Societies Registration Act - Applicability - Exemption of Religious Societies - Tamil Nadu Societies Registration Act, 1975Civil appeal challenging the High Court's dismissal of a writ petition seeking exemption from the 1975 Act – TELC, a society promoting religion, registered under the 1860 Act – Section 4(3) of the 1975 Act exempts societies promoting religion from compulsory registration – Section 53 deems societies registered under the 1860 Act to be registered under the 1975 Act, but interpretation must exclude religious societies – Court holds that the 1975 Act does not apply to TELC, and therefore, the entire litigation is without basis. [Paras 18-24]

Effect of Section 53 of the Tamil Nadu Societies Registration Act, 1975 - Interpretation - Societies Promoting ReligionHeld – Section 53 must be interpreted to exclude societies promoting religion from being deemed registered under the 1975 Act – Inclusion would violate Article 14 of the Constitution, creating an unreasonable classification – Appeal allowed, High Court's judgment set aside, TELC not governed by the 1975 Act. [Paras 22-23]

Decision – Applicability of 1975 Act to TELC - Interpretation Avoiding Constitutional ViolationHeld – The 1975 Act does not apply to TELC as it promotes religion, falling under Section 4(3) exemption – Continuing proceedings against TELC under the 1975 Act is unwarranted – Appeal allowed, High Court's judgment set aside – No order as to costs. [Paras 23-26]

Referred Cases:

Ramanarayan Popli v. CBI (2003) SCC (Crl.) 869

P.K. Narayanan v. State of Kerala (1995) 1 SCC 142

Mohd. Naushad v. State (NCT of Delhi) 2023 SCC Online SC 784

Hari and Anr. v. State of UP 2021 SCC Online SC 1131

Koli Lakhmanbhai Chanabhai v. State of Gujarat (1999) 8 SCC 624

State through Superintendent of Police v. Nalini & Ors. (1999) 5 SCC 253

Yakub Abdul Razak Memon v. State of Maharashtra (2013) 13 SCC 1

Arvind Singh v. State of Maharashtra (2021) 11 SCC 1

State of Haryana v. Krishan (2017) 8 SCC 204

Phula Singh v. State of Himachal Pradesh AIR 2014 SC 1256

Indrakunwar v. State of Chhattisgarh 2023 SCCOnline 1364

Chandran v. State of Kerala (2011) 5 SCC 161

P.N. Krishna Lal v. Govt. of Kerala 1995 Supp (2) SCC 187

Mekala Sivaiah v. State of A.P. (2022) 8 SCC 253

Ravasaheb and Ors. v. State of Karnataka (2023) 5 SCC 391

Excise Law – Retrospective Amendment – Recovery Orders – Natural Justice – Appeals against High Court judgment affirming recovery orders issued by Assistant Commissioner without show-cause notice – Retrospective amendment of notifications by Finance Act, 2003, necessitated recovery of excise duty refunds previously granted – Assessee argued violation of natural justice for lack of notice – Supreme Court declined to interpret necessity of notice but found High Court improperly assessed factual issues – Directed Assessee to deposit specified amounts and pursue statutory appeals. [Paras 1-13]

Principles of Natural Justice – Recovery Without Notice – Analysis – Held – Assessee's contention on violation of natural justice not adjudicated as it was not argued before the High Court – High Court's factual assessment found improper; appellate mechanism under Central Excises and Salt Act, 1944, should address both law and factual disputes. [Para 9-11]

Decision – Partial Allowance of Appeals – Court allowed appeals in part – Set aside High Court's judgment – Directed Assessee to deposit specific sums before adjudicating authority – Ordered statutory appeals to be filed and decided within three months – Directed return of bank guarantees upon compliance. [Paras 11-13]

Referred Cases:R.C. Tobacco Pvt. Ltd. and Another vs. Union of India (UOI) (2005) 7 SCC 725East India Commercial Co. Ltd. vs. Collector of Customs 4 SCR 361

