TaxTMI Updates e-Newsletter
Oct 10,2020

Detention of vehicle for absence of e-way bill - detention and penalty under Section 129 of the GST Act - release of detained goods and vehicle on bank guarantee - requirement of a valid e-way bill for transport of goods

Detention of vehicle for absence of e-way bill - detention and penalty under Section 129 of the GST Act - Detention of the vehicle and consignment held justified where goods were not accompanied by a valid e-way bill. - HELD THAT: - On perusal of the detention notice (Ext.P8) and the order demanding tax and penalty (Ext.P9), the Court recorded that detention was effected on the ground that the consignment was not accompanied by a valid e-way bill. The Court found that, in those circumstances, the detention could not be characterised as unjustified and upheld the legality of the detention and the demand made in Ext.P9 on that basis.

Detention and the consequent demand sustained as justified due to absence of a valid e-way bill.

Release of detained goods and vehicle on bank guarantee - Petitioner permitted to clear the detained goods and vehicle on furnishing a bank guarantee for the amounts demanded in Ext.P9. - HELD THAT: - Although the detention and demand were upheld, the Court exercised its supervisory power to grant interim relief by directing respondents to permit clearance of the goods and vehicle upon the petitioner furnishing a bank guarantee for the amounts stated in Ext.P9. The Court also directed the Government Pleader to communicate the essence of the order to the respondents and required the petitioner to produce copies of the writ petition and this judgment before the respondents to facilitate compliance.

Clearance of goods and vehicle allowed on furnishing a bank guarantee for the amounts demanded; respondents to be informed and to act accordingly.

Final Conclusion: Detention of the vehicle and consignment was upheld because they were not accompanied by a valid e-way bill; however, the petitioner was allowed to clear the goods and vehicle on furnishing a bank guarantee for the amounts demanded in the impugned order, with directions to the respondents to allow clearance upon communication of this order.

Validity of detention under Section 129 of the GST Act - Documentary compliance for carriage of goods under GST - Detention justified where documents accompanying transport contain defects - Release of detained goods and vehicle against bank guarantee for tax and penalty

Validity of detention under Section 129 of the GST Act - Detention justified where documents accompanying transport contain defects - Detention of the goods and the goods carriage was justified on account of defects in the documents accompanying the transportation of the goods. - HELD THAT: - The Court examined the order in Ext.P3 and found that the goods were detained because of various defects in the documents that accompanied the transportation, as required by the GST Act and Rules. The petitioner's contention that the detention was unjustified because the irregularity related to incomplete information furnished by the consignor did not negate the statutory basis for detention where documentary non-compliance is established. Having regard to the material recorded in Ext.P3, the detention was held to be not unjustified. [Paras 2]

Detention upheld as justified due to documentary defects.

Release of detained goods and vehicle against bank guarantee for tax and penalty - Whether the detained goods and vehicle should be released pending resolution, and on what terms. - HELD THAT: - Although the detention was sustained, the Court considered the petitioner's plea for expeditious release of the vehicle. Balancing the respondents' claim for tax and penalty with the petitioner's interest in release, the Court directed conditional release upon furnishing of a bank guarantee for the amounts demanded in Ext.P5 notice. The Court further directed the Government Pleader to communicate the tenor of the judgment to the respondents to facilitate prompt compliance. [Paras 3]

Directed release of the goods and vehicle upon the petitioner furnishing a bank guarantee for the tax and penalty demanded in Ext.P5; respondents to be informed for expeditious clearance.

Final Conclusion: The Court upheld the detention of the goods and vehicle on the ground of defects in the accompanying documents but granted conditional relief by directing release upon the petitioner furnishing a bank guarantee for the tax and penalty demanded, with respondents to be informed to effect expeditious clearance.

Detention and release of vehicle - confiscation under Section 130 of the GST Act - redemption fine in lieu of confiscation - payment in cash versus bank guarantee for release - preservation of appellate rights despite payment

Detention and release of vehicle - confiscation under Section 130 of the GST Act - payment in cash versus bank guarantee for release - The vehicle detained and subject to a confiscation order under Section 130 of the GST Act may be released to the registered owner only upon payment of the tax, penalty and redemption fine demanded, and such payment must be made in cash rather than by furnishing a bank guarantee. - HELD THAT: - The Court accepted the respondents' submission that an order under Section 130 vests ownership of the vehicle in the State and, consequently, the statutory scheme does not permit release of the vehicle on the basis of a bank guarantee once confiscation has been ordered. In these circumstances, the petitioner's request to secure release by furnishing a bank guarantee was rejected. The Court directed that payment of the aggregate amount demanded (tax, penalty under the noted provision and redemption fine) in cash would entitle the petitioner to immediate release of the vehicle. The Court also clarified that acceptance of such payment is without prejudice to the petitioner's right to challenge the confiscation order in appropriate appellate proceedings.

If the petitioner pays the demanded amount in cash, the respondents shall forthwith release the vehicle; bank guarantee is not an acceptable mode of security for release in view of the confiscation order.

Final Conclusion: Writ petition disposed directing release of the detained vehicle upon payment in cash of the tax, penalty and redemption fine demanded (aggregate amount indicated in the order), payment being without prejudice to the petitioner's right to impugn the confiscation order.

Validity of Explanation to Section 17(5)(d) of the CGST Act excluding telecommunication towers from the definition of plant and machinery - Input tax credit exclusion for construction of immovable property under Section 17(5)(d) of the CGST Act - Interference with administrative inquiry and consequential proceedings - No stay of impugned inquiry letter or proceedings

Interference with administrative inquiry and consequential proceedings - Court declined to interfere with the inquiry letter dated 29th July, 2019 and the proceedings initiated thereunder. - HELD THAT: - After hearing the parties, the High Court considered the challenge to the inquiry letter dated 29th July, 2019 and the consequential proceedings and concluded that it would not interfere with the impugned letter or the proceedings initiated pursuant thereto. The court recorded that, notwithstanding the filing of the writ petition, there would be no stay of the inquiry letter dated 29th July, 2019.

Challenge to the inquiry letter dated 29th July, 2019 and proceedings thereunder dismissed; no stay granted.

Validity of Explanation to Section 17(5)(d) of the CGST Act excluding telecommunication towers from the definition of plant and machinery - Input tax credit exclusion for construction of immovable property under Section 17(5)(d) of the CGST Act - Legality and validity of the Explanation to Section 17(5)(d) of the CGST Act and the scope of Section 17(5)(d) insofar as it bars input tax credit on construction of immovable property were kept for adjudication. - HELD THAT: - The High Court declined to decide these questions at the interlocutory stage but directed that these matters be examined along with similar writ petitions (Riveria Commercial Developers v. UOI, Bamboo Hotel & Global Centre (Delhi) Pvt Ltd v. UOI and Delhi International Airport Ltd v. UOI). Notice was issued to respondents and they were permitted to file counter-affidavits within four weeks, with liberty for rejoinder affidavits before the next hearing date. The court thereby kept the substantive legal challenge to the Explanation and to Section 17(5)(d) pending for detailed consideration.

Substantive challenge to the Explanation and to Section 17(5)(d) retained for adjudication; notices issued and further affidavits directed; matter listed for further hearing.

Final Conclusion: The petitioner's challenge to the inquiry letter dated 29th July, 2019 and attendant proceedings is rejected and no stay is granted; the court has directed that the substantive questions on the legality and validity of the Explanation to Section 17(5)(d) of the CGST Act and the exclusion of input tax credit for construction of immovable property be considered in due course alongside related petitions, with notices issued and pleadings to be filed as directed.

Reimbursement of expenses not forming part of taxable income - liability to deduct tax at source under the TDS regime applies only to sums chargeable to tax - tax deduction at source on reimbursement to C & F agents - interpretation of CBDT Circular No.715 subordinate to statutory provisions - disallowance under Section 40(a)(ia) of the Income Tax Act

Reimbursement of expenses not forming part of taxable income - tax deduction at source on reimbursement to C & F agents - liability to deduct tax at source under the TDS regime applies only to sums chargeable to tax - interpretation of CBDT Circular No.715 subordinate to statutory provisions - Payments made as outright reimbursement of freight charges to C & F agents, evidenced by separate bills, do not attract liability to deduct tax at source under the TDS provisions. - HELD THAT: - The Court examined the charging provisions (Section 4) and Chapter XVII (including Section 190 and Section 194C) and held that the TDS machinery applies only to amounts which have an "income element" and are chargeable to tax. The facts establish that C & F agents raised distinct bills: one for their service charges and separate bills for reimbursement of freight paid to carriers, supported by ledger entries, bills and vouchers, and that TDS was deducted on service charges but not on pure reimbursements. Precedents of this Court and the Supreme Court were applied to the effect that reimbursement of expenses, where no income element exists, does not constitute taxable income and therefore does not attract TDS. The Court found errors in the ITAT's factual and legal approach - misidentifying the parties (C & F agent v. carrier) and failing to account for multiple reimbursement bills totalling the paid amount - which vitiated the ITAT's conclusion. The Court further held that CBDT Circular No.715 must be read in consonance with the statute and, where ambiguity arises, the statutory scheme prevails; the Circular does not override the statutory requirement that only sums chargeable to tax suffer TDS. On these grounds the appeal on this point was allowed. [Paras 23, 24, 25, 26, 31]

Assessees not liable to deduct TDS on payments that are pure reimbursements of freight charges supported by separate bills; ITAT's contrary conclusion set aside.

Disallowance under Section 40(a)(ia) of the Income Tax Act - tax deduction at source on reimbursement to C & F agents - Disallowance under Section 40(a)(ia) upheld by the Tribunal was not sustainable in respect of payments which were pure reimbursements evidenced by separate bills. - HELD THAT: - The Tribunal's upholding of disallowance under Section 40(a)(ia) was premised on its conclusion that payments were not reimbursements or lacked nexus; the High Court found that where reimbursements are distinct, evidenced and devoid of income element, Section 40(a)(ia) cannot be applied to disallow expenses for failure to deduct TDS. Given the Court's finding that the payments in question were reimbursements supported by separate bills and that there was no TDS obligation on such sums, the disallowance under Section 40(a)(ia) could not stand. The Court therefore answered the substantial question in favour of the assessees and against the Revenue and directed modification of the impugned orders accordingly. [Paras 26, 28, 29, 31, 33]

Disallowance under Section 40(a)(ia) set aside insofar as it relates to payments which are pure reimbursements evidenced by separate bills.

Final Conclusion: Appeals allowed: Tribunal's findings that reimbursements of freight charged by C & F agents attracted TDS and that related expenses were disallowable under Section 40(a)(ia) were set aside in respect of payments shown to be pure reimbursements supported by separate bills; impugned orders modified accordingly; third question on Section 80IB not considered.

Penalty under section 271(1)(c) for concealment of particulars of income - proportional reduction of penalty upon reduction of assessed income - estimation of income in absence of books of account and return - assessment framed under Section 143(3) read with Section 147 - substantial question of law

Penalty under section 271(1)(c) for concealment of particulars of income - proportional reduction of penalty upon reduction of assessed income - estimation of income in absence of books of account and return - The Appellate Tribunal's reduction of the penalty proportionately with the reduced assessed income was justified and should not be disturbed. - HELD THAT: - The Tribunal found that the assessee had concealed particulars of income but that the income was determined on an estimated basis because the assessee had not maintained books of account nor filed a return, leaving the CIT(A) to estimate income from available materials. The Tribunal held that penalty liability arises from concealment, but the quantum of penalty must be computed with reference to the income so determined. Consequently, when the income was reduced on appeal, the corresponding penalty was to be reduced proportionately. The High Court accepted the Tribunal's reasoning and declined to interfere with the proportional reduction of the penalty. [Paras 8, 9]

Penalty reduced proportionately with the reduced assessed income; Tribunal's order restricting penalty is upheld.

Substantial question of law - The question proposed by the Revenue did not constitute a substantial question of law warranting interference by this Court. - HELD THAT: - The Revenue's challenge to the Tribunal's proportional reduction of penalty was held to be factually and legally unavailing as a substantial question of law. The High Court concluded that, in the circumstances and on the Tribunal's stated reasoning, there was no ground to treat the matter as raising a substantial question of law for determination by the High Court. [Paras 10, 11]

Question is not a substantial question of law; appellate interference is refused.

Final Conclusion: The Tax Appeal is dismissed; the Appellate Tribunal's order restricting the penalty proportionately with the reduced assessed income is upheld.

Ad hoc disallowance of business expenditure - Burden on assessee to substantiate expenditure - Requirement of contemporaneous records (log books, vouchers) to prove vehicle/business use - Findings of fact and the perversity test - Scope of interference under Section 260A of the Income Tax Act, 1961

Ad hoc disallowance of business expenditure - Burden on assessee to substantiate expenditure - Requirement of contemporaneous records (log books, vouchers) to prove vehicle/business use - Findings of fact and the perversity test - Whether the adhoc disallowance of certain expenses claimed by the assessee was sustainable on the facts, and whether the Tribunal's and lower authorities' factual findings are vitiated by perversity. - HELD THAT: - The Court held that the Tribunal, after considering the Assessing Officer's finding that the assessee had not shown that expenditures were directly relatable to the heads under which they were debited, and noting the absence of replies, log books and supporting vouchers, reached conclusions by re-appreciation of evidence which were factual in nature. The Commissioner (Appeals) limited the quantum of disallowance on an admissible basis and the Tribunal upheld a ten per cent disallowance for possible non-business use of vehicles and noted insufficient vouchers for certain expenses. As these determinations rest on meticulous appreciation of evidence, interference by this Court under Section 260A would be justified only if the findings were perverse. The assessee failed to point to any perversity in the concurrent findings recorded by the Assessing Officer, Commissioner (Appeals) and the Tribunal, and no erroneous application of law or ignoring of material evidence was demonstrated. Consequently, the factual conclusions upholding the adhoc disallowance were not liable to be set aside. [Paras 6, 7]

Concurrent factual findings upholding the adhoc disallowance are not perverse; the Tribunal's decision is sustainable and does not give rise to a substantial question of law.

Final Conclusion: The appeal is dismissed; the concurrent factual findings sustaining the adhoc disallowance are not perverse and no substantial question of law requires interference under Section 260A.

Application of beneficial provision under Section 90(2) - distinct tax charge under sub-clauses of Section 115A(1)(b) - date of agreement determining rate for royalty and fees for technical services - taxation of non-resident on royalty and fees for technical services - interest under Section 234B and advance tax liability of non-resident

Distinct tax charge under sub-clauses of Section 115A(1)(b) - date of agreement determining rate for royalty and fees for technical services - application of beneficial provision under Section 90(2) - Assessee entitled to apply rates separately under different sub-clauses of Section 115A(1)(b) or under the DTAA depending on the date of the underlying agreements and to adopt the rate beneficial to it under Section 90(2). - HELD THAT: - The Court upheld the Tribunal's finding that sub-clauses (A), (AA), (B), (BB) and (C) of Section 115A(1)(b) operate as mutually exclusive and independent charging provisions creating separate tax charges under Section 4. Consequently, where royalty/FTS arise under agreements executed on different dates, the statute contemplates differentiation of tax treatment by reference to the date of each agreement and permits separate computation for each stream. Section 90(2) permits application of the provision-Statute or Treaty-which is beneficial to the assessee, and the expression "to the extent" supports selective application. The Court also noted the explanatory note (Circular No.3/2014) recognising differing rates for royalty/FTS under different agreements and the legislative intent behind differentiated rates, reinforcing that taxation must be determined with reference to the specific agreement. For these reasons the Tribunal was correct in allowing bifurcation by date of agreement and in applying the beneficial rate applicable to each stream. [Paras 5, 6, 7]

First substantial question answered in favour of the assessee: tax on royalty/FTS is to be determined separately for different agreements by reference to their dates and the assessee may adopt the beneficial provision under Section 90(2).

