Held: 18. We are in agreement with the decision of this Court in Reninkuntla Rajamma (supra) that there is no provision in law that ownership in property cannot be gifted without transfer of possession of such property. However, the conditions precedent of a gift as defined in Section 122 of the Transfer of Property Act must be satisfied. A gift is transfer of property without consideration. Moreover, a conditional gift only becomes complete on compliance of the conditions in the deed.
19. In the instant case, admittedly, the deed of transfer was executed for consideration and was in any case conditional subject to the condition that the donee would look after the petitioner and her husband and subject to the condition that the gift would take effect after the death of the donor. We are thus constrained to hold that there was no completed gift of the property in question by the appellant to the respondent and the appellant was within her right in cancelling the deed.
S. Basavaraj, Member, Karnataka State Bar Council.
The recent challenge before the Supreme Court in Writ Petition 1479/2020 questions the Notification of the Andra Pradesh Public Service Commission dated 3:12:2020. The Notification invites applications for appointment of Civil Judges Junior Division in the AP State Judicial Service for Advocates having a minimum eligibility requirement of 3 years as practicing advocate.
The Supreme Court in All India Judges Association and others vs Union of India and others , Writ Petition (Civil) 1022/1989 decided on 21 March 2002,Justice B.N. Kirpal, Justice G.B. Pattanaik and Justice V.N. Khare, relied on the report of Justice K.Jagannatha Shetty and observed as follows:
“In the All India Judges’s case [1993] 4 SCC 288 at p. 314; this Court has observed that in order to enter the Judicial Service, an applicant must be an Advocate of at least three year’s standing. Rules were amended accordingly. With the passage of time, experience has shown that the best talent which is available is not attracted to the Judicial Service. A bright young law graduate after 3 year of practice finds the Judicial Service not attractive enough. It has been recommended by the Shetty Commission after taking into consideration the views expressed before it by various authorities, that the need for an applicant to have been an Advocate for at least 3 years should be done away with. After taking all the circumstances into consideration, we accept this recommendation of the Shetty Commission and the argument of the learned Amicus Curiae that it should be no longer mandatory for an applicant desirous of entering the Judicial Service to be an Advocate of at least three years’ standing we accordingly, in the light of experience gained after the judgment in All India Judges’ cases direct to the High Courts and to the State Governments to amend their rules so as to enable a fresh law graduate who may not even have put in even three years of practice, to be eligible to compete and enter the Judicial Service. We, however, recommend that a fresh recruit into the Judicial Service should be imparted with training of not less than one years, preferably two years. The Shetty Commission has recommended Assured Career Progessive Scheme and Functional Scales. We have accepted the said recommendation and a suggestion was mooted to the effect that in order that a Judicial Officer does not feel that he is stagnated there should be a change in the nomenclature with the change of the pay scale.” (PDF copy of the judgment is below.
The Bar Council of India has issued a press release dated 2 January 2021 stating that it is filing an application for impleadment as party in Writ Petition 1479/2020 and to plead in favour of the urgency and requirement to have a minimum 3 year experience at the Bar as a requirement to be eligible to sit in the Judicial Service Exam.
The BCI has expressed deep concern over Judicial Officers not having practical experience at the Bar being incapable and inept in handling matters. BCI says that most of such officers are found impolite and impractical in their behaviour with the Members of the Bar and litigants. ‘They have lack of understanding of the aspirations and expectations of Advocates and litigants in the matter of proper and decent behavior’, the BCI letter says.
Many experienced lawyers practicing in the trial court concur with the views of the BCI. ‘There is immediate need for making minimum practice as lawyer as a qualification to be a judge’, they say.
Since the judgment in All India Judges Association case was delivered by three Hon’ble Judges of the Supreme Court, it is necessary that a larger bench is constituted to consider its validity.
Para 16. The submission of the learned counsel for the appellant that the appellant being in possession of the subject property in question at the time when the 1956 Act came into force and by virtue of Section 14(1) of the Act became an absolute owner of the subject property and the decree being a nullity is inexecutable and it is a jurisdictional error against the policy of legislature, is without substance for the reason that Section 14(1) of the Act, 1956 clearly envisages that the possession of the widow, however, must be under some vestige of a claim, right or title or under any of the devise which has been purported under the law. Undisputedly, in the instant case, the appellant was not holding any valid possession over the subject property and as already observed, opening of fiscal proceedings would not confer a right of acquisition by either of the devise which has been referred to under the Explanation to Section 14(1) of the 1956 Act. Section 14 of the 1956 Act is as under: “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.”
17. The effect of Section 14, after the 1956 Act came to be examined by a three-Judge Bench of this Court in Eramma v. Veerupana, AIR 1966 SC 1879 is as under: (AIR pp. 1881-82, paras 6-7) “6. It was next contended by the appellant that she was admittedly in possession of half the properties of her husband Eran Gowda after he died in 1341-F and by virtue of Section 14 of the Hindu Succession Act she became the full owner of the properties and Respondents 1 and 2 cannot therefore, proceed with the execution case. We are unable to accept this argument as correct. At the time of Eran Gowda’s death the Hindu Women’s Rights to Property Act, 1937 (18 of 1937) had not come into force. It is admitted by Mr Sinha that the Act was extended to Hyderabad State with effect from 7-2-1953. It is manifest that at the time of promulgation of the Hindu Succession Act, 1956 the appellant had no manner of title to properties of Eran Gowda.
