M/s. L&T Housing Finance Limited vs M/s. Trishul Developers and another. Civil Appeal 3413/2020 decided on 27 October 2020. Justice L. Nageswara Rao, Justice Hemant Gupta and Justice Ajay Rastogi.

Judgment Link: https://main.sci.gov.in/supremecourt/2019/25979/25979_2019_38_1501_24436_Judgement_27-Oct-2020.pdf

HELD: 15. Notably from the very inception at the stage, when the
proposal of taking a term loan from the appellant was furnished
by the respondents vide their application dated 15th May, 2015
and accepted by the appellant vide sanction letter dated 07th
August, 2015 (P1), the letterhead which was used for the purpose
clearly indicates that on the top of the letterhead towards right, it
reflects “L&T Finance (Home Loans)” and on the bottom towards
left, is of “L&T Housing Finance Ltd.” with their registered office
in Mumbai and this has been duly signed by the authorised
signatory of the borrower for M/s. Trishul Developers and by its
guarantors.

16. It manifests from the record that the respondents from the
initial stage are aware of the procedure which is being followed by
the appellant in its correspondence while dealing with its
customers and that is the same practice being followed by the
appellant when demand notice dated 16th December, 2016 was
served at a later stage. The demand notice in explicit terms
clearly indicates the execution of the Facility Agreement dated
11th August, 2015 between the appellant (L&T Housing Finance
Ltd.) and the respondents (M/s. Trishul Developers through its partners) and of the default being committed by the respondents
(borrower/guarantor) in furtherance thereof, a notice under
Section 13(2) of the SARFAESI Act was served on the same
pattern of the letterhead which is being ordinarily used by the
appellant in its correspondence with its customers and the
demand notice dated 14th June, 2017 without leaving any iota of
doubt is in reference to the non­fulfillment of the terms and
conditions of the Facility Agreement dated 11th August, 2015
executed between the parties and even the schedule of security
profile which has been annexed thereto is in reference to the
execution of Facility Agreement dated 11th August, 2015 and its
non­compliance of the provisions of the SARFAESI Act.

17. Even in the reply to the demand notice which was served by
the respondents through their counsel dated 08th August, 2017
in compliance to Section 13(3A) of the SARFAESI Act, there was
no confusion left in reference to the correspondence taken place
between the appellant (secured creditor) and the respondents
(borrower) tendering their justification and assigning reasons for
which compliance could not have been made and no objection
was indeed raised by the respondents in regard to the defect if any, in the demand notice dated 14th June, 2017 which was served by the secured creditor i.e. “L&T Housing Finance Ltd.” in
compliance to the provisions of the SARFAESI Act or in
furtherance to the proceedings initiated at the behest of the
appellant under Section 13(4) read with Section 14 of the Act, for
the first time, a feeble attempt was made in raising the alleged
technical objection in a Securitisation Application filed before the
DRT and succeeded.

18. It may be relevant to note that the respondents (borrower)
did not deny advancement of loan, execution of Facility
Agreement, their liability and compliance of the procedure being
followed by the secured creditor (appellant) prescribed under the
SARFAESI Act.

19. In the facts and circumstances, when the action has been
taken by the competent authority as per the procedure
prescribed by law and the person affected has a knowledge
leaving no ambiguity or confusion in initiating proceedings under
the provisions of the SARFAESI Act by the secured creditor, in
our considered view, such action taken thereof cannot be held to
be bad in law merely on raising a trivial objection which has no legs to stand unless the person is able to show any substantial
prejudice being caused on account of the procedural lapse as
prescribed under the Act or the rules framed thereunder still with
a caveat that it always depends upon the facts of each case to
decipher the nature of the procedural lapse being complained of
and the resultant prejudiced if any, being caused and there
cannot be a straitjacket formula which can be uniformly followed
in all the transactions.

Compiled by S. Basavaraj, Advocate, Daksha Legal.

When we read reportable decisions of High Courts and the Supreme Court, we also notice how trial court judgments are upheld as following the correct legal position. Many trial court judgments are really inspiring for the young aspirants of judgeship. Hence, apart from publishing reportable High Court and Supreme Court judgments, Daksha Legal proposes to publish important trial court judgments. Needless to say, these decisions are not binding. However, they guide young judges and candidates who take up judge examinations. This is to request the learned advocates to forward trial court judgments which critically examines and follows legal position. Please send the judgements to raj@dakshalegal.com

NOTE. Please do not send the judgments if they are already reversed by higher courts.

K. V. Venkatasubbaiah vs Rajappa by lrs. Writ Petition 17460/2015 decided on 9 October 2020. Justice N.S. Sanjay Gowda.

Judgment Link: http://judgmenthck.kar.nic.in/judgmentsdsp/bitstream/123456789/345036/1/WP17460-15-09-10-2020.pdf

HELD: If a person who already claim to be in  possession, seek to contend  in the agreement of sale that they are in possession or being continued in possession in part performance of the contract of sale, then, automatically Article 5 (e) (i) of  the Schedule to the Act would be attracted and notwithstanding the earlier possession, the purchaser would still have to pay stamp duty as  conveyance  (Article 20) on the market value of the property.

Relevant Paragraphs: 7. The question that arises for consideration in this  writ petition is: “Whether a recital in an Agreement of Sale that the defendants were already in possession could be a factor to  be  considered in determining the stamp duty payable and ignoring the term that possession was being delivered under the Agreement in part performance of the contract?”

13. …Article 5 (e) of the Schedule – When possession of the property is delivered or is agreed to be delivered before executing the conveyance, the stamp duty is same as a conveyance.

14. A plain reading of the said Article would indicate  that if the Agreement relates to the sale  of  an immovable property and if in part performance of the contract, possession is delivered or is agreed to be delivered without executing the conveyance, then stamp duty on the agreement of sale would have to be paid as would be payable for a conveyance under Article 20 on the market value of the property. Therefore, for  attracting Article 5 (e) (i) of the Schedule to the Act, essentially, the instrument (document) should be a document under which an immovable property is agreed to be sold and more importantly, in part performance of the Agreement, possession has been delivered or has been agreed to be delivered.