Interest under Section 234B and advance tax liability of non-resident - taxation of non-resident on royalty and fees for technical services - No interest under Section 234B is leviable on the non-resident assessee in respect of the assessment year in issue because it was not liable to pay advance tax; this question stands answered against the revenue by earlier decision of this Court. - HELD THAT: - The revenue candidly accepted that the second substantial question had already been decided against it by this Court in a prior order (dated 14.09.2020 in ITA No.171/2011). The Tribunal had deleted the levy of interest under Section 234B on the ground that the non-resident assessee was not liable to pay advance tax. The Court recorded that the earlier decision answers this question against the revenue and did not disturb the Tribunal's deletion of interest. [Paras 3, 4]

Second substantial question answered against the revenue: interest under Section 234B is not leviable on the non-resident assessee for the assessment year 2007-08.

Final Conclusion: Appeal dismissed. The Tribunal's conclusion permitting separate taxation of royalty/FTS streams by reference to the dates of respective agreements and allowing the application of the beneficial rate under Section 90(2) is affirmed; the levy of interest under Section 234B was correctly deleted as already decided against the revenue.

Remand to the Assessing Officer - appellate authority's re appreciation based on remand report - ex parte assessment proceedings - prejudice from lack of opportunity to be heard - disallowance under section 14A - absence of a substantial question of law

Remand to the Assessing Officer - prejudice from lack of opportunity to be heard - Validity of the Tribunal's order remitting the matter to the Assessing Officer and whether such remand caused prejudice warranting interference. - HELD THAT: - The Tribunal found that the Commissioner (Appeals) had allowed deductions hastily without requiring production of complete books and evidence and therefore remitted the matter to the file of the Assessing Officer for fresh consideration. The High Court noted that the initial assessment before the AO had proceeded ex parte because the assessee had not responded to statutory notices, and that the Commissioner (Appeals) had itself obtained a remand report from the AO before deciding. The Court accepted the Revenue's submission that remand to the AO would permit fuller production of material by the assessee and an opportunity for reconsideration, and that it was not for the assessee to insist on a single forum to the exclusion of others. Having considered the procedures already followed and the purpose of remand-to ensure adjudicating authorities examine all material evidence-the Court found no legal infirmity in the Tribunal's remand or any demonstrable prejudice to the appellant sufficient to justify interference.

The Tribunal's remand to the Assessing Officer is unassailable; no prejudice shown that would warrant upsetting the remand.

Disallowance under section 14A - appellate authority's re appreciation based on remand report - absence of a substantial question of law - Whether the appellate authority's confirmation of disallowance under section 14A and deletion of other additions, subsequently disturbed by the Tribunal, raises a substantial question of law for High Court interference. - HELD THAT: - The Commissioner (Appeals) confirmed the AO's disallowance under section 14A while deleting other additions after obtaining a remand report. The Tribunal considered that the appellate authority had allowed certain deductions without ensuring production of complete records and therefore remitted the matter for fresh consideration. The High Court examined whether the Tribunal's action involved any error of law or raised a substantial question of law. Concluding that the remand was directed towards ensuring comprehensive examination of material evidence and afforded the assessee further opportunity to place its case before the AO (with further appellate recourse available), the Court held that no substantial question of law arose that would justify interference with the Tribunal's order.

No substantial question of law arises from the Tribunal's remand; the High Court declines to interfere with the Tribunal's order.

Final Conclusion: The Tax Appeal is dismissed; the High Court declines to interfere with the Income Tax Appellate Tribunal's order remitting the matter to the Assessing Officer, and no substantial question of law is found to arise.

Defective return under section 139(9) - invalid return and treatment as failure to furnish return - rectification of orders under section 154 - assessment proceedings where return is invalid - exemption under section 10(23C)(iiiab) - claim of exemption under section 11 without registration under section 12AA

Defective return under section 139(9) - invalid return and treatment as failure to furnish return - rectification of orders under section 154 - Validity of returns after CPC/AO treated them as defective under section 139(9) and effect of subsequent letter directing that the earlier orders be ignored - HELD THAT: - The AO/CPC correctly issued notices under section 139(9) and, as the assessee did not rectify the defects within the prescribed time, the returns were rightly held to be invalid and to be treated as if no return had been furnished. A subsequent office communication directing that the earlier orders be ignored cannot lawfully nullify an order passed under the Act. Any correction of an order passed under the Act must follow the statutory mechanisms (for example, rectification under section 154 where a mistake apparent from record is shown and notice is given, or revision under section 263 where appropriate). The letters dated 24.3.2017 attempting to direct that the invalidating orders be ignored are therefore without authority and are nullities and cannot validate an invalid return. [Paras 14, 15]

The returns for AY 2014-15 and 2015-16 remain invalid in terms of section 139(9); the AO/CPC letters of 24.3.2017 are nullities and cannot validate the returns.

Exemption under section 10(23C)(iiiab) - assessment proceedings where return is invalid - claim of exemption under section 11 without registration under section 12AA - Whether the CIT(A) could allow exemption under section 10(23C)(iiiab) after holding the returns to be invalid - HELD THAT: - Once a return has been validly held to be an invalid return under section 139(9), there is no return available on the basis of which an assessment can be made or exemptions allowed. The assessee's primary claim under section 11 was also incorrect because registration under section 12AA was not held; the alternative claim under section 10(23C)(iiiab) accepted by the CIT(A) cannot stand where there is no valid return before the tax authorities. Accordingly, the appellate authority was not justified in directing the AO to allow exemption under section 10(23C)(iiiab) after treating the returns as invalid. [Paras 17]

The direction of the CIT(A) to allow exemption under section 10(23C)(iiiab) is set aside as impermissible where the returns have been held invalid.

Assessment proceedings where return is invalid - assessment under section 150 - Whether the Tribunal may direct the AO to assess the income for the years in question where returns have been held invalid - HELD THAT: - The Tribunal observed that the provisions of section 139(9) render the returns as if the assessee had failed to furnish returns, and the AO may proceed in accordance with law to assess income for those years. However, the Tribunal has no power to give a direction under section 150 to the AO to make the assessment because such a direction is unnecessary for adjudicating the dispute before the Tribunal and the power to assess flows from the statutory provisions applicable when a return is invalid. [Paras 16]

The Tribunal will not direct the AO to assess under section 150; the AO may proceed in accordance with law to assess the years where returns are invalid.

Defective return under section 139(9) - assessment proceedings where return is invalid - Effect of the Tribunal's findings on the assessee's cross objections challenging assessment without allowing expenditures - HELD THAT: - The assessee's cross objections regarding assessment of gross receipts without allowing expenditure become infructuous because the returns for the relevant years have been held to be invalid; there is no valid return basis on which those pleas can be entertained in the present proceedings. [Paras 18, 19]

The cross objections filed by the assessee are dismissed as infructuous in view of the returns being held invalid.

Final Conclusion: The Tribunal holds that the returns for AY 2014-15 and 2015-16 were validly treated as invalid under section 139(9); the subsequent office communication attempting to ignore those orders is a nullity; the CIT(A)'s direction to allow exemption under section 10(23C)(iiiab) cannot stand where no valid return exists and is set aside; the Tribunal will not itself direct assessment under section 150 and the AO may proceed in accordance with law; the assessee's cross objections are dismissed as infructuous.

Classification of capital v. revenue expenditure - Allowability of business expenditure under section 37(1) - Rebuttal of non-payment allegation by ledger and bank evidence - Consequential interest levy not independently adjudicated

Classification of capital v. revenue expenditure - Rebuttal of non-payment allegation by ledger and bank evidence - Allowability of business expenditure under section 37(1) - Disallowance of repairs and maintenance expenditure of Rs. 11.96 lacs - HELD THAT: - The assessee claimed repairs and maintenance expenditure paid to M/s Proconvis though the invoice was issued in the name of a group concern. The ledger extract and bank records showed payment of Rs. 3,51,711 cleared from the assessee's bank account and a debit note reversing Rs. 8.37 lacs; TDS was deducted on the payment. These facts rebutted the Revenue's allegation that the payment was not made by the assessee and supported the contention of inadvertent invoicing in the name of a group company. On the nature of expenditure, the invoices related to designing/execution work and items of general wear and tear (cables, fittings, painting material etc.), and no new asset came into existence. Applying the test of revenue v. capital nature, the Tribunal held the expenditure to be revenue in nature and allowable, and therefore deleted the disallowance made by the Assessing Officer. [Paras 4]

Disallowance of Rs. 11.96 lacs in respect of repairs and maintenance deleted; expenditure held revenue in nature and allowable.

Allowability of business expenditure under section 37(1) - Classification of capital v. revenue expenditure - Disallowance of deferred revenue expenditure aggregating Rs. 16.49 lacs - HELD THAT: - The Assessing Officer disallowed specified items classified as deferred revenue expenditure. The assessee had furnished supporting documents and explanations: payment to APCPDCL for service line/development charges relating to electricity connection, stamp duty for registration of lease deed, payment to MSEDCL towards electricity bill, and routine reimbursements paid through bank account. On perusal of the submissions and supporting documents placed on record, the Tribunal found these payments to be revenue in nature and routine business expenses, not capital outlays, and therefore allowable under the applicable provision governing business expenditure. Consequently, the impugned disallowance was deleted. [Paras 5]

Disallowance of Rs. 16.49 lacs deleted; the specified items held to be revenue expenditures allowable under section 37(1).

Final Conclusion: The appeal is partly allowed: the disallowances of repairs and maintenance and of specified deferred revenue expenditures are deleted. The challenge to interest under section 234B was treated as consequential and not separately adjudicated.

Eligibility for deduction under section 80P(2) - Assessing Officer's duty to inquire into activities of cooperative society - Application of sub-section (4) of section 80P - Classification as Primary Agricultural Credit Society - Effect of registration certificate issued by Registrar of Co-operative Societies - Interest income from investments as part of banking business income

Eligibility for deduction under section 80P(2) - Assessing Officer's duty to inquire into activities of cooperative society - Application of sub-section (4) of section 80P - Effect of registration certificate issued by Registrar of Co-operative Societies - Whether the assessee is entitled to deduction under section 80P(2) and whether the CIT(A) could deny the claim without factual inquiry into the activities of the assessee-society - HELD THAT: - The Tribunal noted that the Larger Bench of the Kerala High Court in Mavilayi has held that, after insertion of sub section (4), the Assessing Officer must conduct an enquiry into the factual activities of the society to determine eligibility for deduction under section 80P and is not bound merely by the registration certificate classifying the society. The CIT(A) had initially allowed the claim but later rectified his order under section 154 relying on the Larger Bench decision without undertaking or directing the requisite factual examination. In light of the Full Bench dictum, the Tribunal concluded that the CIT(A) ought not to have rejected the claim without examination of the assessee's activities for each assessment year; accordingly, the matter of entitlement to deduction under section 80P(2) is restored to the files of the Assessing Officer for verification of activities and determination of eligibility in accordance with law. [Paras 8]

Issue remanded to the Assessing Officer to examine the activities of the assessee society for each assessment year and to determine, in accordance with sub section (4) and the Larger Bench decision, whether deduction under section 80P(2) is admissible.

Interest income from investments as part of banking business income - Eligibility for deduction under section 80P(2) - Whether interest income earned on investments with banks and treasuries should be treated as business income and whether such interest is eligible for deduction under section 80P after factual inquiry - HELD THAT: - The Tribunal referred to a coordinate Bench decision (Kizhathadiyoor) which held that interest from investments with treasuries and banks forms part of the banking business income of the assessee and therefore is assessable as business income. However, whether such interest income qualifies for deduction under section 80P must be decided after the Assessing Officer examines the activities of the society in light of the Larger Bench ruling in Mavilayi. Consequently, treatment of the interest as business income is acknowledged, but grant of deduction under section 80P on that interest is remitted to the Assessing Officer for determination after factual inquiry. [Paras 8]

Interest on investments may be treated as business income; grant of deduction under section 80P in respect of such interest is to be examined and decided by the Assessing Officer after verifying the activities of the assessee society.

Final Conclusion: The Tribunal allowed the appeals for statistical purposes, set aside the CIT(A)'s summary denial under section 154, remitted the question of entitlement to deduction under section 80P(2) (including in respect of interest on investments) to the Assessing Officer for factual examination in accordance with the Larger Bench decision in Mavilayi, and dismissed the stay applications as infructuous.

Addition to income on the basis of third-party seized electronic records - requirement of corroborative evidence before making additions based on third-party seized material - assumption of jurisdiction under section 153A of the Income-tax Act - reassessment proceedings initiated on the basis of documents seized from a third party - addition under section 69 of the Income-tax Act

Addition to income on the basis of third-party seized electronic records - requirement of corroborative evidence before making additions based on third-party seized material - addition under section 69 of the Income-tax Act - Validity and correctness of addition of Rs. 56,27,160 made by the Assessing Officer on the basis of entries in an Excel file recovered from the hard disk seized from AEZ Group (a third party). - HELD THAT: - The Tribunal examined whether the AO could make an unexplained investment addition under section 69 based primarily on entries in an Excel file recovered from the hard disk seized during search at AEZ Group. Relying on co ordinate Bench decisions (including Subhash Khattar and Deepak Gupta) and the decision of the Hon'ble Delhi High Court in Subhash Khattar, the Tribunal held that where no incriminating material was found at the assessee's premises and the only material is entries on a third party hard disk, additions cannot be sustained in the absence of independent corroborative evidence linking those entries to the assessee. The Tribunal noted that mere appearance of the assessee's name in the seized electronic record, or admissions by other persons recorded in the same material, is insufficient to prove that the assessee made the cash payment. Applying these principles to the present facts, and finding them identical to the cited precedents, the Tribunal deleted the addition on merits and declined to sustain the AO's action. [Paras 9, 10, 11]

Addition of Rs. 56,27,160 deleted; appeal allowed.

Final Conclusion: Following co ordinate Bench decisions and the Delhi High Court in Subhash Khattar, the Tribunal deleted the addition made on the basis of an Excel file recovered from a third party hard disk for AY 2008-09 for lack of corroborative evidence and allowed the appeal.

Mandatory electronic filing of appeals - substantial justice over technical compliance - deeming of manual filing as filed on original date for e-filing - condonation of delay in e-filing - remand for adjudication on merits - penalty under Section 271(1)(c) of the Income-tax Act, 1961

Mandatory electronic filing of appeals - substantial justice over technical compliance - deeming of manual filing as filed on original date for e-filing - condonation of delay in e-filing - Whether the appeal filed manually in paper form could be dismissed as not maintainable solely for non-compliance with the newly amended rule requiring electronic filing - HELD THAT: - The Tribunal found that dismissal of the appeal only because it was not electronically filed would elevate a procedural/technical requirement over the cause of substantial justice. Relying on precedent emphasizing that procedural rules are subservient to justice, the Tribunal held that the paper appeal filed within the prescribed period should not be defeated by the subsequent mandatory e-filing requirement introduced with effect from 01.03.2016. In the exercise of its appellate discretion the Tribunal set aside the order of the CIT(A) dismissing the appeal in limine, directed that the appeal which the assessee subsequently e-filed be treated as having been filed on the original manual filing date (21.04.2016), and directed condonation of any delay in e-filing if the assessee complies with the Tribunal's direction within the specified period. The Tribunal further directed the CIT(A) to adjudicate the appeal on merits by passing a speaking order after affording the assessee a reasonable opportunity of hearing.

Order of the CIT(A) dismissing the appeal for non e-filing set aside; appeal restored to CIT(A) for fresh disposal on merits and the subsequent e-filing to be deemed filed on the original paper filing date with delay, if any, condoned.

Penalty under Section 271(1)(c) of the Income-tax Act, 1961 - remand for adjudication on merits - Disposition of the penalty order upheld by the CIT(A) under Section 271(1)(c) - HELD THAT: - The Tribunal did not adjudicate the merits of the penalty. Because the appeal against the penalty had been dismissed by the CIT(A) on procedural grounds, the Tribunal's setting aside of that dismissal necessarily restores the assessee's challenge to the penalty to the file of the CIT(A). The CIT(A) is directed to consider and decide the appeal against the penalty on merits in accordance with law after providing the assessee an opportunity of hearing. Thus the issue of the correctness of the penalty order remains for fresh consideration by the CIT(A).

Penalty order under Section 271(1)(c) remanded to the CIT(A) for fresh adjudication on merits after hearing the assessee.

