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Hindu succession & inheritance: An analysis of some provisions

Section 30 of the Hindu Succession Act recognises the right of a Hindu to execute a will. The words ‘capable of being disposed of’ assume significance. The explanation makes it clear that a Hindu can, apart from self-acquired property, also include in the will ‘interest in Mitakshara coparcenary property…’.

Satyajeet A. Desai

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If we look at the probable statistics of litigation in this country, at least 50% of the litigation is against government authorities. From the remaining 50%, at least 30-40% is related to property disputes alone.

Succession law, though a very important and intrinsic part of the whole conspectus of laws, is also a very interesting but extremely difficult subject due to its intricacies. Succession to property has, in the past, the world over, led to wars between siblings. The era of Kings being over, the arena then shifted to the courts in the modern world. Acrimony over property has always been the reason for long drawn disputes.

Origins

 In India, since many years in the ancient past, and especially in case of Hindu’s, we had what can be called the Shastric or traditional Hindu Law, the predecessor of modern statutory Hindu Laws, as we have them today.

Any person professing or following a particular religion should be aware of rights and obligations under their personal law. Before the enactment of the four laws governing Hindus these complex issues were regulated by Dharma, the Vedas and other sources which were believed to be either of divine origin or were formulated by Acharyas and Rishis who were well versed in the study of religion and its various intricacies which were recognised as the law. This was because it was strongly believed that morals and ethics when combined with self imposed restrictions and conditions were expedient to regulate society. These were in the past, the law of the land and any breach was considered as a breach of the law. This was the foundation of the laws relating to Hindus, which has, with the passage of time evolved into the present legislations of Hindu Law as we know them today1 .

The Codification of Hindu Laws

 Four laws governing Hindus namely the Hindu Succession Act, the Hindu Marriage Act, The Hindu Adoptions and Maintenance Act and the Hindu Minority and Guardianship Act, came into force in 1955 and 1956. The laws have taken care to incorporate some of the ancient aspects coupled with progressive thinking in their application. In fact, many principles of the old law were introduced into the modern Hindu Law. Certain aspects were, however abandoned, which has been rued by many as a decimation of the old Hindu Laws. But the words of J.D.M. Derret , a legal scholar on Hindu Succession in his book titled “Introduction to Modern Hindu Law”, say it all. He wrote “In India the law of inheritance has been so recently and so comprehensively reformed that no one need fear dying intestate, that is to say, without leaving a will which is capable of taking effect. In a sense Parliament has made, in the Hindu Succession Act a will for everyone, and whoever proposes to make  a will should consider whether every eventuality bas not been foreseen by Parliament, and whether his own preferences would be an improvement.

The Hindu Succession Act,1956

That brings us to the Hindu Succession Act 1956 as we know it today. I propose to discuss albeit briefly, some important provisions. The act deals with succession to property of a male Hindu (section 8), Rights of a female Hindu over property (section 14), succession to property of a female Hindu (section 15) and most importantly, succession in case of coparcenary property (section 6, which I propose to discuss in a subsequent article). The Act lays down a uniform and comprehensive system of inheritance.

 Succession to the property of a Hindu Male dying intestate

When a male Hindu dies intestate the following section applies. It stipulates that;

 S.8 General rules of succession in the case of males

The property of a male Hindu dying intestate shall devolve according to the provisions of this Chapter-

(a) firstly, upon the heirs, being the relatives specified in class I of the Schedule;

(b) secondly, if there is no heir of Class I then upon the heirs, being the relatives specified in Class II of the Schedule;

(c) thirdly, if there is no heir of any of the two classes, then upon the agnates of the deceased; and

(d) lastly, if there is no agnate, then upon the cognates of the deceased.

THE SCHEDULE (See section 8)

HEIRS IN CLASS I AND CLASS II

Class I

 Son; daughter; widow; mother; son of a predeceased son; daughter of a predeceased son; son of a predeceased daughter; daughter of a predeceased daughter; widow of a predecease son; son of a predeceased son of a predeceased son; daughter of a predeceased son of a predeceased son; widow of a predeceased son of a predeceased son [son of a pre-deceased daughter of a pre-deceased daughter; daughter of a pre-deceased daughter of a pre-deceased daughter; daughter of a pre-deceased son of a pre-deceased daughter; daughter of a pre-deceased daughter of a pre-deceased son].

