Proof of travel not required for claiming LTA: SC

IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.993 OF 2005
COMMISSIONER OF INCOME TAX & ANR. ...APPELLANT (S)
VERSUS
M/S LARSEN & TOUBRO LTD. ...RESPONDENT(S)
WITH
CIVIL APPEAL NO. 992 OF 2005
O R D E R
A short question which arises for determination in these Civil Appeal(s) is –
whether the assessee(s) was under statutory obligation under Income Tax Act, 1961, and/or
the Rules to collect evidence to show that its employee(s) had actually utilized the amount(s)
paid towards Leave Travel Concession(s)/Conveyance Allowance?

It may be noted that the beneficiary of exemption under Section 10(5) is an
individual employee. There is no circular of Central Board of Direct Taxes (CBDT) requiring the employer under Section 192 to collect and examine the supporting evidence to the Declaration to be submitted by an employee(s).
For the above reasons there is no merit in the Civil Appeals and the same are
dismissed with no order as to costs.
....................J.
[ S.H. KAPADIA ]
New Delhi, ....................J
January 21, 2009 [ AFTAB ALAM ]

beyond the reference

If the arbitrator decides a dispute which is beyond the scope of his reference or beyond the subject-matter of the reference or he makes the award disregarding the terms of reference or the arbitration agreement or terms of the contract, it would be a jurisdictional error beyond the scope of reference; he cannot clothe himself to decide conclusively that dispute as it is an error of jurisdiction which requires to be ultimately decided by the Court.

Beyond the scope of reference

If the arbitrator decides a dispute which is beyond the scope of his reference or beyond the subject matter of the reference or he makes the award disregarding the terms of reference or the arbitration agreement or terms of the contract, it would jurisdictional error beyond the scope of reference, he cannot clothe himself to decide conclusively that dispute as it is an error of jurisdiction which requires to be ultimately decided by the court

territorial jurisdiction issue

Both the appellant Board, having its base and operation at Jaipur and the respondent Company, having its registered office and manufacturing unit at Calcutta entered into an agreement having following clause:
"30.....The contract shall for all purposes be construed according to the laws of India and subject to jurisdiction of only at Jaipur in Rajasthan Courts only..........."
Somehow the disputes arose between the parties. The respondent company approcached the Hon'ble High Court at Calcutta. Somehow matter came before Hon'ble Supreme Court. Hon'ble Court referring its earlier judgments confirm the view expressed in Hanil Era Textiles Ltd. v. Puromatic Filters (P) Ltd. [(2004) 4 SCC 671], it was held by this Court that where two or more courts have jurisdiction under the Code, it is permissible to have an agreement between the parties restricting the place of suing to any one of them and if such restriction is placed in the agreement, the same cannot be said to be contrary to public policy and does not contravene Section 28 of the Contract Act. It was however, made clear that such restriction cannot be made and the parties cannot by agreement confer jurisdiction on a court which otherwise it does not possess under the Code.

the matter in respect of which the respondent sought reference to arbitration was "excepted matter" in terms of

the following principlesrelating to "Excepting matters" as under :- "1. These appeals by the grant of Special Leave pertains to the effect of the usual `excepted clause' vis-`-vis the arbitration clause in a Government contract. While it is true and as has been contended, that the authorization of the arbitrators to arbitrate, flows from the agreement but the High Court in the judgment impugned thought it fit to direct adjudication of `excepted matters' in the agreement itself by the arbitrators and hence these appeals before this Court. 2. At the outset, it is pertinent to note that in the usual Government contracts, the reference to which would be made immediately hereafter, there is exclusion of some matters from the purview of arbitration and a senior officer of the Department usually is given the authority and power to adjudicate the same. The clause itself records that the decision of the senior officer, being the adjudicator, shall be final and binding between the parties - this is what popularly known as `excepted matters' in a Government or Governmental agencies' contract. 3. `Excepted matters' obviously, as the parties agreed, do not require any further adjudication since the agreement itself provides a named adjudicator - concurrence to the same obviously is presumed by reason of the unequivocal acceptance of the terms of the contract by 11 the parties and this is where the courts have found our lacking in its jurisdiction to entertain an application for reference to arbitration as regards the disputes arising therefrom and it has been the consistent view that in the event the claims arising within the ambit of excepted matters, question of assumption of jurisdiction of any arbitrator either with or without the intervention of the court would not arise; the parties themselves have decided to have the same adjudicated by a particular officer in regard to these matters; what are these exceptions however are questions of fact and usually mentioned in the contract documents and forms part of the agreement as such there is no ambiguity in the matter of adjudication of these specialized matters and termed in the agreement as the excepted matters....."

