OWNER OF VEHICLE NOT VICARIOUSLY LIABLE FOR ANY MIS-DECLARATION BY OWNER OF GOODS: PUNJAB & HARYANA HIGH COURT - The Daily Guardian
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OWNER OF VEHICLE NOT VICARIOUSLY LIABLE FOR ANY MIS-DECLARATION BY OWNER OF GOODS: PUNJAB & HARYANA HIGH COURT

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While clarifying the legal position on the liability of the owner of vehicle for any mis-declaration by the owner of goods, the Punjab and Haryana High Court in a learned, laudable, landmark and latest judgment titled Vijay Mamgain Vs State of Haryana in 2022 LiveLaw (PH) 34 and Case No. – CWP-1564-2022 (O&M) delivered as recently as February 15, 2022 has held that the owner of the vehicle who is seeking only release of the vehicle is not liable to pay fine for the confiscated goods. It must be apprised here that the Division Bench of Justice Ajay Tewari and Justice Pankaj Jain has observed without mincing any words that to force the owner of the vehicle to pay the tax, penalty and fine on the goods would mean that the owner of the vehicle is also foisted with the vicarious liability of any mis-declaration/fraud by the owner of the goods despite the proviso engrafted on to Sub Section 2 of Section 130 of the Central Goods And Services (CGST) Act, 2017. The goods and conveyance were confiscated by the Tax Authorities during transit as the tax against the goods was not paid. The proceedings under Section 130 were initiated for the reason that the fine and penalty was not paid for 14 days.

To start with, this learned, laudable, landmark and latest judgment authored by Justice Ajay Tewari for a Bench of Punjab and Haryana High Court comprising of himself and Justice Pankaj Jain sets the ball rolling by first and foremost putting forth in para 1 that, “By this petition the petitioner has challenged the action of the respondents in not releasing the conveyance even though he had paid the fine prescribed under Section 130 (2) proviso of the Central Goods and Services Act, 2017 (for short ‘the Act’).”

Be it noted, the Bench then discloses in para 2 that, “It is his contention that the scheme of Section 130 of the Act makes it clear that the owner of the goods and the owner of the conveyance are two separate entities and the liability of one can not be foisted upon the other. Section 129 and 130 of the Act, are reproduced herein below:-

“129. Detention, seizure and release of goods and conveyances in transit

“(1) Notwithstanding anything contained in this Act, where any person transports any goods or stores any goods while they are in transit in contravention of the provisions of this Act or the rules made thereunder, all such goods and conveyance used as a means of transport for carrying the said goods and documents relating to such goods and conveyance shall be liable to detention or seizure and after detention or seizure, shall be released, —

(a) on payment of the applicable tax and penalty equal to one hundred per cent of the tax payable on such goods and, in case of exempted goods, on payment of an amount equal to two per cent of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods comes forward for payment of such tax and penalty;

(b) on payment of the applicable tax and penalty equal to the fifty per cent of the value of the goods reduced by the tax amount paid thereon and, in case of exempted goods, on payment of an amount equal to five per cent of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods does not come forward for payment of such tax and penalty;

(c) upon furnishing a security equivalent to the amount payable under clause (a) or clause (b) in such form and manner as may be prescribed:

Provided that no such goods or conveyance shall be detained or seized without serving an order of detention or seizure on the person transporting the goods.

(2) The provisions of sub-section (6) of section 67 shall, mutatis mutandis, apply for detention and seizure of goods and conveyances.

(3) The proper officer detaining or seizing goods or conveyances shall issue a notice specifying the tax and penalty payable and thereafter, pass an order for payment of tax and penalty under clause (a) or clause (b) of sub section (1).

(4) No penalty shall be determined under sub- section (3) without giving the person concerned an opportunity of being heard.

(5) On payment of amount referred in sub-section (1), all proceedings in respect of the notice specified in sub-section (3) shall be deemed to be concluded.