15. In other words, whenever, in part performance of  an agreement of sale, the agreement indicates that possession is being handed over to the prospective purchaser, then, stamp duty as prescribed for a Conveyance will have to be paid on the market value of the property.

19. Under Section 53A of the Transfer of Property Act….., a purchaser by entering into a Contract of Sale and securing possession in  furtherance of the said contract would be protected against any claim by the seller in respect of any right in respect of the property, except, of course those rights which are expressly provided in the contract of sale. Thus, a purchaser, by drafting of an appropriate contract, can protect his possession over the immovable property against the seller, without completing the conveyance.

20 If such a course is adopted, it would lead to not  only to a situation whereby the conveyance is not concluded but it would also inevitably result in evasion of stamp duty which would otherwise have to be paid on   the Deed of conclusion of conveyance. This would  thereby impact the revenue that the State would receive as Stamp Duty, which is undoubtedly, an  essential  source of revenue to the State.

25. Viewed from this angle, it becomes clear that the possession of the purchaser prior to the execution of the Agreement of Sale would be of no relevance at all for the purposes of applying Article 5(e)(i)  of the Schedule to  the Act.  All that would be required for attracting Article   5 (e)(i) of the Schedule to the Act is that the Agreement contains a recital that, in part performance of the agreement of sale, the prospective purchaser is either being put in possession or is agreed to be put in possession.

26. Thus, in this case, as a necessary consequence of the above discussion, it would emerge that the prior possession of the defendants over the lands as recited in the agreement would be of no relevance for the purpose of determining the stamp duty payable on the execution of the agreement of sale and the singularly  key ingredient to be considered is the recital that possession was being delivered under the agreement in part performance of the contract.

28. ….if a person such as the defendants who already claim to be in  possession, seek to contend  in the agreement of sale that they are in possession or being continued in possession in part performance of the contract of sale, then, automatically Article 5 (e) (i) of  the Schedule to the Act would be attracted and notwithstanding the earlier possession, the purchaser would still have to pay stamp duty as  conveyance  (Article 20) on the market value of the property.

Compiled by S.Basavaraj, Advocate, Daksha Legal. .

Hubli Electricity Supply Company Ltd vs M/s. Sharavathy Conductors Company Pvt Ltd. Writ Petition 103813/2016 decided on 15 October 2020. Justice S. Vishwajith Shetty.

Judgment Link: http://judgmenthck.kar.nic.in/judgmentsdsp/bitstream/123456789/345144/1/WP103813-16-15-10-2020.pdf

Note: The dispute between Hubli Electricity Supply Company Ltd and M/s. Sharavathy Conductors Company Pvt Ltd was referred to arbitration and the same was decided by Karnataka Micro  and Small Enterprises Facilitation Council Bangalore/Arbitral Authority on 23:7:2015. Application under Section 33(1)(a) & (4) was filed by the respondent on 18:8:2015 seeking additional award. The additional award was passed on 10:2:2016. The challenge to original award was made much after filing of this application.

Relevant Paragraphs: 7.From a reading of Section 33 of the Act, it is very clear that the Arbitral Authority has got a power to correct and interpret its order and also pass additional award if an application is filed by the aggrieved party within the period prescribed in the said provision. A reading of sub-section 2 of Section 33 makes it very clear that if the Arbitral Tribunal considers an application under sub-section 1 of Section 33 and passes an order, it shall form part of the arbitral award. Perusal of the order impugned in this writ petition makes it clear that the said order is passed by Arbitral Authority in exercise of its powers under Section 33(1) of the Act. Therefore, the impugned order now passed by the Arbitral Authority forms a part of the original arbitral award.

8. Recourse available under the Act against any arbitral award is provided under Section 34 of the Act. The petitioner is therefore required to challenge the impugned order, which forms the integral part of the original award by taking recourse to Section 34 of the Act and the same cannot be challenged invoking Article 226 and 227 of the Constitution of India.

Compiled by S.Basavaraj, Advocate, Daksha Legal

Nexgen Education Trust (Regd) vs State of Karnataka and others. Writ Petitions 6058/2020 & 9554/2020 decided on 21 October 2020.

Judgment link:http://judgmenthck.kar.nic.in/judgmentsdsp/bitstream/123456789/345480/1/WP6058-20-21-10-2020.pdf

“The respondents have invoked the provision ..in a pedantic way like a village priest ritualistically murmuring the hymn without knowing its inner meaning; the constitutional guarantee of free-primary-education will not fructify in the absence of enough number of schools and therefore, the State action should be facilitative & complimentary to the establishment of private schools; the authorities need to be told that there exists a certain difference between a requisition for the grant of permission for founding a school and an application for the grant of  excise  license for opening a wine shop, they being poles asunder; the impugned orders lack elements of reason & justice; the process by which they have been made falls short of “fair standards” which a Welfare State should profess & practice.” – Justice Krisha S Dixit.

Relevant paragraphs : 6. Way back in 1930, in Interview with Izvestia, Rabindranath Tagore, had powerfully diagnosed: ‘In my view the imposing tower of misery which today rests on the heart of India has its sole foundation in the  absence  of  education’;  Jean Dreze and Amartya Sen in their treatise “An Uncertain Glory – INDIA AND ITS CONTRADICTIONS” in Chapter V at pages 107 to 109 write as under:

“The role of basic education in the  process  of  development and social progress is very wide and critically important. First, the capability to read and write and count has powerful effects on our quality of life; education leads to an informed life, to communicate with others, and to be generally in touch with what is going on. In a society, particularly in the modern world, where so much depends on the written medium, being illiterate is like being imprisoned, and school education opens a door through which people can escape incarceration. Second, our economic opportunities and employment prospects depend greatly on our educational achievements… Third, illiteracy muffles the political voice of people and thus contributes directly to their insecurity  … Fourth, basic education can play a major role in tackling public health problems in general and public health in particular … Fifth, educational development has often been the prime mover in bringing about changes in public perceptions of the range  and reach of what can be called human rights … Sixth,  education can also make a difference to the understanding and use of legal rights… When people are illiterate, their ability to understand, invoke and use their legal rights can be very limited… Lack of schooling can directly lead to insecurities… Seventh,…the schooling of young women can substantially enhance the voice and power of women in family decisions… Eighth, even though education is no magic bullet against class barriers, it can make a big contribution to reduce inequalities related to the divisions of class and caste… Last but not least, learning and studying can be immensely enjoyable …  quite apart from the long run benefits people receive from it…”