Negotiable Instruments Act - Section 138 - Jurisdiction of Magistrate - Criminal appeals against High Court order remitting the matter back to the Magistrate to dispose of criminal complaints expeditiously - High Court based its judgment on the authority of K. Bhaskaran v. Sankaran Vaidhyan Balan - Supreme Court reverses High Court decision following Dashrath Rupsingh Rathod v. State of Maharashtra - Presentation of cheque for collection or issuance of a notice does not confer jurisdiction on courts where the cheque is presented or notice issued - Appeals allowed - High Court order set aside - Orders of Revisional Court restored. [Paras 1-5]

Jurisdiction of Magistrate - Analysis - Presentation of cheque and issuance of notice insufficient to confer jurisdiction - Reiterates necessity of examining specific provisions under Section 138 for establishing proper jurisdiction - Decisions in K. Bhaskaran and Dashrath Rupsingh Rathod examined to resolve jurisdictional disputes - High Court's reliance on K. Bhaskaran found erroneous post-Dashrath Rupsingh Rathod ruling. [Para 4]

Decision - Appeals Allowed - Orders of High Court set aside - Orders of Revisional Court restored - Supreme Court clarifies jurisdictional requirements under Section 138 of the Negotiable Instruments Act - Parties to bear their own costs. [Para 5]

Referred Cases:

K. Bhaskaran v. Sankaran Vaidhyan Balan, AIR 1999 SC 3762

Dashrath Rupsingh Rathod v. State of Maharashtra, (2014) 9 SCC 129

Harman Electronics (P) Ltd. v. National Panasonic India Ltd., (2009) 1 SCC 720

SUPREME COURT OF INDIA

FULL BENCH

M/S K.K. POLYCOLOR INDIA LTD. & ORS — AppellantVs.GLOBAL TRADE FIN. LTD.& ANR — Respondent

( Before : V. Gopala Gowda, J; T.S. Thakur, J; C. Nagappan, J )

Criminal Appeal No. 1914 of 2014 (Arising out of S.L.P. (Crl.) No. 690 of 2011), Criminal Appeal No. 1915 of 2014 (Arising out of S.L.P. (Crl.) No. 718 of 2011) and Criminal Appeal No. 1916 of 2014 (Arising out of S.L.P. (Crl.) No. 749 of 2011)

Decided on : 04-09-2014

Negotiable Instruments Act, 1881 (NI) - Section 138

Cases Referred

K. Bhaskaran Vs. Sankaran Vaidhyan Balan and Another, AIR 1999 SC 3762 : (2005) 3 BC 158 : (2000) 99 CompCas 268 : (1999) CriLJ 4606 : (1999) 3 Crimes 212 : (1999) 3 CTC 358 : (1999) 7 JT 558 : (2000) 124 PLR 113 : (1999) 6 SCALE 272 : (1999) 7 SCC 510 : (1999) 3 SCR 271 Supp : (1999) 2 UJ 1529 : (1999) AIRSCW 3809 : (1999) 8 Supreme 608

Dashrath Rupsingh Rathod Vs. State of Maharashtra, (2014) AIRSCW 4798 : (2014) 3 BC 513 : (2014) 9 SCALE 97 : (2014) 9 SCC 129

Harman Electronics (P) Ltd. and Another Vs. National Panasonic India Ltd., (2009) 2 AD 21 : AIR 2009 SC 1168 : (2009) 1 CompLJ 29 : (2009) CriLJ 1109 : (2008) 13 JT 671 : (2009) 153 PLR 525 : (2008) 16 SCALE 317 : (2009) 1 SCC 720 : (2009) AIRSCW 410

Final Result : Allowed

Service Law – Determination of Seniority – Promotees vs. Direct Recruits – Civil Appeal challenging the seniority granted to promotees over direct recruits in the West Bengal Forest Service – Appeal dismissed on grounds that promotees' delay was caused by a court's interim order restraining their promotion – The Public Service Commission's recommendation for retrospective seniority was upheld based on Rule 6(2) of the West Bengal Services (Determination of Seniority) Rules, 1981. [Paras 1-7]

Legal Precedent – Reference to U.D. Lama case – Supreme Court's previous ruling in U.D. Lama and Others v. State of Sikkim and Others applied – Promotes' claim for seniority due to administrative delay and court orders justified – Promotees en-bloc seniority to direct recruits upheld as per Rule 6(2) of the 1981 Rules. [Para 2, 5]