(6) Mere the person transporting any goods or the owner of the goods fails to pay the amount of penalty under sub-section (1) within fifteen days from the date of receipt of the copy of the order passed under sub-section (3), the goods or conveyance so detained or seized shall be liable to be sold or disposed of otherwise, in such manner and within such time as may be prescribed, to recover the penalty payable under sub-section (3):

Provided that the conveyance shall be released on payment by the transporter of penalty under sub-section(3) or one lakh rupees, whichever is less:

Provided further that where the detained or seized goods are perishable or hazardous in nature or are likely to depreciate in value with passage of time, the said period of fifteen days may be reduced by the proper officer.”

“130. Confiscation of goods or conveyance and levy of penalty

“(1) [Where] any person-

(i) supplies or receives any goods in contravention of any of the provisions of this Act or the rules made thereunder with intent to evade payment of tax; or

(ii) does not account for any goods on which he is liable to pay tax under this Act; or

(iii) supplies any goods liable to tax under this Act without having applied for registration; or

(iv) contravenes any of the provisions of this Act or the rules made thereunder with intent to evade payment of tax; or

(v) uses any conveyance as a means of transport for carriage of goods in contravention of the provisions of this Act or the rules made thereunder unless the owner of the conveyance proves that it was so used without the knowledge or connivance of the owner himself, his agent, if any, and the person in charge of the conveyance, then, all such goods or conveyances shall be liable to confiscation and the person shall be liable to penalty under section 122.

(2) Whenever confiscation of any goods or conveyance is authorised by this Act, the officer adjudging it shall give to the owner of the goods an option to pay in lieu of confiscation, such fine as the said officer thinks fit:

Provided that such fine leviable shall not exceed the market value of the goods confiscated, less the tax chargeable thereon:

Provided further that the aggregate of such fine and penalty leviable shall not be less than the [penalty equal to hundred per cent of the tax payable on such goods]:

Provided also that where any such conveyance is used for the carriage of the goods or passengers for hire, the owner of the conveyance shall be given an option to pay in lieu of the confiscation of the conveyance a fine equal to the tax payable on the goods being transported thereon.

(3) Mere any fine in lieu of confiscation of goods or conveyance is imposed under sub-section (2), the owner of such goods or conveyance or the person referred to in sub-section (1), shall, in addition, be liable to any tax, penalty and charges payable in respect of such goods or conveyance.

(4) No order for confiscation of goods or conveyance or for imposition of penalty shall be issued without giving the person an opportunity of being heard.

(5) Mere any goods or conveyance are confiscated under this Act, the title of such goods or conveyance shall thereupon vest in the Government.

(6) The proper officer adjudging confiscation shall take and hold possession of the things confiscated and every officer of Police, on the requisition of such proper officer, shall assist him in taking and holding such possession.

(7) The proper officer may, after satisfying himself that the confiscated goods or conveyance are not required in any other proceedings under this Act and after giving reasonable time not exceeding three months to pay fine in lieu of confiscation, dispose of such goods or conveyance and deposit the sale proceeds thereof with the Government.””

To put things in perspective, the Bench then envisages in para 3 that, “The facts are that in this case an order of penalty and tax was made against the goods but since the same was not paid within 14 days proceedings under Section 130 of the Act were initiated. At that stage also the owner of the goods did not come forward to pay the tax and penalty or the fine in view of the confiscation. However, the owner of the conveyance i.e. the petitioner went and paid the fine imposed on the vehicle but, since the vehicle was not released he has filed the present writ petition.”

As we see, the Bench then states in para 4 that, “Learned State counsel states that a perusal of Sub Section 1 of Section 129 of the Act clearly shows that on detention the goods and the vehicle can only be released on the payment of the applicable tax and penalty and the mere fact that Section 130 of the Act is subsequently invoked would not take away the rigour of Section 129 (1). She has further argued that there is no warrant for the proposition that the owner of the goods and the owner of the conveyance are two separate entities because as per her under the main Sub Section 2 of Section 130 of the Act it is clear that whoever wants the goods or the vehicle to be released has to pay the tax, penalty and fine imposed for all the things i.e. to say for the goods also as well as for the conveyance also. As per her, the proviso would not affect this basic provision.”