7.It is true that the appellant was in possession of Eran Gowda’s properties but that fact alone is not sufficient to attract the operation of Section 14. The property possessed by a female Hindu, as contemplated in the section, is clearly property to which she has acquired some kind of title whether before or after the commencement of the Act. It may be noticed that the Explanation to Section 14(1) sets out the various modes of acquisition of the property by a female Hindu and indicates that the section applies only to property to which the female Hindu has acquired some kind of title, however restricted the nature of her interest may be. The words “as full owner thereof and not as a limited owner” as given in the last portion of sub-section (1) of Section 14 clearly suggest that the legislature intended that the limited ownership of a Hindu female should be changed into full ownership. In other words, Section 14(1) of the Act contemplates that a Hindu female who, in the absence of this provision, would have been limited owner of the property, will now become full owner of the same by virtue of this section. The object of the section is to extinguish the estate called limited estate or “widow’s estate” in Hindu Law and to make a Hindu woman, who under the old law would have been only a limited owner, a full owner of the property with all powers of disposition and to make the estate heritable by her own heirs and not revertible to the heirs of the last male holder. The Explanation to sub-section (1) of Section 14 defines the word “property” as including ‘both movable and immovable property acquired by a female Hindu by inheritance or devise …’. Sub-section (2) of Section 14 also refers to acquisition of property. It is true that the Explanation has not given any exhaustive connotation of the word “property” but the word “acquired” used in the Explanation and also in sub-section (2) of Section 14 clearly indicates that the object of the section is to make a Hindu female a full owner of the property which she has already acquired or which she acquires after the enforcement of the Act. It does not in any way confer a title on the female Hindu where she did not in fact possess any vestige of title. It follows, therefore, that the section cannot be interpreted so as to validate the illegal possession of female Hindu and it does not confer any title on a mere trespasser. In other words, the provisions of Section 14(1) of the Act cannot be attracted in the case of a Hindu female who is in possession of the property of the last male holder on the date of the commencement of the Act when she is only a trespasser without any right to property.”
18. It was further considered by a three-Judge Bench of this Court in V. V. Tulasamma v. Sesha Reddy, (1977) 3 SCC 99 and interpretation of Sections 14(1) and (2) of the 1956 Act has been summarised as under: (SCC pp. 135-36, para 61)
61. We would now like to summarise the legal conclusions which we have reached after an exhaustive considerations of the authorities mentioned above on the question of law involved in this appeal as to the interpretation of Sections 14(1) and (2) of the 1956 Act. These conclusions may be stated thus: (1) The Hindu female’s right to maintenance is not an empty formality or an illusory claim being conceded as a matter of grace and generosity, but is a tangible right against property which flows from the spiritual relationship between the husband and the wife and is recognised and enjoined by pure Shastric Hindu Law and has been strongly stressed even by the earlier Hindu jurists starting from Yajnavalkya to Manu. Such a right may not be a right to property but it is a right against property and the husband has a personal obligation to maintain his wife and if he or the family has property, the female has the legal right to be maintained therefrom. If a charge is created for the maintenance of a female, the said right becomes a legally enforceable one. At any rate, even without a charge the claim for maintenance is doubtless a pre-existing right so that any transfer declaring or recognising such a right does not confer any new title but merely endorses or confirms the pre-existing rights. (2) Section 14(1) and the Explanation thereto have been couched in the widest possible terms and must be liberally construed in favour of the females so as to advance the object of the 1956 Act and promote the socio-economic ends sought to be achieved by this long needed legislation. (3) Sub-section (2) of Section 14 is in the nature of a proviso and has a field of its own without interfering with the operation of Section 14(1) materially. The proviso should not be construed in a manner so as to destroy the effect of the main provision or the protection granted by Section 14(1) or in a way so as to become totally inconsistent with the main provision. (4) Sub-section (2) of Section 14 applies to instruments, decrees, awards, gifts, etc. which create independent and new titles in favour of the females for the first time and has no application where the instrument concerned merely seeks to confirm, endorse, declare or recognise pre-existing rights. In such cases a restricted estate in favour of a female is legally permissible and Section 14(1) will not operate in this sphere. Where, however, an instrument merely declares or recognises a pre-existing right, such as a claim to maintenance or partition or share to which the female is entitled, the sub-section has absolutely no application and the female’s limited interest would automatically be enlarged into an absolute one by force of Section 14(1) and the restrictions placed, if any, under the document would have to be ignored. Thus where a property is allotted or transferred to a female in lieu of maintenance or a share at partition, the instrument is taken out of the ambit of sub-section (2) and would be governed by Section 14(1) despite any restrictions placed on the powers of the transferee. (5) The use of express terms like “property acquired by a female Hindu at a partition”, “or in lieu of maintenance”, “or arrears of maintenance”, etc. in the Explanation to Section 14(1) clearly makes sub-section (2) inapplicable to these categories which have been expressly excepted from the operation of sub-section (2). (6) The words “possessed by” used by the legislature in Section 14(1) are of the widest possible amplitude and include the state of owning a property even though the owner is not in actual or physical possession of the same. Thus, where a widow gets a share in the property under a preliminary decree before or at the time when the 1956 Act had been passed but had not been given actual possession under a final decree, the property would be deemed to be possessed by her and by force of Section 14(1) she would get absolute interest in the property. It is equally well settled that the possession of the widow, however, must be under some vestige of a claim, right or title, because the section does not contemplate the possession of any rank trespasser without any right or title. (7) That the words “restricted estate” used in Section 14(2) are wider than limited interest as indicated in Section 14(1) and they include not only limited interest, but also any other kind of limitation that may be placed on the transferee.”
