The Delhi High Court in Review: Mar, 2021 [Part II]

With its vast and varied case-docket, the High Court of Delhi has occasion to pronounce verdicts on diverse subjects and myriad areas of law. This two-part monthly column attempts to offer a brief over-view of the important pronouncements of the High Court of Delhi over the period of the relevant month in review.

While an attempt has been made to ensure the widest possible coverage of the various judgments rendered, comprehensive analysis and critique of the individual judgments is eschewed for the sake of brevity.

INTELLECTUAL PROPERTY RIGHTS

In Audioplus v. Manoj Nagar, the Court firstly summarized the broad applicable principles applicable to a passing-off action as under:

i. likelihood of confusion [which is probable and not simply possible] is a standard that is applied both in infringement actions and in passing off.

ii. The priority of use needs to be considered.

iii. A passing off action can lie even against the proprietor of a registered mark.

iv. In a passing off action, the plaintiff is required to establish that the misrepresentation made by the defendant in the course of the trade via the impugned marks is calculated to injure or damage its goodwill, which could be actual or a foreseeable consequence of the defendant’s actions. The misrepresentation need not be fraudulent. The tort of passing off i.e. deception / misrepresentation is agnostic to the intent of the defendant.

The Court also reiterated that when the plaintiff has made sufficiently long use of particularly distinct device mark then a special obligation was cast on the competitor to avoid confusion in any manner. The Court further observed that when the plaintiff has raised claims on the basis of a registered trademark qua which it has rights and on account of demonstrable prior use spanning over nearly a decade, then the mere fact that the plaintiff had abandoned an attempt to get a similar wordmark registered would not be relevant.

In Natures Essence Private Limited v. Protogreen Retail Solutions Private Limited, the Court noted the sui generis nature of interlocutory injunction applications in cases involving infringement of Intellectual Property; considering their irreversible nature inasmuch as an interlocutory injunction would result in the defendant’s business being brought to a halt, whereas non-grant thereof ran the risk of the market being flooded by the infringing good and the litigation being reduced to a mere claim for damages. The Court reiterated that if the alleged infringing trademark had been in use for a long period of time, then the Court would be more circumspect in granting an injunction against the defendant.

In Jagmohan Ratra v. Ampa Cycles Private Limited, the Court observed that the case of the defendant that it had itself applied for registration of the trademark in question on a “proposed to be used basis” would militate against the stand of the defendant before the Court that there was in fact prior use of the trademark by it.

In Dr. Reddy’s Laboratories Limited v. Eros International Media Limited, the Court held that the mere presence of a mark on the Register would not lead to automatic success in an action for infringement, and it was imperative to demonstrate continuous and sustained use of the mark to exemplify its distinctiveness.

LABOUR AND SERVICE LAW

In Kiran Gupta v. The University of Delhi, upon an examination of the relevant provisions of the Career Advancement Scheme, 2010 of the University Grants Commission, the Court held that the date of promotion would relate back to the date of eligibility and not to the date of interview.

In Raj Kumar v. National Human Rights Commission, the Court held that an order of repatriation without providing for the period of notice as prescribed under the relevant regulation would be unsustainable. It was further held that the repatriation is akin to termination of deputation and since the power of appointment includes the power to terminate, it is the appointing authority alone which was competent to take such a decision.

While rejecting the challenge to a skill test / typing test, the Court in Sandhya v. National Capital Territory of Delhi, observed that merely because there were a few complex or difficult words in the test, and there was a consequent difficulty in understanding the same when the audio clip was played during the test, the same would only be reflective of the poor English vocabulary of the candidates concerned and could not be a basis for interfering with the test especially when the candidates were given mock-tests in advance to make them familiar with the pattern, before subjecting them to the final test.

In Sanjeev Kumar Vishwakarma v. Union of India, the Court reiterated that the persons who are employed purely for the purpose of a specific project cannot seek any right to continue in service nor seek regularization or adjustment in some other role once the project for which they were engaged has come to an end.

In Rambir Singh Malik v. Greenfields Public School, the Court held that Rule 110(2) of the Delhi School Education Rules, 1973, which provides for the manner of re-employment of a retiring staff is mandatory in nature and not directory.