Interim Orders – Impact on Promotion Process – Interim order restrained the processing of promotions – Stay vacated, allowing the promotion process to resume – Promotees granted notional seniority from the date the interim order was lifted – Judicial intervention acknowledged as a valid reason for the delay in promotions. [Paras 4-5]

Decision – Dismissal of Civil Appeal – Court dismisses the appeal, maintaining the seniority list favoring promotees – The appeal deemed unnecessary to be referred back to the two-Judge Bench – No order as to costs. [Para 7]

Referred Cases:

U.D. Lama and Others v. State of Sikkim and Others, (1996) 9 AD 544: (1997) 1 SCC 111

Arbitration Law - Non-speaking Award - Interpretation of "Findings" - Clause 70 of the General Conditions of Contract requires the Arbitrator to indicate his "findings" along with sums awarded on each individual item of dispute. The Supreme Court clarifies that "findings" include reasons for the conclusions reached by the Arbitrator. This ensures the adjudicatory process is transparent and reasoned. The High Court's decision to set aside the award and remit the matter back to the Arbitrator for fresh determination is upheld. [Paras 1-16]

Arbitration Law - Obligation to Give Reasons - The Supreme Court underscores that under Section 31(3) of the Arbitration and Conciliation Act, 1996, the requirement to provide reasons for the award is mandatory unless parties agree otherwise. This ensures fairness and accountability in arbitral decisions. The decision of the High Court to direct the Arbitrator to make a reasoned award in terms of the 1996 Act is correct. [Para 9]

Decision - Appeal Dismissed - The appeal by Anand Brothers P. Ltd. is dismissed. The Arbitrator is directed to conclude the proceedings expeditiously under the provisions of the Arbitration Act, 1940, as stipulated by the High Court. If the appointed Arbitrator is unable to proceed, a new Arbitrator should be appointed within six weeks to conclude the proceedings. [Paras 17-21]

Referred Cases:

Gora Lal v. Union of India (2003) 12 SCC 459

Build India Construction System v. Union of India (2002) 5 SCC 433

Raipur Development Authority v. M/s. Chokhamal Contractors (1989) 2 SCC 721

Rama Krishna Ramanath v. The Janpad Sabha, Gondia, AIR 1962 SC 1073

Daffadar Bhagat Singh and Sons v. The Income Tax Officer, A-Ward, Ferozepore, AIR 1969 SC 340

Ghanshyam Dass and Others v. Dominion of India and Others, AIR 1984 SC 1004

Srinivasa Enterprises v. Union of India, AIR 1981 SC 504

Bhanji Bagawandas v. Commissioner of Income Tax, Madras, AIR 1968 SC 139

Reserve Bank of India v. Peerless General Finance and Investment Co. Ltd., (1987) 1 SCC 424

Yogendra Nath Naskar v. Commissioner of Income Tax, Calcutta, AIR 1969 SC 1089

Rajinder Nath v. Commissioner of Income Tax, Delhi, AIR 1979 SC 1933

Criminal Law - Intersection of Statutes - Criminal Appeals against various High Court orders regarding prosecutions under the MMDR Act and IPC for illegal mining activities. The Supreme Court clarified that offences under the MMDR Act do not preclude prosecution under the IPC. Specifically, it was held that while Section 22 of the MMDR Act restricts courts from taking cognizance of offences under the Act without a complaint from an authorized officer, this does not bar prosecution for offences under the IPC, such as theft of minerals. [Paras 1-72]

Jurisdiction of Police - Registration of FIR - Held - The police are not barred from registering FIRs and investigating offences under the IPC even if the acts also constitute violations of the MMDR Act. The court emphasized the importance of addressing illegal mining activities promptly and effectively. [Para 66-67]

Prosecution under Multiple Statutes - Double Jeopardy - Analysis - The court discussed the principle of double jeopardy and concluded that prosecution for offences under the IPC in addition to offences under the MMDR Act does not constitute double jeopardy as the offences are distinct and involve different elements. [Paras 50-72]