Class II

 I Father.

II (1) Son’s daughter’s son; (2) son’s daughter’s daughter; (3) brother; (4) sister.

III (1)Daughter’s son’s son;  (2)  daughter’s son’s daughter; (3) daughter’s daughter’s son; (4) daughter’s daughter’s daughter.

IV (1) Brother’s son; (2) sister’s son; (3) brother’s daughter; (4) sister’s daughter.

V Father’s father; father’s mother.

V I Fa t h e r ’s w i d ow; brother’s widow

VII Father’s brother; father’s sister,

VIII Mother’s father; mother’s mother.

 IX Mother’s brother; mother’s sister.

Explanation—In this Schedule, references to a brother or sister do not include reference to a brother or sister by uterine blood.

 As is evident, the section states the mode of succession to a Hindu male dying intestate. The schedule to the section divides the heirs into classes. The distinction amongst the two classes of heirs being that while heirs in class I take the property simultaneously, heirs in class II take the property to the exclusion of the heirs in the subsequent entry. To explain this, suppose a male Hindu dies intestate and leaves behind a wife a son and a daughter, all the three being heirs in class I will take the property simultaneously. If however a male Hindu dies intestate without leaving any heir in class I, in such a situation the heirs in class II will be entitled to his property. But there is a difference here. To explain, suppose a male Hindu dies without any heirs in class I, and suppose his father is alive, the father being the first entry in class II, will be entitled to the sons property to the exclusion of the heirs in the other entries. It is only if no heir is present in a particular entry , that the heirs in the subsequent entry are entitled to such property. Sections 9 to 13 contain the rules as regards the distribution.

Section 14 of the Hindu Succession Act , 1956

This provision deals with the status of property possessed by a female Hindu.

Section 14. Property of a female Hindu to be her absolute property.—(1) Any property possessed by a female Hindu, whether acquired before or after the commencement of this Act, shall be held by her as full owner thereof and not as a limited owner.

Explanation.—In this sub-section, ‘property’ includes both movable and immovable property acquired by a female Hindu by inheritance or devise, or at a partition, or in lieu of maintenance or arrears of maintenance, or by gift from any person, whether a relative or not, before, at or after her marriage, or by her own skill or exertion, or by purchase or by prescription, or in any other manner whatsoever, and also any such property held by her as stridhana immediately before the commencement of this Act.

(2) Nothing contained in sub-section (1) shall apply to any property acquired by way of gift or under a will or any other instrument or under a decree or order of a civil court or under an award where the terms of the gift, will or other instrument or the decree, order or award prescribe a restricted estate in such property.

The section brought about an extremely important change from the Shastric Hindu law, where there were restrictions and conditions imposed upon a woman’s ownership of property. As can be seen. The first part of the section stipulates that any property possessed by a female Hindu, whether acquired before or after the commencement of this Act, shall be held by her as full owner thereof and not as a limited owner. Therefore the law made it amply clear that a woman has full ownership of property possessed by her. The explanation to the section also makes it abundantly clear that the modes of ownership stipulated therein constitute the property as her own. But it is the second part of the section that states that if a Hindu female has got property in the manner described, and if a restricted ownership is prescribed then she does not become full owner.

