Service” but w.e.f. 16.7.2001 and, therefore, no Tax is payable for the period prior thereto. HSBC Securities & Capital Markets

India Ltd Vs CCE 2009(13) STR 62 (Tri). � The Cenvat Credit of Service Tax paid on CHA and C&F Agent (i.e.

after the goods left the factory for export) has no relation to the manufacture and clearance from the factory and, therefore, Cenvat Credit of Service Tax paid on two services would not be available. Nirma Ltd Vs. CCE 2009(13)STR 64 (Tri).

� The Cenvat Credit of Service Tax paid on the input services such

as repair/maintenance, civil construction, man power recruitment and clearing services used in the residential colony of workers of manufacturer (and not at the factory building) would still be

allowable. CCE Vs. Manikgarh Cement Ltd. 2009 (13) STR 293 (Tri).

� The Assessee having contract carrier permit and has allowed his

vehicles to be used by various companies for carrying their employees to their respective factories, it cannot be said that the assessee is liable to service tax as provider of “Tour Operator Service”. Bhagwan Singh Vs. CCE 2009 (13) STR 253 Tribunal.

� The assessee act as Commission Agent i.e., procurement of orders

from the prospective buyers and informing the same to the Company - such services to be held to be covered under the

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definition of “business auxiliary services”. Nahar Spinning Mills Ltd. Vs. CCE 2009 (13) STR 255.

COMPANIES ACT -- BY SHRI P K MITTAL � In case the Share Certificates have been lost during transit about

16 years back and no one, in the meantime, has lodged any claim, the person who dispatched the share certificates is entitled to

issuance of share certificates. Prem Kabra Vs. Mangalore

Chemicals & Petrochemicals Ltd. 2009 (89) CLA 535. � In case the holding of Petitioner has come down to below 10% due

to issue of further shares and such issuance of shares have been challenged by the Petitioner before the Company Law Board in a petition under Section 397 Companies Act, 1956 for oppression and mis-management, it cannot be said that the petition is not maintainable and the petition is not liable to be dismissed. Kishan Khariwal Vs. Ganganagar Industries Ltd. 2009 (89) CLA 539.

� In case transmission of shares has been declined in favour of legal heirs of the shareholder without any justifiable reason, the Company Law Board shall be fully justified to issue directions for registering transmission of shares and also giving benefits accrued in favour of the shareholder. Mrs. L.Rani Ammal Vs. Shri Shanmughananda Bus Services Pvt. Ltd. 2009 (89) CLA 578.

� The non-confirmation of minutes of the meeting by the Board of

Directors in the subsequent meeting does not effect the validity of the decision taken in the previous board meeting. Kerala State Electricity Board Vs. Hindustan Construction Company Ltd. 2009 (88) CLA 156.

� In case the Company refused to transfer the shares, no civil suit

would be maintainable before the Civil Court but effective alternative remedy in the form of appeal U/s 111 would be maintainable before the Company Law Board. Arvind Porwal Vs. Bharat Pandya 2009 (88) CLA 182 M.P.

� The corporate veil can be lifted and the court would be fully

justified the real beneficiary of the transactions where façade of corporate veil has been employed for the purpose of committing irregularity and/or defrauding the public at large. Ashish Poly Fibres Ltd. Vs. State Bank of India 2008 (115) DLT 672 Delhi DB.

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� In case the debts are undisputed and confirmed one, the Petition

U/s 433 (i)(e) of the Companies Act, 1956, though being discretionary, yet, is the perfect legal remedy for realization of payment of just debts wrongfully withheld by the debtor. 2008 (CLC) 1483.

� It is mandatory that a notice U/s 433 of the Companies Act,

1956 must be served only at the Registered Office of the Company

against whom the winding up petition is sought to be filed before High Court, failing which the petition would not be maintainable and would be liable to be rejected on this short ground alone. 2008 (CLA) 1592.

� In case Sick Company is doing its normal business, though a reference is pending before Board for Industrial & Financial Reconstruction, liabilities incurred after the cut off date so mentioned in the Rehablitation Scheme , shall have to be honoured by the Sick Company and it cannot be permitted to take shelter of Section 22 of Sick Industries Act (i.e. no suit for recovery of money or winding up petition shall lie against such

Sick Industrial Company). Dewan Sugars Ltd. Vs. Central Government 2009 (88) CLA 14 Allahabad.