REQUIREMENT OF rule 4 order 37 cpc

Where on an application, more than one among the specified reliefs
may be granted by the Court all such reliefs must be claimed in one application. It
is not permissible to claim such reliefs in successive petitions as it would be
contrary to the letter and spirit of the provision. That is why where an application
under Rule 4 of Order 37 is filed to set aside a decree either because the defendant
did not appear in response to summons and limitation expired, or having appeared,
did not apply for leave to defend the suit in the prescribed period, the Court is
empowered to grant leave to defendant to appear to the summons and to defend the
suit in the same application. It is, therefore, not enough for the defendant to show
special circumstances which prevented him from appearing or applying for leave
to defend, he has also to show by affidavit or otherwise, facts which would entitle
him leave to defend the suit. In this respect, Rule 4 of Order 37 is different from
Rule 13 of Order 9.”





Indeed, an application under Order 37 Rule 4 CPC differs vis-a- vis an
application under Order 9 Rule 13 CPC for the reason an application under Order
37 Rule 4 CPC is a composite application determination whereof, if in favour of
the applicant, results in not only the ex-parte decree being set aside but leave to
defend being granted to the party concerned. It is for this reason law requires that
the defendant, in addition to show special circumstances which prevented him/her
from appearing, must additionally disclose facts entitling him/her to obtain leave to
defend.

Service of notice/summons U/O 37 CPC

O. 37 CPC specifically provides that in a suit under O. 37 CPC, the plaintiff shall together with the summons under Rule 2, serve the defendant with a copy of the plaint and annexure thereto. Thus where only summons have been affixed without affixing copy of the plaint and annexures thereto, the service is not in accordance with the provisions of O. 37 Rule 3 (1) CPC and this would be a sufficient ground to set aside the decree. The same view is taken by another bench of this Court in the case of New Bank of India Vs. M/s Master Steel Marketing Co.-1995 III AD (Delhi) 957. It was a case of the substituted service. It was held that where only copy of summons was published without publishing copy of the plaint and annexures there to, the service was not in accordance with law.

ORDER 37 RULE 3 (4 & 5) of C P C.

The question as to whether leave to defend a suit can be granted or not is within the discretionary powers of the High Court and it does not appear to us that such discretion has been exercised erroneously or with any irregularity which warrants interference by this Court.


it is now well established as a principle of law that even if a wrong order is passed by a Court having jurisdiction to pass an order in such cases, the revisional Court will not interfere with such an order unless a jurisdictional error is pointed out and established by the person who questions such order.

In the instant case, the High Court did not lack jurisdiction to pass an order with regard to the subject matter of dispute, though the order itself may be incorrect. There is, therefore, little scope for this Court to interfere with.

Whether quashing of FIR/criminal proceedings/complaint be allowed

The question whether a F I R under Sections 420/468/471/34/120-B IPC can be quashed either under Section 482 of the Code of Criminal Procedure or under Article 226 of the Constitution, when the accused and the complainant have compromised and settled the matter between themselves ?


We, accordingly, allow the appeal and set aside the order of the High Court and quash the criminal proceedings pending before Court.