The second part of the section has come up for interpretation on various occasions before the courts. In a benchmark decision of the Supreme Court in V. Tulasamma & Ors vs V. Sesha Reddy (reported in AIR 1977 SC 1944), the court held that a wide interpretation ought to be given to such an ameliorative provision and declaired that property ,even though conferred as a limited estate but for the purpose of maintenance of the woman would confer full ownership upon her. This section can have no application where a female Hindu never acquired any property at all or where having acquired it she happened to have lost her title thereto by alienation, surrender or otherwise. Explaining the ethos of the provision , the Supreme Court has stated in C. Masilamani Mudaliar & Ors vs The Idol Of Sri Swaminath Swamy, (1996) 8 SCC 525 that if the acquisition of the property attracts sub-section [1] of Section 14, sub-section [2] does not come into play. If the acquisition is for the first time, without any vestige of pre-existing right under the instrument, document or device etc. then sub-section [2] of Section 14 gets attracted. Sub-section [2] being in the nature of an exception, it does not engulf and wipe out the operation of subsection [1]. Sub-section [2] of Section 14 independently operates in its own sphere. Therefore it can be clearly seen that the legislative intent was to see to it that a Hindu female was conferred with adequate rights in property, and that the concept of restricted estate would only apply in stricter circumstances where restrictions were stringent.

Section 15 of the Hindu Succession Act , 1956

This section deals with the distribution of property of a Hindu female dying intestate. It stipulates that; 15. General rules of succession in the case of female Hindus.—

(1) The property of a female Hindu dying intestate shall devolve according to the rules set out in section 16,—

(a) firstly, upon the sons and daughters (including the children of any pre-deceased son or daughter) and the husband;

(b) secondly, upon the heirs of the husband;

(c) thirdly, upon the mother and father;

(d) fourthly, upon the heirs of the father; and

(e) lastly, upon the heirs of the mother.

(2) Notwithstanding anything contained in sub-section (1),—

(a) any property inherited by a female Hindu from her father or mother shall devolve, in the absence of any son or daughter of the deceased (including the children of any pre-deceased son or daughter) not upon the other heirs referred to in sub-section (1) in the order specified therein, but upon the heirs of the father; and

(b) any property inherited by a female Hindu from her husband or from her father-in-law shall devolve, in the absence of any son or daughter of the deceased (including the children of any pre-deceased son or daughter) not upon the other heirs referred to in sub-section (1) in the order specified therein, but upon the heirs of the husband.

 This section propounds a uniform scheme of succession to the property of a female Hindu who dies intestate. The section groups the heirs of a female intestate into five categories as Entries (a)–(e) in sub-section (1). That sub-section is the general mode of succession to a female intestate. Here too, as in case of a male Hindu, if the heirs specified in entry (a) are alive, they inherit simultaneously but to the exclusion of heirs in the other entries. The real difference in the mode of succession is brought out in sub-section(2) which is again in two parts. This sub-section is in the nature of an exception to sub-section (1). Broadly stated, the two exceptions are that if the female dies without leaving any issue, then: (1) in respect of property inherited by her from her father or mother, that property will devolve not according to the order laid down in the five Entries in sub-section (1), but upon the heirs of the father; and (2) in respect of property inherited by her from her husband or father-in-law, it will devolve not according to the order laid down in the five Entries but upon the heirs of the husband. In case of a Hindu female having self acquired property section 15(1) will apply and not section 15 (2) . The distinction is that the first portion deals with all categories of heirs and the source of property would be self acquired, whereas insofar as the second sub-section is concerned, it deals with not only a situation in case the female does not have any children, but also the source of the property being either from her father or mother but also from her husband or father-in-law.

The basis of inheritance of a female Hindu’s property who dies intestate would thus be the source from which such female Hindu came into possession of the property and the manner of inheritance which would decide the manner of devolution as held by the Supreme Court in Bhagat Ram v. Teja Singh AIR 2002 SC 1. The Court in a subsequent decision in S.R. Srinivasa v S. Padmavathamma, (2010) 5 SCC 274 stated that in case of property of an issueless female, this particular provision has been enacted to prevent the property going into the hands of strangers.

Testamentary Succession

The Hindu Succession Act deals mainly with intestate succession but section 30 of the Act deals with testamentary succession. It states that;

Section 30. Any Hindu may dispose of by will or other testamentary disposition any property, which is capable of being so disposed of by him, in accordance with the provisions of the Indian Succession Act, 1925 (39 of 1925), or any other law for the time being in force and applicable to Hindus.