Final Conclusion: The appeal is allowed for statistical purposes: the CIT(A)'s dismissal of the paper appeal for non e-filing is set aside; the appeal is restored to the CIT(A) who is directed to treat the subsequent e-filing as having been made on the original paper filing date, condone any delay if the Tribunal's directions are complied with, and decide the appeal (including the challenge to the penalty) on merits by a speaking order after affording the assessee a reasonable opportunity of hearing.

Allowability of bad debts under Section 36(1)(vii) read with Section 36(2)(i) - treatment of inter-corporate deposits as business transactions - taxation of interest in earlier years satisfying condition for deduction - write-off/settlement and characterization as business loss - precedential reliance on High Court decisions on bad debts

Allowability of bad debts under Section 36(1)(vii) read with Section 36(2)(i) - treatment of inter-corporate deposits as business transactions - taxation of interest in earlier years satisfying condition for deduction - write-off/settlement and characterization as business loss - Deletion by the CIT(A) of the assessment-year 2014-15 disallowance of the ICD write-off amounting to Rs. 5,17,76,297/- was justified and the amount is allowable as business loss. - HELD THAT: - The Tribunal accepted the factual findings that the assessee advanced inter-corporate deposit in the ordinary course of its business (permissible under its Memorandum of Association), had offered and been assessed to tax the interest received on the ICD in earlier years, and undertook extensive litigation culminating in a one-time settlement and subsequent write-off of the unrecovered principal and interest. Given that part of the debt (the interest) had been taken into account in computing profits in earlier assessment years and taxed, the Tribunal applied the principle that satisfaction of the first limb of Section 36(2)(i) is met where the debt or part thereof was taken into account earlier; consequently a write-off of the balance is allowable under Section 36(1)(vii). The Tribunal relied on and followed the reasoning of the Hon'ble Bombay High Court in Pudumjee Pulp & Paper Mill Ltd. (and Shreyas S. Morakhia) to hold that taxing of interest earlier establishes the requisite factual basis for deduction and that the write-off arising from settlement and incontrovertible inability of the borrower to pay constitutes a business loss. On these facts and authorities, the Tribunal found no infirmity in the CIT(A)'s deletion of the disallowance. [Paras 3]

Revenue's appeal dismissed; write-off of ICD allowed as business loss for A.Y.2014-15.

Final Conclusion: The Tribunal upheld the CIT(A)'s deletion of the disallowance and dismissed the revenue appeal - the inter-corporate deposit write-off, in the facts of this case where interest had been taxed in earlier years and recovery attempts had failed leading to settlement, is allowable as a business loss for A.Y.2014-15.

Disallowance under section 14A - application of Rule 8D - restriction of disallowance to exempt income - no taxation except by authority of law (Article 265) - admission of additional claim without revised return

Disallowance under section 14A - application of Rule 8D - restriction of disallowance to exempt income - Validity of the learned CIT(A)'s decision to restrict the section 14A disallowance to the amount not exceeding exempt income and to set aside the AO's larger disallowance. - HELD THAT: - The Tribunal examined the departmental appeal against the CIT(A)'s reduction of the AO's disallowance. The departmental representative conceded that the CIT(A)'s order need not be interfered with because the proposition that section 14A disallowance cannot exceed the exempt income has been upheld by higher courts, including the Hon'ble Supreme Court and the jurisdictional High Court decisions relied upon by the CIT(A). In consequence, the Tribunal found no infirmity in the CIT(A)'s approach of limiting the disallowance and dismissed the Revenue's appeal. [Paras 6]

Revenue's appeal dismissed; the disallowance under section 14A cannot exceed the exempt income and the CIT(A)'s order is upheld.

Restriction of disallowance to exempt income - no taxation except by authority of law (Article 265) - admission of additional claim without revised return - Whether the assessee's cross-objection seeking that disallowance be restricted to the actual exempt income earned should be entertained and granted despite the assessee having made a higher suo motu disallowance in the return. - HELD THAT: - The Tribunal considered the assessee's contention that the disallowance must be restricted to the exempt income (recorded as Rs. 44,250/- by the CIT(A)) rather than to the larger amount suo motu disallowed in the return. Relying on constitutional and judicial authorities emphasizing that tax can be collected only by authority of law (Article 265) and on precedents permitting admission of additional or corrective claims before the Tribunal even without a revised return, the Tribunal held that an assessee who has erroneously offered more for taxation is not estopped from seeking correction. The Tribunal therefore allowed the cross-objection and directed the AO to grant relief by limiting the disallowance to the exempt income as recorded by the CIT(A). [Paras 11, 13]

Cross-objection allowed; disallowance to be restricted to the exempt income and the AO directed to grant relief.

Final Conclusion: The Revenue's appeal is dismissed; the assessee's cross-objection is allowed and the section 14A disallowance is to be limited to the exempt income as recorded by the CIT(A) for A.Y. 2013-14.

Deemed dividend under section 2(22)(e) - accommodation entries / temporary loans - mutual benefit test - average balance / net debtor position - gratuitous loan

Deemed dividend under section 2(22)(e) - accommodation entries / temporary loans - average balance / net debtor position - mutual benefit test - Whether the addition made under section 2(22)(e) in respect of amounts recorded against Tricon Infra Buildtech Pvt. Ltd. is exigible as deemed dividend - HELD THAT: - The Tribunal examined the detailed ledger account of the company in the assessee's books which showed numerous reciprocal transactions (138 debits and 19 credits) with a nil closing balance and an average net debit position for the year. The account chronology and the computed average balance indicated that the assessee had predominantly advanced funds to the company and that the company was, on average, a debtor in the assessee's books rather than a creditor. The Tribunal applied the principle that only gratuitous accommodations or bona fide loans to a shareholder which operate as distribution of profits attract deemed dividend under section 2(22)(e). Transactions that are regular accommodation adjustments made for mutual commercial convenience do not constitute deemed dividend. Reliance was placed on precedents holding that where transactions create mutual benefits and obligations, and where entries are accommodation adjustments, the provision of deemed dividend is not attracted. On the facts, the ledger evidence manifested regular reciprocal advances and repayments for mutual benefit and not gratuitous distribution; accordingly the statutory provision was not attracted and the addition could not be sustained.

Addition under section 2(22)(e) deleted and appeal allowed.

Final Conclusion: The Tribunal set aside the addition made under section 2(22)(e) for assessment year 2014-15, holding that the ledger transactions constituted reciprocal accommodation advances for mutual benefit and did not amount to deemed dividend.

Chargeability of interest under the Land Acquisition Act as income from other sources - interpretation of section 56(2)(viii) regarding interest on compensation - effect of statutory amendment deeming interest on compensation taxable on receipt - precedential effect of jurisdictional High Court decisions on subordinate fora - remand for determination of identity and nature of acquired land for capital gains assessment

Chargeability of interest under the Land Acquisition Act as income from other sources - interpretation of section 56(2)(viii) regarding interest on compensation - effect of statutory amendment deeming interest on compensation taxable on receipt - precedential effect of jurisdictional High Court decisions on subordinate fora - Interest payable under section 28 of the Land Acquisition Act is chargeable to tax as income under the head "Income from other sources" in terms of section 56(2)(viii) of the Income-tax Act. - HELD THAT: - The Tribunal held that the net interest computed by the AO under section 56(2)(viii) pertains to interest under section 28 of the Land Acquisition Act and is taxable as income from other sources. The Court noted the Hon'ble Supreme Court decision in Ghanshyam (HUF) but observed that Parliament thereafter inserted clause (viii) in section 56(2) (w.e.f. 01-04-2010) and section 145B deeming such interest to be income in the year of receipt. The Tribunal relied on the jurisdictional High Court's decision in the batch (Shivajirao and others) and the Punjab & Haryana High Court decision in Manjeet Singh, which construed interest under section 28 as chargeable under section 56(2)(viii), and observed that the Tribunal is bound by the interpretation adopted by its jurisdictional High Court unless reversed by the Supreme Court. The Supreme Court's decision in Hari Singh was held to be inapposite on the specific question of whether section 28 interest constitutes separate taxable income, since that decision concerned the appropriate authority to determine agricultural character for TDS purposes and directed the AO to determine the issue keeping in view section 28 and Ghanshyam. Having regard to the statutory amendment and the binding High Court precedents, the Tribunal upheld the CIT(A)'s conclusion that the interest is taxable under section 56(2)(viii). [Paras 6, 7, 8, 9, 10]

The addition of net interest under section 56(2)(viii) is upheld; interest under section 28 of the LAA is chargeable to tax as income from other sources for A.Y. 2013-14.

Remand for determination of identity and nature of acquired land for capital gains assessment - proof of agricultural use for exemption under section 10(37) - Whether the land for which compensation was received was the specific plot alleged by the assessee and whether it qualified as agricultural land for exemption under section 10(37) was not finally adjudicated and is remanded to the Assessing Officer for fresh determination. - HELD THAT: - The Tribunal found a conflict between the AO's finding that the acquired land was situated at Khadgaon and the assessee's claim that the compensation related to Gut No.11, Vasangaon. The assessee produced additional evidence which had not been considered by the AO or CIT(A). In the interest of justice the Tribunal set aside the impugned orders on this point and restored the matter to the AO to determine, on the full material including any evidence the assessee may produce, whether the land acquired was Khadgaon or Gut No.11 Vasangaon and, consequent thereto, whether the land was agricultural or a capital asset for the purpose of claiming exemption under section 10(37) and computing capital gains. The remand is for fresh consideration and determination of these issues by the AO. [Paras 11, 12, 13, 14, 15]

Impugned addition as long term capital gain set aside and matter remanded to the Assessing Officer for determination of identity and nature of the land and consequential tax treatment.

Final Conclusion: Appeal partly allowed: the Tribunal upheld the taxability of interest under section 28 of the Land Acquisition Act as income under section 56(2)(viii) for A.Y. 2013-14, and set aside the capital gains determination, remitting the question of the identity and agricultural character of the acquired land to the Assessing Officer for fresh adjudication.

Service of notice under section 148 on a deceased assessee is a nullity - liability and joinder of legal representative under Section 159 - incurability of notice defect under Section 292BB where notice is issued in the name of a deceased person - reassessment under section 147 vitiated for want of valid notice

Service of notice under section 148 on a deceased assessee is a nullity - liability and joinder of legal representative under Section 159 - incurability of notice defect under Section 292BB where notice is issued in the name of a deceased person - reassessment under section 147 vitiated for want of valid notice - Validity of the notice issued under section 148 in the name of the deceased assessee and consequence for reassessment under section 147. - HELD THAT: - The Tribunal held that issuance of the notice under section 148 dated 28.03.2018 in the name of the deceased assessee (who died on 12.06.2012) is invalid. Once it was known that the original assessee was deceased, the Assessing Officer was obliged, if limitation permitted, to issue a fresh notice to the legal representative; issuing the original notice in the name of the deceased and later bringing the legal heir on record does not cure the initial defect. The Tribunal relied on authoritative decisions which interpret Section 159 as permitting continuation of proceedings only where proceedings were already instituted against the assessee before death or a proper notice to legal representatives was issued within limitation, and which exclude application of Section 292BB to validate a notice issued to a person who could not possibly have appeared (being dead). In those circumstances the notice under section 148 was held to be a nullity and, accordingly, the consequent reassessment under section 147 was vitiated. As the initiation of reassessment was quashed for want of jurisdiction, other disputed additions were not adjudicated and were treated as infructuous.

Notice under section 148 issued in the name of the deceased assessee is invalid and the reassessment proceedings and order under section 147 are quashed.

Final Conclusion: The appeal is allowed: the notice under section 148 issued in the name of the deceased assessee is quashed and the reassessment under section 147 set aside; remaining grounds are rendered infructuous.

Re-export - disposal of representation - direction to decide in accordance with law - adjudicating authority - confiscation under the Customs Act - redemption fine - penalty imposed by adjudicating authority

Disposal of representation - direction to decide in accordance with law - Validity of the Commissioner's earlier communication which deferred decision on the petitioner's request for permission to re-export the goods in response to the High Court's earlier direction. - HELD THAT: - The High Court held that its order dated 03.07.2020 directed the Commissioner to take a definitive decision, one way or the other, on the petitioner's representation dated 19.06.2020 seeking permission for re-export. The Court found that the subsequent reply by the Commissioner-deferring final disposal pending adjudication and reports-did not constitute the decisive determination the Court had mandated and amounted to an indecisive disposal of the representation. The Court therefore directed the Commissioner to pass a fresh or consequential order in terms of the earlier direction and to take a necessary decision in accordance with law within a specified time-frame, keeping in mind the observations made by the Court. [Paras 5, 6]

Commissioner's deferral was inadequate; directed to pass a fresh or consequential order deciding the petitioner's re-export prayer in accordance with law within two weeks.

Confiscation under the Customs Act - redemption fine - penalty imposed by adjudicating authority - re-export - Effect of the order passed by the Commissioner of Customs on 30.09.2020 and the appropriate disposal of the writ petition thereafter. - HELD THAT: - After the High Court's direction, the Commissioner passed a detailed order dated 30.09.2020 which confiscated the goods but granted an option to redeem them for the purpose of re-export on payment of a redemption fine and also imposed a penalty on the importer. The petitioner's counsel stated that the petitioner would comply with the condition of payment of the redemption fine. In light of the adjudicating authority having passed the operative order responsive to the Court's direction and the petitioner's willingness to comply with conditions, the High Court found that no further interim relief was necessary from the writ court and that the petition could be closed. [Paras 3, 5, 6]

On the Commissioner's order of 30.09.2020 and petitioner's compliance, the writ petition is disposed of and no further order is required.

Final Conclusion: The High Court found the Commissioner's earlier tentative response inadequate and directed a fresh/consequential decision; following the Commissioner's order dated 30.09.2020 (confiscation with option of redemption for re-export and imposition of penalty) and the petitioner's undertaking to comply, the writ petition has been disposed of and the proceedings closed.

Condonation of delay in filing appeals - Reasonable cause for delay - Delay attributable to employee's misconduct and theft disrupting receipt of orders - Receipt/service of impugned orders and responsibility of recipient - Laches and deliberate delay - Imposition of costs as condition for condonation

Condonation of delay in filing appeals - Reasonable cause for delay - Delay attributable to employee's misconduct and theft disrupting receipt of orders - Laches and deliberate delay - Imposition of costs as condition for condonation - Condonation of delay in filing the appeals (delay of about 211 to 228 days) was allowable subject to conditions. - HELD THAT: - The Tribunal examined the factual matrix and found that the impugned orders were dispatched in November-December 2018 and were received by the appellant's supervisor, who subsequently left service abruptly on 02.02.2019. An incident of theft, in which that supervisor was implicated, disrupted the normal functioning of the appellant's office and contributed to the orders remaining unnoticed. The appellant made enquiries about the status of their appeals on 15.11.2018 and 20.05.2019 and located the orders on 21.07.2019, after which steps were taken to file the appeals. The Tribunal held that these circumstances constituted a reasonable cause for the delay and were not attributable to deliberate laches by the appellant. The Tribunal rejected the Revenue's reliance on precedents which, on their facts, were distinguishable. In the exercise of discretion to condone delay, the Tribunal allowed the condonation applications but imposed a lump-sum cost to be paid to the specified public fund as a condition of admission of the appeals, with a timeline for deposit and reporting of compliance. [Paras 5]

Condonation of delay applications allowed; appeals admitted for hearing subject to payment of the specified lumpsum cost within the stipulated period and reporting of compliance.

Final Conclusion: The Tribunal allowed condonation of delay (211-228 days) in filing the appeals on the facts that employee misconduct and a theft disrupted receipt and notice of the impugned orders; the condonation was granted subject to payment of a lumpsum cost to the designated public fund within the prescribed time and reporting of compliance.

