Recently, in Perarivalan’s case, a three-judge Bench of the Supreme Court headed by Justice L. Nageswar Rao has rightly and timely invoked its extraordinary constitutional power, conferred upon it under Article 142 of the Constitution to protect the rule of law, human dignity, and rights from the arbitrary gubernatorial action. By releasing Perarivalan, the Court has sent the right message to the constitutional functionaries to exercise their powers according to the constitutional norms and not play with the personal liberty and dignity of the people. Perarivalan was convicted in the Rajiv Gandhi assassination case based on weak evidence. He spent 31 years in jail. His mother worked very hard for convincing the political executive to grant him a pardon. Both the DMK as well as the AIDMK Governments of Tamil Nadu came with her and supported the Perarivalan’s release. When the Governor did not act according to the elected government’s advice, the matter reached the Apex Court which felt the long incarceration and pain of Perarivalan and exercised its extraordinary powers under Article 142 of the Constitution. The State Cabinet advised the Governor in 2018 to grant pardon to Perarivalan, who had submitted his mercy plea in 2015, but the Governor referred his mercy petition to the President of India, against the well-established constitutional provisions and practice relating to the use of Article 161 of the Constitution. This was nothing but a deliberate abdication of constitutional powers and responsibilities conferred upon the Governor. This is why the Apex Court came down heavily on the Governor and the Central Government and came to the rescue of Perarivalan. The Court has strengthened the Rule of Law by its verdict.
Under our constitutional law and practice, the Governor is a constitutional head of the State who generally exercises his powers and functions conferred upon him by or under the Constitution on the aid and advice of the Council of Ministers headed by the Chief Minister. However, the Governor is not a mere figurehead or a rubber stamp. There are a few areas where the Governor can act according to his discretion. In other words, the Governor can act without receiving the advice of the elected government in certain situations. But the pardoning power of the Governor does not allow him to act independently. This is a matter of executive policy which needs to be handled by the government. in actual constitutional practice, the Home Minister of the State takes a decision, under the overall control and supervision of the Chief Minister, to grant or refuse the pardon to any convict and sends his recommendation to the Governor who merely approves the file as per the constitutional provisions and practices relating to Article 161 of the Constitution. The Governor cannot allow or dismiss the mercy petition of any convict at his discretion. However, the Governor can ask the Home Minister to revisit his decision and answer his queries, if any. But, if the Home Minister reiterates his recommendation, the Governor will have no option but to accept the Home Minister’s view. This is a well-settled position.
In Perarivalan’s case, the Supreme Court has also made it categorically clear that the Governor is bound to exercise the pardoning power on the advice of the State Cabinet. “..The advice of the State Cabinet is binding on the Governor in matters relating to commutation/remission of sentences under Article 161. No provision under the Constitution has been pointed out to us nor any satisfactory response tendered as to the source of the Governor’s power to refer a recommendation made by the State Cabinet to the President of India. In the instant case, the Governor ought not to have sent the recommendation made by the State Cabinet to the President of India. Such action is contrary to the constitutional scheme elaborated above. It is relevant to point out that the recommendation made by the State Cabinet was on 09.09.2018, which remained pending before the Governor for almost two and a half years without a decision being taken. It was only when this Court started enquiring about the reason for the decision being delayed, the Governor forwarded the recommendation made by the State Government for remission of the appellant’s sentence to the President of India”, the Court observed regarding the exercise of the pardoning power by the Governor.
Respecting the constitutional immunity available to the Governor under Article 361 of the Constitution, the Apex Court rightly exercised its powers of judicial review and ordered the government to release Perarivalan immediately. This is a good decision. Had the Court remanded the matter back to the Governor for his decision, more delay could have been occurred. The Court said, “We are fully conscious of the immunity of the Governor under the Constitution with respect to the exercise and performance of the powers of his office or for any act done or purported to be done by him in the exercise and performance of such powers and duties. However, as held by this Court in numerous decisions, this Court has the power of judicial review, as held by this Court in Epuru Sudhakar v. Government of A.P. Given petitions under Article 161 pertain to the liberty of individuals, inexplicable delay not on account of the prisoners in inexcusable as it contributes to adverse physical conditions and mental distress faced by a prisoner, especially when the State Cabinet has taken a decision to release the prisoner by granting him the benefit of remission/commutation of his sentence”.