Explanation: The interest of a male Hindu in a Mitakshara coparcenary property or the interest of a member of a tarward, tavazhi, illom, kutumba or kavaru in the property of the tarward, tavazhi , illom, kutumba or kavaru shall, notwithstanding anything contained in this Act or in any other law for the time being in force, be deemed to be property capable of being disposed of by him or by her within the meaning of this section.

Under Shastric law, wills were alien to Hindu’s. This was in view of the joint family system. It was only in 1870, with the passing of the Hindu Wills Act that wills for Hindus were codified. Section 30 of the Hindu Succession Act, recognises the right of a Hindu to execute a will. The words ‘ capable of being disposed of’ assume significance. The explanation makes it clear that a Hindu can, apart from self acquired property, also include in the will ‘interest in Mitakshara coparcenary property…’. I add a cautionary caveat here. The will can only deal with a portion of the property by virtue of being a member of a Mitakshara coparcenary, but neither of a specific portion nor of the whole of the property. It has to be restricted to his share alone.

These then are some important provisions as to succession to Hindus, both male and female.

Senior Advocate Satyajeet Desai practices at the Gujarat High Court and is a Revising Author – Mulla’s Hindu Law & ST Desai on The Law of Partnership.

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ONCE CIRP IS ADMITTED AND MORATORIUM IS ORDERED THE SARFAESI PROCEEDINGS CANNOT BE CONTINUED AGAINST CORPORATE DEBTOR: SC

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The Supreme Court in the case Indian Overseas Bank vs RCM Infrastructure Ltd observed that once the CIRP is initiated and the moratorium is ordered, the proceedings under the SARFAESI Act cannot be continued.

the appellant Bank could not have continued the proceedings under the SARFAESI Act once the CIRP was initiated and the moratorium was ordered as Section 14(1)(c) of the IBC has an overriding effect interest created by the Corporate Debtor in respect of its property including any action under the SARFAESI Act is prohibited with respect to any other law, any action to foreclose, to recover or to enforce any security, the court observed in view of this provision.

It was further being observed and was stated clearly that once the CIRP is commenced, there is complete prohibition for any action created by the Corporate Debtor to foreclose, recover or enforce any security interest are prohibited with respect of its property. All the actions including any action under the SARFAESI Act to foreclose, to recover or to enforce any security interest are prohibited, after the CIRP initiate, the legislative point is clear at this, the bench observed while referring to Section 14 and Section 238 of the IBC.

The contentions made by bank: on 13th December 2018 and as such, and on 3rd January 2019 the admission of the petition by the learned NCLT would not affect the said sale as the sale in question was complete on its confirmation and further stated that it will not deprive the Bank from receiving the said money in pursuance to the sale which has already been completed, merely because a part of the payment was received subsequently after initiation of CIRP.

under Section 10 of the Insolvency and Bankruptcy Code, 2016, an application was filled by the Corporate Debtor before NCLT. On 03.01.2019, the NCLT admitted the petition and a moratorium was also notified the auction was continued by the bank the auction proceedings and accepted the balance 75% of the bid amount and completed the sale, even after that. The NCLT passed an order setting aside the sale, while allowing the application filled by the Corporate Debtor and the appeal filled by the Bank was dismissed by the Bank and thereafter the bank approached the Apex Court. As to recover the public money availed by the Corporate Debtor, an E-­auction notice came to be issued by the Bank.

The bench comprising of Justice L. Nageswara Rao and the justice B R Gavai observed that in respect of its property including any action under the SARFAESI Act is prohibited in such a situation, any action to foreclose, to recover or to enforce any security interest created by the Corporate Debtor.

The contentions made by bank: on 13th December 2018 and as such, and on 3rd January 2019 the admission of the petition by the learned NCLT would not affect the said sale as the sale in question was complete on its confirmation and further stated that it will not deprive the Bank from receiving the said money in pursuance to the sale which has already been completed, merely because a part of the payment was received subsequently after initiation of CIRP.