In Professor Shreekant Gupta v. University of Delhi, the Court held that there was nothing arbitrary or unreasonable in intending to bestow the benefit of seniority for the purpose of appointment as Head of Department only on those professors who had actually worked on the concerned post and not on a notional basis.

In ONGC Diploma Engineers Technical Association (DETA) v. Oil and Natural Gas Corporation Limited, the Court observed that a dispute between the employer and the workmen or between the labor unions and the workmen would fall within the definition of an industrial dispute under Section 2(k) of the Industrial Disputes Act, 1947 (“ID Act”) and would be amenable to the jurisdiction of the Industrial Tribunal alone.

In Dr. Ritu Singh v. University of Delhi, the Court held that though a contractual employee should not be substituted by another contractual employee in terms of the settled law, however, this proposition would not apply where the termination of employment is actioned on the basis of unsatisfactory service rendered by the employee concerned.

In Ehtesham-ul-Haque v. Union of India, the Court reiterated that it was not mandatory for a selection committee to give reasons for arriving at its conclusion as to the names recommended for appointment unless the applicable rule governing the appointment to the post in question so stipulates.

In Mukul Talwar v. Union of India, the Court held that in terms of the applicable regulations, the cost of treatment of a Central Government Health Scheme beneficiary in a private hospital was also liable to be reimbursed when the admission was under emergency circumstances.

In Sunil Kumar Nagpal v. Central Bank of India, the Court held that it was not open to a delinquent official to contend that he / she should be subjected to a more lenient approach or absolved of guilt all together merely because certain other officials who were also complicit in the act of misconduct complained of had not been proceeded against or were subjected to more lenient punishments.

While reiterating that transfer was an exigency of service, the Court in SUB (PA) Awadhesh K. R. Singh v. Union of India, noted that there was no vested right in getting a transfer to a particular post in a particular Embassy.

In Ravinder Kumar v. Union of India, while noting the difficulties faced by the General Reserve Engineering Force in accommodating the choice of posting for its various employees on the basis of serious ailments suffered by them, the Court observed that diseases like muscle spasm, club foot and asthma are not of such a serious magnitude so as to require any exceptional indulgence in relation to matters of transfer.

In Mahendra Rana v. Union of India, the Court deprecated the conduct of the petitioner in making false averments in relation to the mental health of his wife as a ruse to avoid an order of transfer.

In Divya v. Staff Selection Commission, the Court noted that having categorically applied for a post under the unreserved category, the candidate concerned could not subsequently seek to be treated under the Other Backward Class (“OBC”) category.

While interpreting Rule 7(2) of the BSF Recruitment Rules, 2001, the Court in Subodh Rokade v. Union of India through its Secretary, reiterated that in the case of direct entrants, the date of appointment shall be construed as the date of commencement of their training course at the Border Security Force Academy.

In Sonu v. Union of India, the Court observed that once the candidate has been disqualified by the Appeal Medical Board due to the existence of an unhealed wound, then merely because the said wound had allegedly healed much later in time could not be a ground to grant permission for conducting further medical examination.

While upholding the punishment imposed on the petitioner of removal from service, the Court in Ex. Ct. Sobendra Bhodana v. Union of India, observed that the act of pushing a senior officer into a ditch while the said officer was carrying a loaded carbine could not be brushed aside with a minor punishment.

In Prabhakaran Unnithan v. Union of India & in Anil Kumar Singh v. Union of India, it was reiterated that a Court would not enter into a complete re-evaluation and reappreciation of the evidence produced before the inquiry officer while exercising its writ adjudication.

In Avinash Dixit v. Union of India, the Court held that a relief granted to an official in respect to the Annual Confidential Report (“ACR”) grading is purely personal to the said individual, and a fellow official would not have the locus standi to challenge the same.

In Sumit Yadav v. Union of India, the Court refused to grant relief to the petitioner for being considered under the OBC category inasmuch as it noted that grant of such relief against an examination and selection procedure conducted in the year 2015 would have a serious cascading effect on the seniority of a large number of officers.

In Suresh Kumar v. Union of India, the Court held that there was no evidence to warrant the claim that the Railway Protection Force personnel were entitled to a separate medical categorization as compared to those persons working in the Railways.