7. 86th Amendment to the  Constitution  has introduced Article 21A with effect from 12.12.2002 which reads “The State shall provide free and compulsory education to all children of the age of six to fourteen years in such manner as the State may, by law, determine.” This provision is strengthened by adding clause (k) to Article 51A which enacts that it is a duty of a parent or guardian to provide opportunities for education to his/her child or ward between the age of six & fourteen years; the importance of these new provisions can be understood by the observations of the Apex Court to the effect that without Article 21A, the other fundamental rights are rendered meaningless; without education, a citizen may never come to know of his other rights; since there is no corresponding constitutional right to higher education, the fundamental stress has to  be  on primary and elementary education, so that a proper foundation for higher education can be effectively laid vide BHARTIYA SEWA SAMAJ TRUST vs. YOGESHBHAI AMBALAL PATEL, (2012) 9 SCC 310;

8. It needs to be noted that the Parliament has enacted the Right to Education Act, 2009 and expanded its scope by a few amendments inter alia imposing an obligation even on private schools to admit students from the State Government quota, subject to certain conditions; this is because of the fact that the school education in the country inter alia suffers from the limitation of coverage; there are no enough number of government/public schools to cater to the societal need; a corresponding statutory duty is cast on the private schools to make the fundamental right to free education at the primary level, meaningful; if the applications for grant of permission to establish such schools are mindlessly declined, that would muffle the inner voice of the aforesaid constitutional amendments that are complimented by legislative instruments; the first sentence in the first paragraph of the Writ Petition, reads – “That the petitioner Trust has one of its object, is to establish educational institution and provide educational facilities to all sections of societies on no profit and no loss basis”; this has not been controverted by the respondents in their Statement of Objections; there is some material on record to show that the petitioner-Trust has been running several educational institutions; the version of the answering  respondents  that the petitioner-Trust is not adhering to Government Orders, lacks material particulars, to say the least;  the  school  building in question is completely surrounded by a compound wall; in cities like Bangalore, several schools and fuel stations co-exist & function as peaceful neighbours; it is nobody’s case that precautionary measures cannot be taken to avoid likely accidents; therefore, the existence of a petrol pump beside it, is only a feeble ground to deny permission;

9. The above aspects have not factored even in the penumbra of impugned decision making at the hands of the answering respondents; they have invoked the provisions of Rule 4 of Karnataka Educational Institutions (Classification, Regulation and Prescription of Curricula etc) Rules, 1995 as amended vide notification dated 08.03.2018, in a pedantic way like a village priest ritualistically murmuring the hymn without knowing its inner meaning; the constitutional guarantee of free-primary-education will not fructify in the absence of enough number of schools and therefore, the State action should be facilitative & complimentary to the establishment of private schools; the authorities need to be told that there exists a certain difference between a requisition for the grant of permission for founding a school and an application for the grant of  excise  license for opening a wine shop, they being poles asunder; the impugned orders lack elements of reason & justice; the process by which they have been made falls short of “fair standards” which a Welfare State should profess & practice.

In the above circumstances, these Writ Petitions succeed; a Writ of Certiorari issues invalidating the impugned orders; the matter is remitted back to the 2nd respondent- DDPI for consideration afresh, in accordance with law and after providing an opportunity of hearing to all the stakeholders. Time for compliance is eight weeks from the date a copy of this order is produced, subject to the rider that delay if brooked shall entail the concerned official personally with a cost of Rs.10,000/- per week payable to the petitioner-Trust; the time taken by the petitioner-Trust for production of documents or the like, shall be excluded while computing the said period of eight weeks.

Compiled by S. Basavaraj, Advocate, Daksha Legal.

Kallegowda and another vs State of Karnataka. Criminal Appeal 539 & 504/2014 decided on 21 October 2020.

Judgment Link: http://judgmenthck.kar.nic.in/judgmentsdsp/bitstream/123456789/345479/1/CRLA539-14-21-10-2020.pdf

Relevant Paragraphs: 25. In order to prove the dowry death as contemplated under Section 304B of IPC and presumption under Section 113B of Indian Evidence Act, necessary ingredients are required to be placed on record by the prosecution. The initial burden of proving the case by bringing the evidence against the accused will not shift. However, if the prosecution is able to bring all the circumstances and after discharging the burden of proving the fact that the deceased was subjected to harassment due to demand of dowry soon prior to the death, then the burden shifts on  the accused to rebut the same by leading evidence. The Hon’ble Supreme Court has held in Baijnath and others vs. State of Madhya Pradesh reported in (2017) 1 SCC 101 at paragraph 29 and 30 as follows:

“29. Noticeably this presumption as well is founded on the proof of cruelty or harassment of the woman dead for or in connection with any demand for dowry by the person charged with the offence. The presumption as to dowry death thus would get activated only upon the proof of the fact that the deceased lady had been subjected to cruelty or harassment for or in connection with any demand for dowry by the accused and that too in the reasonable contiguity of death. Such a proof is thus the legislatively mandated prerequisite to invoke the otherwise statutorily ordained presumption of commission of the offence of dowry death by the person charged therewith.

30. A conjoint reading of these three  provisions, thus predicate the burden of the prosecution to unassailably substantiate the ingredients of the two offences by direct and convincing evidence so as to avail the presumption engrafted in Section 113-B of the Act against the accused. Proof of cruelty or harassment by the husband or her relative or the person charged is thus the sine qua non to inspirit the statutory presumption, to draw the person charged within the coils thereof. If the prosecution fails to demonstrate by cogent, coherent and persuasive evidence to prove  such fact, the person accused of either of the above referred offences cannot be held guilty by taking refuge only of the presumption to cover up the shortfall in proof.”