The Supreme Court decided the matter of Perarivalan based on the constitutional position, human rights jurisprudence, and humanitarian grounds that justify the release of the appellant. The Court took the delay in the mercy petitions seriously. This is what the Court stated about this issue: “Given that his petition under Article 161 remained pending for two and a half years following the recommendation of the State Cabinet for remission of his sentence and continues to remain pending for over a year since the reference by the Governor, we do not consider it appropriate to remand the matter for the Governor’s consideration. In the absence of any other disqualification and in the exceptional facts and circumstances of this case, in exercise of our power under Article 142 of the Constitution, we direct that the appellant is deemed to have served the sentence in connection with Crime No. 329 of 1991. The appellant, who is on bail, is set at liberty forthwith.”
Given the above discussion, it is submitted that the Supreme Court has delivered a timely judgment to check the misuse of gubernatorial powers relating to the pardoning power. The Governor of Tamil Nadu had no justification to refer the Perarivalan’s mercy plea to the President of India when the State Cabinet advised him to grant remission to the petitioner. He should have decided the matter himself, as per the Cabinet’s advice. The government is collectively responsible to the State’s Legislative Assembly and the Governor is only a mouthpiece of the government. The Governor was bound to act according to the advice tendered by the State Cabinet. His decision to refer the mercy petition to the President of India went against the well-settled constitutional jurisprudence relating to the pardoning power of the Governor and our federal constitutional governance. The Court observed that the reference made by the Governor to the President of India is without any constitutional backing and is inimical to the scheme of our Constitution, whereby the Governor is but a shorthand expression for the State Government as observed by the Court in the Maru Ram’s case. The Governor cannot override the government. The Court has rightly corrected a constitutional error committed by the Governor of Tamil Nadu. The judgment of the Court will strengthen the rule of law and constitutionalism in our parliamentary democracy. This verdict will be a milestone to avoid the delay in the disposal of mercy petitions by the Governors and the President of India.
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TELANGANA HIGH COURT: PLACE OF RESIDENCE OF THE ARBITRATOR WOULD NOT BE THE SEAT OF ARBITRATION
The High Court of Telangana in the case M/s S. Square Infra v. Garneni Chalapathi Rao observed and held that the place of residence of the arbitrator would not determine the seat of arbitration.
The Single bench comprising of Justice P. Sree Sudha observed and held that merely because an arbitrator residing in Hyderabad has been appointed, it does not mean that only the Courts at Hyderabad would have the jurisdiction to decide all the matters arising out of arbitration agreement.
Facts of the Case:
In the present case, after the dispute arouse between the parties, the respondent sent a letter to the petitioner for nomination an arbitrator who is residing in Hyderabad. To its said notice, petitioner replied and declined the appointment of the arbitrator for the reason that there was no dispute which required the appointment of an arbitrator.
A suit was filled by the respondent before the VII Additional District Judge Sangareddy, seeking for relief of permanent injunction. An application was filled by the petitioner under Section 8 of the Arbitration & Conciliation Act and the parties referred to the arbitration.
An application was filled by the respondent under section 9 of the Arbitration & Conciliation Act before the Principal District Judge, Sangareddy, Subsequently, an application was filled by the petitioner for transferring the application from the Court at Sangareddy to Court at Hyderabad.
Contentions made by Parties:
On the following grounds, the petitioner sought the transfer of application.
An arbitrator residing in Hyderabad was nominated to respondent. However, only the courts in Hyderabad would have the jurisdiction to decide all the matters arising out of the arbitration.
It was stated that the nomination of an arbitrator residing in Hyderabad amounted to designating Hyderabad as the Seat of Arbitration.
On the following grounds, the respondent countered the submissions of the petitioner:
An application was filled by the petitioner under Section 8 of the A&C Act before the Court at Sangareddy. However, in terms of Section 42 of the A&C Act, only the court at Sangareddy would have the jurisdiction to decide all the matters arising out of arbitration.
The Court held that the seat of arbitration would not be decide by the place of residence of the arbitrator.
The argument of the petitioner was rejected by the court that since the respondent had initially nominated an arbitrator residing in Hyderabad, the Hyderabad Court would have the jurisdiction.