It is worth noting that the Bench then hastens to add in para 5 that, “In our opinion, if this argument is to be accepted then the Section might well be rendered unconstitutional. In CWP No.18392 of 2021 titled as M/s Shiv Enterprises Vs. State of Punjab and others, decided on 04.02.2022 this Court held as under :-

“21. Section 129 deals with contravention of the provisions of the Act by person transporting goods or storing goods while in transit. The provision provides for consequence of contravention of the provisions of the Act in form of detention or seizure of goods. In case, transport of goods in transit is found to be in contravention of the provisions of the Act, the same are liable to detention/seizure. On the other hand, Section 130 provides for S different situations in which the goods or conveyances are liable to confiscation and the person is liable to penalty under Section 122. Reading of Section 131 further makes it clear that Section 130 is a penal clause and confiscation is a form of punishment over and above other punishments prescribed under the Act. Section 130 is more stringent as compared to Section 129.

25. Men the aforesaid principles of law and the bare provisions of law are applied to the present case, we find that the investigation report relied upon by the respondents to initiate proceedings under Section 130 against the petitioner lacks sting. Under the 2017 Act, a trader is either a ‘supplier’ qua ‘outward supply’ or is a ‘recipient’ of ‘inward supply’. The alleged ‘intent to evade tax’ must have a direct nexus with the activity of trader. The opinion formed by the authorities must reflect such nexus before proceeding under Section 130 of 2017 Act. A trader cannot be accused of having intention to evade payment of tax for act or omission on part of a person not immediately linked to his activity. Learned counsel for the State agreed that even if a trader wants to be prudent, there is no system in place from where he can check as to whether his predecessors in supply chain have paid input tax credit or not. Meaning thereby, it is virtually impossible for a trader to ascertain as to whether input tax has been paid by his predecessors or not and it is for this reason also that the claim to input tax credit has been made subject to scrutiny and assessment. It is the fundamental legal principle embedded in legal maxim “LEX NON COGIT AD IMPOSSIBILIA”-That the law does not compel a man to do that which he cannot possibly perform”. Once a person cannot be compelled to do something not possible, definitely he cannot be penalized for not doing so.””

As a corollary, the Bench then most commendably holds in para 6 that, “By this judgment this Court has held that the principle of vicarious liability can not be extended indefinitely. In the present case also to force the owner of the conveyance to pay the tax, penalty and fine on the goods would mean that the owner of the conveyance is also foisted with the vicarious liability of any mis-declaration/fraud by the owner of the goods despite the proviso engrafted on to Sub Section 2 of Section 130 of the Act.”

As a consequence, the Bench then directs in para 7 that, “Consequently, the argument of the learned State counsel is rejected and it is directed that the conveyance be released forthwith. The goods obviously would be confiscated and disposed of by the respondents in accordance with law.”

Furthermore, the Bench then states in para 8 that, “Petition stands allowed.”

Finally, the Bench then concludes by holding in para 9 that, “Since the main case has been decided, the pending Misc. Application, if any, also stands disposed of.”

In conclusion, the Punjab and Haryana High Court has rightly, rationally and robustly held that owner of vehicle is not vicariously liable for any mis-declaration by owner of goods. It has adequately explains also the reasons for it as discussed herein aforesaid. No denying it in any way!

Sanjeev Sirohi, Advocate

By this judgment this Court has held that the principle of vicarious liability can not be extended indefinitely. In the present case also to force the owner of the conveyance to pay the tax, penalty and fine on the goods would mean that the owner of the conveyance is also foisted with the vicarious liability of any mis-declaration/fraud by the owner of the goods despite the proviso engrafted on to Sub Section 2 of Section 130 of the Act.

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‘The crime committed has to be considered in the remission or premature policy of the state’

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The Supreme Court in the case Radheshyam Bhagwandas Shah, Lala Vakil vs State of Gujarat observed that where the crime was committed has to be considered in the remission which is applicable in the State and the pre­mature release in terms of the policy

The Court noted while hearing the writ petition that in terms of the policy which is applicable in the State of Gujarat where the crime was committed and not the State where the trial stands transferred and concluded for exceptional reasons under the orders of this Court once the crime was committed in the State of Gujarat, after the trial been concluded and judgment of conviction came to be passed, all further proceedings have to be 6 considered including remission or pre­mature release, as the case may be, in the instance case. under Section 432(7) CrPC, there cannot be a concurrent jurisdiction of two State Governments, can be either the Central or the State Government of the appropriate government.

in terms of Section 432(7) CrPC, the trial was to be concluded in the same State and ordinarily in the State of Gujrat the crime in the instant case was admittedly committed. by an order 06.08.2004., the case was transferred in exceptional circumstances by this Court for limited purpose for trial and disposal to the neighbouring State i.e., the State of Maharashtra, observed by the bench of Apex Court.

