Daksha Legal

Contract Act, 1872. Forfeiture of earnest money/security money. In the absence of a forfeiture clause in the agreement, parties to contract can not forfeit the sum. Supreme Court.

Suresh Kumar Wadhwa v. State of M.P., (2017) 16 SCC 757 . Civil Appeal 7665/2009 decided on 25 October 2017.

Judgment Link: https://main.sci.gov.in/supremecourt/2007/5473/5473_2007_Judgement_25-Oct-2017.pdf

Relevant paragraphs: 20 &21. Three questions, basically, arise in this appeal. (1) Whether the appellant-plaintiff committed any breach of the terms and conditions of the public auction. (2) Whether the State was justified in forfeiting the security money deposited by the appellant for the alleged breach said to have been committed by the appellant. (3) Whether the State had power to forfeit the security money in the facts of this case?. These questions need to be answered keeping in view the provisions of Section 74 of the Contract Act, 1872 and some settled legal principles relating to law of contract.

23. Reading of Section 74 would go to show that in order to forfeit the sum deposited by the contracting party as “earnest money” or “security” for the due performance of the contract, it is necessary that the contract must contain a stipulation of forfeiture. In other words, a right to forfeit being a contractual right and penal in nature, the parties to a contract must agree to stipulate a term in the contract in that behalf. A fortiori, if there is no stipulation in the contract of forfeiture, there is no such right available to the party to forfeit the sum.

24. The learned author Sir Kim Lewison in his book The Interpretation of Contracts (6th Edn.) while dealing with subject “Penalties, Termination and Forfeiture Clauses in the Contract” explained the meaning of the expression “forfeiture” in these words: “A forfeiture clause is a clause which brings an interest to a premature end by reason of a breach of covenant or condition, and the court will penetrate the disguise of a forfeiture clause dressed up to look like something else. A forfeiture clause is not to be construed strictly, but is to receive a fair construction.”

25. The author then quoted the apt observations of Lord Tenterden from an old case reported in Doe d Davis v. Elsam wherein the learned Lord while dealing with the case of forfeiture held as under: (ER p. 1127) “… I do not think provisos of this sort are to be construed with the strictness of conditions at common law. These are matters of contract between the parties, and should, in my opinion, be construed as other contracts.”

26. Equally well-settled principle of law relating to contract is that a party to the contract can insist for performance of only those terms/conditions, which are part of the contract. Likewise, a party to the contract has no right to unilaterally “alter” the terms and conditions of the contract and nor they have a right to “add” any additional terms/conditions in the contract unless both the parties agree to add/alter any such terms/conditions in the contract.

27. Similarly, it is also a settled law that if any party adds any additional terms/conditions in the contract without the consent of the other contracting party then such addition is not binding on the other party. Similarly, a party, which adds any such term/condition, has no right to insist on the other party to comply with such additional terms/conditions and nor such party has a right to cancel the contract on the ground that the other party has failed to comply with such additional terms/conditions.

(On facts) 29. In our opinion, a stipulation for deposit of security amount ought to have been qualified by a specific stipulation providing therein a right of forfeiture to the State. Similarly, it should have also provided the contingencies in which such right of forfeiture could be exercised by the State against the bidder. It is only then the State would have got a right to forfeit. It was, however, not so in this case.

Compiled by S.Basavaraj, Advocate, Daksha Legal

Preventive detention. Order of detention can be passed even if detenue is in custody. Law on the point discussed. Karnataka High Court.

Gayatri vs The Police Commissioner and others. Writ Petition Habeus Corpus 53/2020 decided on 18 November 2020.

Judgment Link: http://judgmenthck.kar.nic.in/judgmentsdsp/bitstream/123456789/349000/1/WPHC53-20-18-11-2020.pdf

Relevant paragraphs: 2. Learned counsel for the petitioner submitted that grounds referred to in the order of detention are factually incorrect and the order of detention was passed when the detenue was already in judicial custody. Since the detenue was in judicial custody, therefore, the order of detention could not have been passed.

5. The Act* was enacted with an object to ensure that the maintenance of public order in the State is not adversely affected by the activities of known anti-social elements. The legislature also took note of the fact while enacting the Act that the activities of antisocial elements like bootleggers, drug offenders, gamblers, immoral traffic offenders and slum grabbers and also video and audio pirates, have caused a feeling of insecurity among the public and even tempo of life especially in urban areas has frequently been disrupted because of such persons.

6. It is well settled in law that preventive detention is not punitive but is a precautionary measure and its object is not to punish a person but to prevent him from doing any illegal activity which may be prejudicial to maintenance of public order. The power of preventive detention is invoked as an anticipatory measure and the same does not relate to an offence in respect of which criminal proceeding is pending to punish a person.