27. In order  to attract Section 304B of IPC and Section 113-B of Indian Evidence Act for drawing a legal presumption, the prosecution has to satisfy the ingredients of 304B is very much essential. The Hon’ble Supreme Court in the case of Hira Lal vs. State (Government of NCT of Delhi) reported in (2003) 8 SCC 80, at paragraph-8 has held as under:

(Section 304B IPC extracted) The provision has application when death of a woman is caused by any burns or bodily injury or occurs otherwise than under normal circumstances within seven years of her marriage and it is shown that soon before her death she was subjected to cruelty or harassment by her husband or any relatives of her husband for, or in connection with any demand for dowry. In order to attract application of Section 304B IPC, the essential ingredients are as follows: (i) The death of a woman should be caused by burns or bodily injury or otherwise than under a normal circumstance. (ii) Such a death should have occurred within seven years of her marriage. (iii) She must have been subjected to cruelty or harassment by her husband or any relative of her husband. (iv) Such cruelty or harassment should be for or in connection with demand of dowry. (v) Such cruelty or harassment is shown to have been meted out to the woman soon before her death. (Section 113-B Evidence Act extracted) The necessity for insertion of the two provisions has been amply analyzed by the  Law Commission of India in its 21st Report dated 10-8-1988 on “Dowry Deaths and Law Reform”. Keeping in view the impediment in  the pre-existing law in securing evidence to prove dowry-related deaths, the legislature thought it wise to insert a provision relating to presumption of dowry death on proof of certain essentials. It is in this background that presumptive Section 113-B in the Evidence Act has been inserted. As per the definition of “dowry death” in Section 304B IPC and the wording in the presumptive Section 113-B of the Evidence Act, one of the essential ingredients, amongst others, in both the provisions is that the woman concerned must have been “soon before her death” subjected  to cruelty or harassment “for or in connection with the demand of dowry”. Presumption under Section 113-B is a presumption of law. On  proof of the essentials mentioned therein, it becomes obligatory on the court to raise a presumption that the accused caused  the dowry death.”

28. In view of the law laid down by the Hon’ble Supreme Court in the above said case and on perusal of the  evidence on record, the prosecution failed to place any evidence on record to show that the accused has harassed the deceased in connection with the demand of dowry soon prior to the death in order to attract Section 304B of IPC or to draw a legal presumption under Section 113-B of Indian Evidence Act, that the death of the deceased was dowry death.

30. On perusal of the explanation (b) to 498A clearly  goes to show that accused No.1 harassed the deceased for receiving the fixed deposit and to encash the same but the deceased refused to do so which amounts to cruelty under Section 498A of IPC. Therefore, we hold the prosecution though failed to prove the offences against the accused Nos.2 and 4 for the offences punishable under Sections 498A, 304B of IPC and Sections 3 and 4 of DP Act and also failed to prove the offence against accused No.1 under Section 304B of IPC and Sections 3 and 4 of DP Act, but, successful in proving the offence under Section 498A.

Compiled by S.Basavaraj, Advocate, Daksha Legal.

1. The judgment of the Supreme Court in the case of Sai Kamal Shivaji Pokarnekar Vs State of Maharashtra in Crl.A.255/2019 (DD 12.02.2019) is likely to open floodgates for frivolous complaints which arise out of disputes purely of civil nature. 

2. It is true that a wrong may give rise to both civil and criminal liability and in such a case where offence under the penal law is clearly made out, a court cannot threw out a complaint merely on the ground that remedy by way of civil suit is available.  However, experience has shown that recently with the expansion of commercial activities, large number of criminal complaints are filed regarding disputes purely or predominantly of civil nature by camouflaging the same as criminal offence by clever drafting by legally trained persons. 

3. Above decision of the Supreme Court has stated propositions of law so broadly that the courts may be compelled to entertain a complaint purely of civil nature, as the same has been drafted cleverly including therein all the ingredients of the alleged offence.  The Supreme Court has laid down the following direction:

“If the ingredients of the offence alleged against the accused are made out in the complaint the criminal proceedings shall not be interdicted ” (emphasis supplied)

4. A complaint of the type referred to above are mostly in commercial transactions where business houses file such complaints which are drafted not by the laymen but by advocates or legally trained persons.  One cannot expect such complaints authored by people with legal background not to contain all the ingredients of the offence alleged.  The Supreme Court did not even say that the court should be guided by the substance of the matter rather than by its form. 

5. If the above dicta of the Supreme Court is taken literally even a computer can successfully perform the functions of magistrate.  The computer can tell you whether the complaint contains allegations which constitute ingredients of the offence or not and accordingly pass orders.  As early as in the year 1969, the Supreme Court while dealing with judicial function of a Judge in appreciating the material on record observed as follows:

“Judges are not computers.  They must call in aid their knowledge of Worldly affairs in appreciating evidence”.  (1969 SCR (1) 412 Chaturbhuj Panda & others Vs. The Collector).

6. Again in the case of Niranjan Singh (AIR 1990 SC 1962 para 7), the Supreme Court observed that even at the initial stage one “need not consider everything that prosecution says as gospel truth even if it is contrary to common sense and broad probabilities of the case”.

7. By the present judgment the discretion of the magistrate is confined to only reading of the complaint and nothing else, not even referring to the documents produced with it to determine if the dispute is of civil  nature or not.  Observation of the Supreme Court that “correctness or otherwise of the allegations has to be decided only in the trial” further puts embargo on the power of the court to treat the case as a civil dispute at any stage earlier than conclusion of the trial. 

8. The Supreme Court appears to have given undue importance to the wordings of the complaint rather than the substance of the dispute which has to be ascertained from all circumstances available on record. 

9.       A 3 Judge Bench of the Supreme Court in the case of  Madhava Rao Scindia (AIR 1988 S.C. 709) observed as follows:

“A case of breach of trust is both a civil wrong and a criminal offence.  There would be certain situations where it would be a civil wrong and may or may not amount to criminal offence”.