In Vinod Kumar v. Union of India, the Court held that providing one method to draw up the inter se seniority of direct recruits and another method to draw up the inter se seniority of limited departmental competitive examination promotees could not be considered as discriminatory, since they represented two clear distinct classes.

While noting that the petitioner had willfully suppressed information in relation to his involvement in criminal proceedings at the stage of applying for the post in question, the Court in Sanoj Kumar Yadav Ex-Constable v. Union of India, noted that such conduct was especially at odds with the nature of employment with the Central Industrial Security Force, where the person would be required to provide security to installations and institutions of public importance.

InPrem Chandra Thakur v. Central Industrial Security Force, the Court reiterated that once an employee has been confirmed in service then it was mandatory to hold a departmental enquiry before the passing of a dismissal order on the ground of suppression of information or of having submitted false information in the application form.

In Ganesh Prasad Ram v. Union of India, the Court refused to interfere with the enhanced punishment imposed by the appellate authority inasmuch as it noted that the petitioner had indulged in reckless conduct and made various false averments including false allegations of caste discrimination.

In Hari Mohan Rathore v. Union of India, the Court rejected the challenge to adverse remarks against the petitioner in the ACR and noted that the pen picture of the petitioner clearly revealed his tendency to discriminate on the grounds of caste and region and which was completely unacceptable behavior from the officer of a Central para-military force.

In Bheem Singh Rawat v. Hon’ble High Court of Delhi through Registrar General, the Court reiterated that revaluation of the answer sheet in a departmental examination would only be permitted only in rare or exceptional cases if it was demonstrated very clearly, without any inferential process of reasoning or by a process of rationalization, that there had been a commission of material error.

In Dinkar Kumar Singh v. Union of India, the Court held that directions could not be passed which would have the impact of asking the Central para-military forces to lower or dilute their standards.

In Bhopal Singh v. Delhi Development Authority, the Court upheld the decision of the respondent in dispensing with an inquiry in exercise of power under Regulation 30(2) of the DDA Conduct, Disciplinary and Appeal Regulations, 1999 and imposing a penalty of dismissal of services while noting that the petitioner had carried out various violent acts, including assaulting higher officials of the respondent in the office premises, and had caused a complete fear psychosis within the organization, thereby rendering the holding of a formal disciplinary inquiry completely impractical.

In Union of India v. Dr. Shailja Saxena, the Court reiterated that when absorption to a post was on the basis of specific terms and conditions, then the benefit of past service could not be claimed as a matter of right.

In Dr. Shyam Lal v. Union of India, the Court reiterated that there was no question of granting promotion after the retirement / superannuation of the employee concerned.

In Delhi Transport Corporation v. Dheer Singh, the Court observed that for a driver, in a public transport undertaking, to be found drunk on duty is misconduct of the highest degree.

In Baiju G. v. Delhi Tourism And Transportation Development Corporation Limited, the Court held that there was no absolute proposition that an inquiry officer could not be substituted during the course of the inquiry especially when the decision taken was only for a further inquiry by the new officer and not a fresh inquiry as also cogent reasons had been given by the disciplinary authority for adopting the required action, including clearly recording the lacunae in the proceedings as conducted by the erstwhile inquiry officer.

In Biswari Mukherjee v. Punjab and Sind Bank, the Court reiterated that under usual circumstances, challenges to disciplinary proceedings at an interim stage should be eschewed.

In Azmira Bhima v. Union of India, the Court held that a rule providing for a power of relaxation could not be exercised in a manner so as to bestow an undue advantage or favour upon an employee as also to obliterate the mandate of the other applicable rules.

In North Delhi Municipal Corporation v. Vandana, the Court held that an award of regularization has to be given effect to and if the same is not done, owing to the pendency of a writ petition thereagainst, then the requisite amounts under Section 17B of the ID Act will become payable. The Court further observed that once the industrial dispute qua regularisation was pending consideration and had resulted in an award of regularisation, then any termination of employment in the interim is immaterial.

Upon an examination of the applicable Rule 25.13 of the National Textile Corporation Conduct Discipline and Appeal Rules, 2009, the Court in National Textile Corporation Limited v. S B Singh, held that if the record demonstrated that the competent authority had applied its mind and decided to issue a memorandum of charge to the employee concerned before his / her superannuation, then the date of the decision would be relevant and not the date on which the memorandum of charge was actually served on the employee concerned.

