Facts:

In 1939, Krishnan Nair obtained ownership of a property through a family partition.

Due to debts from a chit fund business, Krishnan Nair executed a sale deed in 1940, transferring the property to Parameswaran Nair.

Legal issues arose, leading to the property being sold in execution.

Krishnan Nair attempted to regain the property by depositing the debt amount, interest, and commission.

To raise funds for this deposit, Krishnan Nair executed a sale deed in favor of Kesavan Channar for Rs. 1,200, with a condition that the property be resold after 10 years.

Simultaneously, Kesavan Channar entered into an agreement to sell the property to Kochu Kunja Nair after 10 years.

After Kesavan Channar's death, the property came into the possession of his daughter, Lakshmikutty.

Kochu Kunja Nair assigned his rights under the agreement to the predecessor of the appellant.

When Lakshmikutty did not sell the property as per the agreement, the predecessor of the appellant filed a suit for specific performance.

Issues:

The interpretation of the property-related documents, including sale deeds (Exts. A-5) and agreements (Exts. A-6 and A-7).

Whether the transactions represented a genuine sale, a mortgage by conditional sale, or another legal arrangement.

Held:

The trial court held that Exts. A-5, A-6, and A-7 were not genuine, with Exts. A-6 and A-7 being benami transactions. The trial court also indicated that the transactions resembled a mortgage by conditional sale.

The first Appellate Court upheld the trial court's decision, seemingly concluding that if Ext. A-5 was genuine, Exts. A-6 and A-7 were also genuine.

The High Court determined that the transactions indicated Krishnan Nair had no intention of a permanent sale but rather resembled a mortgage by conditional sale. It passed a preliminary decree for redemption and ordered accounts to be taken.

The Supreme Court agreed with the High Court's interpretation of the documents, stating that the transactions resembled a mortgage by conditional sale and were not perverse or illogical. It found that this interpretation did not reverse concurrent findings of fact. The Supreme Court, therefore, dismissed the appeal.

Facts:

The appellants (tenants) were using a property in Karol Bagh for commercial purposes, in violation of the residential-only lease terms. The Delhi Development Authority (DDA) issued a notice for lease cancellation due to misuse. The landlord filed an eviction suit under Section 14(1)(k) of the Delhi Rent Control Act, 1958.

Issues:

Included the misuse of the property, the validity of the lease cancellation, the applicability of Section 14(1)(k) of the Act, and the tenants' willingness to pay compensation.

Held:

The Supreme Court held that the DDA was within its rights to demand a stoppage of misuse, as the tenants had breached the lease terms. The Court emphasized that the case concerned lease terms and not zoning plans. The DDA's threat of lease cancellation was valid.

Decision: The appeal was dismissed, and the tenants were granted two months to comply with the Additional Rent Controller's order. No costs were awarded.

Facts:

Seven persons were prosecuted in a sessions court for various offenses, with the most serious being an offense under Section 307 of the Indian Penal Code (IPC). The trial resulted in the acquittal of all the accused. While the Sessions Judge acquitted the accused based on the lack of belief in the prosecution's eyewitness testimony, the judge also expressed concern about the quality of the investigation and highlighted the delay in dispatching the First Information Report (FIR) to the magistrate.

The State of Karnataka filed a petition for leave to appeal against the acquittal. The Division Bench of the Karnataka High Court, while refusing leave, made sweeping observations unrelated to the case, including remarks about murders, atrocities against women, harassment of young married women, and molestation and rape of girls and young women. The High Court also made disparaging remarks about the state police department.

Issues:

Whether the High Court's observations, which extended beyond the scope of the case, were justified and whether it was appropriate to direct the State Public Prosecutor, Home Minister, and Home Secretary to report on their reactions to these observations.

Held:

The Supreme Court held that the High Court's observations were uncalled for and went beyond the scope of the case. The Court emphasized that judicial decisions should confine themselves to the facts and legal points of the case being considered. Making sweeping generalizations and disparaging remarks about persons or authorities should be avoided unless there is evidence on record justifying such remarks and it is necessary for the decision of the case. The Court cited previous judgments to support the principle that judicial pronouncements should maintain sobriety, moderation, and reserve.

The directions issued to the State Public Prosecutor, Home Minister, and Home Secretary were set aside.