The court stated that merely because a party has nominated an arbitrator who resides in Hyderabad, the same would not designate Hyderabad as the Seat of arbitration in absence of any designation of the seat under the arbitration agreement.
It was further stated by the court that the application filled by the petitioner filled under Section 8 application before the Court at Sangareddy consequent to which the parties were referred to arbitration. Therefore, the Court would have the jurisdiction, in terms of Section 42 of the A&C Act.
The Transfer petition was dismissed by the Court.
DELHI HIGH COURT REMANDS IN THE MATTER BACK TO ASSESSING OFFICER AFTER SETTING ASIDE: JUST 3 DAYS’ TIME GRANTED TO RESPOND TO THE INCOME TAX NOTICE
The Delhi High Court in the case Shubham Thakral Vs ITO, the Delhi bench comprising of Justice Manmohan and Justice Manmeet Pritam Singh Arora observed and remanded the matter back to the assessing officer as just 3 days’ time was granted to respond to the income tax notice.
In the present case, the petitioner/assessee assailed the notice under Section 148A (b) of the Income Tax Act, 1961 and the order passed under Section 148A (d) for the Assessment Year 2018–19.
It was contended by the assessee that only three days’ time was granted to the assessee to respond, as against the mandatory statutory period of at least seven days. However, despite of the fact that the annexure attached to the notice gave the petitioner eight days to respond, the e-filing submission portal was closed earlier, in violation of Section 148A (b) of the Income Tax Act.
Furthermore, the petitioner relied on the decision of Delhi High Court, in the case of Shri Sai Co-operative Thrift and Credit Society Ltd versus ITO, the Delhi High Court in the case held that under Section 148A (b), a minimum time of seven days has to be granted to the assessee to file its reply to the show cause notice.
No objections were raised by the department/respondent to the matter being returned to the Assessing Officer for a fresh decision in accordance with the law. Accordingly, the court set aside the order passed under Section 148A (d) for the Assessment Year 2018-19. The Assessing officer was directed by the court to pass a fresh reasoned order in accordance with the law after considering the reply of the petitioner, which was directed to be filed within a week.
ALLAHABAD HIGH COURT: ADVOCATES SHOULDN’T ADVISE CLIENTS TO REAGITATE MATTERS IF THERE IS NO ERROR APPARENT ON FACE OF RECORD
The Allahabad High Court in the case Malhan and 17 Others Vs. State Of U.P. And Another observed and stated that an advocate should be given such a piece of advice when there is no error apparent on the face of the record nor was there any reason why the matter be re-agitated it was finally decided.
The bench comprising of Justice Dr. Kaushal Jayendra Thaker and Justice Vivek Varma observed while dealing with the civil review application wherein the bench observed the concerned advised his client to make a chance by filling the instant review application after a period of six year.
In the present case, a civil review petition was filled along with the application under section 5 of the Limitation Act, 1963., the application was filled for seeking condonation of delay in filling the application, the application was filled with a delay of six years i.e., 1900 days.
It was stated by the applicant that the review application could not be filled due to the blockage of public transportation on account of the COVID-19 guidelines.
Moreover, the court observed that the appeals were disposed of by the Apex Court in the year 2016 and only in 2020-2021, the pandemic struck India and furthermore, it cannot be said that due to the COVID guidelines the public transportation was blocked and however, the applicant could not come to Allahabad Court to file review.
Further, it was stated that the court asked the counsel for the review applicants to explain the delay in filling the review application, to which the council gave a strange reply that the counsel had advised the clients that they must take a chance by filling this review application after a period of six years.
Following this, the Court observed:
The court noted that an advocate should not give such an advice when there is no error apparent on the face of record nor was there any other reason that when the matter was finally decided, why the matter be re-agitated.
It was stated that the court has no reason to condone the delay of six years as the same was not explained as to why this review application is filed after such an inordinate delay.
The Court opined that the lapse in approaching the court within the time is understandable but a total inaction for long period of delay without any explanation whatsoever and that too in absence of showing any sincere attempt on the part of suiter, this would add to his negligence and the relevant factor going against him.
The court observed that careless and reckless is shown by the review applicant in approaching the court and due to the condemnation of delay in the application with a token cost of Rs.10,000/, the court dismissed the application.