19. In Eramma v. Veerupana, AIR 1966 SC 1879, the widow was in possession of the half of the property of her late husband and claimed her absolute ownership by virtue of Section 14 of the 1956 Act which was negated by this Court for the reason that the widow was not holding possession over the subject property in question under any of the devise indicated in the Explanation to Section 14(1) of the 1956 Act.
20. Wherein V. Tulasamma v. Sesha Reddy, (1977) 3 SCC 99, it was an admitted case before the Court that the suit property came in possession of the widow under a compromise in execution of decree of the Court, restricting her right of alienation in recognition of right to maintenance, having pre-existing right over the subject property in question on the date the 1956 Act came into force (i.e. 17-6-1956). In that reference, the claim was considered by this Court and held that the pre-existing right of the widow on the date of the commencement of the 1956 Act will get her the absolute rights over the subject property.
21. In the instant case, the appellant although was holding possession but not under any of the devise referred to under the Explanation to Section 14(1) of the 1956 Act and mere possession would not confer pre-existing right of possession over the subject property to claim full ownership rights after the 1956 Act came into force by operation of law.
The Karnataka High Court is considering the constitutional validity of Sections 79A and 79B of the Karnataka Land Reforms Act. Validity of 34th Amendment to the Constitution of India by which Karnataka Act 1 of 1974 was included in the IX Schedule is directly under attack on the touchstone of Articles 14, 19 and 21 golden triangle.
Overture: With the Supreme Court recognising Articles 14, 19 and 21 golden triangle as part of the basic structure of the Constitution of India in I.R. Coelho v. State of T.N., (2007) 2 SCC 1, challenge to amendment of the Constitution on the anvil of Article 13(2) as enunciated in Golak Nath v. State of Punjab, AIR 1967 SC 1643 has finally reached its original destination at least to a quintessential level.
Article 13 which occurs in Part III Fundamental Rights, as it originally enacted in 1950, read thus;
13. Laws inconsistent with or in derogation of the fundamental rights.—(1) All laws in force in the territory of India immediately before the commencement of this Constitution, in so far as they are inconsistent with the provisions of this Part, shall, to the extent of such inconsistency, be void. (2) The State shall not make any law which takes away or abridges the rights conferred by this Part and any law made in contravention of this clause shall, to the extent of the contravention, be void. (3) In this article, unless the context otherwise requires,— “law” includes any Ordinance, order, bye-law, rule, regulation, notification, custom or usage having in the territory of India the force of law; “laws in force” includes laws passed or made by a Legislature or other competent authority in the territory of India before the commencement of this Constitution and not previously repealed, notwithstanding that any such law or any part thereof may not be then in operation either at all or in particular areas.
Article 13(1) declares that the laws that existed as on 26 January 1950 as void to the extent of their inconsistency with Part III.
The sub-article that paved the way for prolonged constitutional scrutiny is Article 13(2) which mandates the State not to make any law which takes away the rights conferred in Part III. It also declares as void any law made in contravention of clause 13(2) to the extent of the contravention.
Political tête-à-tête. One of the major steps undertaken by Pandit Nehru government to bring socialistic reforms in the Indian rural economy was land reforms. This resulted in the enactment of various land reforms legislations known as Zemindary Abolition Acts in Bihar, Uttar Pradesh and Madhya Pradesh. There was immediate challenge to these legislations. The High Court at Patna held that the Act passed in Bihar was unconstitutional while the High Courts at Allahabad and Nagpur upheld the validity of the corresponding legislation in Uttar Pradesh and Madhya Pradesh respectively. Needless to say, declaration of unconstitutionality led to political goals reaching their dead-end. There was immediate need to insulate land reform legislations from constitutional impingement. The result was the very first amendment to Constitution in 1951.