As mentioned by the petitioner in the plea that by judgment impugned dated 17.07.2019., the application for pre­mature release has to be filed in the State of Maharashtra and not in the State of Gujarat and His petition filed in the High Court of Gujarat was dismissed taking note of Section 432(7) CrPC on the premise that since the trial has been concluded in the State of Maharashtra. under Sections 433 and 433A of the Code of Criminal Procedure, 1973, the petition was filled by the petitioner for premature release further the petitioner stated that that he had undergone under the custody of more than 15 years 4 months.

Section 302, 376(2) (e) (g) and reading it with Section 149 IPC, Shah was found guilty for the offence, the offence committed by him in the State of Gujrat.

The bench comprising of Justice Ajay Rastogi and the justice Vikram Nath observed that under Section 432(7) CrPC can be either the Central or the State Government but there cannot be a concurrent jurisdiction of two State Governments of that appropriate government.

The bench comprising of Justice Ajay Rastogi and the justice Vikram Nath observed that under Section 432(7) CrPC can be either the Central or the State Government but there cannot be a concurrent jurisdiction of two State Governments of that appropriate government.

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Seeking reduction of qualifying the percentile for admission in ayurveda course: A plea in Supreme Court

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The Supreme Court in the Case Amit Kumar v UOI & Or’s observed in Ayurveda course in view of large number of vacancies and for seeking reduction of qualifying percentile for admission, an ayurveda aspirant who appeared in NEET 2021 has approached the Court.

the court had observed that lowering the minimum marks and reducing the percentile for admission to first year BDS Course would not amount to lowing the standards of Education and further the Court directed to lower the percentile mark by 10 percentiles for admission in first year of BDS Course for academic year 2020-2021, with regards to substantive the contentions made by the petitioner by referring the judgement passed in the case in Harshit Agarwal & Or’s v Union of India.

the percentile may also be reduced for Ayurveda programme enabling the Petitioner to take admissions then If percentile is being reduced/considered for reduction for BDS course was further stated by the petitioner in the plea, while referring to an order dated 04.29.2022. Thereafter the top Court had asked Centre to consider lowering the percentile for BDS Courses.

Seeking the Centre’s response in a plea by filing a counter affidavit, noted by the Top Court specifying the above-mentioned information:

after deducting the admission granted for MBBS Courses (BDS Courses), the total number of Candidates.

in All India Quota and State Quota, the totals number of vacant seats.

in government colleges on one hand & private/deemed colleges on the other hand, the number of seats which are remaining.

the petition was filed through AOR Neeraj Shekhar and for the petitioner Advocate Shivam Singh appeared.

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Bank case rejected by Supreme Court against farmer

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The Supreme Court in the case Bank of Maharashtra & Or’s v Mohanlal Patidar observed an order given by the High Courts of directing the bank the OTS proposal given by a farmer who had availed a loan from the bank, the court further pulled up the Bank of Maharashtra for challenging the order.

The Bank shall complete remaining formalities and provide all consequential benefits flowing therefrom to the petitioners, the court further stated that it is needless to emphasize The OTS proposal given by the petitioners in both the cases shall be accepted by the Bank and ‘sanction letters’ be issued forthwith, the court allowed the petitioner plea.

The petitioner not only promptly challenged the said order, it is noteworthy that petitioner never acceded to the unilateral decision dated 25th August 2021 and even otherwise the letter dated 25th August 2021 is held to be illegal by us, clause-7 of policy cannot take away the fruits of OTS benefits, within two months from the date of issuance of order dated 22th September 2021, the petitioner filled the instant petition and further the court directed we are unable to give stamp of approval to the impugned orders and action of the Bank, observed by the bench comprising of Justice Sujoy Paul and the justice Dwarka Dhish Bansal while setting aside the impugned orders of the bank.