In Kendriya Vidyalaya Sangathan v. Manju Sahgel, the Court observed that in certain circumstances reliance could be placed on secondary documents to demonstrate that the employee concerned had exercised an option under the Contributory Provident Fund scheme, even if the original option form in this regard was unavailable.

In Khitesh Gupta v. Department of Personnel and Training, the Court held that in the absence of any specific provision in the Rules permitting an error detected during the medical examination held during the previous year of recruitment entitling the candidate to be given the benefit in a subsequent year of what has been denied in a previous year, no relief could be granted and the finality achieved by the result of the recruitment process could not be sought to be disturbed or varied in this manner.

While rejecting the prayer for reevaluation of the answer sheet of the candidate in question, the Court in Mahesh Kumar v. Staff Service Commission, reiterated that in the absence of any provision for re-evaluation, the same can be directed only in rare or exceptional circumstances.

In Manmod Shankar v. LIC of India, the Court observed that there was no such absolute proposition that a workman upon reinstatement would always be entitled to back wages unless shown to be gainfully employed elsewhere, and other factors such as the workman having been reinstated only because the punishment for removal from services was found to be disproportionate etc. would also have to be considered while determining this issue.

In Pankaj Kumar v. East Delhi Municipal Corporation, it was reiterated that while exercising the power under Article 226 of the Constitution, the Court could not grant regularization in public employment.

In Prashant Yadav v. Union of India, the Court reiterated that a cut-off date fixed for determining the eligibility for a particular post cannot be held to be arbitrary, unless it was demonstrated that the same was capricious or whimsical or very wide-off the reasonable mark.

In Union of India v. Archana Wadhwa, the Court held that pre-2017 appointees are to be governed by the CESTAT Members (Recruitment and Conditions of Service) Rules, 1987 (“1987 Rules”), and not by the Tribunal, Appellate Tribunal and Other Authorities (Qualifications, Experience and other Conditions of Members) Rules, 2017 (“2017 Rules”). The Court held that the petitioners could not seek to pick-and-choose beneficial provisions from both the Rules.

While rejecting a challenge to an order of dismissal on the ground of unauthorized absentation from duty, the Court in Ram Singh v. Union of India, observed that no public servant performing a vital public duty, can be permitted to absent himself as per his desire without even applying for leave and the same being sanctioned. The Court observed that if the employee applies for leave and is not granted the same, he / she would have remedies there against, however a causal approach of absenting form work without even applying for leave could not be countenanced.

In Shiv Shakti Tractor Corpn. v. Babloo Yadav, the Court reiterated that the inquiry proceedings would be rendered suspect once it was found that the inquiry officer was not impartial but, in fact, related to the employer.

In Sohan Pal Singh Sharma v. Delhi Development Authority, the Court held that once promotion or grant of MACP during the pendency of the prosecution against the employee concerned was clearly barred, any grant of such relief to the employee concerned in error would be corrected later while reverting the relief extended and no cavil could be found with such approach.

While reiterating that the Central Administrative Tribunal (“CAT”) was entitled to interfere with the punishment arrived at when the disciplinary authority has not taken into consideration the relevant matters, the Court in State of Rajasthan v. Pankaj Kumar Chaudhary, also further observed that specialized tribunals such as the CAT are deemed to be vested with the power of doing substantive justice in the matters of the government and its employees including determining if any apparent misconduct in private life, though breaching ethical standards, did not adversely impact the public at large nor disturbed the peace and harmony amongst the cadre and did not besmirch the image of the service, and the government servant concerned had ultimately settled the issue to the satisfaction of the aggrieved private party. The Court further observed that societal attitudes and norms of behavior had changed significantly over the last half-a-century since when the All India Services (Conduct) Rules, 1968, were framed and the said Rules, much like the law, have to be considered from a dynamic perspective while keeping in mind changes in societal behavior.

While noting that there was no such absolute proposition that the CAT upon finding the punishment imposed to be disproportionate was necessarily required to remit back the matter to the disciplinary authority, the Court in Union of India v. Manoj Kumar Baranwal, held that the CAT could itself substitute the punishment, particularly once it was found that remitting the matter would lead to unnecessary multiplicity of proceedings.