Condonation of delay - delay attributable to counsel's negligence - exercise of discretion in condoning delay - loss of livelihood as relevant consideration - costs as condition for condonation

Condonation of delay - delay attributable to counsel's negligence - loss of livelihood as relevant consideration - costs as condition for condonation - Application for condonation of delay in filing the appeal was allowed. - HELD THAT: - The appeal against revocation of the Customs broker's licence was filed beyond the prescribed period with a delay of about 212 days. The delay was explained as resulting from inadvertent intermingling of the appellant's file with other clients' files in the counsel's office, and supporting affidavits from the counsel and the third party who had custody of the file were filed. The Tribunal found no deliberate laches on the part of the appellant, noted that the impugned order resulted in debarment from the customs broker profession affecting the appellant's livelihood, and distinguished the precedents relied on by the Revenue as factually different. In the exercise of its discretion and in the interest of justice, the Tribunal held the explanation sufficient to condone the delay but imposed a condition of payment of costs. The Tribunal therefore permitted the appeal to be filed subject to payment of costs and gave liberty for seeking early hearing.

Delay of 212 days in filing the appeal is condoned; condonation allowed subject to payment of costs of Rs. 5,000 to the Prime Minister's Cares Fund by the stipulated date, and the appellant is granted liberty to pray for early hearing.

Final Conclusion: The application for condonation of delay is allowed in the interest of justice, subject to payment of costs to the Prime Minister's Cares Fund by the date directed; the appeal may proceed and the appellant may seek early hearing.

Applicability of section 129D over section 129A - limitation for appeal under section 129A(3) - one month time-limit for application to Appellate Tribunal under section 129D(4) - power of Committee under section 129D(1) to direct appeal

Applicability of section 129D over section 129A - one month time-limit for application to Appellate Tribunal under section 129D(4) - limitation for appeal under section 129A(3) - Whether the departmental appeal was time-barred in view of the limitation provisions of section 129A(3) or was maintainable under section 129D(4). - HELD THAT: - The Committee of Chief Commissioners passed a review order under the powers conferred by section 129D(1). Appeals arising from orders made by the Committee under section 129D are governed by the special procedure and time-limits contained in section 129D(4), which permits an application to the Appellate Tribunal within one month from communication of the Committee's order and directs the Tribunal to hear such application as if it were an appeal against the adjudicating authority's order. Therefore, the shorter three-month limitation in section 129A(3) does not apply to orders initiated by the Committee under section 129D. In the present case the Committee's review order was dated August 7, 2019 and the appeal was filed on August 19, 2019, which falls within the one-month period prescribed by section 129D(4). The departmental appeal is accordingly within time and the limitation objection founded on section 129A(3) is not sustainable. [Paras 8, 9, 10]

The appeal is maintainable under section 129D(4) and is within the prescribed one-month period; the limitation plea under section 129A(3) is rejected.

Merits of the order to be heard on appeal - Disposition of the challenge to the merits of the Commissioner's order contained in the cross-objections. - HELD THAT: - The Tribunal did not decide the substantive merits raised by the respondent in its cross-objections. Those contentions were noted but expressly deferred for consideration at the hearing of the appeal. No adjudication on the merits was undertaken in the order under review. [Paras 11]

Contentions on merits are left open for determination at the hearing of the appeal.

Final Conclusion: The limitation objection based on section 129A(3) is repelled as the Committee's review falls under section 129D and the departmental appeal filed within one month of the Committee order is within time; issues on the merits are reserved for hearing of the appeal.

Revocation of customs broker's licence for sub-letting - obligations of customs broker under Licensing Regulations - verification and KYC obligations of customs broker - liability for acts of unauthorised user of broker licence - forfeiture of security deposit on revocation - directory character of time-limits in disciplinary regulation

Revocation of customs broker's licence for sub-letting - obligations of customs broker under Licensing Regulations - verification and KYC obligations of customs broker - liability for acts of unauthorised user of broker licence - forfeiture of security deposit on revocation - Whether the appellant's Customs Broker licence could be revoked and security deposit forfeited for having sub-let its licence and thereby violating the obligations under the Customs Brokers Licensing Regulations, 2013. - HELD THAT: - The Tribunal accepted the factual findings that the appellant allowed an unlicensed third party to use its licence: the partner's statement admitted permitting Shri Sudhir Kr. Jha to handle imports/exports and that original documents were with Shri Jha; Shri Jha corroborated that he paid the appellant for use of the licence and that export documents (invoice, packing list, ARE-1) were fake. The enquiry found that the appellant had no records of the consignments, did not verify or have KYC of the exporter, and did not transact business through its own approved employees. These facts established sub-letting/transfer of the licence in breach of Regulation 10 and obligations in Regulation 11 (including 11(b), 11(d) and 11(n)). The Tribunal held that the appellant had thus created a channel through which contraband could be smuggled, justifying revocation and forfeiture of the security deposit. The Tribunal also analysed Regulation 17(9) and concluded that the person conducting the work was not an employee of the appellant (he paid the appellant), and therefore the case did not rest on vicarious employee liability under that provision; the decisive finding was sub-letting of the licence and failure to perform the verification/advisory duties required of a broker. [Paras 23, 24, 25, 26, 27]

The revocation of the Customs Broker's licence of the appellant and forfeiture of the security deposit were justified and are upheld.

Directory character of time-limits in disciplinary regulation - Whether the delay beyond the period specified in Regulation 20 of CBLR, 2013 vitiates the revocation proceedings. - HELD THAT: - The Tribunal followed the view of the jurisdictional High Court that the time-limit in Regulation 20 is to be construed as directory where the regulation does not prescribe a consequence for non-compliance. Applying that principle, the Tribunal found no grounds to set aside the revocation merely because the procedural timeline exceeded the period mentioned in Regulation 20. [Paras 28, 29]

Delay in completing the disciplinary process under Regulation 20 does not invalidate the revocation; the regulation is directory and not mandatory for that purpose.

Final Conclusion: The appeal is rejected; the Order-in-Original revoking the appellant's Customs Broker licence and forfeiting the security deposit is upheld, and delay in completing the disciplinary process under Regulation 20 does not vitiate the revocation.

Absolute confiscation - personal penalty - voluntary statement under Section 108 - circumstantial evidence and Call Data Records corroboration - retraction and credibility of accused - allegation of threat in recording statement rejected

Absolute confiscation - Absolute confiscation of the seized foreign-origin gold biscuits upheld. - HELD THAT: - The Tribunal observed that recovery of the gold was not in dispute, the seizure formalities were carried out in the presence of two independent witnesses and no third party claimed the seized gold. The adjudicating authority's order of absolute confiscation was examined and found to be supported by the material on record, including the fact of recovery and absence of any claim of lawful possession by the appellants. [Paras 19, 25, 26]

The absolute confiscation of the seized goods is upheld.

Personal penalty - reasonableness of penalty - reduction of penalty - Imposition of personal penalties on both appellants is justified but the quantum of penalties is excessive and accordingly reduced. - HELD THAT: - The Tribunal found that the imposition of personal penalties was justified by the involvement of the appellants in smuggling activities as established by the material. However, having regard to the facts and circumstances, the Tribunal exercised its discretion to moderate the punishment. The penalty on Shri Nirmalendu Paul was reduced to Rs. 10,000 and the penalty on Shri Debraj Paul was reduced to Rs. 50,000. [Paras 16, 25, 26]

Penalties upheld in principle but reduced: Shri Nirmalendu Paul to Rs. 10,000 and Shri Debraj Paul to Rs. 50,000.

Voluntary statement under Section 108 - circumstantial evidence and Call Data Records corroboration - retraction and credibility of accused - allegation of threat in recording statement rejected - The voluntary statements of Shri Nirmalendu Paul and the Call Detail Records provided adequate corroboration; allegation that the statement was recorded under threat was rejected and the later change of version was treated as an afterthought. - HELD THAT: - The Tribunal accepted the prosecution's circumstantial evidence: the accused was intercepted with the gold and consistently stated in his Section 108 statements that he was carrying the gold for Shri Debraj Paul. Call Detail Records showed communication links between the mobile numbers involved, supporting the investigative inferences. The appellant's allegation that the initial voluntary statement was obtained under threat lacked supporting evidence and was negatived. The Tribunal also noted that the appellant changed his version only after issuance of the show cause notice, which undermined his credibility. [Paras 20, 21, 22, 23, 24]

Voluntary statement and CDRs constitute corroborative evidence; the threat allegation is rejected and subsequent retraction is treated as an afterthought.

Final Conclusion: The Tribunal upheld absolute confiscation of the seized gold and sustained imposition of personal penalties in principle; exercising discretion, it reduced the penalties to Rs. 10,000 for Shri Nirmalendu Paul and Rs. 50,000 for Shri Debraj Paul.

Power to inspect under Section 206 of the Companies Act, 2013 - Conduct of inspection and inquiry under Section 207 of the Companies Act, 2013 - Standard for recording satisfaction to order inspection - Permissibility of parallel or concurrent proceedings during pendency before the NCLT - Scope of judicial review of administrative discretion under Article 226 of the Constitution

Power to inspect under Section 206 of the Companies Act, 2013 - Standard for recording satisfaction to order inspection - Scope of judicial review of administrative discretion under Article 226 of the Constitution - Lawfulness of the order directing inspection of the company's books under Section 206(5) of the Companies Act, 2013. - HELD THAT: - The court held that Section 206 confers broad powers on the Registrar and Central Government to call for information and to direct inspection where, on scrutiny of documents or on information received, further explanation or documents are necessary. Sub sections (4) to (6) permit inquiry and inspection where the Registrar or Central Government is satisfied that the business is being carried on for fraudulent or unlawful purposes or grievances of investors are not being addressed. The court found that repeated complaints from a former director alleging oppression, mismanagement and fraudulent acts furnished a prima facie basis on which the authorities could form an opinion and record satisfaction to order inspection. Non recording of detailed reasons in the order itself, where the allegations are serious and disclosed by the material before the authority, was not fatal to the exercise of power. The Court further observed that the discretion to order inspection is administrative in nature and, absent material showing mala fides or illegality, the High Court will not supplant that discretion by exercising writ jurisdiction under Article 226. [Paras 13, 15, 17, 18, 19]

The inspection ordered under Section 206(5) was lawful and the challenge thereto was dismissed.

Conduct of inspection and inquiry under Section 207 of the Companies Act, 2013 - Permissibility of parallel or concurrent proceedings during pendency before the NCLT - Validity and timing of summons issued under Section 207(3)(b) and whether continuation of inspection/inquiry was barred by pending proceedings before the NCLT. - HELD THAT: - The court noted that the scope of an inspection under Sections 206-207 is distinct from the remedy sought before the NCLT (including proceedings under the repealed Act equivalent provisions). Pendency of adjudicatory proceedings before the NCLT or an appeal does not, by itself, bar the Registrar or Central Government from initiating inspection or inquiry where there are valid grounds. The summons under Section 207(3)(b) sought production of books and information in furtherance of the inspection; however, the Court observed that subsequent steps under Section 208 (investigation) depend on the inspection report and, as of the stage of issuance of the summons, the challenge to such steps was premature. Consequently the writ challenging the summons was dismissed as premature while the legality of inspection itself was upheld. [Paras 15, 18, 20]

Summons issued under Section 207(3)(b) were not objectionable in law and the petition challenging them was dismissed as premature.

Final Conclusion: Writ petition No. 10201 of 2017 challenging the inspection under Section 206(5) of the Companies Act, 2013 and writ petition No. 12296 of 2019 challenging the summons under Section 207(3)(b) are dismissed; the exercise of power to order inspection and to issue summons was held lawful and the challenge to the summons was also held premature.

Reduction of share capital under section 66 read with section 52 - Confirmation of capital reduction by the Tribunal - Cancellation and extinguishment of equity shares held by public shareholders - Fair valuation and fairness opinion - Utilisation of securities premium for repayment of paid up capital - Compliance with NCLT (Procedure for Reduction of Share Capital) Rules, 2016 - Service of individual notices to creditors and public advertisement - Delisting and lack of marketability of shares as basis for exit - Protection of creditors and preference shareholders - Approval by special resolution of shareholders

Reduction of share capital under section 66 read with section 52 - Confirmation of capital reduction by the Tribunal - Approval by special resolution of shareholders - Tribunal confirmed the proposed reduction of the issued, subscribed and paid up equity share capital by cancelling and extinguishing the equity shares held by public shareholders as approved by the special resolution dated January 28, 2020. - HELD THAT: - The Tribunal examined the company's resolutions and the voting results of the extraordinary general meetings of equity and preference shareholders and found that the special resolution approving reduction of equity share capital had been duly passed. Having perused the petition, supporting documents and reasons advanced for reduction, the Tribunal concluded there was no reason to withhold confirmation and that the proposal did not prejudicially affect any party. Consequently the Tribunal sanctioned the reduction and recorded the minute under section 103(1) confirming the reduced capital. [Paras 14, 16, 17]

The proposed capital reduction is confirmed and sanctioned by the Tribunal.

Fair valuation and fairness opinion - Delisting and lack of marketability of shares as basis for exit - The valuation by an independent registered valuer and the SEBI registered merchant banker's fairness opinion were accepted as the basis for determining fair value payable to public shareholders. - HELD THAT: - The petitioner obtained a valuation report from a registered valuer and a fairness opinion from a SEBI registered merchant banker; these were considered by the audit committee and the board before the shareholders' meeting. The Tribunal reviewed the material and the explanation that the shares had become non marketable following delisting, and accepted the valuation and fairness opinion as valid and appropriate for determining the consideration payable to public shareholders. [Paras 5, 6, 14]

Valuation and fairness opinion are accepted as fair and adequate for the capital reduction.

Compliance with NCLT (Procedure for Reduction of Share Capital) Rules, 2016 - Service of individual notices to creditors and public advertisement - Protection of creditors and preference shareholders - Procedural compliances including dispatch of notices to creditors, publication of public notice, and responses to the Regional Director were found to be duly made and sufficient; no creditor or other party objection prevented confirmation. - HELD THAT: - The petition record showed compliance with filing requirements and dispatch of individual notices to secured and unsecured creditors and publication of public notice as required by the Rules. The Regional Director's queries concerning FEMA, RBI, and Income tax compliance were addressed and undertakings given. The Tribunal noted that no substantive objections were filed within the prescribed period and that the limited creditor communications had been dealt with (including reconciliation and payment where agreed). The Tribunal treated the timing of notices as substantially compliant given receipt of the order and found no prejudice to creditors or preference shareholders. [Paras 11, 12, 13, 14, 15]

Procedural and regulatory compliances are satisfactory and do not bar confirmation of the capital reduction.

Utilisation of securities premium for repayment of paid up capital - Accounting treatment and maintenance of positive net worth - Payment of consideration in excess of face value to public shareholders is to be adjusted against the securities premium account and the company's accounting treatment for the reduction is approved to the extent recorded. - HELD THAT: - The resolution provided for payment of the fair value, including a premium, to public shareholders and specified that the excess over face value would be adjusted against the securities premium account. The petitioner produced certificates and confirmations from statutory auditors and directors regarding accounting treatment and positive net worth post reduction. The Tribunal directed the petitioner to act in accordance with the shareholders' resolution and the proposed accounting entries to give effect to the reduction. [Paras 8, 9, 10, 19]

Company must effect repayment to public shareholders and adjust the premium against the securities premium account as per the approved resolution and accounting treatment.

Publication of confirmation and post sanction formalities - Compliance with directions of the Tribunal - The petitioner was directed to publish the notice of confirmation in designated newspapers and to comply with other post sanction formalities, and ordered to make a payment to the office of the Regional Director. - HELD THAT: - As part of the sanction, the Tribunal required the petitioner to publish the notice of confirmation of reduction and approving minutes in specified newspapers within a stipulated time after registration with the Registrar of Companies. The Tribunal also directed compliance with the resolution for repayment to the public shareholders and ordered payment to the Regional Director's office. These directions were given to ensure completion of statutory formalities and regulatory record keeping. [Paras 18, 19, 20]

Petitioner must publish the confirmation notice, carry out the repayment and accounting steps as directed and comply with the Tribunal's post sanction directions including payment to the Regional Director's office.

Final Conclusion: The Tribunal allowed the petition, sanctioned the reduction of the company's equity share capital by cancelling and extinguishing the equity shares held by public shareholders as approved by the special resolution, accepted the valuation and procedural compliances, and directed the petitioner to implement the repayment, accounting adjustments and post sanction formalities in accordance with the resolution and applicable law.