Facts:

The case revolves around a property dispute stemming from a registered settlement deed executed by Muthuswamy Pillai in favor of Papammal and her children. The plaintiff, Venugopal Pillai, sought a share in the property based on the terms of the settlement deed. Defendant No. 1, Singaravaelu Pillai, contended that a subsequent oral arrangement in 1941 had modified the settlement deed's terms, granting him exclusive rights to the property.

Issues:

Whether parol evidence can be admitted to prove a subsequent oral arrangement that rescinds or modifies the terms of a registered settlement deed.

Whether the document in question is a settlement deed or a will.

Held:

The court interpreted Section 92 of the Evidence Act, which restricts the admission of parol evidence to contradict, vary, add to, or subtract from the terms of a written document. Proviso (4) to Section 92 allows the proof of distinct subsequent oral agreements that rescind or modify a contract, grant, or disposition of property, except in cases where such documents are required to be in writing or have been registered.

The court held that the subsequent oral arrangement set up by the defendant-appellant could not be proved by parol evidence. This was because the settlement deed in question, Ex. A/1, was required by law to be in writing for its efficacy. Parol evidence was not admissible to modify or alter such a written document. Furthermore, the terms of a registered document can only be altered, rescinded, or varied by another registered document.

The argument that Ex. A/1 was a will and not a settlement deed was rejected by the court, as both parties had initially agreed before the trial court that it was indeed a settlement deed.

The court stated that the plaintiff and defendants had agreed that Ex. A/1 was a settlement deed, and therefore, it could not entertain the argument that it was a will.

The appeal was dismissed, affirming the High Court's decision that parol evidence was not admissible to modify the terms of the registered settlement deed, primarily because it was required by law to be in writing. The court also stated that there would be no order as to costs.

Facts:

FL.1 and FL.3 license holders purchased liquor from the Kerala State Beverages (Manufacturing and Marketing) Corporation Ltd.

The excise duty had already been paid by the Corporation when the liquor was issued from the bonded warehouse.

The government sought to collect the increased excise duty from these license holders for unsold stock as of April 1, 1996, following the excise duty rate hike.

Issues:

Whether the proviso to Section 18(3) of the Kerala Abkari Act allows the government to collect the increased excise duty from FL.1 and FL.3 license holders.

Held:

The Supreme Court held that Section 18(3) could not be applied to FL.1 and FL.3 license holders who were not originally obligated to pay excise duty. The proviso to Section 18(3) allowed the government to collect the increase in excise duty from specific license holders, and the Act did not permit the imposition of excise duty on stockists, retailers, or FL.3 license holders.

The appeals were allowed, the Division Bench's decision was set aside, and the Single Judge's judgment in favor of the FL.1 and FL.3 license holders was reinstated.

Final Result : Allowed

Facts:

The Central Bank of India filed a suit to recover a certain amount from the Associated Timber Industries and others. The defendants objected to the suit's maintainability, arguing that the bank, being a 'money-lender,' had not been registered under the Assam Money Lenders Act. They contended that the suit couldn't proceed without a registration certificate.

Issues:

Whether the Central Bank of India falls under the definition of a 'money-lender' as per the Assam Money Lenders Act. This question had significant implications for the suit's maintainability.

Held:

The Supreme Court interpreted the relevant provisions of the Assam Money Lenders Act, 1934, and the Banking Regulation Act, 1949, to determine the status of the Central Bank of India. The Court emphasized the distinction between banking activities and money-lending activities, noting that banks engage in a wide range of financial activities, are regulated by specific legislation, and are subject to the regulatory control of the Reserve Bank of India.

The Court held that banks, including the Central Bank of India, do not fall within the purview of the Assam Money Lenders Act. Therefore, the suit filed by the bank was considered maintainable, and the appeal by the appellants was dismissed with costs.

Facts:

Bharat Earth Movers had two categories of employees, "staff" and "officers," with different leave entitlements.

Employees could accumulate earned or vacation leave, with a maximum limit.

Employees had the option to either use their leave or seek encashment.

In the assessment year 1978-79, Bharat Earth Movers made a provision of Rs. 62,25,483 for encashment of accrued leave.

The company claimed this provision as a deduction.

Issues:

The central issue was whether the provision made for meeting the liability for encashment of earned leave by employees was an admissible deduction for income tax purposes.