10.     Again in Parbathbai Aahir’s case 2017 (9) SCC  641, the Supreme Court held as follows:

“16.7. As distinguished from serious offences there may be criminal cases which have an overwhelming or predominant element of a civil dispute.  They stand on a distinct footing in so far as exercise of inherent power to quash is concerned”.

11.     The present decision of the Supreme Court does not refer to above earlier rulings and primarily or exclusively give importance to the wordings in the complaint and virtually directs exclusion of all other material.  Thus indirectly it lays emphasis on the capacity of the author to draft the complaint mentioning the Ingredients of the offence.  If that is successfully done, then the accused is bound to face harassment till the conclusion of the trial, as according to the Supreme Court the decision on the question could be only after trial. 

12.     It is a matter of common knowledge that with the increase in the volume of commercial transactions, courts are over burdened with cases involving such  complaints.  Such  entities make all attempts to get their claims settled early.  It is well known that civil cases takes years to attain finality.  Therefore, in most cases, business entities try to initiate criminal actions so as to secure early settlement of their disputes.  To achieve this end, services of police are utilized by adopting questionable means and the power of police is abused to compel parties to settle the disputes on threat of criminal action including arrest.  Many a times to shield themselves against criticism of registering FIRs in civil disputes, on the advise of police, private complaints are filed before the Magistrates and routine orders under section 156 (3) of Cr.P.C are secured for ordering registration of FIR and investigation.  These developments lead to enormous pressure on criminal courts and police whose time is wasted in such frivolous cases purely of civil nature, thereby ignoring genuine cases involving serious offences. 

13.     The Supreme Court and the High Courts must bear above practical aspects in mind while laying down law on the question of taking cognizance of alleged offences which are purely or predominantly of civil nature. 

14.     According to Article 141 of the Constitution, law declared by the Supreme Court is binding on everyone including all courts and tribunals.  Of course, in many cases the Supreme Court has clarified that “it is not every observation or opinion expressed by the Supreme Court is law of the land”.  It is only the ratio decidendi  which is binding.  However, in practice, no judge or Magistrate can afford to ignore even a stray sentence in the judgment of the Supreme Court on the ground that it is not ratio but only obiter.  It is therefore, imperative that Supreme Court should be careful in making observations on legal aspects which, if followed in the context of different fact situation, might result in miscarriage of justice. 

15.     It is therefore, suggested that it is  expedient and in the interest of justice that the superior courts rest their judgments on the facts of the case rather than lay out broad propositions of law in general terms.  Even where such proposition of law is laid down, it would be advisable  to use expressions such as  “ordinarily” or “normally” so that in a given case courts are empowered to carve out an exception to render justice.  It is also advisable for superior courts to make it clear that only in exceptional circumstances; the normal rule could be relaxed. 

16.     In many cases of breach of contract, which enables only civil remedy, an attempt is made to give it colour of criminality by making out of a case of cheating.  The dividing line between the two is rather thin. While mere breach of contract can never be cheating, if  at the time of promise itself, the party had intention to deceive, a case of cheating is made out.  According to the above decision of the Supreme Court, if the complaint contains an allegation that at the time of promise itself the opponent entertained an intention to cheat, (though not supported by circumstance) then the courts cannot terminate the proceedings till the trial is over. It is hoped that the Supreme Court will very soon clarify its above decision to enable quashing of cases involving civil dispute.

17.     The power of courts to terminate frivolous proceedings at initial stages such as taking cognizance or discharge or even quashing  under section 482 Cr.P.C should not be unduly curtailed by using such expressions as “rarest of rare cases” etc., without leaving the decision to the sound judicial discretion  of the High Courts. This will enable criminal courts to usefully utilize their time and energy to dispose of genuine criminal cases involving serious crimes rather waste their time on luxury litigation involving purely civil disputes.

Mr. B.V. Acharya, Senior Advocate and former Advocate General for Karnataka.

Mallappa Ramappa Naik and others vs Ittappa Ramappa Banti @ Heggani and others. Regular Second Appeal 1811/2005 decided on 14 October 2020. Justice V. Shrishananda.

Judgment Link: (High Court server down. Will update link later. )

Relevant Paragraphs: 13. Order XX Rule 5 CPC contemplates a mandatory duty on Trial Court to answer all issues framed in a suit. Non answering of all issues results in vitiating the entire judgment subject to exception carved out in Order XIV Rule 2 CPC.

14. The term “issue” in a civil case means a disputed question relating to rival contentions in a suit.  It  is the focal point of disagreement, argument or decision. Needless to emphasise that framing of appropriate issue/s serves the laudable object of narrowing the conflict in a succinct manner. Scheme of Civil Procedure Code, contemplates that the court must thereafter proceed with the trial based on the issues and pronounce  its  judgment  by answering all the issues.

17. …what constitutes a  judgment  is  no  longer res integra. In this regard, reliance is placed on the judgment of the Hon’ble Apex Court in the case of  K.V.  Rami Reddi v. Prema, reported in AIR 2008 Supreme Court 1534. The relevant portion of the said judgment is culled out hereunder:

9. The ultimate question is whether in the instant case the judgment has been validly delivered? If it is a mere procedural irregularity and the Judge concerned had  not signed the judgment, then the judgment thus rendered cannot be invalidated. Order XX Rule 1 CPC postulates that after the case has been heard, the court hearing the same shall pronounce the judgment in open court by dictation to the shorthand writer, wherever it is permissible. It bears the date on which it is pronounced. The date of the judgment is never altered by the date on which the signature has been put subsequently.  The mere fact that a major portion has been dictated by the learned Judge in the judgment already  dictated, will not, by itself, lead to the conclusion that the judgment had been delivered.