Composite scheme of arrangement - demerger - amalgamation - meetings of shareholders and creditors - notice and disclosure of material facts under sections 230(3) and 102 of the Companies Act, 2013 - e-voting requirement for a listed company - appointment of scrutinizer - service of scheme on regulatory authorities and Official Liquidator - option to hold meetings through video conferencing or other audio-visual means - quorum as prescribed under section 103 of the Companies Act, 2013

Meetings of shareholders and creditors - composite scheme of arrangement - e-voting requirement for a listed company - option to hold meetings through video conferencing or other audio-visual means - quorum as prescribed under section 103 of the Companies Act, 2013 - notice and disclosure of material facts under sections 230(3) and 102 of the Companies Act, 2013 - appointment of scrutinizer - service of scheme on regulatory authorities and Official Liquidator - Directions for convening and conduct of meetings of equity shareholders and creditors for approval of the composite scheme of arrangement; ancillary procedural directions. - HELD THAT: - The Tribunal directed that meetings of the equity shareholders of all four applicant companies and of secured and unsecured creditors of the first and third applicant-companies be convened on specified dates, times and at specified venues for the purpose of considering the composite scheme of arrangement involving amalgamation and demerger. The first applicant-company, being listed, shall provide facility for e-voting and voting at the venue. The Tribunal appointed named chairpersons for each meeting (with identified alternates) and prescribed quorum requirements in accordance with the Companies Act, 2013, including rules for adjournment and deemed quorum where applicable. Provisions for voting by proxy or authorized representative, valuation of shares and claims to be determined from company records (or by the chairman where disputed), and preservation of unedited raw footage where meetings are held through audio-visual means were directed. The Tribunal specified timelines and modes for issue and publication of notices, required inclusion of the scheme and the statement of material facts as mandated by the Companies Act, 2013 (read with rules), and permitted publication in print or online editions in view of the Covid-19 lockdown. The Tribunal appointed a practising company secretary as scrutinizer for the meetings and fixed his fee, and required the chairmen to file compliance and results reports within prescribed periods. The applicant-companies were directed to serve copies of the scheme and notices on regulatory authorities (including Regional Director, Registrar of Companies, Income-tax authorities, stock exchanges and Luxembourg Stock Exchange) and, in respect of the third and fourth applicant-companies, on the Official Liquidator; the Tribunal appointed a firm of chartered accountants to assist the Official Liquidator in scrutinizing the books for the last five years and directed payment of their fees. The Tribunal required the applicant-companies to post notices on their websites and to file compliance reports with the Registry in lieu of customary affidavits of service due to lockdown. [Paras 11, 13, 14, 15, 16]

Meetings of shareholders and creditors are ordered to be convened and conducted in accordance with the directions given, notices and publications to be issued as specified, chairmen and scrutinizer appointed, service on regulatory authorities to be effected, and compliance and results to be reported to the Tribunal within the prescribed timelines.

Final Conclusion: The Tribunal directed convening of statutory meetings of equity shareholders and relevant creditors to consider the composite scheme (involving amalgamation and demerger), prescribed procedural safeguards for notice, voting (including e-voting), quorum and conduct (including option for video conferencing), appointed chairmen and a scrutinizer, required service of the scheme on specified authorities (including the Official Liquidator for two companies) and directed filing of compliance and results reports.

Commercial wisdom of the Committee of Creditors - disqualification under Section 29A of the Insolvency and Bankruptcy Code, 2016 - approval of Resolution Plan under Section 31(1) of the Insolvency and Bankruptcy Code, 2016 - compliance with the requirements of Section 30(2) of the Insolvency and Bankruptcy Code, 2016 - non-justiciability of CoC's commercial decision

Disqualification under Section 29A of the Insolvency and Bankruptcy Code, 2016 - commercial wisdom of the Committee of Creditors - non-justiciability of CoC's commercial decision - Objection that the Resolution Applicants are related parties and barred under Section 29A and that the Resolution Plan is sham/collusive attacking the CoC's approval. - HELD THAT: - The Adjudicating Authority, relying on the principle that the commercial wisdom of the Committee of Creditors is afforded primacy and is largely non-justiciable, rejected the Operational Creditor's challenge to the CoC's decision. The Resolution Professional placed on record affidavits and Form-H evidencing that the Resolution Applicants are not disqualified under Section 29A and complied with the disclosure requirements; the Court accepted that the CoC, being fully informed, acted within its commercial discretion in approving the plan. Consequently, the objection that voting share was reduced improperly and that the plan is sham was rejected. [Paras 4]

Objection under Section 29A and allegation of collusion/sham vis-a -vis CoC approval rejected; CoC's commercial decision treated as non-justiciable in the circumstances.

Compliance with the requirements of Section 30(2) of the Insolvency and Bankruptcy Code, 2016 - approval of Resolution Plan under Section 31(1) of the Insolvency and Bankruptcy Code, 2016 - Whether the Resolution Plan complied with mandatory parameters of Section 30(2) and was fit for approval under Section 31(1). - HELD THAT: - The Tribunal examined the plan against the statutory criteria. It recorded that the Resolution Applicants submitted the requisite affidavit regarding Section 29A, that CIRP costs were provided in priority, that the plan proposed to pay 100% of admitted operational creditors' claims (and thus offered more than liquidation value), and that there would be no change in management or capital structure during the plan period while providing for appointment to the board as stated. The Tribunal found that the plan did not contravene any law and met the mandatory compliances set out in Section 30(2) and related regulations. On that basis, and noting CoC approval, the plan was held compliant and approved. [Paras 15, 16]

Resolution Plan found to satisfy the mandatory requirements of Section 30(2) and was approved under Section 31(1); the plan shall be binding and become effective from the date of the order.

Final Conclusion: The Adjudicating Authority rejected the Operational Creditor's objections, held the CoC's approval to be within its commercial discretion, found the Resolution Plan to comply with the mandatory requirements of Section 30(2), and approved the Resolution Plan under Section 31(1) of the IBC, 2016, to be effective from the date of this order.

Scheme of amalgamation - sanction under sections 230 to 232 - appointed date - vesting of assets and liabilities - continuation of pending proceedings - tax implications subject to decision of tax authorities - examination of defaults under sections 185 and 186 - adjudication by Regional Director of alleged defaults and related party transactions - delivery of certified copy to Registrar of Companies for registration - handover of books of account under section 239

Scheme of amalgamation - sanction under sections 230 to 232 - appointed date - Sanction of the scheme of amalgamation between the transferor and transferee companies and fixation of the appointed date. - HELD THAT: - The Tribunal examined the petition, reports of the Registrar of Companies and Regional Director, replies and undertakings of the petitioners and the official liquidator's observations. The Regional Director concluded that the scheme appears fair, reasonable and not detrimental to members or creditors. The Tribunal was satisfied that the procedure specified in sub-sections (1) and (2) of section 232 had been complied with. On that basis the scheme was sanctioned and the appointed date for the scheme was fixed as April 1, 2018. [Paras 15, 16]

The scheme of amalgamation is sanctioned and the appointed date is April 1, 2018.

Vesting of assets and liabilities - Transfer and vesting of the transferor company's assets and liabilities in the transferee company. - HELD THAT: - Pursuant to the sanction under section 232, the Tribunal directed that the transferor company shall be transferred without further act or deed and that all assets and interests of the transferor shall vest in the transferee company, subject to existing charges. Likewise, all liabilities, including taxes and duties, of the transferor shall stand transferred to and become liabilities of the transferee.

Assets, interests and liabilities of the transferor company shall transfer and vest in the transferee company, subject to existing charges.

Tax implications subject to decision of tax authorities - Treatment of tax consequences arising from the scheme. - HELD THAT: - The Tribunal made clear that sanctioning the scheme does not decide tax consequences; any tax implications arising from the scheme are to be finally determined by the concerned tax authorities. The transferee company is bound by such decisions, including with reference to transfer pricing issues arising from related party transactions.

Tax implications arising out of the scheme are subject to final decision of the concerned tax authorities and shall be binding on the transferee company.

Examination of defaults under sections 185 and 186 - adjudication by Regional Director of alleged defaults and related party transactions - Procedure to address alleged non-compliance with sections 185 and 186 and transactions under section 188. - HELD THAT: - Having noted observations regarding possible non-compliance with sections 185 and 186 and related party transactions, the Tribunal directed the Registrar of Companies to examine any defaults after giving due opportunity to the applicants. The transferee company was directed to approach the Regional Director within 30 days for adjudication of any defaults under sections 185 and 186 and for transactions covered by section 188; penal consequences, if any, will be determined by the Regional Director in accordance with law.

Registrar of Companies to examine defaults under sections 185 and 186; transferee company to approach the Regional Director within 30 days for adjudication of defaults under sections 185, 186 and transactions under section 188, with penal consequences to be dealt by the Regional Director.

Delivery of certified copy to Registrar of Companies for registration - handover of books of account under section 239 - continuation of pending proceedings - Post-sanction compliance directions including filing of certified copy, handover of records and continuation of pending proceedings. - HELD THAT: - The Tribunal directed the petitioner-companies to deliver a certified copy of the order and scheme to the Registrar of Companies for registration within thirty days, and ordered that after completion of amalgamation the transferor or its authorised signatories shall hand over books of account and relevant documents to the transferee for purposes of section 239. It also directed that all proceedings pending by or against the transferor shall continue by or against the transferee.

Petitioners to file certified copy of order and scheme with ROC within thirty days; transferor to hand over books and records to transferee post-amalgamation; pending proceedings to continue against transferee.

No exemption from payment of taxes, stamp duty or other charges - Effect of sanction on liabilities for stamp duty, taxes and other statutory charges. - HELD THAT: - The Tribunal clarified that sanction of the scheme does not operate as exemption from payment of stamp duty, taxes or other charges; such matters remain subject to the relevant authorities and applicable law.

Sanctioning the scheme shall not be construed as granting exemption from stamp duty, taxes or other charges; these shall be dealt with by respective authorities under law.

Compliance with Companies Act and statutory returns - Requirement of continuing compliance and filings by the petitioner-companies. - HELD THAT: - The Tribunal made acceptance of the scheme subject to the petitioners' compliance with directions to file all statutory returns immediately if any are pending, and to ensure compliance with provisions of the Companies Act, 2013. It further required submission of quarterly/annual compliance status affidavits by directors supported by professional certification until compliance is ensured.

Scheme acceptance is subject to due statutory filings and ongoing compliance; petitioners to submit periodic affidavits and professional certificates until compliance is ensured.

Liberty to apply for further directions - Right of persons to seek further directions from the Tribunal. - HELD THAT: - The Tribunal recorded that any person shall be at liberty to apply to the Tribunal for directions as may be necessary in respect of the scheme or its implementation.

Any person may apply to the Tribunal for necessary directions concerning the scheme.

Final Conclusion: The Tribunal sanctioned the scheme of amalgamation between HHV Center for Advanced Photovoltaic Technologies P. Ltd. (transferor) and Hind High Vacuum Co. P. Ltd. (transferee), fixing the appointed date as April 1, 2018, and issued directions for vesting of assets and liabilities, registration and post-sanction compliance, while reserving tax determinations and adjudication of any alleged defaults under sections 185, 186 and transactions under section 188 to the appropriate authorities.

Probate requirement for establishing rights of executor or legatee - application of Section 57 territorial exceptions to wills - transfer of interest under a will without grant of probate

Probate requirement for establishing rights of executor or legatee - application of Section 57 territorial exceptions to wills - transfer of interest under a will without grant of probate - A person can transfer an interest on the basis of a will executed outside the original territorial jurisdiction of the Madras High Court without obtaining probate. - HELD THAT: - The Tribunal analysed Sections 57 and 213 of the Indian Succession Act and applied the territorial exceptions in Section 57(a) read with Section 213(2). A combined reading shows that Section 213(1)'s general probate requirement does not apply where the wills fall outside the territories or limits specified in Section 57(a) and (b). The Tribunal relied on the principle stated in Clarence Pais Vs. Union of India to the effect that where the parties are Hindus or the properties are situated outside the territories falling under Section 57(a) and (b), Section 213(2) applies and Section 213(1) is inapplicable, so that probate is not required. The Tribunal also accepted the Madras High Court's view in P. Ranganathan and Others Vs. Sai Jagannathan and Others that property in Saidapet lies outside the original territorial jurisdiction of the Madras High Court. Applying those authorities to the facts before it (the will executed at 81 V.S. Mudali Street, Saidapet, Madras), the Tribunal concluded that the probate requirement is not attracted and therefore a person may transfer interest on the basis of such a will even if probate has not been granted. [Paras 15, 16, 17]

Section 213(1) is not applicable to the will executed at Saidapet; probate is not required and a transfer of interest on the basis of that will is permissible.

Final Conclusion: The Tribunal answered the preliminary question in the affirmative: where a will is executed outside the territories covered by Section 57(a) and (b) (as in Saidapet), Section 213(2) applies and probate need not be obtained for transfer of interest under the will; the main matter is fixed for final hearing.

Rectification of clerical error - rectification under Section 420 of the Companies Act - mistake apparent on the record - merger of order with appellate orders - jurisdiction to amend an order after appellate confirmation

Rectification of clerical error - mistake apparent on the record - rectification under Section 420 of the Companies Act - Maintainability of the interlocutory application seeking rectification of an alleged clerical error in the Bench's order dated 15.03.2017 r.w. 26.04.2017. - HELD THAT: - The Tribunal examined the applicants' plea that Paragraph 145 inadvertently omitted the name of Respondent No. 3 and sought a further correction as a clerical error. Section 420 permits amendment to rectify a mistake apparent on the record within two years, but expressly precludes amendment in respect of any order against which an appeal has been preferred. The order of this Bench dated 15.03.2017 r.w. 26.04.2017 was the subject of Company Appeal (AT) No. 159 of 2017, which the NCLAT dismissed and which dismissal was confirmed by the Hon'ble Supreme Court. As a result, the earlier order stands merged with the appellate orders. The record shows that the predecessor Judge made deliberate handwritten alterations omitting Respondent No. 3, indicating a conscious decision rather than an inadvertent slip. Permitting the present rectification would, in effect, revisit or recall the earlier corrected order and alter its purport after appellate confirmation, which the Tribunal is not competent to do. Consequently the IA is not maintainable before this Bench. The Tribunal nonetheless granted liberty to seek appropriate relief or a no-objection from the higher appellate forum to permit any modification without changing the original purport of the order confirmed on appeal. [Paras 16, 17, 18, 19, 20]

Interlocutory application for rectification is not maintainable and is dismissed; liberty granted to approach the appellate forum for permission/NOC for any modification.

Final Conclusion: The application for rectification of the order dated 15.03.2017 r.w. 26.04.2017 is dismissed as not maintainable because the order has been upheld on appeal and merged with appellate orders; parties have liberty to approach the appellate forum for appropriate relief or permission for any modification.

Ad-interim injunction - prima facie case - balance of convenience - application under Section 8 of the Arbitration and Conciliation Act, 1996 - binding precedent under Article 141 of the Constitution of India - continuation of interim order - direction to adjudicating authority to decide Section 8 application promptly - power to pass interim relief in a company petition under Sections 241-242

Application under Section 8 of the Arbitration and Conciliation Act, 1996 - direction to adjudicating authority to decide Section 8 application promptly - binding precedent under Article 141 of the Constitution of India - CA No. 422 of 2019 (application under Section 8) pending before NCLT is to be taken up on a day-to-day basis and disposed of within a short, specified timeframe with reporting of compliance to the Appellate Tribunal. - HELD THAT: - The Tribunal held that the order of the Hon'ble Supreme Court in Civil Appeal No. 9400/19 is binding under Article 141 and required the National Company Law Tribunal, New Delhi Bench III to take up CA No. 422 of 2019 (the Section 8 application) on a day-to-day basis from 17.03.2020 without granting adjournments, to decide the same within one week thereafter and to report compliance to this Tribunal. The Tribunal made clear that the parties are free to raise all factual and legal issues before the NCLT and that the NCLT must pass a reasoned order on merits in accordance with law. The Appellate Tribunal expressly refrained from traversing the merits of the underlying dispute so as not to affect the parties' rights pending adjudication by the NCLT. [Paras 5, 7]

Directed NCLT, New Delhi Bench III to hear CA No. 422 of 2019 day-to-day from 17.03.2020, dispose it within one week, pass a reasoned order on merits, and report compliance; Tribunal did not decide the merits.