Inbuilt insulation of land reform laws: The first amendment to the Constitution introduced Article 31A and 31B with effect from 18 June 1951. While Article 31A saved laws providing for acquisition of estates, Article 31B validated certain Acts and Regulations. Unlike the present day lengthy version, Article 31A (before 1955 amendment) had only two paragraphs which read thus;
31A (1) Notwithstanding anything in the foregoing provisions of this Part, no law providing for the acquisition by the State of any estate or of any rights therein or for the extinguishment or modification of any such rights shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by, any provisions of this Part: Provided that where such law is a law made by the Legislature of a State, the provisions of this article shall not apply thereto unless such law, having been reserved for the consideration of the President, has received his assent.
Introduction of Article 31A was in direct confrontation with Article 13(2) to a limited extent i.e. mainly saving laws providing for acquisition of estate and rights thereon.
Article 31B provided a unique constitutional insulation to certain legislations by creating Schedule IX and validating the laws inserted therein notwithstanding their inroad into Part III or they being contrary to any judgment, decree or order of any court or tribunal.
Article 13(2) vs Article 368. The first amendment which diluted Article 13(2) to a certain extent was met with stern opposition. The Supreme Court Sankari Prasad Singh Deo v. Union of India, AIR 1951 SC 458, had to deal with one of the powerful arguments that the Amendment Act, in so far as it purports to take away or abridge the rights conferred by Part III of the Constitution, falls within the prohibition of article 13(2). The Court conceded that “law” must ordinarily include constitutional law. However, the Court said there is a clear demarcation between ordinary law, which is made in exercise of legislative power, and constitutional law, which is made in exercise of constituent power. The Court opined that in the context of article 13 “law” must be taken to mean rules or regulations made in exercise of ordinary legislative power and not amendments to the Constitution made in exercise of constituent power, with the result that article 13(2) does not affect amendments made under article 368.
A second formidable challenge to the amending power of the Parliament touching fundamental rights was made in Sajjan Singh v. State of Rajasthan, AIR 1965 SC 845. The challenge was to the 17th amendment which sought to, inter alia, amend the definition of “estate” in article 31A of the Constitution by including therein, lands held under ryotwari settlement and also other lands in respect of which provisions are normally made in land reform enactments. Many more agrarian reform legislations were added to Schedule IX from entry 21 to 64.
Though the argument based on Article 13(2), along with another argument based on power of High Courts under Article 226 (Article 368, first proviso) were repelled, the foundation for the Basic Structure doctrine was laid by his lordship Justice J.R. Mudholkar by posing the following question “Whether making a change in a basic feature of the Constitution can be regarded merely as an amendment or would it be, in effect, rewriting a part of the Constitution; and if the latter, would it be within the purview of Article 368?”
Parliamentary emasculation: The confrontation reached its crescendo when eleven judge bench of the Supreme Court declared in Golaknath v. State of Punjab, AIR 1967 SC 1643 that – Amendment is‘law’ within the meaning of Article 13 of the Constitution and, therefore, if it takes away or abridges the rights conferred by Part III thereof, it is void. The Supreme Court declared that the Parliament had no power from the date of the decision to amend any of the provisions of Part III of the Constitution so as to take away or abridge the fundamental rights enshrined therein.
However, Golaknath did not accept the ‘basic feature’ test which was suggested in Sajjan Singh. Their lordship opined that if such an implied limitation were to be put on the power of amendment contained in Article 368, it would only be the courts which would have the power to decide what are basic features of the Constitution and then to declare whether a particular amendment is valid or not on the ground that it amends a particular basic feature or not and that the result would be that ‘every amendment made in the Constitution would provide a harvest of legal wrangles so much so that Parliament may never know what provisions can be amended and what cannot’. (paragraph 90 scc).
Parliament’s reaction to Golaknath: The parliament, as expected, amended the Constitution by 24th amendment with effect from 5 November 1971. Articles 13 and 368 were amended firstly to declare that nothing in Article 13 would apply to any amendment of the Constitution made under article 368 and secondly to achieve parliamentary supremacy in the matter of amendment of the constitution.
Finest moment in Indian Constitutional Law. Article 31C was inserted by 25th amendment with effect from 24th April 1972. The object was to save laws which gave effect to Articles 39B and 39C. The primacy of these two Articles, which are in Part IV Directive Principles of State Policy, over fundamental rights was to see that the ownership and control of the material resources of the community are so distributed as best to subserve the common good; (Art.39B) and that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment (Art.39(C). However, what prompted challenge to this amendment was the 29th Amendment which inserted the Kerala Land Reforms (Amendment) Act, 1969 and the Kerala Land Reforms (Amendment) Act, 1971 as entries 65 and 66 in IX Schedule. All three amendments i.e. 24th, 25th and 29th amendments were challenged in Kesavananda Bharati v. State of Kerala, (1973) 4 SCC 225.
It may be noted that when the aforesaid challenges were made, right to property was still a fundamental right under Article 19(1)(f).