In an order dated 03.09.2021 it was stated and it showed that the petitioner was required to pay minimum 10% of the OTS amount within stipulated time and that he had deposited Rs.35,00,000/- out of Rs.36,50,000/- within the stipulated time, it was argued before the court by the counsel.

As full and final settlement of the dues, he will be required to deposit Rs.50.50 lakhs as he was informed by the Asset Recovery Branch of the Bank.

Whole law comes into place when a matter of farmers come as the down payment were also accepted and it was further stated by the bench in an oral remark You don’t file cases against the ones who loot 1000s of crores.

The respondent had obtained a loan and intended to pay it in terms of a One Time Settlement which was quantified as Rs 3650000/-. in furtherance thereof the respondent had deposited Rs 35,00,000 with the bank, in the above-mentioned matter.

The bank had miserably failed to accept the same and on the contrary, decided to enhance the compromise amount to Rs.50.50 lakhs unilaterally which was contrary to the OTS scheme, contended by the counsel further the counsel stated that the bank had miserably failed to accept the same and on the contrary, decided to enhance the compromise amount to Rs.50.50 lakhs unilaterally which was contrary to the OTS scheme.

The bench comprising of Justice DY Chandrachud and the justice Surya Kant observed and remarked while dismissing the plea assailing Madhya Pradesh High Court’s order dated 02.21.2022 Such a litigation in Supreme Court will spoil the families of farmers financially, Go after bigger fish.

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In Company Law the duomatic principle is applicable even in Indian context: Supreme Court

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The Supreme Court in the case Mahima Datla vs Renuka Datla observed and stated that it will be applicable even in the Indian context, if the same is consented by all members ‘strict adherence to a statutory requirement may be dispensed with if it is demonstrated in the Duomatic Principle.

It was therefore held that G.V. Rao never seized to be a Director of the Company in view of the acquiescence by Dr. Datla and he had withdrawn his resignation prior to its acceptance, the resignation dated 6th April 2013 was clearly not accepted by Mr. G.V. Rao, as it is clearly being showed by her conduct and there is overwhelming evidence to show that Dr. Datla had accepted Mr. G.V. Rao back into the Board, in this case the court noted.

anything the members of a company can do by formal resolution in a general meeting, they can also do informally, if all of them assent to it, as stated briefly in the Duomatic Principle as derived from the decision In Re: Duomatic Ltd further the court noted the case of Salmon v. Salmon Co. Ltd, as it was held in that case if a company is bound in a matter intra vires by the unanimous agreement of its members. As In Re the court noted that the Duomatic Principle as derived from the decision.

Mr. G.V. Rao continued to carry on as the Director in view of the acquiescence by Dr. Renuka Datla? And weather can the Duomatic Principle can be invoked to state that the issue of resignation of the Director had lapsed, as one of the issues being raise in the appeal filled before the Apex Court.

The High Court of Judicature at Hyderabad for the State of Telangana and Andhra Pradesh allowed the Company appeal filed by Dr. Datla and the court further issued the various directions as this petition was dismiised by the Board as only to ensure Dr. Datla doesn’t have sufficient shareholding to maintain a petition under Sections 397 and 398 of the Companies Act, 1950, as it was being approached by Dr. Datla to the Company Law Board complaining that the holding of board meetings was illegal as an attempt was made to increase the number of members in the Company.

there is no protest by Dr. Renuka Datla regarding attendance of Mr. G.V. Rao. Dr. Renuka Datla also participated in the Board Meetings dated 22nd August 2013 and 25th September 2013, without any protest for continuation of Mr. G.V. Rao as its Director as in the resolution passed. The latter which was placed in the meeting of the Board on 9th April 2013, seeking withdrawal of his resignation as on 6th April 2013, G.V Rao submitted his resignation letter and further which it was later withdrawn by G.V Rao on 9th April 2013. As on 20th March 2013 the late Dr. Vijay Kumar Datla as the directors of the Company were Biological E. Ltd are Dr. Renuka Datla and one G.V Rao.

The bench comprising of Justice Vineet Saran and the justice JK Maheshwari clarified that the said principle is only applicable in those cases wherein bona fide transactions are involved and that ‘Fraud’ is a clear exception.