10. In Smt. Swaran Lata Ghosh Vs. Harendra Kumar Banerjee and Anr. (AIR 1969 SC 1167), it was inter-alia held as follows (at Para 6):

“Trial of a civil dispute in Court is intended to  achieve, according to law and the procedure of the Court, a judicial determination between the contesting parties of the matter in controversy. Opportunity to the parties interested in the dispute to present their respective cases on question of law as well as fact, ascertainment of facts by means  of  evidence  tendered by the parties and adjudication by a reasoned judgment of the dispute upon a finding on the facts in controversy and application of the law to the facts found, are essential attributes of a judicial trial. In a judicial trial, the judge not only must reach a conclusion which he regards as just, but, unless otherwise permitted, by the practice of the Court or by law, he must record the ultimate mental process leading from the dispute to its solution. A judicial determination of a disputed claim where substantial questions of law or fact arise is satisfactorily reached, only if it be supported by  the most cogent reasons that suggest themselves to the Judge; a mere order deciding the matter in dispute not supported by reasons is no judgment at all. Recording of reasons in support of a decision of a disputed claim serves more purposes than one. It is intended to ensure that the decision is not the result of  whim or fancy, but of a judicial approach to the matter in contest; it is also intended to ensure adjudication of the matter according to law and the procedure established by law. A party to the dispute is ordinarily entitled to know the grounds on which the Court has decided against him, and more so, when the judgment is subject to appeal. The Appellate Court will then have adequate material on which it may determine whether the facts are properly  ascertained, the law has been correctly applied and the resultant decision is just. It is unfortunate that the learned Trial Judge has recorded no reasons in support of his conclusion, and the High Court in appeal merely recorded that they thought that the plaintiff had sufficiently proved the case in the plant.”

11.The declaration by a Judge of his intention of what  his  `judgment’  is  going  to  be,  or  a  declaration  of his intention of what final result it is going to embody, is not a judgment until he had crystallized his intentions into a formal shape and pronounced it in open court as the final expression of his mind.

12. The CPC does not envisage the writing of a judgment after deciding the case by an oral judgment and it must not be resorted to and it would be against public policy to ascertain by evidence alone what the `judgment’ of  the Court was,  where  the final result  was announced  orally  but  the  `judgment’,  as  defined  in  the CPC embodying a concise statement of the case, the points for determination, the decision thereon and the reasons for such decision, was finalized later on.

13. Section 2(9) of the CPC defines a “judgment” to mean the statement given by the Judge of the grounds for a decree or order. “There is yet another infirmity in the case which relates to the “judgment” passed by the  single  Judge and upheld by the Division Bench.

“Judgment” as defined in Section 2(9) of the Code of Civil Procedure means the statement given by the Judge of the grounds for a decree or order. What a judgment should contain is indicated in Order 20 Rule 4(2) which says that a judgment “shall contain a concise statement of the case, the points for determination, the decision thereon, and the reasons for such decision”.  It should be a self-contained document from which it should appear as to what were the facts of the case and what was the controversy which was tried to be settled by the Court and in what manner. The process of reasoning by which the Court came to the ultimate conclusion and decreed the suit should be reflected clearly in the judgment.”

15. Undisputedly, the Trial Judge had not completed the judgment before he delivered his decision.  That being so, the impugned judgment does not suffer from any infirmity to warrant interference. What the High Court has directed is to hear only the arguments afresh. While dismissing the appeal, we direct that the arguments shall be heard afresh and the Trial Court  shall deliver its judgment as early as practicable, preferably within three months from today. To avoid unnecessary delay, let the parties appear before the Trial Court on 05.03.2008 so that the date for arguments can be fixed.”

18. It is also necessary to place reliance on the decision of this court reported in AIR 2001  Kant  120, in  the case of Lakshmamma vs Kamalamma And Others, where in it was held as under:

“17. The Trial Court also erred in not considering and deciding issue Nos. (2) to (5). Under Order 20, Rule 5  it is mandatory that the Court shall state its finding or decision with reasons thereof upon each separate issue and all the distinct issues have to be answered by the finding supported by reasons. The exceptional situation is provided under Order 14, Rule 2 where an issue relating to the jurisdiction or a bar to a suit created by any law for the time arises for determination and if  Court can once and for all dispose of the case with reference to the said issues only. In such a situation, the Court is entitled to postpone the settlement of other issues only after that issue has been determined  and  may deal with the suit in accordance  with the decision on the said preliminary issues. In the  instant  case,  issue No. (1) obviously cannot be considered as one covered by the purview of Order 14, Rule 2.”

19. On careful perusal of the above statutory provisions of Order XIV Rule 2 and Order XX Rule 5  CPC  Trial Court after remand order  … was  duty  bound answer all issues raised in the suit while passing the judgment….  Non-recording  of  the  findings on the remaining issues by the Trial Court, is  totally  erroneous and cannot be countenanced  in  the  eye  of  law  and can be safely termed as perverse.

20. Further, on applying legal principles enunciated in Rami Reddy Supra to the case on hand, non recording of finding on remaining issues by Trial Court other than additional Issue Nos.4 and 5, the judgment cannot be termed as a judgment in the eye of law and it is incomplete judgment.

29. Therefore, this Court has no option, but to set aside the judgment and decree so passed by  Trial  Court and confirmed by first appellate court and remand the matter for decision afresh by hearing the arguments on all issues as recording of evidence is concluded.

Compiled by S. Basavaraj, Advocate, Daksha Legal

A batch of Writ Appeal/Petitions, nine Senior Advocates including Solicitor General of India and Additional Solicitor General of India, more than 25 instructing counsel – all logged in from different parts of the country and one from abroad, 5000 pages of documentation and marathon hearing for 25 working days including two Court holidays, totally 61 hours of hearing. This is the biggest experimentation by the Karnataka High (Virtual) Court in the matter of Securities Exchange Board of India vs Franklin Templeton Trustees Services Pvt Ltd & others decided on 24 October 2020.

The Corona related lockdown and closure of courts opened a new avenue of virtual courts through video conference. The judiciary especially High Courts across the country are fully equipped with the new technology. The court staff are fully trained. The complements given by the learned advocates in Securities Exchange Board of India vs Franklin Templeton Trustees Services Pvt Ltd & others shows the hard work and efficiency exhibited by the court staff in handling the entire matter brilliantly.

However, as I have seen, when the writ matters are listed in ‘B’ group or when other matters are indicated by the court to be heard, learned advocates are seeking adjournment stating they would like to argue physically. This, I feel is a pure state of mind rather than the practical difficulty being pleaded. Minor and avoidable technical glitches do happen. As noted by the Karnataka High Court only once an issue of connectivity of internet was faced for a brief period of ten minutes just before the submissions of learned Solicitor General of India were heard.