7. The Supreme Court in Union of India & another vs Dimple Happy Dhakad 2019 SCC Online 875 has held that even if a detenue is in custody, an order of detention can be passed provided the detaining authority is satisfied that if the detenue is released from the custody, he is likely to indulge in activities which are prejudicial to maintenance of public order….Therefore, the contention of the detenue that since he is in custody therefore, order of detention could not have been passed, does not deserve acceptance. PETITION DISMISSED.

Compiled by S. Basavaraj, Advocate, Daksha Legal.

Indo-Tibetan Border Police Force. Notification for the non-combat post of Deputy Judge/Attorney General (Deputy Commandant) fixing minimum weight. Rejection on the ground of overweight is arbitrary. Extreme fitness of a soldier cannot be demanded for the post. Karnataka High Court.

The Union of India and another vs Sudheer Hareesh Belagali. Writ Appeal 100396/2015 decided on 10 November 2020.

Judgment Link: http://judgmenthck.kar.nic.in/judgmentsdsp/bitstream/123456789/348391/1/WA100396-15-10-11-2020.pdf

Relevant paragraphs: 6 & 7. Admittedly, the respondent applied for the post of Deputy Judge/Attorney General (Deputy Commandant). It is a post that involves only office work and it does not demand any extreme fitness as that of a soldier. The notification issued by the appellants to recruit a person for the post of Deputy Judge/Attorney General (Deputy Commandant), which is a Group “A”, gazetted Non- Ministerial Combatized Post, prescribes the qualification and the eligibility criteria in detail. As rightly noticed by the learned Single Judge, it states that the minimum weight of the person is to be 50 kgs and it does not prescribe the maximum weight. It is not the case of the appellants that the conditions prescribed in the said notification is erroneous. Under the said circumstances, they cannot have recourse to the guidelines of Ministry of Home Affairs for medical examination and state that as per the said guidelines, the maximum weight is also prescribed.

9. Further, the post to which the petitioner has applied is a non-combat post and as per Article 14 of the Constitution of India, the Rules prescribed should have a reasonable nexus with the object sought to be achieved by it. Probably for the same reason, the upper limit for weight of a candidate is not prescribed in the aforementioned rules or the notification issued by the appellants

Writ Appeal dismissed upholding the order of the learned single judge.

Judgment link for the single judges order- http://judgmenthck.kar.nic.in/judgmentsdsp/bitstream/123456789/21020/1/WP105528-14-16-09-2014.pdf

Compiled by S. Basavaraj & Sumana Chamarty, Daksha Legal.

Trial Courts in Karnataka examine 4523 witnesses and dispose 1790 cases via video conferencing in 27 days.

S. Basavaraj, Advocate, Daksha Legal.

Gearing up to meet the challenges posed by Covid-19 pandemic, the trial courts in Karnataka have successfully adopted technology to examine witnesses and dispose cases, both civil and criminal. The “Statement showing the District-wise information regarding Filing, No. of Witnesses examined and Disposal of cases in District Judiciary of Karnataka State from 12:10:2020 to 07:11:2020″” published on the official website of the Karnataka High Court gives district-wise information about Filing (both e-filing and physical), E-Recording and Physical Recording of witnesses, Virtual Hearing and Physical Hearing of cases. The information in tabular form is reproduced below.

Though physical examination of cases and physical hearing is considered as more effective, the situation has compelled both bar and bench to make use of technology to the best extent possible.

Daksha Legal.

Narcotic Drugs and Psychotropic Substances Act, 1985. Mixture of drug with neutral substance. To decide ‘commercial quantity’ of drug seized, even neutral substance has to be taken into consideration. Law on the point discussed. Karnataka High Court.

Rigesh Ravindran vs Union of India Criminal Petition 5009/2020 decided on 24 November 2020.

Judgment link: http://judgmenthck.kar.nic.in/judgmentsdsp/bitstream/123456789/349587/1/CRLP5009-20-24-11-2020.pdf

Relevant paragraphs: 9. The first contention is that the MDMA which has been seized from the possession of the accused after excluding neutral substance is not a commercial quantity. 10. It is the specific contention of the respondent that the Court while considering the quantity of the drug seized, neutral substance must also have to be taken into consideration.

12. On close reading of Hira Singh and another Vs. Union of India and Another, reported in SC 2020 SCC Online SC 382., it has been made clear that in case of seizure of mixture of drugs with one or neutral substance, the quantity of neutral substance is not to be excluded and to be taken into consideration along with the actual content by weight of the offending drug while determining the small quantity or commercial quantity of the drug.

Petition for bail dismissed.

Compiled by S. Basavaraj, Advocate, Daksha Legal.

Cancellation of bail. Unless supervening circumstances have rendered it no longer conducive to a fair trial, bail once granted cannot be cancelled. Cogent and overwhelming circumstances are necessary. Karnataka High Court.