MODE OF SERVICE

Admittedly, notice under Section 138B of theNegotiable Instruments Act was sent to therespondents through registered post and under acertificate of posting on their correct address of therespondents. The High Court had quashedproceeding on the ground that although noticethrough registered post and also under certificate ofposting were sent by the appellant/ complainant tothe respondents but because of the endorsement ofthe postal peon, the service could not be said tohave been effected. In our view, the High Court wasnot justified in holding that service of notice couldnot be found to be valid. In K.Bhaskaran vs.Sankaran Vaidhyan Balan & Anr. [1999 (7) SCC510], it has been held that the context of section138B of the Negotiable Instruments Act invites aliberal interpretation favouring the person who hasthe statutory obligation to give notice under the Actbecause he must be presumed to be the loser in thetransaction and provision itself has been made in 3 his interest and if a strict interpretation is asked forthat would give a handle to the trickster chequedrawer. It is also well settled that once notice hasbeen sent by registered post with acknowledgmentdue in a correct address, it must be presumed thatthe service has been made effective. We do not findfrom the endorsement of the postal peon that thepostal peon was at all examined. In V. Raja Kumarivs. P. Subbarama Naidu & Anr. [2004 (8) SCC 774],again this Court reiterated the same principle andheld that the statutory notice under Sections 138and 142 of the Negotiable Instruments Act, 1881sent to the correct address of the drawer butreturning with the endorsement must be presumedto be served to the drawer and the burden to showthat the accused drawee had managed to get anincorrect postal endorsement letter on thecomplainant and affixed thereof have to beconsidered during trial on the background facts ofthe case.

arbitration clause

This appeal is directed against the Judgment and order for appointment of an Arbitrator on the ground that no Arbitration Clause was in existence between the parties.

It was held by the learned Addl. District Judge, that since the photocopy of the proposed agreement bears the signature of only the appellant and not that of the PGI, it could not be held that an arbitration agreement was executed between the parties and since there was no signature of the PGI on the said agreement, which was sent after signature of the appellant, remained only as an offer.

We may reiterate that in this case admittedly the documents which are on record apparently show supply of the material by the appellant to the PGI and acceptance thereof by the PGI in pursuance of the tender enquiry by them wherein tender of the appellant containing the arbitration clause was admittedly accepted by the PGI. Accordingly, we hold that arbitration agreement did exist and, therefore, dispute between the parties would be referred to an
Arbitrator for decision.

Therefore, considering the above aspects of the matter in this case, we must come to this conclusion that although no formal agreement was executed, the ender documents indicating certain conditions of contract contained an arbitration clause. It is also an admitted position that the appellant gave his tender offer which was accepted and the appellant acted upon it.

Insurance — whether a dispute raised by an insured, after giving a full and final discharge voucher to the insurer, can be referred to arbitration

When a contract contains an arbitration clause and any dispute in respect of the said contract is referred to arbitration without the intervention of the court, the Arbitral Tribunal can decide the following questions affecting its jurisdiction: (a) whether there is an arbitration agreement; (b) whether the arbitration agreement is valid; (c) whether the contract in which the arbitration clause is found is null and void and if so whether the invalidity extends to the Arbitration clause also.

It follows therefore that if the respondent before the Arbitral Tribunal contends that the contract has been discharged by reason of the claimant accepting payment made by the respondent in full and final settlement, and if the claimant counters it by contending that the discharge voucher was extracted from him by practicing fraud, undue influence, or coercion, the arbitral tribunal will have to decide whether the discharge of contract was vitiated by any circumstance which rendered the discharge voidable at the instance of the claimant. If the arbitral tribunal comes to the conclusion that there was a valid discharge by voluntary execution of a discharge voucher, it will refuse to examine the claim on merits, and reject the claim as not maintainable.

In what circumstances, a court will refuse to refer a dispute relating toquantum to arbitration, when the contract specifically provides forreference of disputes and differences relating to the quantum toarbitration?

a three Judge Bench of this Court culled out the following general principles as to when arbitration agreements operate and when they do not operate:

maintenance under Section 125 of the Code

Three questions arise for our consideration;

(i) whether interim maintenance could be awarded in absence of specific express provision in the Code;

(ii) whether the applicant-wife and her daughter are entitled to maintenance from the date of the order passed by the Family Court or from the date of application made by them under Section 125 of the Code; and

(iii) what could be the amount of maintenance which could be awarded by the
Court.