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Supreme Court pulls up the state of Kerala for challenging the seniority of upper division clerk

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The Supreme Court in the case The State of Kerala and Or’s. V. Subeer N.S. And Anr observed assailing the Kerala High Court’s order of affirming the seniority of an upper division clerk for filling a Special Leave Petition pulled up the State of Kerala.

The Government lost sight of these aspects while issuing Annexure-A13 order ratifying Annexure-A10 decision of the Director of Public Instruction on Annexure-A5 complaint was undertaken by the Director of Public Instruction, who has no authority to take a decision invoking Rule 27B of Part II KS & SSR based on the review of the Seniority the Director of Public Instruction and the Government while issuing the impugned orders, none of these aspects wee considered to Annexure-A3 final seniority list also by any of the aggrieved persons except a bogus complaint submitted as Annexure A5, that too almost 3 years after the finalization of the seniority list and there was no objection and further there was no objections to the rank and seniority assigned to the applicant in the provisional seniority list. the said seniority is finalized after publishing a provisional seniority list and inviting objections if any to the same as early as on 8th March 2009., the bench observed While affirming the view by KAT.

The said mistake was brought to the notice of the authorities, necessary corrective action was taken and the applicant’s seniority was reassigned based on his eligibility on the part of the controlling officer it is only by a mistake that he was granted promotion and was assigned the rank in the seniority list, the counsel said to further persuade the bench.

The Bench of Justice Chandrachud remarked that if the counsel feels there is an error you must rectify the error correctly and there was no fraud on his part and all this must be due on a reasonable dispatch.

The bench comprising of Justice DY Chandrachud further observed and noted when the matter was called upon hearing before the bench that the State is here challenging it the bench further remarked by saying that why don’t you do something better? Build schools, roads or infrastructure as one upper division clerk has got seniority.

respondent’s seniority was revised to the date on which he rejoined duty after the leave and the respondent was on leave without allowance at the time of his promotion as U.D Clerk, the counsel appearing for the State contended before the Court.

The Bench comprising of Justice DY Chandrachud and the justice Surya Kant orally remarked while dismissing the SLP against the order dated 01.17.2022., We are not a court of law but a court of justice as well.

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A PLEA IN SUPREME COURT CHALLENGES THE CHANGED NEET-SS 2022 EXAM PATTERN

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The Supreme Court in the case Dr Richa Verma v. National Board of Examination observed the changed examination pattern which would now be comprising of 150 questions from the general i.e., the basic component of the primary feeder broad specialty subject and from all sub- specialty/systems/component of that primary feeder broad specialty subject. A plea filled in the Supreme Court by MD Radiation Oncologists and MD Anaesthesiologists NEET SS 2022 aspirant.

the petitioners have sought issuance of directions to restrain the NBE from excluding / MD Radiotherapy from the eligible feeder specialties for the super specialty course of DM Medical Oncology for NEET SS 2022 and have further sought for restoring the scheme/pattern for the exam further the petitioner deleting the MD Radiation Oncology, against this backdrop.

On 05.10.2021 the Central Government had told the Court that the revised pattern will be implemented only from next year and it may be noted that over the eleventh-hour changes brought to the NEET-SS 2021 pattern after facing the harsh criticism from the Supreme Court.

The petition further states that they will have to compete with candidates who have 100% questions from their postgraduate syllabus/ broad specialty as the new examination scheme is making some candidates write a paper which has no questions from their postgraduate broad specialty.

particularly in favor of MD Medicine in so far as the choice of options is far greater vis-a-vis the choices available to either MD Radiation Oncology or MD Anaesthesia, the pattern is not just a waste of time and effort for all those who have prepared for Critical Care but also grossly biased against few broad specialties and of the other four post-graduate branches there will be no questions from broad specialties.

This is complete waste of time, resources and effort put by the candidates who have been preparing for a super speciality subject for years as it is arbitrarily, illogical, highly partial and unreasonable, while terming the change in pattern, the contentions made by the petitioner.

the new pattern was forcing all the candidates from the broad specialties to write a single paper which will have 100% questions from General Medicine, stated by the petitioner. Furthermore, contending that the erstwhile pattern had a paper with 40% mixed questions from all the broad specialties and 60% questions from Critical Care (i.e., the super-specialty subject) which had ensured a level playing field.