CORPORATE LAWS -- BY SHRI P K MITTAL � In case Sick Company is doing its normal business, though a

reference is pending before Board for Industrial & Financial Reconstruction, liabilities incurred after the cut off date so mentioned in the Rehablitation Scheme , shall have to be honoured by the Sick Company and it cannot be permitted to take shelter of Section 22 of Sick Industries Act (i.e. no suit for recovery of money or winding up petition shall lie against such Sick Industrial Company). Dewan Sugars Ltd. Vs. Central

Government 2009 (88) CLA 14 Allahabad. � The Notice U/s 138 of the Negotiable Instrument Act is required

to be served upon the addressee/notice and only upon non-payment of the amount demanded within a period of 15 days, the offence is complete. If there is no evidence about the receipt of notice U/s 138 of NI Act, the Court will not entertain the petition as no offence has been committed. Harman Electronics Pvt. Ltd. Vs. National Panasonic India Ltd. 2009 (25) CLA supplementary 122 SC.

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� The presumption U/s 139 of NI Act (i.e. issuance of cheque towards payment of debt or liability) is rebuttable presumption. It is for the accused to lead evidence to rebut such presumption. Once Accused has led evidence to rebut presumption, then onus shifts upon the complainant to prove their case. Kumar Exports Vs. Sharma Carpets 2009 (25) CLA Suppl.132 SC.

� The Policy of the State Government says that if a manufacturing

unit is set up by making investment in plant, machinery, land

and building of a particular size, would be entitled, inter-alia,

entitled to exemption from payment of Excise Duty, such exemption cannot be denied subsequently by changing exemption policy by taking out pan masala from the list of exempted item. The State Government is barred from doing so on the principle of Promissory Estoppel. The manufacturing unit shall continue to be entitled to benefit of exemption from payment of Excise Duty. Unicorn Industries Vs. Union of India 2009(13)STR 84 Sikkim.

� The Bank Guarantee and Letter of Credit constitute independent

contracts between the beneficiary and the bank. The Court should

be extremely slow in granting stay at whose instance such BG/LC was issued by the bank. Further, in respect of “Excepted Matters” where the decision of the departmental officer is final and binding - same cannot be adjudicated upon by the Sole Arbitrator. Further, in case, as per Agreement between theparties, levy of liquidated damages is provided as “Excepted Matter”, the same cannot be adjudicated upon by the Arbitrator. C. Dot Vs. Ansal Properties and Infrastructure Ltd. 2009 (DLT) 158 page 409 Delhi (DB).

� The retraction of the confessional statement should be made at

the earliest point in time. If the accused did not retract the

statement when he was produced before the Magistrate for the first time after recording of his statement, subsequently he would not be permitted to retract the said statement so made. The confessional statement can be read against the accused. Rehamatulla Vs. Narcotics Control Bureau 2009 (158)DLT 539.

CIVIL LAWS - BY SHRI P K MITTAL

� The amendment to either plaint and/or written statement would not be permitted after Issues have been framed - specially amendment relating to objections pertaining to ouster of jurisdiction of trial court or fact of payment of rent by the tenant

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to the landlord. Further, disputed question of fact cannot be decided while considering application under Order 7 Rule 11 for rejection of plaint, 2009 (158) DLT 359 Satish Kumar Jain Vs. Raj Kumar Singh Yadav Delhi HC.

� The additional documents can be permitted to be filed

subsequently only in exceptional cases where previously, the documents were not in possession of the party. Ordinarily, no documents can be permitted filed after the framing of issues and admission of documents have been carried out. Haldiram India

Pvt.Ltd. Vs. Haldiram Bhujiawala 2009 (158) DLT 522. � In case, the application under order 23 Rule 3 CPC has been filed

by both the parties saying that compromise has been arrived at, the Court is not permitted to add or vary the terms of the settlement and the Court must pass a decree in accordance with the spirit of the compromise/settlement. The decree holder, in

such a situation, would be free to execute the decree so granted on the basis of joint application under order 23 rule 3 filed by the

parties. Mohd. Amin Vs. Mohd. Iqbal 2009 (158) DLT 531. � When the party is prohibited from doing a particular thing

directly, then it cannot do by following indirect method. Poonam Chawla Vs. Niranjan Kumar 2009(158) DLT 68.