Specifically, the question was whether this liability was a certain, accrued liability or a contingent one.

Held:

The appellant argued that the liability is certain. Provision was made to meet the liability to the extent of employee entitlement to accumulate leave, subject to maximum limits. Whether the amount was paid as salary from the current year's profit and loss account or from the reserve, it would not make any practical difference. In either case, the liability was certain.

The law was cited, stating that if a business liability has arisen in the accounting year, it should be allowed as a deduction, even if it needs to be quantified and discharged at a future date. The liability must be certain and capable of being estimated with reasonable certainty.

Citing relevant precedents, the court confirmed that the liability was not contingent. The court held that the provision made by the company for meeting the liability incurred under the leave encashment scheme, subject to the ceiling on accumulation, was entitled to deduction from the gross receipts for the accounting year.

The court expressed dissatisfaction with the Income Tax Appellate Tribunal's delay in complying with its directions to provide a supplementary statement of the case based on the appellant's books of account and other records. The court reminded the Tribunal of its obligation to act in aid of the Supreme Court and called for more responsiveness and sensitivity to the court's directions.

REFERRED CASES:

Metal Box Company of India Ltd. Vs. Their Workmen, AIR 1969 SC 612 : (1969) 39 CompCas 410 : (1969) 18 FLR 336 : (1969) 73 ITR 53 : (1969) 1 LLJ 785 : (1969) 1 SCR 750

Calcutta Company Ltd. Vs. The Commissioner of Income Tax, West Bengal, (1959) 37 ITR 1 : (1960) 1 SCR 185

Facts:

The appellant, The K.C.P. Limited, was engaged in the manufacturing and sale of sugar and other products and maintained its accounts under the mercantile system of accounting.

In the assessment year 1972-1973, the government had fixed the levy price of sugar, but the appellant challenged this price ceiling through a writ petition in the High Court.

The High Court passed an interim order that allowed the appellant to sell sugar at a higher rate than the government's authorized price, pending further orders.

Issues:

Whether the excess amount collected by the appellant in the sale of sugar constituted a trading receipt subject to taxation.

Whether the appellant's arguments regarding the disputed nature of the amount and its accounting treatment were valid.

Held:

The excess amount collected by the appellant in the sale of sugar was deemed a trading receipt. It was collected in the regular course of the company's business activities and was considered the price of sugar sold. The court emphasized that the nature of the receipt, not its accounting treatment, was decisive in determining its taxability.

The court rejected the appellant's argument that the amount should not be considered a trading receipt due to disputes and separate accounting. It held that maintaining a separate account did not alter the real nature of the receipts if they were indeed trading receipts.

The court noted that the eventual transfer of the excess amount to a government fund in 1997 did not affect its taxability for the assessment year 1972-1973.

The court cited various precedents and legal principles to support its conclusion that the excess amount constituted a trading receipt. It further clarified that if such amounts are later refunded or paid to the government, the taxpayer can claim deductions accordingly.

In summary, the court found no merit in the appellant's arguments and upheld the High Court's decision, dismissing the appeal with costs.

Facts:

The appellant, originally of Indian origin, had settled in Malaysia in 1941 and acquired Malaysian citizenship.

The appellant's wife and children resided in India.

The appellant had financial interests, including agricultural land, house property, and bank investments, in India.

The appellant stayed in India from June 13, 1982, to April 14, 1985, with his wife for medical treatment.

For Assessment Years 1983-84 and 1984-85, the appellant claimed that the interest accrued on the credit balance in his Non-Resident (External) Account should be exempt from income tax.

Issues:

Whether the appellant should be considered a resident outside India as defined in Section 2(q) of FERA.

Whether the interest income in the Non-Resident (External) Account is exempt from income tax under Section 10(4A) of ITA.

Held:

Section 2(p)(iii)(c) of FERA, which deals with stay with a spouse, requires a degree of permanence in the stay, indicating residence with the spouse rather than a brief visit.

Casual or short-term stays should not be considered for determining residency status as it would undermine the purpose of Non-Resident (External) Accounts.

Consequently, the appellant cannot be treated as a person resident in India during the relevant period.

The appellant should be treated as a person resident outside India as per Section 2(q) of FERA.

As a result, the court set aside the High Court's order, answered the relevant question in favor of the appellant, and allowed the appeals.