This appeal is filed against the order passed by

On the contentions raised, the following questions arise for our consideration : (i) Whether informed consent of a patient is necessary for surgical procedure involving removal of reproductive organs? If so what is the nature of such consent ?
(ii) When a patient consults a medical practitioner, whether consent given for diagnostic surgery, can be construed as consent for performing additional or further surgical procedure -- either as conservative treatment or as radical treatment -- without the specific consent for such additional or further surgery.
(iii) Whether there was consent by the appellant, for the abdominal hysterectomy and Bilateral Salpingo-oopherectomy (for short AH-BSO) performed by the respondent?
(iv) Whether the respondent had falsely invented a case that appellant was suffering from endometriosis to explain the unauthorized and unwarranted removal of uterus and ovaries, and whether such radical surgery was either to cover-up negligence in conducting diagnostic laparoscopy or to claim a higher fee ?
(v) Even if appellant was suffering from endometriosis, the respondent ought to have resorted to conservative treatment/surgery instead of performing radical surgery ?
(vi) Whether the Respondent is guilty of the tortious act of negligence/battery amounting to deficiency in service, and consequently liable to pay damages to the appellant

principles for grant or refusal to grant of injunction to restrain enforcement of a Bank Guarantee or a Letter of Credit

From the discussions made hereinabove relating to the principles for grant or refusal to grant of injunction to restrain enforcement of a Bank Guarantee or a Letter of Credit, we find that the following principles should be noted in the matter of injunction to restrain the encashment of a Bank Guarantee or a Letter of Credit :-
(i) While dealing with an application for injunction in the course of commercial dealings, and when an unconditional Bank Guarantee or Letter of Credit is given or accepted, the Beneficiary is entitled to realize such a Bank Guarantee or a Letter of Credit in terms thereof irrespective of any pending disputes relating to the terms of the contract.
(ii) The Bank giving such guarantee is bound to honour it as per its terms irrespective of any dispute raised by its customer.
(iii) The Courts should be slow in granting an order of injunction to restrain the realization of a Bank Guarantee or a Letter of Credit.
(iv) Since a Bank Guarantee or a Letter of Credit is an independent and a separate contract and is absolute in nature, the existence of any dispute between the parties to the contract is not a ground for issuing an order of injunction to restrain enforcement of Bank Guarantees or Letters of Credit.(v) Fraud of an egregious nature which would vitiate the very foundation of such a Bank Guarantee or Letter of Credit and the beneficiary seeks to take advantage of the situation.
(vi) Allowing encashment of an unconditional Bank Guarantee or a Letter of Credit would result in irretrievable harm or injustice to one of the parties concerned.

definition of Misconduct

CASE NO.: Appeal (civil) 6835 of 2000

PETITIONER:
Institute of Chartered Financial Analysts of India & Ors

RESPONDENT:
Council of the Institute of Chartered Accountants of India & Ors

DATE OF JUDGMENT: 16/05/2007
………………………………………………………….
Somewhere in this matter is held:
We are herein concerned with the term 'misconduct'. The word
'misconduct' which in generic sense would mean, as held in Probodh Kumar
Bhowmick v. University of Calcutta and Ors. 1994 (2) C.L.J. 456 is as
under:

"Misconduct, inter alia, envisages breach of discipline,
although it would not be possible to lay down
exhaustively as to what would constitute conduct and
indiscipline, which, however, wide enough to include
wrongful omission or commission whether done or
omitted to be done intentionally or unintentionally. It
means, 'improper behaviour; intentional wrong doing on
deliberate violation of a rule of standard or behaviour':

Misconduct is a transgression of some established and
definite rule of action, where no discretion is left except
what necessity may demand; it is a violation of definite
law a forbidden act. It differs from carelessness.
Misconduct even if it is an offence under the Indian
Penal Code is equally a misconduct."