”All the parties will not agree about the correctness of the conclusions drawn on merits. But we are sure that all the parties will agree that notwithstanding the voluminous record, long length of arguments and involvement of complicated legal and factual issues, hearings can be effectively conducted by use of video conferencing facility.“ – Chief Justice speaking for the bench.

I may mention here, the advocates fraternity sat Dharna and made strongest demands for filling up of vacancies in the Karnataka High Court. Justice A.N. Venugopala Gowda, Mr. B.M. Arun, Advocate and myself had to file a Public Interest Litigation before the High Court seeking a direction to Union of India in this regard. Finally, the strength of Judges in Karnataka High Court has reached its satisfactory mark. The judiciary is fully equipped. Advocates fraternity, especially the younger members of the bar are doing their best to reduce pendency of cases.

It is high time we all gear up with the sense of inevitable reality that virtual courts are here to stay and any matter of any magnitude can be dealt with, with the active participation of Bar and Bench. The recent disposal of several Criminal Appeals involving serious crimes like rape and murder through video conference has withered away the slightest apprehension about disposal of matters involving life and liberty of the citizens through video conferencing.

“Traditional court room drama is undoubtedly delightful. But the conviction to clear pendency through other legally permissible ways is noble.”

S. Basavaraj, Advocate & Member, Karnataka State Bar Council

Beerappa vs The State through Town P.S. Yadgiri. Criminal Appeal 200036/2015 decided on 4 September 2020. Justice Krishna S Dixit and Justice Krishna P Bhat. (author, Justice Krishna P Bhat).

Judgment Link: http://judgmenthck.kar.nic.in/judgmentsdsp/bitstream/123456789/338981/1/CRLA200036-15-04-09-2020.pdf

“What is a dying declaration? It is vain on our part to attempt to define the term, for, it ought to remain undefined and the exercise of characterizing it as such and investing it with probative sanctity, to some extent, must essentially remain an exercise particular to each case. It has, paradoxically, an undying quality about it. It is not a declaration when made; but it has all the solemnity attached to a declaration once the maker dies subject to what is stated in Section 32 (l) of Evidence Act; and the construction put on it in Laxman’s case (supra) and various other authorities. Why is this solemnity attached when the maker is not available to be cross- examined? Does it not seem illogical? Probably, yes. Experience acquired over centuries due to eternal conflict between human nature –  his  proclivities,  and the law has apparently made the law makers to hew this principle to bring about a balance, as  it  were.  Sagacious and revered Oliver Wendell Holmes Jr. put it pithily when he said “The life of the law has not been logic; it has been experience.” Literature tells us, Sohrab, the son, had apparently retorted to Rustom, the father, “Man who are thou who dost deny my  words? Truth sits upon the lips of dying men, and falsehood, while lived, was far from mine.” (Mathew Arnold  – Sohrab and Rustum). We said – it  has  an  undying  quality about it, for, it is made at a time when the undying hope of life inhering in the chest of every human, starts ebbing away and when the  stark portents of death waiting at the door steps gives a  unique serenity to the mind compelling the maker to state nothing but the truth.” Justice Krishna P Bhat speaking for the bench.

Relevant paragraphs: 16. There is no statutory requirement that the dying declaration need to be in any particular format and further that it should carry certification by a medical officer that the deponent was in a fit state of mind to give statement. A Constitutional Bench of Hon’ble Supreme Court of India in (2002) 6 SCC 710 (Laxman Vs. State of Maharashtra) has observed as follows:

“3.  The     juristic     theory  regarding acceptability of a dying declaration is that such declaration is made in extremity, when the party is at the point of death and when every hope of this world is gone, when every motive to falsehood is silenced, and the man is induced by the most powerful consideration to speak only the truth. Notwithstanding the same, great caution must be exercised in considering the weight to be given to this species of evidence on account of the existence of many circumstances which may affect their truth. The situation in which a man is on death bed is so solemn and serene, is the reason in law to accept the veracity of his statement. It is for this reason the requirements of oath and cross-examination are dispensed with. Since the accused has no power of cross- examination, the courts insist that the dying declaration should be of such a nature as to inspire full confidence of the court in its truthfulness and correctness. The court, however has to always be on guard to see that the statement of the deceased was not as a result of either tutoring or prompting or a product of imagination. The court also must further decide that the deceased was in a fit state of mind and had the opportunity to observe and identify the assailant. Normally, therefore, the court in order to satisfy whether the deceased was in a fit mental condition to make the dying declaration look up to the medical opinion. But where the eyewitnesses state that the deceased was in a fit and conscious state to make the declaration, the medical opinion will not prevail, nor can it be said that since there is no certification of the doctor as to the fitness of the mind of the declarant, the dying declaration is not acceptable. A dying declaration can be oral or in writing and in any adequate method of communication whether by words or by signs or otherwise will suffice provided the indication is positive and definite. In most cases, however, such statements are made orally before death ensues and is reduced to writing by someone like a magistrate or a doctor or a police officer. When it is recorded, no oath is necessary nor is the presence of a magistrate is absolutely necessary, although to assure authenticity it is usual to call a magistrate, if available for recording the statement of a man about to die. There is no requirement of law that a dying declaration must necessarily be made to a magistrate and when such statement is recorded by a magistrate there is no specified statutory form for such recording. Consequently, what evidential value or weight has to be attached to such statement necessarily depends on the facts and circumstances of each particular case. What is essentially required is that the person who records a dying declaration must be satisfied that the deceased was in a fit state of mind. Where it is proved by the testimony of the magistrate that the declarant was fit to make the statement even without examination by the doctor the declaration can be acted upon provided the court ultimately holds the same to be voluntary and truthful. A certification by the doctor is essentially a rule of caution and therefore the voluntary and truthful nature of the declaration can be established otherwise.