In Rajendra Prasad Sharma v. Union Public Service Commission, the Court reiterated that there were indeed certain exceptions to the general rule in relation to the exclusive jurisdiction of the CAT, and where the Court finds that the CAT would not be in a position to render justice in the case concerned on account of certain exceptional prevailing circumstances, there was no justifiable reason for the High Court to not entertain the writ petition on the ground of alternative remedy provided under the statute.

In Rahul Kumar Mishra v. Union of India, the Court held that no candidate had a right to continuation of the same syllabus for the scheme of examinations for an eternity, and as long as there was sufficient intimation given to the candidates about the change in syllabus, there could be no grievance against the said change.

LAND ACQUISITION

In Naresh Kumar v. Union of India, the Court reiterated that acquisition of the land would be said to have been lapsed only on the cumulative fulfillment of two independent conditions i.e., (i) possession of land has not been taken over, and (ii) compensation amount has not been paid or deposited or tendered with the Land Acquisition Collector (“LAC”). The Court further observed that in a case where the title of the party to the land in question was not admitted by the LAC, the special procedure for claiming compensation under such circumstances as prescribed under the Land Acquisition Act, 1894, would have to be taken recourse to by the aggrieved party and the said issue could not be adjudicated upon in a writ petition.

MATRIMONIAL DISPUTES, CUSTODY AND MAINTENANCE

In Prahlad Singh v. Seema @ Vidhya, the Court observed that the forms of customary divorce prevalent in certain areas and regions within the country have been consistently recognized, including in a statutory form under Section 29(2) of the Hindu Marriage Act, 1955, and the same permits marriages to be dissolved in accordance with local custom governing the parties.

In Sneha Ahuja v. Satish Chander Ahuja, the Court clarified that the judgment of the Supreme Court in Satish Chander Ahuja v. Sneha Ahuja [(2021) 1 SCC 414], does not bar the maintainability of an application offering alternative accommodation at an interim stage.

In Rakhi Sharma v. The State, the Court directed the requisite authorities under the Maintenance and Welfare of Parents and Citizens Act, 2007 (“Maintenance Act”), to clearly indicate in their Orders as to the concerned appellate forum and the remedy which was available to the parties as also the limitation period in proceedings under Section 7 of the Maintenance Act and Rule 23(3) of the Delhi Maintenance and Welfare of Parents and Senior Citizens Rules, 2009 (as amended in 2016).

In Sonam Asrani v. Government of NCT of Delhi, the Court deprecated the heavy handed and unauthorized intervention by the police officers and government officials in pressurizing the petitioner into providing an undertaking in a pending judicial proceeding under the Maintenance Act and directed an enquiry into the matter.

In Amit Kumar Sindhi v. Monika @ Kashish, the Court observed that while fixing the amount of maintenance to be paid by the husband to the estranged wife in an application under Section 125 of the Code of Criminal Procedure, 1973, the determination thereof by the Trial Court could not be based entirely on guess work and at least some material was required to be produced by the applicant wife so as to demonstrate the earning capacity of the husband.

In Deepak Kumar v. Meenu Sirohi, the Court observed that it is the duty of the marriage officer before whom a marriage is performed or registered to satisfy himself / herself that the marriage was indeed entered into voluntarily. The Court further observed that in the absence of any evidence being led by the estranged wife that the marriage was not lawfully performed on account of coercion and pressure, then the mere failure of the husband to cross-examine the witness or lead his own evidence could not override the complete lack of evidence having been led by the wife.

MEDIA LAW, CENSORSHIP, AND DEFAMATION, AND FREE SPEECH

While reiterating that the concept of free speech was an unalienable fundamental right, the Court in Dr. Reddy’s Laboratories Limited v. Eros International Media Limited, held that any perceived harm on the basis of an abstract and farfetched association and the feeling of discomfort generated by an artistic expression and its perceived impact on corporate goodwill would not be a valid ground for silencing and injuncting the very expression of that idea.

In Hindustan Media Ventures Limited v. Press Council of India, the Court prima facie observed that an all-encompassing order barring government advertising in the newspapers run by the petitioner would have extremely detrimental consequences on the financial health of the publications concerned and the proportionality of the same would have to be examined by the Court.