Mohammed Imran vs State by Rural Police, Chintamani & others. Criminal Petition 5023/2020 decided on 10 November 2020.

Judgment Link: http://judgmenthck.kar.nic.in/judgmentsdsp/bitstream/123456789/348579/1/CRLP5023-20-10-11-2020.pdf

Relevant Paragraphs: 9. What are the factors to be kept in mind while considering the bail application relating to heinous offences have been indicated by the Hon’ble Apex Court in the case of Prasanta Kumar Sarkar Vs. Ashis Chaterjee & another, reported in (2010)14 SCC 496, by relying on its earlier decisions in the case of State of U.P. Vs. Amarmani Tripathi, reported in (2005)8 SCC 21 and in the case of Ram Govind Upadhyay Vs. Sudarshan Singh reported in (2002)3 SCC 598. They are

(1) Whether there is any prima facie or reasonable ground to believe that the accused had committed the offence;

(2) nature and gravity of the accusation;

(3) severity of the punishment in the event of conviction;

(4) danger of the accused absconding or fleeing, if released on bail;

(5) character, behaviour, means, position and standing of the accused;

(6) likelihood of the offence being repeated;

(7) reasonable apprehension of the witnesses being influenced; and

(8) danger, of course, of justice being thwarted by grant of bail.

10. The Hon’ble Apex Court in the case of Dolat Ram & others Vs. State of Haryana, reported in (1995)1 SCC 349 has discussed in detail about the cancellation of bail already granted. It is further observed that if already bail has been granted, it has to be considered and dealt with on different basis. It is further held that very cogent and overwhelming circumstances are necessary for directing the cancellation of bail already granted. This proposition of law has also been subsequently followed by the Hon’ble Apex Court in the case of Subhendu Mishra Vs. Subrat Kumar Mishra & another, reported in AIR 1999 SC 3026 and in the case of Samarendra Nath Bhattacharjee Vs. State of West Bengal & another, reported in AIR 2004 SC 4207.

12. The satisfaction of the court, on the basis of material placed on record and the possibility of the accused absconding is yet another reason justifying the cancellation of bail. However, bail once granted should not be cancelled in a mechanical manner without considering whether any supervening circumstances have rendered it no longer conducive to a fair trial to allow the accused to retain his freedom by enjoying the concession of bail during the trial.

Compiled by S. Basavaraj, Advocate, Daksha Legal.

Karnataka SC/ST Commission has NO powers to deal with matters under Karnataka SC/ST (Prohibition of Certain Lands) Act, 1978. Order of resumption of land passed by the Commission quashed. Karnataka High Court.

Ganganna vs The State of Karnataka & others. Writ Petition 46279/2013 decided on 9 November 2020.

Judgment Link: http://judgmenthck.kar.nic.in/judgmentsdsp/bitstream/123456789/348937/1/WP46279-13-09-10-2020.pdf

Relevant paragraphs: … Facts. The Assistant Commissioner again initiated proceedings under the Karnataka SC/ST (Prohibition of Certain Lands) Act, 1978 and passed an order holding that Act was not applicable as both the petitioner and the fourth respondent were grantees of land which they are respectively holding and there was no violation of the provisions of the said Act. The fourth respondent did not choose to challenge the same before the Assistant Commissioner, but approached the Karnataka Scheduled Caste and Scheduled Tribe Commission for restoration of land in his favour without making the petitioner a party to the proceedings. The Commission ordered resumption of land in favour of the fourth respondent.

14. Against the order of the Assistant Commissioner, appeal is maintainable under Section 5A of the 1978 Act. Section 11 gives overriding effect to 1978 Act. Hence, no other quasi-judicial forum is empowered to entertain an appeal against the order of the Assistant Commissioner passed in terms of the said Act.

16 &17. Commission is created under the Karnataka State Commission for the Scheduled Castes and Scheduled Tribes Act, 2002. The commission is enjoined with functions to investigate and examine the working of various safeguards provided under Constitution of India or any other law intended for the welfare and protection of the scheduled castes and scheduled tribes and to enquire into specific complaints with respect to deprivation of their rights and safeguards under the Constitution.

18. The provisions of the Act do not clothe the Commission with such powers to entertain the petition that is filed by a grantee seeking restoration of land and investigate into the matter.

19. Commission has jurisdiction to entertain petitions seeking restoration of land. Therefore, the very act of Commission entertaining the petition filed by the fourth respondent, assuming jurisdiction to itself as an appellate authority over the order of the Assistant Commissioner is blatantly contrary to the provisions of the said Act, without jurisdiction and is non est in the eye of law.

Writ Petition allowed. Order of the Commission quashed.

Compiled by S. Basavaraj, Advocate, Daksha Legal.