[See also State of Punjab and Others v. Ram Singh Ex. Constable - AIR
1992 SC 2188 : (1992) 4 SCC 54 and B.C. Chaturvedi v. Union of India
(1995) 6 SCC 749].

Interpretation of law is the job of the superior court. An opinion of an
expert is not beyond the pale of judicial review. It would certainly not be so
when the statutory authority transgresses its jurisdiction. A decision taken in
excess of jurisdiction would render the same a nullity. [See Vasu Dev Singh
& Ors. v. Union of India & Ors. 2006 (11) SCALE 108]

If a notification issued under a statute is a law within the meaning of
Article 13(3)(a) of the Constitution, the same is liable to be struck down if it
is contrary to any of the fundamental rights guaranteed under the
Constitution of India. [See Indian Express Newspapers (Bombay) Private
Ltd. and Others v. Union of India and Others, (1985) 1 SCC 641]. In our
opinion the notification dated 03.08.1989 issued by respondent No.1 violates
Articles 14 and 19 (1) (g) of the Constitution and is hereby quashed.

What constitutes a reasonable notice by an arbitrator

For constituting a reasonable opportunity, the following conditions are required to be observed :

1. Each party must have notice that the hearing is to take place.
2. Each party must have a reasonable opportunity to be present at the hearing, together with his advisers and witnesses.
3. Each party must have the opportunity to be present throughout the hearing
4. Each party must have a reasonable opportunity to present evidence and argument in support of his own case.
5. Each party must have a reasonable opportunity to test his opponent's case by cross-examining his witnesses, presenting rebutting evidence and addressing oral argument.
6. The hearing must, unless the contrary is expressly agreed, be the occasion on which the parties present the whole of their evidence and argument.

Indian nationals should not be permitted to derogate from Indian law

Determination of nationality of the parties plays a crucial role in the matter of appointment of an arbitrator. A company incorporated in India can only have Indian nationality for the purpose of the Act. It cannot be said that a company incorporated in India does not have an Indian nationality. Hence, where both parties have Indian nationalities, then the arbitration between such parties cannot be said to be an international commercial arbitration.

Section 28 of the 1996 Act is imperative in character in view of Section 2(6) thereof, which excludes the same from those provisions which parties derogate from (if so provided by the Act). The intention of the legislature appears to be clear that Indian nationals should not be permitted to derogate from Indian law. This is part of the public policy of the country

a provision made in the agreement for referring the disputes to arbitration is not an effective substitute for a criminal prosecution when the dispute

What are the ingredients which constitute a criminal breach of trust to enable an aggrieved party to launch criminal proceedings against the accused? What is the effect of an arbitration clause in an Agreement when criminal proceedings have been initiated against the other parties to the Agreement?
Answer:
In Trisuns Chemical Industry vs. Rajesh Agarwal dealing with the effect of existence of arbitration clause in the Agreement on criminal prosecution on the ground that civil proceedings are also maintainable, the Supreme Court has held that quashing of FIR or a complaint exercising power under Section 482 CrPC should be limited to a very extreme exception; merely because an act has a civil profile is not enough to stop action on the criminal side. It was further held that a provision made in the agreement for referring the disputes to arbitration is not an effective substitute for a criminal prosecution when the disputed act constitutes a criminal offence.

the expression accidental falling of a passenger from a train carrying passengers

In our opinion, if we adopt a restrictive meaning to the expression accidental falling of a passenger from a train carrying passengers in Section 123(c) of the Railways Act, we will be depriving a large number of railway passengers from getting compensation in railway accidents. It is well known that in our country there are crores of people who travel by railway trains since everybody cannot afford traveling by air or in a private car. By giving a restrictive and narrow meaning to the expression we will be depriving a large number of victims of train accidents (particularly poor and middle class people) from getting compensation under the Railways Act. Hence, in our opinion, the expression accidental falling of a passenger from a train carrying passengers includes accidents when a bona fide passenger i.e. a passenger traveling with a valid ticket or pass is trying to enter into a railway train and falls down during the process. In other words, a purposive, and not literal, interpretation should be given to the expression.