Final Conclusion: The Appellate Tribunal, treating the Supreme Court's directions as binding, directed the NCLT to urgently decide the pending Section 8 application (CA No. 422 of 2019) on a day-to-day basis and to report compliance, without expressing any view on the merits of the subject matter; the Tribunal refrained from adjudicating the substantive issues and left them for reasoned disposal by the NCLT.

Overriding effect of Section 238 of the Insolvency and Bankruptcy Code - Moratorium under Section 14 of the Insolvency and Bankruptcy Code - Recovery proceedings under Section 28A of the Securities and Exchange Board of India Act - Liability and enforcement against directors, shareholders and key managerial personnel - Cooperation between Recovery Officer and Resolution Professional / participation of Recovery Officer as observer in CoC

Overriding effect of Section 238 of the Insolvency and Bankruptcy Code - Moratorium under Section 14 of the Insolvency and Bankruptcy Code - Recovery proceedings under Section 28A of the Securities and Exchange Board of India Act - Section 14 and Section 238 of the IBC have an overriding effect on Section 28A of the SEBI Act once CIRP is commenced. - HELD THAT: - The Tribunal examined the respective objects and operation of the IBC and the SEBI Act and held that the IBC is a complete, time bound code enacted after considering existing statutes, aimed at maximisation of value for all stakeholders. Reliance on the principle of primacy established in Innoventive Industries and the text of Sections 14 and 238 led to the conclusion that recovery actions under Section 28A of the SEBI Act are constrained by the moratorium and the non obstante provision of the IBC where an application under Sections 7, 9 or 10 is admitted and CIRP is on foot. Consequently, the Tribunal found that Section 14(1) and Section 238 operate to override Section 28A insofar as they are inconsistent with the Code during the CIRP. [Paras 17, 18]

Section 14 and Section 238 of the IBC override Section 28A of the SEBI Act; no modification of the earlier order appointing the IRP is required.

Liability and enforcement against directors, shareholders and key managerial personnel - Recovery proceedings under Section 28A of the Securities and Exchange Board of India Act - SEBI is not barred from initiating or continuing actions against individuals (directors, shareholders and key managerial personnel) for fraudulent acts notwithstanding the moratorium applicable to the corporate debtor. - HELD THAT: - Although recovery against the corporate debtor's assets is subject to the moratorium and the overriding effect of the IBC, the Tribunal clarified that this constraint does not preclude SEBI from taking action against individuals responsible for fraudulent conduct. The order records that SEBI may proceed, as it deems fit, against such persons for their fraudulent acts, distinguishing actions that seek recovery from the corporate debtor's estate (which are stayed by the Code) from enforcement against individuals. [Paras 18]

SEBI may take action against the directors, shareholders and key management personnel of the corporate debtor for fraudulent acts.

Cooperation between Recovery Officer and Resolution Professional / participation of Recovery Officer as observer in CoC - Recovery proceedings under Section 28A of the Securities and Exchange Board of India Act - Moratorium under Section 14 of the Insolvency and Bankruptcy Code - The Recovery Officer appointed under Section 28A should cooperate with the Resolution Professional and, if feasible, may participate as an observer in the Committee of Creditors to facilitate quicker resolution and maximise value. - HELD THAT: - Recognising the overlapping objectives of investor protection and maximisation of asset value under the IBC, the Tribunal recommended coordination between SEBI's Recovery Officer and the Resolution Professional. The observation stems from practical considerations that SEBI's parallel recovery efforts have not produced effective protection for investors and that cooperation-rather than contestation over statutory supremacy-would better serve rapid resolution and stakeholders' interests. The Tribunal framed this as a suggestion for SEBI's consideration while upholding the primacy of the Code in relation to recovery from the corporate debtor. [Paras 17, 18]

The Recovery Officer under Section 28A is to cooperate with the Resolution Professional and may, if feasible, attend CoC meetings as an observer to assist in quicker resolution.

Final Conclusion: The interlocutory applications are dismissed. The Tribunal holds that Sections 14 and 238 of the IBC override Section 28A of the SEBI Act in respect of recovery from the corporate debtor during CIRP, while leaving SEBI free to pursue actions against responsible individuals; the Tribunal recommends cooperation between SEBI's Recovery Officer and the Resolution Professional, including possible participation as an observer in the CoC.

Lifting of corporate veil - group insolvency / consolidation of group assets - principal-agent / back-to-back contractual obligations between parent and subsidiary - performance bank guarantee - invocation and realisation for CIRP - assets of corporate debtor to include receivables and claims arising from parent company's contract - moratorium under the Insolvency and Bankruptcy Code

Lifting of corporate veil - group insolvency / consolidation of group assets - principal-agent / back-to-back contractual obligations between parent and subsidiary - Whether, on the facts, the corporate veil ought to be pierced and assets/claims of the parent company treated as assets of the Corporate Debtor for the purposes of the CIRP. - HELD THAT: - The Tribunal examined the corporate relationship, identity of management, contractual arrangement and flow of economic benefits between Albanna Engineering LLC (parent) and Albanna Engineering (India) Pvt. Ltd. (Corporate Debtor). Records show 100% shareholding, common promoters and directors, an explicit back-to-back subcontracting agreement under which the Corporate Debtor performed the project and was entitled to a defined share of receipts, and a practical absence of distinct operations or other sources of revenue for the Corporate Debtor. Relying on precedent recognising that piercing the corporate veil is fact-sensitive and may be warranted where a parent and subsidiary operate as a single economic entity or where a company is used to evade obligations, the Tribunal concluded that the parent and subsidiary are so intertwined that assets and claims held by the parent, arising from the contract performed by the Corporate Debtor, fall within the ambit of the Corporate Debtor's assets for CIRP purposes. The Tribunal therefore accepted that consolidation (or recognition of group insolvency attributes) is necessary here and that the bank guarantees and receivables attributable to the parent in respect of work performed by the Corporate Debtor can be treated as assets of the Corporate Debtor in the CIRP. [Paras 13, 16, 20, 23, 24]

The corporate veil is pierced on the facts; the assets/claims of Albanna Engineering LLC relating to the BPCL project, to the extent they derive from work performed by the Corporate Debtor, are to be regarded as assets of the Corporate Debtor for the ongoing CIRP.

Performance bank guarantee - invocation and realisation for CIRP - assets of corporate debtor to include receivables and claims arising from parent company's contract - moratorium under the Insolvency and Bankruptcy Code - Whether the Respondent (BPCL) should be directed to invoke the performance bank guarantees furnished by the parent company and preserve the proceeds for the benefit of the Corporate Debtor's CIRP, notwithstanding contention about privity and pending garnishee/injunction orders. - HELD THAT: - The Tribunal found that (i) the guarantees were performance guarantees given by the parent in respect of the same project executed by the Corporate Debtor; (ii) material receivables retained with BPCL and the proceeds of guarantees are traceable to work performed by the Corporate Debtor and thus form part of the Corporate Debtor's assets in CIRP; and (iii) although BPCL contended that there is no privity with the Corporate Debtor and various garnishee/injunction orders exist, those attachments and injunctions do not preclude the Tribunal from directing invocation and preservation of guarantee proceeds for CIRP. Taking into account the imminent expiry/amendment of guarantee validity and the absence of other meaningful assets of the Corporate Debtor, the Tribunal exercised its powers under Section 60(5) IBC and NCLT Rules to direct BPCL to invoke both bank guarantees issued by the parent, deposit the proceeds in an interest-bearing fixed deposit in a designated account, and produce original deposit receipts before the Registry. The Tribunal recorded that the moratorium under Section 14 (read with Section 238) applies to proceedings against the Corporate Debtor and its parent in the CIRP context. [Paras 15, 24, 25, 26, 27]

BPCL is directed to invoke the parent company's performance bank guarantees immediately, place the proceeds in an interest-bearing fixed deposit in the specified account in the name of BPCL - Account Albanna Engineering, and produce the original deposit receipt before the Registry; the moratorium under the IBC is applicable in the circumstances.

Final Conclusion: The Tribunal held that, on the facts, piercing the corporate veil and treating the parent company's contract-related claims and guarantee proceeds as assets of the Corporate Debtor is warranted; accordingly BPCL was directed to invoke the parent's performance bank guarantees and preserve the proceeds in a designated interest-bearing deposit pending further orders, and the application was disposed of in accordance with the directions.

Validity of substituted service by publication - compliance with prescribed service procedure under Rule 5(2) (demand notice/service modes) - pre-existing dispute as bar to admission of Section 9 application - adjudicating authority to reject Section 9 application where notice of dispute exists

Validity of substituted service by publication - compliance with prescribed service procedure under Rule 5(2) (demand notice/service modes) - Whether the ex parte proceedings and consequent orders of the Adjudicating Authority based on substituted service by newspaper publication were proper in the absence of satisfaction that ordinary modes of service could not be resorted to and without exploring other modes such as email. - HELD THAT: - The Tribunal found that the notice issued to the Corporate Debtor was returned unserved on account of 'insufficient address' and that, before ordering substituted service by publication, the Adjudicating Authority did not explore or record attempts at alternative modes of service such as electronic mail. Reliance was placed on the principle that substituted service by publication requires the Court to be satisfied that the defendant is keeping out of the way or that summons cannot be served in an ordinary way and that the Court must apply its mind before making such an order. In these circumstances the Adjudicating Authority's order holding service sufficient by publication and proceeding ex parte was held improper. [Paras 24, 26]

The order of the Adjudicating Authority proceeding ex parte on the basis of substituted service by publication was held improper and set aside.

Pre-existing dispute as bar to admission of Section 9 application - adjudicating authority to reject Section 9 application where notice of dispute exists - Whether there existed a plausible, pre existing dispute between the parties prior to the demand notice which required rejection of the Section 9 application. - HELD THAT: - The Tribunal examined email correspondence dated prior to the demand notice which showed objections by the Corporate Debtor concerning posting of barter ledger revenues, issuance of post dated cheques without informing the Corporate Debtor, dissatisfaction with service quality and intention to take over management. Applying the settled test that an adjudicating authority must reject a Section 9 application where a notice of dispute exists or there is material showing a plausible dispute (so long as it is not patently feeble, hypothetical or illusory), the Tribunal concluded that a pre existing dispute was established on the material before it. Accordingly the Section 9 petition could not have been admitted. [Paras 28, 29, 31]

A pre existing dispute was held to exist; the Section 9 application was not maintainable and must be dismissed.

Final Conclusion: The Appeal was allowed: the impugned order admitting the Section 9 application, appointments and moratoriums flowing therefrom were set aside; the Section 9 application is dismissed and the Adjudicating Authority directed to close the proceeding, with the Adjudicating Authority to fix the Interim Resolution Professional's fee for the period served and no order as to costs.

Approval of Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code - Compliance with Section 30(2) and Regulations 37, 38 and 39 of the CIRP Regulations - Priority of payments under an approved resolution plan (CIRP costs, operational creditors, dissenting financial creditors) - Eligibility and ineligibility under Section 29A of the Code - Limited role of the Adjudicating Authority in judicial scrutiny of an approved resolution plan - Resolution Applicant takes over assets and liabilities as specified in the approved plan - Cessation of moratorium upon approval of the resolution plan

Approval of Resolution Plan under Section 30(6) of the Insolvency and Bankruptcy Code - Compliance with Section 30(2) and Regulations 37, 38 and 39 of the CIRP Regulations - Priority of payments under an approved resolution plan (CIRP costs, operational creditors, dissenting financial creditors) - Eligibility and ineligibility under Section 29A of the Code - The Resolution Plan submitted by Shri Sai Priya Sugars Limited satisfies the statutory requirements and is liable to be approved under Section 30(6) read with Section 30(2) of the Code and applicable CIRP Regulations. - HELD THAT: - The Tribunal examined the Resolution Plan against the requirements of Section 30(2) and Regulations 37, 38, 38(1A) and 39(4). The Plan provides for priority payment of CIRP costs, sets out payments to operational creditors (notwithstanding a calculated liquidation value of NIL for OCs) and provides for payment to a dissenting financial creditor as per Regulation 38(1)(b). The RP submitted Form H and verified compliance with Regulations. The Tribunal applied the guidance in K. Sashidhar and Committee of Creditors of Essar Steel to restrict its role to scrutiny within the four corners of Section 30(2) and not to re-open commercial decisions of the CoC. The Resolution Applicant was found not to be ineligible under Section 29A following verification. Having satisfied itself that the Plan conforms to the statutory requirements and Regulations, the Tribunal held the Plan fit for approval. [Paras 11, 12, 13, 14, 15]

The Application is allowed and the Resolution Plan of Shri Sai Priya Sugars Limited is approved; it shall be binding on the corporate debtor and all stakeholders and shall take effect immediately.

Resolution Applicant takes over assets and liabilities as specified in the approved plan - Cessation of moratorium upon approval of the resolution plan - Consequences of approval: the Resolution Applicant shall take over the corporate debtor as per the Plan and the moratorium under Section 14 shall cease to have effect. - HELD THAT: - Relying on the settled position that a successful resolution applicant takes the corporate debtor on a fresh slate subject to the liabilities and obligations as set out in the approved plan, the Tribunal recorded that the Resolution Applicant will take over the corporate debtor with assets and liabilities as specified in the Plan. The order further provides that the moratorium under Section 14 shall cease from the date of the order. The Tribunal also directed amendment and filing of MoA/AoA, implementation supervision by the RP and Monitoring Committee, and transmission of CIRP records to the IBBI. [Paras 12, 15]

The Resolution Applicant shall assume the corporate debtor as per the Plan; the moratorium under Section 14 ceases with immediate effect and the RP/Monitoring Committee will supervise implementation.

Final Conclusion: The Tribunal allowed the Section 30(6) application and approved the Resolution Plan of Shri Sai Priya Sugars Limited as meeting the requirements of Section 30(2) and the CIRP Regulations; the Plan is effective immediately, binding on all stakeholders, the moratorium ceases, and the RP and Monitoring Committee are directed to supervise implementation and forward CIRP records to the IBBI.

Maintainability of Section 7 application - applicability of RBI Circular dated 12.02.2018 - effect of Dharani Sugars on proceedings initiated pursuant to the RBI Circular - aggregate exposure threshold for invocation of RBI resolution timelines - NPA classification and Strategic Debt Restructuring (SDR) timeline

Applicability of RBI Circular dated 12.02.2018 - aggregate exposure threshold for invocation of RBI resolution timelines - effect of Dharani Sugars on proceedings initiated pursuant to the RBI Circular - maintainability of Section 7 application - Whether the Section 7 application was filed pursuant to the RBI Circular dated 12.02.2018 and whether the ratio of Dharani Sugars applies. - HELD THAT: - The Tribunal held that the RBI Circular's timelines and mandatory reference regime were directed primarily at accounts with aggregate exposure of Rs. 2,000 crore and above and, for other accounts, required specified announcement of reference dates over a two-year transition. The outstanding aggregate debt in the present matter was below the Rs. 2,000 crore threshold and there was no documentary evidence of any announced reference date applicable to the account. The Tribunal further observed that the account had been classified as NPA prior to the reference date and that the Section 7 application was filed before expiry of the 180-day window stipulated in the Circular. Mere discussion of the Circular in JLF minutes and the committee's decision to examine investor proposals in the light of the Circular did not establish that the Section 7 petition was instituted pursuant to the Circular. In the absence of cogent evidence that the petition was filed only in implementation of the RBI Circular (which the Tribunal found in any event not applicable to these facts), the ratio in Dharani Sugars declaring proceedings initiated solely because of the Circular to be non-est was held not to apply to the present case. [Paras 13, 14, 15, 16]

The RBI Circular dated 12.02.2018 was not applicable to the instant case and the decision in Dharani Sugars does not render the Section 7 petition non-est on the facts before the Tribunal.