Thirteen Hon’ble Judges in Keshavanand Bharati by majority declared that Article 368 does not enable Parliament to alter the basic structure or framework of the Constitution. The majority view reflected in the judgment is as follows;
1. Golak Nath case is overruled; 2. Article 368 does not enable Parliament to alter the basic structure or framework of the Constitution; 3. The Constitution (Twenty-fourth Amendment) Act, 1971, is valid; 4. Section 2(a) and 2(b) of the Constitution (Twenty-fifth Amendment) Act, 1971 is valid; 5. The first part of Section 3 of the Constitution (Twenty-fifth Amendment) Act, 1971, is valid. The second part, namely, “and no law containing a declaration that it is for giving effect to such policy shall be called in question in any court on the ground that it does not give effect to such policy” is invalid; 6. The Constitution (Twenty-ninth Amendment) Act, 1971 is valid.
The Parliament was at it again. As noticed earlier, primacy of Articles 39(b) and 39(C) over Articles 14, 19 and 31, was upheld in Keshavananda Bharti. By the 42nd amendment with effect from 3 January 1977, primacy of entire Part IV was given over Articles 14 and 19. (Art 31 was already omitted by then). Article 368 was amended to give almost unbridled power to Parliament to amend the Constitution. These offending portions were declared as unconstitutional by the Supreme Court in Minerva Mills Ltd. and Others Vs. Union of India and Others (1980) 2 S.C.C. 591.
Whether fundamental rights are basic features? In my view, Waman Rao v. Union of India, (1981) 2 SCC 362 is a case of ‘touch and go’. The Supreme Court came close to declaring fundamental rights as basic features of the constitution. However the Supreme Court only added that every case in which the protection of a fundamental right is withdrawn will not necessarily result in damaging or destroying the basic structure of the Constitution and that the question as to whether the basic structure is damaged or destroyed in any given case would depend upon which particular Article of Part III is in issue and whether what is withdrawn is quintessential to the basic structure of the Constitution.
Back to Golaknath. When I say ‘back to Golaknath’, it is not that the original test of Article 13(2) to decide validity of constitutional amendment is restored. But the declaration of law by nine Hon’ble judges of the Supreme Court in I.R. Coelho v. State of T.N., (2007) 2 SCC 1 to the effect that the golden triangle of Article 14, 19 and 21 is the basic feature of the Constitution, is a clear acceptance of the law declared in Golaknath that infringement of fundamental rights is a ground to invalidate constitutional amendments.
Waman Rao says whether the basic structure is damaged or destroyed in any given case would depend upon which particular Article of Part III is in issue and whether what is withdrawn is ‘quintessential’ to the basic structure of the Constitution. Coelho identifies the golden triangle of Articles 14, 19 and 21 as quintessential to the basic structure. Coelho is criticized for confining only to three articles.
In conclusion The Constitutional law and its evolution into to a perfect shape underwent many confrontations and contradictions. The judgment in Keshavananda Bharti lit the beacon of light for generations to follow. The law declared in Coelho might be expanded to include all the articles of Part III thus doing complete justice to the judgment in Golaknath.
Relevant paragraphs: 29. The contention of learned counsel for complainant that, there is no bar under law to repay the time barred debt and it is not open to the drawer of the cheque to contend that he is not liable as the debt was time barred is also not tenable as such contention is either pleader or any legally admissible evidence was led by complainant-Bank. Such time barred debt cannot be called as legally recoverable debt so as to attract penal provision under section 138 of N.I Act.
30. The Kerala High Court in a decision reported in 2001 Crl.L.J 24 in case of Sasseriyal Joseph Vs Devassia, held that section 138 of the Act is attracted only if there is legally recoverable debt and it cannot be said that time barred debt is legally recoverable debt. The said Judgment rendered by Kerala High Court in Sasseriyil Joseph’s case was challenged before the Hon’ble Supreme Court in Special Leave to Appeal (Crl.) No.1785/2001 by Hon’ble Supreme Court by Judgment dated:10-09-2001 affirmed the said view of Kerala High Court.
31. Further the High Court of Andhra Pradesh in case of Girdhari Lal Rathi Vs P.T.V Ramanujachari and another reported in 1997 (2) Crimes 658 held that, in case of cheque issued for time barred debt which is dishonoured the accused cannot be convicted under section 138 of Negotiable Instrument Act on the ground that the debt was not legally recoverable.
Therefore in view of the principles stated in those decisions the arguments of the learned counsel for the appellant that the said cheque can be construed as a promise to pay time barred debt is also not tenable.
In view of the principles stated in the above referred decision, it is evident that the provisions of Section 25(3) of the Indian Contract Act, 1872 is not applicable to the facts and evidence in this case.
Further as per section 13 of N.I Act “negotiable instrument” means a “promissory note” bill of exchange”, or “cheque” payable either to order or to bearer. The definition of promissory note as stated in section 4 of the N.I Act indicates that, it contains an unconditional undertaking signed by the maker, to pay a sum of money only to, or to the order of, a certain person, or to the bearer of instrument. The definition of “bill of exchange” as stated in Section 5 and the definition of cheque contain only an unconditional order which clearly distinguish them from the definition of promissory note. In promissory note there must be an express undertaking upon the face of instrument to pay the money. Therefore in promissory there is unconditional undertaking i.e., promise to pay, but the definition of bill of exchange and cheque contain only an unconditional order. This distinction needs to be kept in mind while considering whether the cheque itself constitutes a promise in writing by the accused so as to bring that cheque within the ambit of section 25 (3) of the Indian Contract Act 1872 and penal provision under section 138 of N.I Act.