PERSONAL LAW AND SUCCESSION

In Ashok Baury v. State, the Court held that even though the general onus to prove a Will would be on the propounder, the person challenging the Will was also required to specifically state the grounds of challenge in the pleadings. The Court noted that though soundness of mind may require only a bare statement to be made, an allegation of an unsoundness of mind on the contrary would require a cogent demonstration in the form of proven consistent conduct etc. The Court further held that when an allegation of exercise of undue influence, fraud or coercion in the respect of the Will propounded is made, such pleas have to be proved by the party making the said allegations.

The Court observed that a Testamentary Court is a Court of conscience inasmuch as its judgment would operate as a judgment in rem by establishing the document being propounded as a valid Will and accordingly rendering all intermediate actions of the executor as valid. The Court further reiterated that the aspect of soundness of mind as defined under Section 12 of the Indian Contract Act, 1872, would have application in relation to determining the issue of soundness of mind for making of a Will as well. The Court noted that the question of the deceased testator/testatrix being under undue influence would arise only if he / she was in a position to be influenced i.e., of sound mind, and if the testator / testatrix was of unsound mind, the question of him/her being influenced would not even arise.

RENT CONTROL

In Permanand Vijay Kumar v. Smt. Savitri Devi, the Court noted the difference between Section 14(1)(a) and Section 14(2) of the Delhi Rent Control Act, 1958 (“DRC Act”) and observed that for the purpose of the latter, mere tendering of the rent would not suffice and there has to be an actual payment or deposit of rent unlike in the case of the former. The Court further held that as on the date of the notice, the Rent Controller would have to examine as to whether the conditions of Section 14(1)(a) of the DRC Act were at all made out by the landlord. In case the Rent Controller found that on the date of the notice, there was no default on part of the tenant in payment of the rent as no rent legally recoverable from him/her was due or that the rent was duly tendered to the landlord, then the question of moving onto the stage of Section 14(2) of the DRC Act would not at all arise and the eviction petition would be forthwith dismissed as being without any valid cause of action.

In The Technological Institute of Textiles and Sciences v. Shree Nath ji Developers, the Court held that alternative premises have to be readily available and usable for the landlord concerned and if the alternative premises in question were under the threat of sealing/demolition, it could not be said that the said premises were readily available with the landlord. The Court further observed that the tenant had not undertaken any effort to prove that the said premises were in fact readily available for use by the landlord.

In Ashok Mittal v. Sudhesh Mehta, it was reiterated that while sitting in revisional jurisdiction, the Court does not act as an appellate forum and is only concerned with ensuring that the Rent Controller has not committed any jurisdictional error and has passed an Order on the basis of material available before him/her.

SPECIFIC RELIEF AND PROPERTY

In Bari Bhati and Chhoti Bhati Resident Welfare Association v. Government of NCT of Delhi, the Court held that the National Capital Territory of Delhi Laws (Special Provisions) Act, 2006, would not be applicable to forest land. The Court further held that in order to stake a claim as being “Other Traditional Forest Dwellers” under the Schedule Tribes & Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 (“Recognition of Forest Rights Act”), it was incumbent on the person concerned to first file a claim before the concerned Gram Sabha under Section 6(1) of the Recognition of Forest Rights Act. The Court also observed that the mere fact that an un-authorized structure had been built on the forest land several decades ago would not create any right in favor of the occupants to continue to illegally occupy the land in question.

In Syed Aijaz Hussain v. Islahuddin Khan, the Court reiterated that merely because an electricity meter or a house-tax receipt was in the name of a particular person, the same would not by itself be sufficient to establish title to the property in question in the absence of any other title documents.

In Vaibhav Gupta v. Real Estate Regulate Authority, the Court reiterated that if there was the existence of any unauthorized construction, then any party aggrieved therefrom would be entitled to approach the Special Task Force set up by the Supreme Court in this regard.

In Naharpur Yuva Shakti RWA v. Union of India, the Court expounded upon the rationale behind the Master Plan for Delhi (“MPD”) which has been prepared to meet the demands and requirements of the city and to ensure planned urbanisation. The Court noted that a Zonal Development Plan contains detailed information regarding provisions of social infrastructure, parks, open spaces and circulation system of the concerned identified Zone. It was further noted that a layout plan means a sub-division plan indicating configuration and sizes of all used premises, and that the said layout plan demarcates specific areas which can be used for different purposes. The Court thus surmised that when certain plots have been categorized as residential plots in terms of the layout plan for the area in question, no injunction could be sought against the said plots being put to such use.