Decision - Validity of Dual Prosecutions - Court held that dual prosecutions under the MMDR Act and IPC are permissible. The court directed lower courts to proceed accordingly and rejected the contention that the MMDR Act provisions provide an absolute bar against prosecution under the IPC for related illegal mining activities. [Para 72]

Referred Cases:

Smt. Seema Sarkar Vs. The State, (1995) 1 CALLT 95

Sengol, Charles and K. Kannan Vs. State, (2012) CriLJ 1705

M. Palanisamy Vs. The State of Tamil Nadu and Others, (2012) 4 CTC 1

Jeewan Kumar Raut and Another Vs. Central Bureau of Investigation, AIR 2009 SC 2763

M.C. Mehta Vs. Kamal Nath and Others, (1997) 1 SCC 388

State of Bihar Vs. Murad Ali Khan and Others, AIR 1989 SC 1

Maqbool Hussain Vs. The State of Bombay, AIR 1953 SC 325

Manohar Lal Sharma Vs. The Principal Secretary and Others, AIR 2014 SC 666

V.K. Agarwal, Assistant Collector of Customs Vs. Vasantraj Bhagwanji Bhatia and Others, AIR 1988 SC 648

H.N. Rishbud and Inder Singh Vs. The State of Delhi, AIR 1955 SC 196

T.S. Baliah Vs. T.S. Rengachari, AIR 1969 SC 701

Centre for Public Interest Litigation and Others Vs. Union of India (UOI) and Others, AIR 2013 SC 3725

Avtar Singh Vs. State of Punjab, AIR 1965 SC 666

Leo Roy Frey Vs. The Superintendent, District Jail, Amritsar and Another, AIR 1958 SC 119

The State of Bombay Vs. S.L. Apte and Another, AIR 1961 SC 578

State of Madhya Pradesh and Others Vs. Shri Ram Singh, AIR 2000 SC 870

Thakur Pratap Singh Vs. Shri Krishna Gupta and Others, AIR 1956 SC 140

State of Rajasthan Vs. Hat Singh and Others, AIR 2003 SC 791

H.S. Bains, Director, Small Saving-Cum-Deputy Secretary Finance, Punjab, Chandigarh Vs. State (Union Territory of Chandigarh), AIR 1980 SC 1883

The State of Uttar Pradesh and Others Vs. Babu Ram Upadhya, AIR 1961 SC 751

Directorate of Enforcement Vs. Deepak Mahajan and another, AIR 1994 SC 1775

The Institute of Chartered Accountants of India Vs. Vimal Kumar Surana and Another, AIR 2010 SC 4926

Intellectuals Forum, Tirupathi Vs. State of A.P. and Others, AIR 2006 SC 1350

Arbitration Law - Delay in Contract Performance - Attribution of Responsibility - Civil Appeal arising out of arbitral award regarding delay in the delivery of a vessel upgraded with hydrophones. The key issue was determining which party was responsible for the delay from 9th July 2001 to 6th May 2002. The Supreme Court partially allowed the appeal by modifying the period of delay attributed to the appellant and affirming deductions made for certain intervals. [Paras 1-33]

Contractual Obligations - Force Majeure - Held that the respondent's invocation of force majeure due to delay in obtaining a U.S. license for hydrophones was not justified as the requirement for such a license was not a part of the contractual obligations. The arbitrators' finding that the period from 1st November 2001 to 21st March 2002 was not entirely attributable to the appellant was modified, reducing the appellant's attributed delay by 56 days. [Para 20-23]

Tax Deductions - Applicability Under Indian Income Tax Law - The Tribunal rightly held that no taxes were payable under the Indian Income Tax Act for the work executed in Singapore, rejecting the appellant's deductions for alleged non-payment of taxes. [Paras 32-33]

Public Policy - Arbitral Award - Judicial Review - Reiterated that an arbitral award can be set aside if it is contrary to the public policy of India, including situations of patent illegality or irrationality. The court found that the arbitrators' attribution of the entire period of delay to the appellant resulted in a miscarriage of justice. [Paras 24-31]