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THE CRIMINAL PROCEEDINGS UNDER SECTION 482 OF THE CRPC CANNOT BE QUASHED MERELY ON THE GROUND THAT NO USEFUL PURPOSE WILL BE SERVED: SUPREME COURT

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The Supreme Court in the case Satish Kumar Jatav vs State of Uttar Pradesh observed that while by prolonging the proceedings of the case, the criminal proceedings cannot be quashed. As when a clear case is made for the offence alleged on the ground that no useful purpose will be served.

under Sections 307, 504, 506 of the IPC and 9 Section 3(10)(15) of the Act, the serious allegations for the offences were made and while considering the application under Section 482 Cr.P.C. and quashing the criminal proceedings for the aforesaid offences, the High Court ought to have been more cautious and circumspect. on how the order passed by the learned Magistrate summoning the accused was wrong and/or erroneous, has not at all being allowed by the High Court. the application under Section 482 Cr.P.C. and has quashed the criminal proceedings is deprecated in the manner in which the High Court has disposed of further the High Court has observed in the proceedings of the case that no useful purpose will be served. The aforesaid cannot be a good ground and/or a ground at all to quash the criminal proceedings when a clear case was made out for the offences alleged, appeared while quashing the criminal proceedings by the High Court even for the impugned order passed, the bench overserved while allowing the appeal.

The application under Section 482 Cr.P.C The manner in which the High Court has disposed and quashed the criminal proceedings is not appreciated at all Furthermore the Court has emphasized that the High Court must pass a speaking and reasoned order in such matters. The same has been set aside by the High Court in a most cursory and casual manner.

The allegations made against the accused persons and even on the legality and validity of the order passed by the Magistrate summoning the accused, has not been discussed by the High Court the Court noted.

The appellant contended that there are no reasons whatsoever have been assigned while quashing the criminal proceedings and further the appellant contended that there is no independent application of mind by the High Court. The respondent defended the impugned order, on the other hand before the Apex Court.

the Allahabad High Court quashed the criminal proceedings merely opining that “that no useful purpose shall be served by prolonging the proceedings of the case, while allowing the petition filled by the accused challenging this order and the offences punishable under Sections 307, 504, 506 of the Indian Penal Code and Section 3(10)(15) of the Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act, the accused to face the trial the Magistrate summoned the accused in the present case.

The bench comprising of Justice MR Shah and the justice BV Nagarathna observed and reiterated under Section 482 of the Code of Criminal Procedure that a High Court must pass a speaking and reasoned order while disposing petitions.

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Nexus between accused’s negligence and victim’s death has to be established under Section 304A IPC: Supreme Court

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The Supreme Court in the case Nanjundappa vs State of Karnataka observed that would not apply to a criminal case, the doctrine of res ipsa loquitur stricto sensu.

when there is no report of a technical expert to corroborate the prosecution story as The Appellants therefore are entitled to be given the benefit of doubt furthermore It is even more unbelievable that Appellant no. 2 came in contact with the same voltage and managed to get away with a few abrasions.

when such current passed through the Television set, it did not blast and melt the wiring of the entire house and the court further added that it sounds completely preposterous that a telephone wire carried 11KV current without melting on contact.

While evaluating such evidence the jury should bear in mind that inference of guilt should be the only reasonable inference from the facts as In case of circumstantial evidence, there is a risk of jumping to conclusions in haste However the conviction of the accused persons seems wholly unjustified against the weight of the evidence adduced, in the present case. The Court also referred to the case of Syad Akbar Vs. State of Karnataka in which this Court proceeded on the basis that doctrine of res ipsa loquitur stricto sensu would not apply to a criminal case as its applicability in an action for injury by negligence is well known, observed by the court in the present case.