SUPREME COURT CRITICISES HIGH COURT: POSTING ANTICIPATORY BAIL PLEA AFTER TWO MONTHS CAN’T BE APPRECIATED
The Supreme Court in the case Sanjay versus The State (NCT of Delhi) & ANR observed and stated that in the case where personal liberty is involved, the court is expected to pass orders at the earliest while taking into account the merits of the matter in one way or other. Further, the top court observed that posting of an application for anticipatory bail after a couple of months cannot be appreciated by the court.
The bench comprising of Justice C. T. Ravikumar and the Justice Sudhanshu Dhulia was hearing a June 2 SLP against the Delhi High Court in a petition filed under section 420, 467, 468, 471, 120-B, 34 of the Indian Penal Code, 1860 for seeking anticipatory bail in a 2022 FIR, a notice is issued. It was stated that the learned APP for the state is present and accepts the notice and seeks time to file status report. The High Court in the impugned order stated that Let the status report be filed by the state prior to the next date with an advance copy to the learned counsel for the petitioner. The matter is to be list on 31.08.2022.
It was noted by the bench comprising of Justice Ravikumar and the Justice Dhulia that in the captioned Special Leave Petition, the grievance of the petitioner is that the application for anticipatory bail moved by the petitioner, being Crl. M.A. No. 11480 of 2022 in Bail Application No. 1751 of 2022 without granting any interim protection, was posted to 31.08.2022. on 24.05.2022, the bail application was moved on.
However, the bench asserted that the bench is of the considered view that in a matter involving personal liberty, the Court is expected to to pass orders at the earliest while taking into account the merits of the matter in one way or other.
It was declared by the bench that at any rate posting an application for anticipatory bail after a couple of months cannot be appreciated by the court.
Further, the bench requested to the High Court to dispose off the application for anticipatory bail on its own merits and in accordance with law expeditiously, preferably within a period of three weeks after reopening of the Court. Adding to it, the bench stated that if the main application could not be disposed off, for any reason, within the stipulated time, relief sought for in the interlocutory and on and on its own merits, the application shall be considered.
While disposing of the SLP, the bench directed in its order that we grant interim protection from arrest to the petitioner herein, Till such time.
IN THE CIRP OF BOMBAY RAYON FASHIONS LTD, NATIONAL COMPANY APPELLATE TRIBUNAL (NCLT) STAYS THE CONSTITUTION OF COC
The National Company Appellate Tribunal (NCLT) in the case National Company Appellate Tribunal (NCLT), comprising of the bench of Justice M. Venugopal (Judicial Member) and the technical member, Shri Kanthi Narahari observed while adjudicating an appeal filed in Prashant Agarwal v Vikash Parasprampuria, has stayed in the Corporate Insolvency Resolution Process (CIRP) the constitution of the Committee of Creditors (COC) of Bombay Rayon Fashions Ltd. on 15.06.2022, the order was passed.
FACTS OF THE CASE:
The Operational Creditor or the Respondent, Vikash Parasprampuria is the sole Proprietor of Chiranjilal Yarn Traders and the respondent had supplied goods to a public listed company i.e., Bombay Rayon Fashions Limited (“Corporate Debtor”). The Operational Creditor raised nine invoices which was accepted by the Corporate Debtor without any demur and it was noted that the dispute, protest and part payments were also made towards certain invoices.
The reminder letter was sent by the Operational Creditor when the Corporate Debtor failed to release balance payments letters followed by a Demand Notice under Section 8 of the IBC dated 05.11.2020, which was delivered to the Corporate Debtor but no response was received from the Corporate Debtor.
MUMBAI NCLT PROCEEDINGS
An application under section 9 of the Insolvency & Bankruptcy Code, 2016 was filled by the Operational Creditor before the NCLT Mumbai Bench, seeking to initiation of CIRP against the Corporate Debtor, for defaulting in payment of Rs.1,60,87,838/-, wherein the principal amount was Rs. 97,87,220/- and remaining was interest. 01.11.2020, was the default date.
the Operational Creditor placed reliance so as to justify the compliance of Rs. 1 Crore threshold for initiating CIRP of the NCLT judgement in the case Pavan Enterprises v. Gammon India, it was held in the case that interest is payable to the Operational of Financial Creditor then the debt will include interest, in terms of any agreement. However, by including the interest component the threshold of Rs. 1 Crore was being me and no reply has been filled by the Corporate Debtor.