39. In view of the principles stated in the above referred decision and discussion it is evident that the penal provision of Section 138 of the N.I.Act is applicable only to the cheques which are issued for the discharge in whole or in part, of any debt or other liability, which according to Explanation must be a legally enforceable debt or other liability. A cheque given in discharge of a time barred debt will not constitute an unconditional undertaking or promise in writing either expressly or impliedly so as to attract the criminal offence under section 138 of N.I Act.
While a creditor is looking for judgment in one jurisdiction he may want to safeguard the debtor’s assets located in a different jurisdiction so that at the end of the process he is able to enforce his judgment. To this end, he may want to obtain a Mareva injunction, also known as a freezing order, from the court of the jurisdiction where the assets are held. (Philip Jeyaretnam and Lau Wen Jin, (2016) 28 SAcLJ 503).
Background: The name “Mareva Injunction” owes its origin to a freezing order by the English court in Mareva Compania Naviera SA v International Bulkcarriers SA [1980] 1 All ER 213]. An order of injunction is issued in favour of a creditor who has a right to be paid the debt owing to him, even before he has established his right by getting judgment for it. The test is; the debt is due and owing, and there is a danger that the debtor may dispose of his assets so as to defeat it before judgment. The court has jurisdiction in a proper case to grant an interlocutory judgment so as to prevent him disposing of those assets.
It is important to note that in the case of a Mareva, the court does not alter the substantive rights of the parties, but preserves the status quo until it has determined the action. Similar principle is reiterated by the Supreme Court in respect of temporary injunctions in Dalpat Kumar v. Prahlad Singh, (1992) 1 SCC 719 . The court held that the order of temporary injunction is in the nature of preventive relief to a litigant to prevent future possible injury. In other words, the court, on exercise of the power of granting ad interim injunction, is to preserve the subject matter of the suit in the status quo for the time being.
The objective of Mareva order is that a natural person should not step down from his living standards by reducing his assets just before the judgment or to avoid the payment. Polly Peck International Plc v Nadir AILII Citation Number: [1992] EWCA Civ 3
Grounds for Mareva Injunction: (1) There should be an evidence of the real risk of dissipating the assets. (2) Any alleged dishonesty must have a “real and material” relation to the risk of dissipation such that the necessary inference of fact may be drawn. (Yves Charles Edgar v. Accent Delight International Ltd., [2015] 5 SLR 558)
Nature of the order. Once granted, a Mareva injunction has immediate effect on every asset of the defendant covered by the injunction. It is a method of attachment, which operates in rem in the same manner as the arrest of a ship and because any authority which third parties may have to deal with the asset in accordance with the instructions of the defendant is revoked once such third parties have notice of the injunction. – Z Ltd vs A 1982 1 All ER 556 – referred to in Vidya Charan Shukla v. Tamil Nadu Olympic Association, 1991 SCC OnLine Mad 3.
In India: Civil Procedure Code – Section 38 says that a decree may be executed either by the Court which passed it, or by the Court to which it is sent for execution. Section 39 deals with transfer of decree. However, grant of Mareva injunction which is interlocutory in nature can be traceable to inherent powers of the court under Section 151.
Mareva injunction and Attachment before judgment. Order 38 Rule 5 CPC empowers the courts to attach property of the defendant pending adjudication of the suit. Attachment before judgment and Mareva injunction are similar to each other. They are granted under similar circumstances on similar grounds. However, the fundamental difference is while Mareva injunction simply restrains the defendant by injunction, attachment before judgment is a lien on the property. It is an attachment of the property by the court.
The Calcutta High Court in Popular Jute Exchange Limited vs Murlidhar Ratanlal Exports Ltd. 1998 2006 (4) CHN 381 has exhaustively explained the meaning. Mareva Injunction, the court says, is an established feature of English Law and the English Court has been categorical enough to record that there should not be any hesitation in the matter of such a grant where it appears likely that the plaintiff would recover judgment against the defendant for a certain or approximate sum and there is reason to believe that the defendant has the assets within the jurisdiction to meet the judgment but may deal with the same, so that they would not be available or traceable when the judgment is given against him.