The court noted that there is no eye witness to say conclusively that the Appellants were in fact executing the work at the place alleged and further the court notice that no report or even inspection was conducted by a technical expert to assess the veracity of the averments made by the complainants to suggest that it was due to the alleged acts of the Appellants that the incident took place. the allegations against the Appellants are highly technical in nature, notice by the court on perusing the evidence on record.

On 21th November 2003 at 1.00p.m. the deceased was watching TV in his house. Noticing a sudden sound in the TV, the deceased got up to separate the dish wire, the TV connection wire and the telephone wire, which were entwined together, he felt an electric shock and his right hand was burnt and as a result of this shock he succumbed to death at that point of time it was found that the said incident took place because of the negligent act on the part of the accused, the supervisor (an employee in the telephone department ) and daily wage worker employed by him, as it was found out in the investigation. under Section 304A read with Section 34 IPC was upheld by the Karnataka High Court, the appellant is convicted.

the bench comprising of CJI NV Ramana, Justice Krishna Murari and the justice Hima Kohli observed under Section 304A of Indian Penal Code for causing death by negligence, while acquitting two persons that prosecution has to firstly prove negligence and then establish direct nexus between negligence of the accused and the death of the victim, for bringing home the guilt of the accused.

The Court also referred to the case of Syad Akbar Vs. State of Karnataka in which this Court proceeded on the basis that doctrine of res ipsa loquitur stricto sensu would not apply to a criminal case as its applicability in an action for injury by negligence is well known, observed by the court in the present case.

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AN ASSOCIATION OF CORPORATE BODIES CAN ESTABLISH A CAPTIVE POWER PLANT PRIMARILY FOR THEIR OWN USE UNDER THE ELECTRICITY ACT: SUPREME COURT

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The Supreme Court in the case Chhattisgarh State Power Distribution Company Ltd. vs Chhattisgarh State Electricity Regulatory Commission observed that a captive power plant primarily for their own use can be established by an association of corporate bodies.

The requirement would be that the consumption of SBIPL and SBMPL together should not be less than 51% of the power generated. Admittedly, the joint consumption by SBIPL and SBMPL is more than 51% and under the provisions of the said Act, the use of electricity by it would be for captive use only even an association of corporate bodies can establish a power plant. Since SBMPL holds 27.6% of the ownership, the requirement of not less than 26% of shares is fulfilled by SBMPL as SBMPL holds 27.6% equity shares in SBPIL.

The fourth proviso to sub­section (2) of Section 42 of the said Act would also reveal that surcharge would not be leviable in case open access is provided to a person who has established a captive generating plant for carrying the electricity to the destination of his own use and under Section 9 of the said Act, could be an individual or a body corporate or association or body of individuals, whether incorporated or not, it is clear that the person will get benefit even an association of corporate bodies can establish a captive power plant it has been seen. The definition of “person” is wide enough to include any company or body corporate or association or body of individuals, whether incorporated or not, or artificial juridical person it should be primarily for the use of the members of such co­operative society or association is the requirement, the Bench observed while referring to the provisions of the Electricity Act.

The BPIL, the respondent contended and supported the impugned judgment that no permission is required from the Commission for supply of electricity for its own use. Thereafter the appellant Company contended that unless SBPIL consumes 51% of the aggregate electricity generated by it, it will not be entitled to get the benefit under Section 9 of the said Act, in an appeal filled before the Apex Court.

An appeal was dismissed by the Appellate Tribunal for Electricity filed by the Company further The Commission held that SBPIL was entitled to supply electricity to its sister concern SBMPL and the same would qualify to be treating as own consumption and within the ambit of Section 9 read with Section 2(8) of the Electricity Act, 2003 and Rule 3 of the Electricity Rules, 2005 SBPIL submitted a petition for providing open access and wheeling of power through the transmission system of the Chhattisgarh State Power Distribution Company Ltd (Company) for captive use by SBMPL to the Chhattisgarh State Electricity Regulatory Commission, the commission. A Captive Generation Plant is established by SBPIL, and is a sister concern of SBPIL Shri Bajrang Power and I spat Ltd and Shri Bajrang Metallics and Power Ltd, SBMPL.

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