An order dated 07.06.2022, the NCLT Mumbai Bench observed that the Corporate Debtor had time and again by its letter, invoices and by making part payment acknowledged its liability.
It was stated by the bench that the application under Section 9 was complete in all respects as required by law and there was a default in the payment of debt amount by the Corporate Debtor. The bench accepted the application and the CIRP was initiated against the Corporate Debtor, Mr. Santanu T Ray, Interim Resolution Professional was appointed.
An application was filled by the appellant, Prashant Agarwal before the NCLT against the order dated 07.06.2022.
The settlement was proposed by the Respondent by submitting that if it would be satisfied if the Appellant pays the principal amount along with the CIRP cost towards settlement and on the settlement proposal, the appellant is yet to seek instructions.
Accordingly, the bench in the CIRP of the Corporate Debtor stayed the constitution of CoC and the CIRP process would otherwise continue.
The Appellant to accept or reject the settlement proposal of the Respondent, the bench listed the matter on 07.07.2022.
ESTOPPEL CANNOT OVERRIDE LAW: SUPREME COURT ACCEPTS UNSUCCESSFUL CANDIDATES’ CHALLENGES TO SELECTION PROCESS HELD AGAINST REGULATIONS
The Supreme Court in the case Krishna Rai (Dead) Through LRs versus The Benarus Hindu University & Others observed and held that the principle of estoppel or acquiescence would not be applied in a selection process when the principle of estoppel is held contrary to the relevant rules.
The bench comprising of Justices Dinesh Maheshwari and Justice Vikram Nath observed and reiterated that that the procedure in the relevant service manual will prevail over the principle of estoppel and the principle of estoppel cannot override in the eye of law.
An appeal was considered by bench relating to the filling up of 14 posts in Class III (Junior Clerk) in the Benarus Hindu University by way of promotion. However, the notification inviting the applications from Class IV employees for promotion to Class III had not prescribed that interview will be conducted in addition to the typing test. It was also stated that the The service rules also did not mention interview for promotion to Class III. However, it finalized 14 candidates, the Board of Examiners conducted an interview as well.
Before the Allahabad High Court, some of the candidates challenged the selection process by some candidates, who did not get selected. The candidates alleging that through the manual did not prescribe an interview and the Board of Examiners conducted the interview by “changing the rules of the game”. The Selection process was set aside by the Single bench of the High Court by holding that a grave error was committed by preparing the merit list on the basis of the interview as well.
on appeal by the BHU, the division bench of the High Court set aside the judgement of the Single bench on the ground that the petitioners without protest after having participated in the interview, the petitioners are estopped from challenging the selection process after becoming unsuccessful. The appellants approached the Supreme Court challenging the order of division bench.
The Court noted that the Supreme Court held that the division bench fell in error by applying the principle of estoppel. the Manual duly approved by the Executive Council, According to para 6.4, all Class-IV employees who had put in five years’ service and passed matriculation examination or equivalent, those employees were eligible for the promotion to the post of Junior Clerk Grade.
the departmental written test of simple English, Hindi, and Arithmetic, but could not pass the typing test, was passed by the eligible candidates and still the candidates would be eligible for promotion.
It was observed by the Court that the Board on their own changed the criteria and by introducing an interview it made it purely merit based and the merit list was also prepared on the basis of marks awarded in the type test, the written test and interview.
The Top Court said that it is settled principle that the principle of estoppel cannot override the law and the manual duly approved by the Executive Council will prevail over any such principle of estoppel or acquiescence.
The Court remarked, while referring to the precents that If the law requires something to be done in a particular manner, there can be no estoppel against law, then it must be done in that particular manner, and if it is not done in that particular manner, then in the eye of the law, it would have no existence.
It was stated that the case laws relied upon by the Division bench had no application in the facts of the present case as none of those judgments laid down states that the principle of estoppel would be above in the eye of law.
Accordingly, The judgement of the Single bench was restored and the appeal was allowed, the judgement of the division bench was set aside.
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