� If the defense of the defendant has been struck off, the party

would yet be entitled to cross-examine the cross-examine the witness of the plaintiff and would be entitled to address final arguments. However, while cross-examining the plaintiff witness, the defendant cannot extend the scope of cross-examination so as to ask questions to plead their own case. Poonam Chawla Vs.

Niranjan Kumar 2009(158) DLT 68 DHC. � If a money decree has been passed against the partnership firm,

such decree has been executed against the partners of the said firm personally and not to the extent of their share in the partnership firm. A Khandelwal & Sons (HUF) Vs. Sardar Mall Alok 2009 (158) DLT 102.

� Where a manger of Hindu Undivided Family has incurred a debt,

all the co-parceners shall be personally liable for the debt of HUF only to the extent of their share in the partnership firm. Krishan Gopal Vs. Suraj Mal AIR 1964 Raj 218 Delhi DB.

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� The manager of the HUF firm cannot be arrested and detained for failure to pay the tax dues by the HUF under the scheme of Income Tax Act. Kapur Chand Shrimal Vs. Tax Recovery Officer AIR 1969 SC 682.

� Any evidence which is led beyond pleadings cannot be looked into

and thus whatever evidence which has come on court record (but beyond pleadings) is liable to be rejected. Vimla Mehra Vs. K S Mehra 2009(158) DLT136 DHC.

CONSUMER CASES -- BY SHRI P K MITTAL

� Even if the consumer has given a Declaration, at the time of taking over the possession of the flat that the flat is in habitable condition, that will not preclude him from raising a consumer dispute if it is otherwise found that the that there are number of defects and deficiencies in the flat and the Builder is liable to be saddled with the costs of such deficiencies. P Mohan Bhat Vs. Brigade Developers (P) Ltd 2009(CTJ)620 National Commission.

� If the monthly telephone bill of a consumer is ranging from

Rs.1500 to Rs.2500 per month for the last many years and suddenly the bill came to Rs.1,41,000 and like amount for the

three months consecutively, then the MTNL is bound to carry out the investigation for such abnormal bills and produce such investigation report and in the absence of such investigation, the Bills are liable to be quashed. MTNL Vs. Unibros 2009 CTJ 614 National Commission.

� The averment in the complaint should not taken as gospel truth

and the complaint must bring on record adequate evidence, documents and papers to establish their case. Ludhiana Improvement Trust Vs. Shakti Group House Building Society Ltd Vs.2009 CTJ 594 Supreme Court.

� If the Builder/Developer makes a representation that “green area” and “open area” would be left and later on the property in disregard of these representations, it shall amount to “unfair trade practice” within the meaning of Section 36A of the MRTP Act, 1969 and the allottee is liable to be compensated by the Developer. Atul Kapoor Vs. Apollo Land & Housing Co Ltd 2009(CTJ) 110 MRTP Commission.

� MRTP Commission has power to award to compensation in the

event Unfair Trade Practice has been established but has no power to grant specific performance of contract and thereby

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ordering the builder/developer to hand over the possession of the plot/flat. ABNA Vs. UPSIDC 2009(CTJ)85 MRTP Commission.

� If the builder/developers causes delay in handing over the

possession despite receiving the entire payments, it shall amount to “Unfair Trade Practice” and the aggrieved party is entitled to receive the compensation from the builder/developers Vs. N K Jain Vs. DDA 2009 CTJ 94 MRTP Commission.

� If the seeds have been purchased for the purpose of earning livelihood and it cannot be said that the there is a commercial purpose and the consumer dispute would be maintainable. The arbitration clause in the agreement would not prevent the consumer from approaching the “consumer courts”. National Seeds Corporation Ltd Vs. P V Krishna Reddy 2009 CTJ 522 National Commission.

� The National Commission has awarded a compensation of

Rs.10,00,000/- due to delay on the part of Electricity Board in installation transformer of 250 KVA and also granted compensation of Rs.1,00,000 towards mental agony. Purbachal

Cables & Conductors (P) Ltd Vs. Assam State Electricity Board. 2009 CTJ 535.

INDUSTRIAL & LABOUR LAWS -- BY SHRI P K MITTAL

Once the termination of service of a workman is held to be illegal and unjustified, reinstatement of workmen with back wages is not automatic. Where the issue of reinstatement is decided after 12 years from the date of termination, instead of re-instatement, a

lumpsum compensation would be appropriate remedy. Rajesh Wire Industries Vs. Umesh 2009 (158) DLT 472 Delhi High Court.

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