Decision: The Supreme Court allowed the appeal to the extent of reducing the period of delay attributed to the appellant by 56 days, modifying the arbitral award with a proportionate reduction in the amount payable to the respondent. The challenge regarding tax deductions was rejected. No costs. [Paras 33]

Referred Cases:

Associated Cement Companies Ltd. Vs. P.N. Sharma and Another, AIR 1965 SC 1595

Oil and Natural Gas Corporation Ltd. Vs. SAW Pipes Ltd., AIR 2003 SC 2629

Negotiable Instruments Act, 1881 - Section 138 - Territorial Jurisdiction - Criminal Appeals - Presentation of a cheque by the complainant in a bank at a location different from where the cheque was issued does not confer jurisdiction upon the courts at the place of presentation to entertain a complaint under Section 138 of the NI Act. The appeals challenged the High Court’s decision that the courts at Kayamkulam, Kerala, lacked territorial jurisdiction as the cheque was drawn on a bank in Karnataka. [Paras 2-4]

Jurisdiction - Presentation of Cheque - Held - The presentation of a cheque at a bank in Kerala and the issuance of a notice by the complainant from Kerala do not by themselves confer jurisdiction on the courts at Kerala. The courts where the cheque was presented or the notice was issued do not have jurisdiction unless the cheque was issued or dishonoured at the same place. This view is supported by the precedent set in Dashrath Rupsingh Rathod v. State of Maharashtra and Harman Electronics (P) Ltd. v. National Panasonic India Ltd. [Para 4]

Decision - Appeals Dismissed - The Supreme Court affirmed the High Court's order, dismissing the appeals and holding that the courts at Kayamkulam, Kerala, had no territorial jurisdiction. The complaints were rightly returned by the Magistrate to be filed before the appropriate court. The decision in Dashrath Rupsingh Rathod's case was followed. [Paras 4-5]

Referred Cases:

Dashrath Rupsingh Rathod v. State of Maharashtra, (2014) 9 SCC 129

Harman Electronics (P) Ltd. and Another v. National Panasonic India Ltd., (2009) 1 SCC 720

Criminal Law - Jurisdiction - Territorial Jurisdiction in NI Act Cases - High Court exercised its jurisdiction under Article 226 of the Constitution of India and Section 482 of the CrPC to direct the return of complaints filed under Section 138 of the Negotiable Instruments Act. The complaints were pending in Courts of Metropolitan Magistrates in Delhi, where cognizance was taken solely on the basis of statutory notices being issued from Delhi. [Paras 2-7]

NI Act, 1881 - Section 138 - Territorial Jurisdiction - Held, issuing a statutory notice from Delhi does not confer jurisdiction on Delhi courts. The jurisdiction is determined by the location of the drawee bank that dishonoured the cheque. The Supreme Court affirmed the High Court's decision, emphasizing the principle that the place of dishonour dictates the jurisdiction. [Para 6]

Extraordinary Jurisdiction - High Court’s Power - Held, the High Court’s direction for the return of complaints to the courts of competent jurisdiction was valid. This was to manage docket overload and ensure that courts without proper jurisdiction do not entertain such complaints, adhering to the principles laid out in previous decisions like Harman Electronics (P) Ltd. vs. National Panasonic India Ltd. and Dashrath Rupsingh Rathod vs. State of Maharashtra. [Paras 2-3, 5-6]

Decision - Appeals Dismissed - The Supreme Court dismissed the appeals, holding that the High Court correctly directed the return of complaints filed under Section 138 NI Act to the competent jurisdictional courts. The appeals were dismissed with no order as to costs. [Paras 6-7]

Referred Cases:

Adalat Prasad vs. Rooplal Jindal and Others, (2004) 7 SCC 338

Air India Statutory Corporation vs. United Labour Union, AIR 1997 SC 645 (overruled)

Dwarka Nath vs. Income Tax Officer, AIR 1966 SC 81

K. Bhaskaran vs. Sankaran Vaidhyan Balan, AIR 1999 SC 3762

Dashrath Rupsingh Rathod vs. State of Maharashtra, (2014) 9 SCC 129

Harman Electronics (P) Ltd. vs. National Panasonic India Ltd., (2009) 1 SCC 720