17. Similarly the Hon’ble Supreme Court of India in (2019) 6 SCC 145 (Poonam Bai Vs. State of Chhattisgarh) has observed as follows:

“10. There cannot be any dispute that a dying declaration can be the sole basis for convicting the accused. However, such a dying declaration should be trustworthy, voluntary, blemishless and reliable. In case the person recording the dying declaration is satisfied that the declarant is in a fit medical condition to make the statement and if there are no suspicious circumstances, the dying declaration may not be invalid solely on the ground that it was not certified by the doctor. Insistence for certification by the doctor is only a rule of prudence, to be applied based on the facts and circumstances of the case. The real test is as to whether the dying declaration is truthful and voluntary. It is often said that man will not meet his maker with a lie in his mouth. However, since the declarant who makes a dying declaration cannot be subjected to cross-examination, in order for the dying declaration to be the sole basis for conviction, it should be of such a nature that it inspires the full confidence of the court. In the matter on hand, since Exh. P2, the dying declaration is the only circumstance relied upon by the prosecution, in order to satisfy our conscience, we have considered the material on record keeping in mind the well established principles regarding the acceptability of dying declarations.”

18. Further, in a case reported in (2009) 13 SCC 614 (Kamalavva  and  Another  Vs.  State  of  Karnataka) the Hon’ble Supreme Court of India has observed as follows:

“23. The Constitution Bench in Laxman case also referred to an earlier decision of this Court in Koli Chunilal Savji v . State of Gujarat, wherein it was held that the ultimate test with regard to the admissibility of a dying declaration is whether the dying declaration can be held to be a truthful one and voluntarily given. In the said decision it was also held that before recording the declaration, the officer concerned must find that the declarant was in a fit condition to make the statement. The aforesaid ratio of Koli Chunilal Savji  case  was    affirmed by the Constitution Bench in Laxman case.In Vikas V. State of Maharashtra this Court elaborately  discussed  the  previous relevant decision governing the legality of dying declaration and observed in para 45 as follows : (SCC pp.529-30)

“45. The Court, referring to earlier case law, summed up principles governing  dying declaration as under: (Paniben case, SCC pp. 480-81, para 18)

i. There is neither rule of law nor of prudence that dying declaration cannot be acted upon without corroboration.

ii. If the court is satisfied that the dying declaration is true and voluntary it can base conviction on it, without corroboration.

iii. This Court has to scrutinise the dying declaration carefully and must ensure that the declaration is not the result of tutoring, prompting or imagination. The deceased had opportunity to observe and identify the assailants and was in a  fit state to make the declaration.

iv. Where dying declaration is  suspicious it should not be acted upon without corroborative evidence.

v. Where the deceased was unconscious and could never make any dying declaration the evidence with regard to it is to be rejected.

vi. A dying declaration which suffers from infirmity cannot form the basis of conviction.

vii. Merely because a dying declaration does not contain the details as to the occurrence, it is not to be rejected.

viii. Equally, merely because it is a brief statement, it is not to be discarded. On the contrary, the shortness of the statement itself guarantees truth.

ix Normally the court in order to satisfy whether the deceased was in a fit mental condition to make the dying declaration looks up to the medical opinion. But where the eyewitness has said that the deceased was in a fit and conscious state to make this dying declaration,  the medical opinion cannot prevail.

x. Where the prosecution version differs from the version as given in the dying declaration, the said declaration cannot be acted upon.”

After referring to the decision of this Court in Khushal Rao v. State of Bombay, this Court in Vikas reiterated the legal position that where a dying declaration is recorded by a competent Magistrate, it would stand on a much higher footing inasmuch as a competent Magistrate has no axe to grind against the person named in the dying declaration of the victim and in absence of circumstances showing anything to the contrary, he should not be disbelieved by the court.

In Nallapati Sivaiah Vs. SDO, in para 22 it was stated thus: (SCC p.474)

“22. It is equally well settled and needs no restatement at our hands that dying declaration can form the sole  basis for conviction. But at the same time due care and caution must be exercised in considering weight to be given to dying declaration in as much as there could be any number of circumstances which may affect the truth. This Court in more than one decision cautioned that the courts have always to be on guard to see that the dying declaration was not the result of either tutoring or prompting or a product of imagination. It is the duty of the courts to find that the deceased was in a fit state of mind to make the dying declaration. In order to satisfy itself that the deceased  was in a fit mental condition to make the dying declaration, the courts have to look for the medical opinion.”

32. The technical objection raised by the counsel for the appellant regarding  the unavailability of doctor’s certification and endorsement as to mental fitness of the deceased is liable to be rejected inasmuch as the same has been held by this Court in numerous decisions as  a mere rule of prudence and not the ultimate test as to whether or not the said dying declaration was truthful or voluntary.”

20. What is a dying declaration? It is vain on our part to attempt to define the term, for, it ought to remain undefined and the exercise of characterizing it as such and investing it with probative sanctity, to some extent, must essentially remain an exercise particular to each case. It has, paradoxically, an undying quality about it. It is not a declaration when made; but it has all the solemnity attached to a declaration once the maker dies subject to what is stated in Section 32 (l) of Evidence Act; and the construction put on it in Laxman’s case (supra) and various other authorities. Why is this solemnity attached when the maker is not available to be cross- examined? Does it not seem illogical? Probably, yes. Experience acquired over centuries due to eternal conflict between human nature –  his  proclivities,  and the law has apparently made the law makers to hew this principle to bring about a balance, as  it  were.  Sagacious and revered Oliver Wendell Holmes Jr. put it pithily when he said “The life of the law has not been logic; it has been experience.” Literature tells us, Sohrab, the son, had apparently retorted to Rustom, the father, “Man who are thou who dost deny my  words? Truth sits upon the lips of dying men, and falsehood, while lived, was far from mine.” (Mathew Arnold  – Sohrab and Rustum). We said – it  has  an  undying  quality about it, for, it is made at a time when the undying hope of life inhering in the chest of every human, starts ebbing away and when the  stark portents of death waiting at the door steps gives a  unique serenity to the mind compelling the maker to state nothing but the truth.

Conviction of the appellant for the offence punishable under Section 302 IPC upheld.

Compiled by S.Basavaraj, Advocate, Daksha Legal