The concept of grant of Mareva Injunction is not different from the power of the Court to grant interlocutory or final order of an injunction and under this general power of jurisdiction to grant an ex parte injunction the English Court has developed a principle that the Court has power to restrain the defendant from removing assets from the jurisdiction pending the trial of action whenever it was just and convenient to do so. This power was originally exercised when the defendant was out of the jurisdiction but has subsequently been extended so as to be available against a defendant even though he is based within the jurisdiction. Popular Jute Exchange Limited vs Murlidhar Ratanlal Exports Ltd. 1998 2006 (4) CHN 381
In Mohit Bhargava v. Bharat Bhushan Bhargava, (2007) 4 SCC 795 the Supreme Court dealt with an order passed by the executing court that the documents produced by the third party be kept in safe custody of the court. The Supreme Court termed the order as within the jurisdiction of the court which passed the decree since they are only orders of restraint being issued to a person from handing over a property in his possession to the judgment-debtor along with the documents concerned and keeping the documents in safe custody. The court also termed the order as a “freezing order” or a “Mareva injunction and an order akin to an Anton Piller order, that can be issued even if the property or the person concerned is outside the jurisdiction of the court.
Note: An Anton Piller Order is a form of civil search warrant that displaces the normal rules on discovery of records. It enables the Applicant to attend at the premises of the Defendant, without notice, and take possession of the records of the Defendant Anton Piller v Manufacturing Processes Ltd: CA 8 Dec 1975.
A Mareva injunction freezes a party’s assets to prevent it from dissipating the assets before the arbitral proceedings have concluded, and frustrating satisfaction of the eventual award if this goes against the dissipating party. A Mareva injunction also takes effect against third parties such as banks, to prevent them from assisting in the dissipation of the assets. Anton Piller orders allow a party to secure and preserve property by entering and searching the opposing party’s premises. Such property could include documentary evidence, or items implicated in the dispute, such as counterfeit goods. Mareva injunctions and Anton Piller orders are usually sought under very urgent circumstances. For maximum efficacy, they are also typically sought ex parte without notice to the opposing party, to preclude the opposing party from pre-empting the orders by disposing of the assets or goods before the orders are granted. When such relief is sought therefore, the parties would have to approach national courts for assistance. Benoit Le Bars and Tejas Shiroor ‘Provisional Measures in Investment Arbitration: Wading through the murky waters of enforcement’ 6IJAL(2017)24
In conclusion, the power to grant Mareva injunction, though traceable to inherent powers of the Court, such power is guided by the sound judicial principles evolved in respect of similar orders i.e. attachment before judgment and temporary injunction. The purpose of the order, as explained by the Supreme Court is to preserve the subject matter of the suit in the status quo for the time being.
Relevant paragraphs: 20…under the ‘Act Policy/Statutory Policy/liability only policy’, the occupants of the car/jeep or pillion rider on motorcycle the risk is not covered as they are not to be categorized as third parties. But under the ‘Comprehensive Policy/Package Policy/ liability only policy’, the risk of occupants of the car/jeep or pillion on motorcycle are covered as the insured(owner) has entered into contract of insurance with the Insurer for covering risk at higher degree by making payment of extra premium above the horizon of covering risk under the ‘Statutory Policy’. Therefore, it is dictum in the above cited judgments if extra premium is not paid covering the risk of the occupants of the car/jeep or pillion on motorcycle, the Insurance Companies are not liable to indemnify the owner by making payment of compensation.
22. Chapter X of the M.V.Act stipulates regarding liability on the Insurance Companies ‘without fault’ in certain cases. Therefore, Chapter X of the M.V.Act is dealing with liability of payment of compensation on the principle “no fault liability’. Chapter XI of the M.V.Act deals with insurance of motor vehicles against third party risks. The provisions in Chapter XI and XII of the M.V.Act deals with procedures regarding award of compensation, liability on the owner and insurance companies etc. Section 145 of the M.V.Act gives the definitions. Clause (g) only stipulates the “third party” includes the Government (before amendment Act 2019). Section 146 of the M.VAct deals with necessity for insurance against third party risk. Section 147 of the M.V.Act stipulates regarding requirements of policies and limits of liability. Therefore, there are no definitions in the M.V.Act defining the term ‘Act Policy/Statutory Policy/liability only policy’ and ‘Comprehensive Policy/Package Policy’. These terminology are evolved and generated through the wordings used in the M.V.Act. Therefore, these terminologies are used which arose out of practice of purchase of insurance policies keeping in view the degree of covering risk. Covering risk of third party is mandatorly made by the statute. Unless a vehicle is made insured compulsorily so far as covering risk of third party, that vehicle shall not be used on the public places or even in private premises for plying. Therefore every insured shall purchase insurance policy compulsorily covering risk of third parties before making use the said vehicle for plying either in public place or in private place. Therefore, the terminology of ‘Act Policy/Statutory Policy/liability only policy’ is being used. Therefore, the contract of insurance between the insured and insurer in case of covering risk of third parties is compulsorily made and for this the owner of the vehicle has to pay a minimum amount of premium compulsorily as this type of insurance policy is called as ‘Act policy/Statutory Policy/liability only policy’. Whereas, if the owner intends to cover higher degree of risk above the covering risk of third parties so as to include covering risk of occupants in the car/jeep or pillion rider on the motorcycle or damaged caused to the vehicle the owner has to pay higher amount of premium covering the risk comprehensively. Therefore, above the degree of covering the risk of third parties, if the owner intends to cover risk on higher degree as above stated it is because of on own volition of insurer and insured. Therefore, the degree of covering risk of covering third party only or covering higher degree of risk that depends upon payment of extra premium. Therefore if extra premium is paid on the own volition of the insured (owner) then it covers higher degree of risk, otherwise not.