In Krishan Chanda v. Mohinder Jit Singh, the Court upheld the direction of the Trial Court in apportioning the cost of replacing the pipelines and accessories in a building majorly on the defendants inasmuch as it found that if remedial measures had been taken by defendants at an appropriate stage, then further damage to the property could have been avoided.

STAMP ACT AND COURT FEE

In Shiv Kumar Gupta v. Pooja, the Court held that with the plaintiffs having claimed a specific amount as damages, they were liable to pay court fee on such determined amount. The Court held that the plaintiffs could not arbitrarily value the reliefs claimed so as to avoid the liability of paying the court fee. The Court further reiterated that when certain positive objective standards were available for the purpose of determination of the valuation of the relief, and despite the same, the plaintiff proceeds with a manifestly arbitrary valuation, then the Court would be entitled to interfere under Order VII Rule 11(b) of the CPC.

In Vijay Kumar v. Mera Baba Infrastructure Private Limited, the Court reiterated that the benefit of refund of Court fee would extent to all methods of out-of-court settlement between the parties that the Court subsequently finds to have been legally arrived at, including a purely private settlement.

TAX, EXCISE AND CUSTOMS

While expounding on the concept of the commercial prudence of an assessee in matters of valuation of an asset, the Court in Principle Commissioner of Income Tax-2 v. Cinestaan Entertainment Private Limited, reiterated that the law mandates the determination of fair-market value to be undertaken as per a prescribed and recognised methodology. The Court further observed that when the assessee had utilized and recognized an accepted method to arrive at the fair-market value, then merely because the ultimate financial performance of the assessee did not match the projections would not be a ground for the revenue to challenge the valuation on that basis.

In National Highways Authority of India v. C.P. Rama Rao, the Court observed that the enactment of the Goods and Services Tax Act, 2017 (“GST Act”), brought into force an entirely novel tax regime and the same amounted to a significant change in law.

In Ingenico International India Private Limited v. Deputy Commissioner of Income-Tax, Circle 10(1), the Court held that a plain reading of Section 241A of the Income Tax Act, 1961 (“IT Act”), shows that the mere issuance of a scrutiny notice under Section 143(2) of the IT Act cannot stall the remittance of refund to the assessee. The Court further held that the refund can only be stalled if the conditions stipulated in Section 241A of the IT Act are fulfilled viz. the Assessing Officer (“A.O.”) records reasons in writing as to why the release of refund is likely to affect the interests of the revenue and that this step of the A.O. receives the imprimatur of the Principal Commissioner or Commissioner as the case may be.

In Shyam Sunder Sethi v. Pr. Commissioner of Income Tax-10, the Court held that an appeal would be said to be “pending” in the context of Section 2(1)(a) of the Direct Tax Vivad Se Vishwas Act, 2020 (“Direct Tax Act”), from when the appeal is first filed till its disposal. It was observed that Section 2(1)(a) of the Direct Tax Act does not stipulate that the appeal should be admitted before the specified date, and that it only adverts to its pendency.

In Synfonia Tradelinks Private Limited v. Income Tax Officer, Ward-22(4), the Court reiterated the principles governing the initiation of proceedings under Section 147 of the IT Act as under:

i. The reasons which lead to the formation of opinion or belief that the assessee’s income chargeable to tax has escaped assessment should be inextricably connected. In other words, the reasons for the formation of opinion should have a rational connection with the formation of the belief that there has been an escapement of income chargeable to tax [See: ITO v. Lakhmani Mewal Das, 1976 3 SCC 757]

ii. The expression "reason to believe" is stronger than the word "satisfied". The belief should be based on material that is relevant and cogent. [See: Ganga Saran & Sons Pvt. Ltd. v. ITO, 1981 3 SCC 143].