Adjudicating authority to decide admission on merits - remand for fresh consideration - maintainability of Section 7 application - Disposition of the impugned order dismissing the Section 7 petition and the appropriate remedial direction. - HELD THAT: - Having found that the RBI Circular was inapplicable and that there was no cogent evidence that the petition was filed pursuant to that Circular, the Tribunal concluded that the Adjudicating Authority erred in dismissing the Section 7 application on that ground. The Tribunal therefore set aside the impugned order and remitted the matter to the Adjudicating Authority (NCLT), Mumbai Bench, with a direction to decide admission of the Section 7 application on its merits, taking into account the records, and to do so as expeditiously as practicable. [Paras 16, 17]

Impugned order dated 20.12.2019 is set aside and the petition is remitted to the Adjudicating Authority to decide admission of the Section 7 application on merits expeditiously.

Final Conclusion: The NCLAT concluded that the RBI Circular of 12.02.2018 did not apply to the present case (aggregate exposure below Rs. 2,000 crore) and that Dharani Sugars therefore did not invalidate the Section 7 petition; the impugned order dismissing the petition on that ground is set aside and the matter is remitted to the Adjudicating Authority to decide admission of the Section 7 application on merits expeditiously.

Admission of Section 9 application under IBC - operational debt and default - pre-existing dispute - Mobilox test - limitation and time-bar - appointment of Interim Resolution Professional and moratorium under Section 14 - deposit for IRP expenses

Operational debt and default - admission of Section 9 application under IBC - The Section 9 application by the Operational Creditor was admitted on the ground that an operational debt existed and default was established. - HELD THAT: - The Tribunal found that invoices raised by the Operational Creditor remained unpaid despite reminders and partial payment, and that the total unpaid operational debt (as claimed) satisfied the requirements of section 9(5) of the Code. The Bench recorded that the Applicant had complied with service requirements and had filed the demand notice; the Corporate Debtor had not established that the debt was fully disputed on merits prior to the demand notice. On this basis the Tribunal concluded that default was established and the application was complete and liable to be admitted. [Paras 13, 14, 15, 46]

Application under Section 9 admitted as default of operational debt established.

Pre-existing dispute - Mobilox test - operational debt and default - The plea of a pre-existing dispute raised by the Corporate Debtor was rejected as not satisfying the Mobilox standard. - HELD THAT: - The Corporate Debtor contended that there was a pre-existing dispute regarding statutory dues, TDS reconciliation and alleged double payment of bonus, relying on correspondence and internal communications. The Tribunal applied the Mobilox test - requiring a plausible contention which is not patently baseless - and held that the dispute relied upon by the Corporate Debtor did not survive. The Bench observed that some contentions were raised belatedly or were matters of reconciliation and that the Applicant had placed invoices and acknowledgements on record; therefore the defence was not a credible pre-existing dispute to defeat admission. [Paras 25, 40, 41, 42]

Alleged pre-existing dispute rejected; it did not bar admission of the Section 9 application.

Limitation and time-bar - The Tribunal held that the claim was within limitation and not time-barred. - HELD THAT: - Having noted the date of last payment by the Corporate Debtor and the dates of invoices and demand notice, the Bench concluded that the present application fell within the applicable limitation period and therefore limitation did not preclude admission of the petition. [Paras 45]

Claim held within limitation; not time-barred.

Appointment of Interim Resolution Professional and moratorium under Section 14 - An Interim Resolution Professional was appointed and the moratorium under Section 14 was declared consequent to admission. - HELD THAT: - Upon admission of the Section 9 application, the Tribunal directed appointment of the proposed Interim Resolution Professional and required him to perform the statutory functions in terms of the Code and Regulations. The Bench further ordered that the moratorium under Section 14(1) of the IBC shall apply, with the related provisions of Sections 14(2) and 14(3) coming into force during the moratorium period. [Paras 47, 48]

IRP appointed; moratorium under Section 14 declared upon admission.

Deposit for IRP expenses - The Operational Creditor was directed to deposit a specified sum to meet IRP expenses. - HELD THAT: - The Tribunal ordered the Operational Creditor to deposit an amount with the appointed Interim Resolution Professional to meet expenses of performing IRP functions in accordance with the relevant Regulation. The direction included a timeline for deposit and provision for adjustment and repayment through the Committee of Creditors accounting. [Paras 49]

Operational Creditor directed to deposit funds for IRP expenses within the stipulated time.

Final Conclusion: The Tribunal admitted the Section 9 petition filed by Adecco India Pvt. Ltd., holding that operational debt and default were established, that the alleged pre-existing dispute did not satisfy the Mobilox standard, and that the claim was within limitation; an Interim Resolution Professional was appointed, moratorium under Section 14 declared, and the Operational Creditor directed to deposit funds to meet IRP expenses.

Extinguishment of claims post-approval of resolution plan - Binding effect of Committee of Creditors' approval - Requirements for approval under Section 30(2) and Section 31 - Effective date conditions and implementation obligations - Performance Bank Guarantee and Letter of Intent as pre/post-conditions - Inclusion as secured financial creditor and maintainability - Adjudicating Authority's limited jurisdiction regarding validity of third party transactions

Extinguishment of claims post-approval of resolution plan - Admission of claims after approval of resolution plan - Claim filed by an operational creditor after approval of a resolution plan is not maintainable and must be dismissed. - HELD THAT: - Applying the principle that successful resolution applicants must not be faced with "undecided" claims after their plan is approved, the Tribunal followed the Supreme Court's decision in Committee of Creditors of Essar Steel and the NCLAT in Santosh Wasantrao Walokar to hold that a claim submitted after a resolution plan had been approved by the Committee of Creditors and the Adjudicating Authority cannot be admitted. The applicant had not established delivery proof for part of its claim and the application was filed after approval of the Liberty House plan; hence the application was dismissed.

CA No.293/2018 dismissed.

Extinguishment of claims post-approval of resolution plan - Vendor financing and resubmission of claims - Application by a vendor to admit a claim already represented by another creditor (IDBI) and filed after approval of the resolution plan is not maintainable. - HELD THAT: - The applicant's claim duplicated an amount already claimed and admitted by IDBI Bank under the vendor facility agreement. The IA was filed after approval of the resolution plan and therefore, in view of the principle that claims must be submitted to and decided by the resolution professional before plan approval, the Tribunal dismissed the IA while clarifying no opinion on contractual rights under the vendor facility agreement.

IA No.7/2020 dismissed.

Binding effect of Committee of Creditors' approval - Majority decision of Committee of Creditors - A member of the Committee of Creditors who dissents cannot, post-approval, seek to modify the resolution plan on matters that were deliberated and approved by the Committee. - HELD THAT: - The applicant (a financial creditor and COC member) sought modification of the plan and to restrain deductions agreed by the RP and considered by the COC. The Tribunal held that decisions taken by the Committee with the requisite majority are binding on all stakeholders, including dissenting members, and a dissenting member cannot challenge those decisions after the plan has been approved. The IA was therefore dismissed for lack of merit.

IA No.222/2020 dismissed.

Inclusion as secured financial creditor and maintainability - Non-joinder and failure to challenge claim in time - An entity which has not lent money to the corporate debtor and whose claim as secured financial creditor was rejected by the resolution professional, but not challenged in time, cannot later seek inclusion as a secured financial creditor. - HELD THAT: - Applicants claiming rights as security trustee had their identical claim rejected in 2017 and did not pursue remedy then. They had not lent to the corporate debtor directly and therefore could not be treated as financial creditors; having acquiesced earlier, their belated IA seeking inclusion in the COC was held not maintainable and dismissed without adjudicating other contentions.

IA No.62/2020 dismissed.

Requirements for approval under Section 30(2) and Section 31 - Performance Bank Guarantee and Letter of Intent as pre/post-conditions - Effective date conditions and implementation obligations - Adjudicating Authority's limited jurisdiction regarding validity of third party transactions - The resolution plan submitted by DVI satisfied the statutory requirements under Section 30(2) and Section 31 and is approved subject to directions to complete certain implementation formalities within specified timeframes. - HELD THAT: - The Tribunal examined compliance with statutory requirements: contents of the information memorandum, Form H certifications, treatment of operational and dissenting creditors, management and implementation mechanisms, and absence of disqualification under Section 29A. Noting peculiar procedural orders of the Supreme Court and time constraints, the Tribunal treated issuance of LOI and full submission of Performance Bank Guarantee as matters that could be completed post approval; it directed the successful resolution applicant to furnish the balance Performance Bank Guarantee and to file for Competition Commission of India approval within 15 days of certified copy of the order. The Tribunal accepted that certain effective date conditions in the plan related to implementation rather than pre-approval legal impediments, and declined to decide on the validity of third party transactions affecting implementation (e.g., the lease deed).

IA No.225/2020 allowed; DVI resolution plan approved with directions (PBG and CCI application to be furnished within 15 days, moratorium to cease, RP to forward records to IBBI).

Adjudicating Authority's limited jurisdiction regarding validity of third party transactions - Effective date conditions and implementation obligations - Application by the security trustee challenging inclusion of clauses relating to mortgaged ACE Complex Land in the resolution plan is dismissed; Tribunal will not decide validity of a third party registered lease deed in this proceeding. - HELD THAT: - The security trustee sought directions protecting its rights over mortgaged property and challenged plan clauses making a long term lease of the ACE Complex Land part of implementation. The Tribunal observed that the owner had executed a registered lease (dated 28.01.2020) before the COC approval, rendering some contractual 'acceptable terms' redundant. As the NCLT cannot adjudicate the validity of a third party transaction in these proceedings and given that the challenged clauses were implementation (effective date) conditions rather than pre approval legal obstacles, the IA was dismissed while expressly reserving any opinion on the validity of the lease deed or rights over the land.

IA No.237/2020 dismissed (no adjudication on validity of lease deed or parties' proprietary rights).

Final Conclusion: The Tribunal dismissed applications seeking admission or readmission of claims filed after approval of a resolution plan and applications challenging COC decisions where the applicant had acquiesced; it held that claims must be submitted to and decided by the resolution professional before plan approval and that COC approvals by requisite majority are binding. The DVI resolution plan was approved under Section 31(1) subject to directions to furnish the balance performance bank guarantee and obtain Competition Commission approval within 15 days; the Tribunal declined to adjudicate on the substantive validity of third party transactions (notably the ACE Complex Land lease) and left those rights undetermined.

Exclusion of time from statutory CIRP period - Discretion of the Adjudicating Authority to grant time extensions in the interest of justice - Effect of judicial stays and unforeseen circumstances on computation of CIRP timeline

Exclusion of time from statutory CIRP period - Effect of judicial stays and unforeseen circumstances on computation of CIRP timeline - Granting exclusion of 30 days from the statutory CIRP period to enable conclusion of the resolution process. - HELD THAT: - The Tribunal, after considering the factual matrix and authoritative decisions, held that the Adjudicating Authority has power to exclude certain periods from the statutory CIRP timeline where facts and circumstances justify such exclusion. Reliance was placed on the NCLAT decision in Quinn Logistics (CA No.185/2018) which recognises that periods caused by stays, absence of a functioning Resolution Professional, reservation of orders, restoration of CIRP by appellate fora and other unforeseen circumstances may be excluded when counting the resolution period. The Tribunal also applied the clarificatory observations of the Supreme Court in Committee of Creditors of Essar Steel (paras referred in the application) which permits the Adjudicating Authority to exercise discretion in exceptional cases to extend time beyond the statutory limits where it is shown to be in the interest of stakeholders and the delay is not attributable to the litigant. On the facts-receipt of two Resolution Plans, involvement of a foreign Resolution Applicant causing time-zone and communication delays, prior exclusions already granted and a unanimous CoC request-the Tribunal found justification for further exclusion of 30 days in the interest of justice and to enable completion of CIRP. [Paras 5, 6]

Exclusion of a further 30 days is granted from the statutory period (in addition to earlier exclusions) and the Resolution Professional is directed to complete the CIRP expeditiously and file the concluding application before the expiry of the extended period.

Final Conclusion: I.A. No. 92/2020 is allowed; the Tribunal exercised its discretion to grant a further exclusion of 30 days from the CIRP statutory period (in addition to earlier exclusions) to enable completion of the resolution process, directing the Resolution Professional to conclude CIRP within the extended period.

Operational debt - provision of services - operational creditor - pre-existing dispute - default - condonation of delay - opportunity to be heard / ex-parte proceedings

Operational debt - provision of services - service - Lease/rental payments under the Leave and Licence Agreement constitute an operational debt - HELD THAT: - The Tribunal held that lease of the cold storage for commercial purposes amounts to the provision of a service for the purposes of the definition of operational debt. Reliance was placed on the ordinary meaning of goods and services, legislative intent reflected in antecedent reports, the classification of leases as services in other statutes, and the distinction drawn between financial and operational creditors. Regulation 32 and Section 14(2) (listing essential supplies) do not circumscribe the scope of Section 5(21); the mentioned regulation lists supplies that cannot be interrupted during CIRP and does not limit the meaning of 'operational debt'. On the facts, the cold storage was let for commercial use and rentals were reflected in tax invoices and ledger accounts, bringing the claim within the ambit of operational debt as defined in the Code. [Paras 19, 21, 22]

The Tribunal held that the dues arising from the Leave and Licence Agreement in the present case are operational debt.

Pre-existing dispute - existence of dispute - default - There was no pre-existing dispute prior to issuance of the demand notice which would bar admission of the Section 9 application - HELD THAT: - Applying the Mobilox test, the Tribunal examined whether the communications relied upon by the Corporate Debtor disclosed a plausible dispute requiring further investigation. The letter of 19.09.2018 (and other communications) showed continued possession, an offer to extend the licence and admissions of outstanding amounts, and thus evidenced a debt due and payable. The asserted contentions were found to be unsupported, speculative or mere bluster and did not constitute a bona fide pre-existing dispute whose existence was brought to the Operational Creditor's notice before filing. The Corporate Debtor's late reply to the demand notice further militated against a finding of a pre-existing dispute. [Paras 27, 29]

The Tribunal held that no pre-existing dispute existed in fact prior to the demand notice and the Adjudicating Authority correctly admitted the application.

Condonation of delay - opportunity to be heard / ex-parte proceedings - Delay in filing the appeal was condoned and the contention that the Adjudicating Authority passed an ex-parte order without giving sufficient opportunity was rejected - HELD THAT: - The Tribunal exercised its discretion under the Code to condone a nine-day delay in filing the appeal, finding sufficient cause in the appellant's custodial circumstances and observing that the delay fell within the discretionary period. On the allegation of an ex-parte order, the record showed service of notices on the Corporate Debtor and communications to its advocate; the appellant's release from custody preceded the notice of hearing. Moreover, a private limited company could have been represented notwithstanding the director's custody. The Tribunal concluded that adequate opportunity to appear was available and the Adjudicating Authority did not err in proceeding as it did. [Paras 8, 9]

Delay of nine days was condoned; the claim of lack of opportunity/ex-parte decision was rejected.

Final Conclusion: The appeal is dismissed; the Adjudicating Authority's order admitting the Section 9 application is upheld. Delay in filing the appeal is condoned; there is no order as to costs.

Networth eligibility - compliance with eligibility criteria under Section 25(2)(h) of the Insolvency and Bankruptcy Code, 2016 - commercial wisdom of the Committee of Creditors - valuation of assets and role of registered valuers - limited judicial review of a resolution plan - implementation of approved resolution plan

Networth eligibility - compliance with eligibility criteria under Section 25(2)(h) of the Insolvency and Bankruptcy Code, 2016 - commercial wisdom of the Committee of Creditors - Validity of approval of the Resolution Plan insofar as the Resolution Applicant's networth eligibility was challenged. - HELD THAT: - The Tribunal held that the objection to the Resolution Applicant's networth was untenable. The record showed that an erroneous networth certificate was corrected by the Resolution Applicant by filing a revised certificate which was placed before the Resolution Professional and considered by the Committee of Creditors. The Appellant, though present during the CIRP, did not raise the eligibility objection at the relevant time; the CoC thereafter negotiated and approved the applicant's plan with an overwhelming majority. The method adopted for computing networth was not shown to be fundamentally flawed or perverse, and the Appellant cannot be permitted to challenge the CoC's commercial decision after approval and commencement of implementation absent cogent material showing irregularity that vitiates the process. [Paras 6, 9]

The challenge to the Resolution Plan on the ground of deficient networth eligibility is rejected and the approval is sustained.