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SUPREME COURT ASKS WEST BENGAL GOVERNMENT TO LOOK INTO REPORT OF OLDER WOMEN PUSHED INTO PROSTITUTION AFTER COVID IN SOUTH 24 PARGANAS

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The Supreme Court in the case Budhadev Karmaskar v. State of West Bengal and Or’s observed that women of older age groups are being forced into prostitution after the onset of the COVID-19 pandemic and further the court ordered the State of West Bengal to look into the issue that in South 24 Parganas District of West Bengal.

The traffickers who were finding it difficult to get hold of young women due to the lockdown had shifted focus and by taking advantage of their acute poverty which was being worsened by the pandemic engaged older women from West Bengal’s costa regions in prostitution. An article was referred by the Amicus, The Article covered the plight of the women in the Sunderban Delta region of West Bengal and stated and noted that the pandemic coupled with climate change is now pushing older women and even the grandmothers into the trade, the Article was published on the website of The Print.

The pandemic that has stretched on for more than two years, it was said by the activists working in the area and this made them vulnerable to traffickers who found it difficult to procure young women and minor girls and shifted focus to middle aged women from West Bengal’s coastal regions due to their abject poverty.

No precautionary measure are taken by the State Government though the State Government is aware it further request the State Government to look upon the issue as due to the pandemic In South 24 Parganas (West Bengal), aged women are being used for this purpose for their poverty.

The Bench asked the Counsel representing the State of West Bengal to look into this issue and respond when the matter is put up for hearing on 05.17.2022., At the request of the Amicus the bench directed.

The Bench Comprising of Justice L. Nageswara Rao and the justice B.R. Gavai observed that the older women in South 24 Parganas District of West Bengal, from poor families, especially after the onset of the pandemic, are being pushed into prostitution and the Amicus further alleged though the State Government aware of the same but the State Government have not taken any precautionary measures. The Bench noted while hearing a plea seeking various benefits for sex workers across the country, Amicus Curaie, Mr. Piyush K. Roy apprised it that, as per news reports.

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Supreme Court sets aside POCSO conviction; TN custom is of marriage of girl with maternal uncle

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The Supreme Court in the case K Dhandapani vs State observed while hearing a plea that after noticing that he had married the prosecutrix and had two children, a man accused in a POCSO case, the court set aside the conviction.

The Court cannot shut its eyes to the ground reality and disturb the happy family life of the appellant and the prosecutrix. Thereafter the Court said that it has been informed of the custom in Tamil Nādu of the marriage of a girl with the maternal uncle. if the accused-appellant does not take proper care of the prosecutrix, she or the State on behalf of the prosecutrix can move for modification of this Order, further being clarified by the Court. The bench is of the considered view that the conviction and sentence of the appellant who is maternal uncle of the prosecutrix deserves to be set aside in view of the subsequent events that have been brought to the notice of this Court, while considering the facts and circumstances of the Case.

The Court observed, while allowing the appeal that the marriage between the accused and the prosecutrix is not legal and it was submitted by the state in an appeal that the prosecutrix was aged 14 years on the date of the offence and gave birth to the first child when she was 15 years and the second child was born when she was 17 years.

the prosecutrix stated that she has two children and they are being taken care of by the appellant and she is leading a happy married life, the statement given by her was being noticed by the Court. the allegations submitted by the

the appellant against him was that he had physical relations with the prosecutrix on the promise of marrying her and that he married the prosecutrix and they have two children, submitted before the Apex Court.

Section 6 of Protection of Child from Sexual Offences (POCSO) Act, 2012 and reading with the Sections 5(j)(ii) read with Section 6, 5(I) read with Section 6 and 5(n). the maternal uncle of the prosecutrix who is the accused in the said case was being convicted under the said sections and was sentenced to undergo rigorous imprisonment for a period of 10 years by the Madras High Court.

The Bench comprising of Justice L Nageswara Rao and the justice B R Gavai observed while rejecting the objection raised by the State which contended that the marriage might be only for the purpose of escaping punishment that the court have been informed about the custom in Tamil Nādu of the marriage of a girl with the maternal uncle and on the ground of reality and to disturb the happy family life of the appellant and the prosecutrix, The Court cannot shut its eyes.

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