(ii)(a) The assessing officer should have reasons to believe that the taxable income has escaped assessment. The process of reassessment cannot be triggered based on a mere suspicion. The expression "reason to believe" which is found in Section 147 of the IT Act does not have the same connotation as "reason to suspect". The order recording reasons should fill this chasm. The material brought to the knowledge of the assessing officer should have nexus with the formation of belief that the taxable income of the assessee escaped assessment; the link being the reasons recorded, in that behalf, by the assessing officer.

iii. The A.O. is mandatorily obliged to record reasons before issuing notice to the assessee under Section 148(1) of the IT Act. This is evident from the bare perusal of sub-section (2) of Section 148 of the IT Act.

iv. No notice can be issued under Section 148 of the IT Act by the A.O. after the expiry of four years from the end of the relevant Assessment Year (AY) unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner arrives at a satisfaction based on the reasons recorded by the A.O. that it is a fit case for issuance of a notice under Section 148 of the IT Act. [See: Section151(1) of the IT Act].

v. The limitation for issuance of notice under Section 148 of the IT Act as prescribed under Section 149 of the IT Act commences from the date of its issuance while the time limit for passing the order of assessment, reassessment, computation and re-computation as prescribed under Section 153 of the IT Act commences from the date of service [See: R.K. Upadhyay v. Shanab Bhai P. Patel, (1987) 3 SCC 96].

A jurisdictional error would occur, which can be corrected by a writ court, if reasons to believe are based on grounds that are either arbitrary and/or irrational. [See: Sheo Nath Singh v. Appellate ACIT, Calcutta (1972) 3 SCC 234].”

In The Pr. Commissioner of Income Tax - Central -3 v. Taneja Developers and Infrastructure Limited, the Court held that penalty could not be imposed on the assesses only because it had made a new claim purely in line with the change in its accounting policy in a fresh return.

In The Pr. Commissioner of Income Tax -6 v. Miele India Private Limited, the Court upheld the Order of the Income Tax Appellate Tribunal directing deletion of the addition made by the A.O. towards pre-operating expenses and advertising expenses and Court observed that there is a difference between the setting-up of business and the commencement of business. Execution of lease deeds for its premises, engagement of senior employees, carrying out of local purchases and sales would all clearly point to the setting up of the business, and hence the disallowing of the expenditure in question was completely flawed. The Court further observe that Goodwill, which is built based on the reputation acquired over the years is an intangible asset, which can be said to be monetized when the business is sold, and therefore, the disallowing of advertising expenditure on this basis was also completely erroneous.

In TMA International Private Limited v. Union of India, the Court observed that the interest at the rate of 7% simple from the date of filing of shipping bills till the date of actual refund was an appropriate rate of interest for delayed refund of Integrated Goods and Services Tax (“IGST”).

In PR. Commissioner of Income Tax – 04, NEW DELHI v. HCL Comnet Systems and Services Limited, the Court reiterated that inasmuch as the scope and power under Section 260A of the IT Act is for the High Court to adjudicate upon substantive questions of law, hence, without even taking a ground in the appeal in this regard or laying any edifice thereof, the Revenue could not contend as a matter of right that the matter should be adjudicated upon by the Court.

In GE Capital Mauritius Overseas Investments v. Deputy Commissioner of Income Tax, the Court held that under the garb of a challenge to an Order under Section 41A of the IT Act, the question of tax liability itself could not be sought to be determined inasmuch as it would be tantamount to entertaining a challenge to the assessment underway in exercise of writ jurisdiction. The Court held that the scope of scrutiny would have to be confined to whether grant of refund is likely to adversely affect the revenue i.e., whether there was a complete absence of a basis for the opinion that if refund were to be granted at the present juncture, then the tax, if any found due on subsequent completion of assessment underway of the Income Tax Return (“ITR”) claiming refund, would not be recoverable. It was, however, noted that in a gross case where even though a notice under Section 143(2) of the IT Act might have been issued but there was no material to controvert the ITR, the Court would then be entitled to quash the Order passed under Section 241A of the IT Act.

TENDER AND BLACKLISTING

In Rhonpal Biotech Private Limited v. New Delhi Municipal Council, the Court reiterated that an order of blacklisting could not be sought to be implemented in a manner by which it would continue indefinitely.

Dr. Amit George is an Advocate practicing before the High Court of Delhi.

The author would like to place on record his appreciation for the assistance provided by Advocates Amol Acharya, Bharat Rayadurgam and Piyo Harold Jaimon.