The Divisional Controller NEKRTC vs Kiran and others. Miscellaneous First Appeal 201567/2017 decided on 23 December 2020. Justice Sunil S. Dutt Yadav and Justice P.N. Desai.
Relevant paragraphs: 15. Insofar as the second contention of the appellant that the death due to heart attack cannot be construed to be an accident “arising out of” and “in the course of employment” is not a “personal injury” as per Section 3 of the Act, 1923, the following substantial question of law is framed as under: “Whether the ƒinding oƒ the ‘Commissioner’ holding that the death oƒ the employee was by accident arising out oƒ the course oƒ the employment is in accordance with Section 3 oƒ the Act 1923? “
18. Section 3 of the Act, 1923 provides for Employer’s liability in cases of “personal injury” provided a) the workman must have sustained personal injury; b) the personal injury must have been caused by an accident; c) the accident may have arisen out of and in the course of employment and d) the personal injury caused to the workman must have resulted either in the total or partial disablement of the workman for a period exceeding three days or it must have resulted in the death of the workman. The expression “personal injury” has not been defined. It need not involve physical trauma, but may include such injuries as disease, sunstroke, nervous collapse, traumatic neurosis, hysterical paralysis and neurasthenia. It may be external, or may be internal. In the case of chest pain arising during duty after remaining busy in strenuous work for many hours may be termed as an accidental internal injury. The word ‘personal injury’ being wider than bodily injury also includes all physical injuries which may be caused by an accident arising out of and in the course of employment. It also includes all mental stress and strains or mental tension or mental illness or psychological diseases, provided such mental conditions have arisen by accidents arising out of and in the course of employment. Similarly, a death from heat stroke has also been held to be personal injury entitling the dependant to compensation. It may also include nervous shock caused by an excitement and alarm resulting from a fatal accident to a fellow workman.
19. The word, “accident” has not been defined in the statute but the judgment law by this time has adequately defined it. ‘Accident’ should be understood in the popular and ordinary sense as an unlooked for mishap or an untoward event which is not expected or designed. For the purpose of law relating to the compensation for personal injuries sustained by workman and the employer’s liability in that behalf includes any injury, which is not designed by the workman himself, and it is of no consequence that the injury was designed and intended by the person inflicting the same.
Case laws referred: National Insurance Company Ltd. Bangalore vs. Balawwa and Others 1993 (2) KLJ 406, United India Insurance Co. Ltd. Vs. Smt. Susheela 2004 (3) LLN 732, of General Manager, B.E.S.T. Undertaking, Bombay vs. Smt. Agnes AIR 1964 SC 193, Divisional Controller, NEKRTC, Gulbarga vs. Sangamma and Others 2005 (2) L.L.N. 776, Daya Kishan Joshi and Ors. Vs. Dynemech Systems Pvt. Ltd. 2018 (11) SCC 642, Leela Bai and Another vs. Seema Chouhan and Another (2019) 4 SCC 325, Poonam Devi and Ors. Vs Oriental Insurance Co.Ltd., (2020) 4 SCC 55, Malikarjun G. Hiremath vs Branch Manager, Oriental Insurance Co.Ltd., reported in 2009 ACJ 721 (SC).
27. Therefore, for the last 22 years he was driving the bus which is admittedly a heavy motor vehicle belonging to the Transport Corporation of the appellant. It is also evident that the bus was driven in a city that too in day time. The very nature of work of the deceased that is driving heavy vehicle causes lot of stress and strain, that too in a big city like Kalaburagi which is a district head quarters. The drivers of heavy vehicle have to face lot of stress and strain because of movements large number of vehicles and public in big cities. The very nature of work of driving heavy vehicle continuously for more than 22 years definitely causes stress and strain, which is incidental to the nature of employment. It is not the case of appellants that he had any disease or he died due to some other reason. The medical reports and evidence placed by petitioners clearly indicates deceased died while on duty due to heart attack.
31. Therefore, in view of the above discussions and in the light of the principles stated in the above referred decisions, if the petitioners-claimants contentions is considered then it can be safely concluded that deceased- Vijayakumar suffered “heart attack” which is “accident” and it is “personal injury” caused to him “arising out of” and “during the course of employment”. The ingredients of Section 3(l) of the Act, l923, are fully complied by the respondents- claimants. The appellant has failed to show any grounds for interference by this Court. Keeping in mind the object and reasons for enacting the Workmen’s Compensation Act, which is a social welfare legislation ment for welfare of employer and employees, if the evidence placed before the Court, in the light of the well established principles regarding appreciation of evidence in such cases, then it is evident that the appeal being devoid of merits is liable to be dismissed. Hence, the substantial question of law is answered in affirmative.
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