Valuation of assets and role of registered valuers - limited judicial review of a resolution plan - implementation of approved resolution plan - Whether the valuation process and resultant approval contravened Regulations or required the Resolution Plan to match liquidation or fair value. - HELD THAT: - The Tribunal observed that two registered valuers were appointed and their reports were placed before the CoC, which considered them prior to approving the plan. Citing controlling authority, the Tribunal reiterated that valuation is intended to assist the CoC in decision-making and there is no requirement that a resolution plan match liquidation value; the Adjudicating Authority's role is confined to the statutory checks under Section 31 and not to reassess commercial decisions of the CoC. No material irregularity in the valuation process was demonstrated that would render the resolution process unsustainable, and implementation had already begun. [Paras 7, 8, 9]

The objection to valuation and to the CoC's acceptance of the Resolution Plan on valuation grounds is repelled; the plan's approval stands.

Final Conclusion: The appeal is dismissed; the impugned order approving the Resolution Plan is upheld as not suffering from legal infirmity or factual frailty and the challenge based on networth and valuation is rejected.

Existence of pre-existing dispute - plausible contention requiring further investigation - requirement of pre-existing suit or arbitration for Section 8(2)(a) purposes - summary nature of insolvency adjudication under the Code - amendment of cause title - maintainability of Section 9 application in presence of dispute

Amendment of cause title - Application under Rule 11 to amend the cause title by substituting the Petitioner's name was allowed. - HELD THAT: - The Tribunal examined the MA/135/2020 filed under Rule 11 seeking amendment of the cause title to replace the petitioner's name with the proprietor's name. As the relief sought was confined to correction of the cause title, the application was considered purely formal and was allowed. [Paras 2]

MA/135/2020 allowed; the cause title amendment was permitted.

Existence of pre-existing dispute - requirement of pre-existing suit or arbitration for Section 8(2)(a) purposes - plausible contention requiring further investigation - summary nature of insolvency adjudication under the Code - maintainability of Section 9 application in presence of dispute - The Section 9 petition was not maintainable because a pre-existing dispute existed between the parties prior to issuance of the demand notice. - HELD THAT: - The Tribunal analysed the correspondence exchanged before the demand notice and found emails from the corporate debtor asserting supply of expired/defective materials, refusal to pay and instruction to withhold payments. Those communications establishes a dispute antecedent to the demand notice. Applying the principle in Mobilox Innovations Pvt. Ltd. v. Kirusa Software (regarding the need for a dispute or pending suit/arbitration to pre-exist the demand notice and that the adjudicating authority must be satisfied that the dispute is not a patently feeble legal argument), the Tribunal held the corporate debtor's contentions to be plausible and requiring further investigation. Given the summary nature of insolvency proceedings and the presence of a pre-existing dispute, the adjudicating authority concluded that the Section 9 petition could not proceed and must be dismissed. [Paras 13, 14, 18, 20]

IBA/834/2019 dismissed for non-maintainability due to a pre-existing dispute; no costs.

Final Conclusion: The interlocutory application to amend the cause title was allowed; the Section 9 petition was dismissed because contemporaneous communications established a pre-existing dispute prior to the demand notice and the dispute was a plausible contention requiring further investigation.

Financial Debt - Default - Admission under Section 7 of the I&B Code - Corporate Insolvency Resolution Process (CIRP) - Interim Resolution Professional (IRP) appointment - Moratorium under Section 14 - Public Announcement of initiation of CIRP - Duties of IRP under Section 18 and Section 15

Financial Debt - Default - The Financial Creditor had established the existence of a financial debt and a default by the Corporate Debtor. - HELD THAT: - The Tribunal examined the loan agreement, security arrangements, payment terms and the correspondence evidencing demand and recovery steps. It found that the loan was sanctioned and disbursed, secured by title deeds and hypothecation and personally guaranteed, and that instalments fell due under the agreed repayment schedule. Notices calling for payment, requisition for revenue recovery and attachment steps were proved on record. On these admitted facts the Tribunal concluded that the obligation constituted a Financial Debt and that there was a Default by the Corporate Debtor as defined in the Code. [Paras 8, 9]

Existence of financial debt and default established in favour of the Financial Creditor.

Admission under Section 7 of the I&B Code - Corporate Insolvency Resolution Process (CIRP) - Interim Resolution Professional (IRP) appointment - The application under Section 7 was admitted and CIRP was ordered; an Interim Resolution Professional was appointed. - HELD THAT: - Having found that debt and default were established and that the applicant had complied with the procedural formalities including filing the application in prescribed form and producing the written consent (Form-2) of the proposed IRP with no record of disciplinary proceedings, the Tribunal held that the statutory threshold for admission under Section 7 was met. Consequently the application was admitted, commencement of CIRP was declared effective from the date of order and the proposed IRP was appointed to conduct the process, subject to production of the Authorisation for Assignment by the Insolvency Professional Agency. [Paras 10, 11, 12, 13]

Application admitted under Section 7; CIRP commenced and the nominated IRP appointed.

Moratorium under Section 14 - Public Announcement of initiation of CIRP - Duties of IRP under Section 18 and Section 15 - Moratorium was declared and ancillary directions as to public announcement and duties of the IRP were issued. - HELD THAT: - On admission the Tribunal directed that the statutory moratorium operate from the date of the order, subject to the Code's exceptions regarding supply of essential goods and services. It directed the IRP to make the public announcement immediately upon appointment and to perform obligations assigned under the Code, specifically duties under Sections 18 and 15, and to inform the Tribunal of progress and compliance within 30 days. Registry and Registrar of Companies were directed to communicate and update records as required. These directions flow from the statutory consequences of admission and the institutional responsibilities placed on the IRP and Registry. [Paras 14, 15, 16, 17, 18]

Moratorium declared; IRP to make public announcement, discharge statutory duties and report progress; registry to communicate order and RoC to update master data.

Final Conclusion: The Tribunal admitted the Section 7 application, held that a financial debt and default existed, ordered commencement of CIRP with immediate operation of the moratorium, appointed the nominated Interim Resolution Professional and directed the IRP and Registry to take statutory and consequential steps.

Maintainability of application under Section 9 of the IBC - limitation under the Limitation Act, 1963 and effect of post-limitation communications - communication and acknowledgment by corporate debtor as estopping defence - validity of Power of Attorney - Doctrine of substance over form in economic legislation - admission of Corporate Insolvency Resolution Process and declaration of moratorium under the IBC - appointment of Interim Resolution Professional

Maintainability of application under Section 9 of the IBC - limitation under the Limitation Act, 1963 and effect of post-limitation communications - communication and acknowledgment by corporate debtor as estopping defence - The Section 9 application by the operational creditor is maintainable and not barred by limitation in view of admitted communications from the corporate debtor including the January 2019 email. - HELD THAT: - The Tribunal found that notice under Section 8 was duly served and that the services and dues claimed arose from the terms of the employment agreement. A series of emails passed between the operational creditor and the corporate debtor from the corporate debtor's valid mail-id, including an email in January 2019 acknowledging financial constraints and promising a payment schedule, were held to be material. No evidence was placed on record to show that communications were with an unauthorised person. Applying the principle in Mobilox (as relied upon by the Tribunal), feeble contentions of pre-existing dispute or technical challenges to communications could not be allowed to frustrate the CIRP process. On that appreciation of the record the Tribunal concluded that the claim was not time-barred and that the corporate debtor's acknowledgments prevented the limitation defence from prevailing.

Application is maintainable and not barred by limitation; factual acknowledgments by the corporate debtor negate the limitation defence.

Validity of Power of Attorney - Doctrine of substance over form in economic legislation - The Power of Attorney relied upon by the operational creditor is valid for the purposes of the application. - HELD THAT: - The Tribunal rejected the corporate debtor's technical objection to the form of the Power of Attorney, observing that no specific format is prescribed under the IBC or the regulations. Having regard to general practice and the objectives of the IBC to promote entrepreneurship and balance stakeholders' interests, the Tribunal applied the Doctrine of substance over form and held that the Power of Attorney was properly executed and sufficient for the proceedings.

Objection to the Power of Attorney is overruled; the Power of Attorney is treated as valid.

Admission of Corporate Insolvency Resolution Process and declaration of moratorium under the IBC - The application under Sections 8 and 9 of the IBC is admitted and moratorium is declared as mandated by the Code. - HELD THAT: - Having found the application complete and the primary conditions satisfied, the Tribunal admitted the application for initiation of CIRP. Consequential directions were issued declaring moratorium and directing public announcement and claim submission in accordance with the Code. The Tribunal clarified the scope and effect of the moratorium consistent with Sections 13-15 and Section 14 of the IBC and directed the IRP to conduct the process in a time-bound manner.

Application admitted; moratorium declared and public announcement to be made; CIRP initiated.

Appointment of Interim Resolution Professional - An Interim Resolution Professional is appointed from the IBBI-approved list and the operational creditor is directed to pay an advance to the IRP. - HELD THAT: - The Tribunal observed that naming an IRP in the application is not mandatory under Section 9 and therefore appointed an IRP from the approved list maintained by the IBBI. Directions were given about replacement if the proposed IRP does not accept the assignment, and the operational creditor was ordered to pay an advance fee to the IRP as per the applicable regulation, to be adjusted against the final bill. The Tribunal further directed the IRP/RP to approach the Tribunal if additional funds become necessary during CIRP.

IRP appointed from IBBI list; operational creditor to pay advance fee; IRP to proceed with CIRP and may seek further directions if additional funds are required.

Final Conclusion: The Tribunal admitted the Section 9 application, rejected the limitation and technical objections, upheld the Power of Attorney as valid applying substance-over-form principles, declared moratorium, appointed an IRP from the IBBI list and directed the IRP to make the public announcement and conduct the CIRP in a time-bound manner with the operational creditor providing the prescribed advance.

Default - Financial debt arising from non-convertible debentures - Adjudicating Authority's limited scope under Section 7 - Initiation of Corporate Insolvency Resolution Process (CIRP) - Appointment of Interim Resolution Professional - Moratorium

Default - Financial debt arising from non-convertible debentures - The sums due on the Non-Convertible Debentures (NCDs) held by the petitioners constitute a financial debt and a continuing default has occurred. - HELD THAT: - The Tribunal found the material facts undisputed: issuance and allotment of NCDs to the petitioners, terms providing for interest at 20.5% p.a. and staggered repayment of principal, and cessation of payments after December 2016. Correspondence from the corporate debtor seeking extensions and admitting inability to repay were treated as admissions of debt. The accounts and filings (including MCA information) confirmed liabilities and inability to meet obligations. On these facts the Tribunal held that the claimed outstanding amount qualifies as a financial debt under Section 5(8)(c) of the Code and that a default has occurred. [Paras 5, 6]

The claimed dues arising from the NCDs are a financial debt and a continuing default has occurred.

Adjudicating Authority's limited scope under Section 7 - Initiation of Corporate Insolvency Resolution Process (CIRP) - The Company Petition under Section 7 is fit to be admitted and CIRP initiated. - HELD THAT: - Applying the limited scope of enquiry for a Section 7 application as expounded in Innoventive Industries Ltd., the Tribunal was satisfied that a default had occurred and that no law interdicted admission. The respondent's repeated non-appearance and failure to file a reply were taken as implicit concession that there was no defence to the claim of default. Considering the admitted default and the corporate debtor's adverse financial indicators (increased liabilities, negative net worth, cash outflows and large interest liability), the Tribunal concluded that the petition must be admitted and CIRP initiated. [Paras 7, 8, 9]

The petition is admitted under Section 7 and CIRP is initiated against the corporate debtor.

Appointment of Interim Resolution Professional - Moratorium - Appointment of the interim resolution professional and declaration of moratorium with consequential directions. - HELD THAT: - The Tribunal accepted the proposed insolvency professional's written consent and eligibility. Exercising powers under Section 7(5)(a) and other provisions, the Tribunal appointed the named professional as Interim Resolution Professional to carry out CIRP functions. The order also declared the moratorium proscribing institution or continuation of suits, transfer or disposal of assets, enforcement of security interests, recovery of property, termination of essential supplies and other actions listed in the Code, effective from the date of the order until completion of CIRP. Directions were given to the IRP to follow extant Code and Rules, to obtain cooperation from the board and staff, and to file progress reports. [Paras 10, 11]

The named insolvency professional is appointed as IRP and the moratorium and ancillary directions are imposed to give effect to the CIRP.

Final Conclusion: The Tribunal admitted the Section 7 petition, holding that the asserted dues on NCDs constitute a financial debt and that a continuing default exists; CIRP is initiated, the nominated insolvency professional is appointed as IRP, and the statutory moratorium and consequential directions are imposed.

Definition of 'input service' - Cenvat credit on outward transportation from the place of removal - interpretation of 'from the place of removal' versus 'upto the place of removal' - availability of credit for transportation to depot or customer's premises

Definition of 'input service' - Cenvat credit on outward transportation from the place of removal - availability of credit for transportation to depot or customer's premises - Entitlement to Cenvat credit of service tax paid on outward transportation of final products from factory (place of removal) to depot or directly to customer's premises for the period before amendment of the definition of 'input service'. - HELD THAT: - The Tribunal reconsidered the claim for Cenvat credit on outward transportation services for the period prior to the amendment effective 01.04.2008. The Tribunal relied on the interpretation adopted by the Apex Court in CCE vs. Vasavadatta Cements Ltd , which affirmed that the first (exhaustive) part of the definition of 'input service' covers services used by a manufacturer in relation to manufacture and includes 'clearance of final products from the place of removal', and that transportation tax paid on movement of final products from the place of removal up to the first point (whether a depot or the customer's premises, where delivery is direct) is admissible as input service credit. The Tribunal noted that the post 1.4.2008 amendment replacing "from the place of removal" with "upto the place of removal" limited credit prospectively, but did not affect the pre amendment period in dispute. In view of the Apex Court's authoritative construction, the adjudication disallowing the credit for the period in question was set aside and credit was allowed. [Paras 6, 7]

The appeal is allowed; the disallowance of Cenvat credit on outward transportation for the period from January 2005 to December 2007 is set aside and credit is permitted with consequential relief as per law.

Final Conclusion: The Tribunal allowed the assessee's appeal and set aside the adjudication disallowing Cenvat credit on outward transportation for the period from January 2005 to December 2007, following the Apex Court's interpretation that pre amendment 'input service' included transportation from the place of removal up to the first point of delivery.

Classification of goods - Animal Feed Grade Di Calcium Phosphate - Exemption under Notification No. 04/2016-C.E. (N.T.) - Retrospective exemption - Remand for de novo adjudication

Exemption under Notification No. 04/2016-C.E. (N.T.) - Retrospective exemption - Remand for de novo adjudication - Whether the matter requires reconsideration in view of Notification No. 04/2016-C.E. (N.T.) which has retrospective effect and covers the period in dispute. - HELD THAT: - The Tribunal noted that the lower authorities held the classification dispute against the appellant before issuance of Notification No. 04/2016-C.E. (N.T.). The Tribunal found that, irrespective of the classification under Chapter 2309 or Chapter 2835, the product is prima facie covered by the said notification which has retrospective effect and covers the period June, 2012 to March, 2013. Because the adjudicating authorities had no occasion to examine or apply the notification when they passed the impugned orders, the matter cannot be finally decided without reconsideration in the light of the notification. In these circumstances the proper course is to set aside the impugned order and remit the matter for fresh adjudication applying Notification No. 04/2016-C.E. (N.T.), with a direction to the adjudicating authority to complete de novo adjudication within three months. [Paras 4]

Impugned order set aside and matter remanded to the adjudicating authority for fresh adjudication in light of Notification No. 04/2016-C.E. (N.T.), with a direction to decide the old period June, 2012 to March, 2013 within three months.

Final Conclusion: The Tribunal allowed the appeal by setting aside the impugned order and remanding the matter for de novo adjudication by the adjudicating authority in light of Notification No. 04/2016-C.E. (N.T.), which has retrospective effect and covers the period June, 2012 to March, 2013; fresh adjudication to be completed within three months.

Rebate of excise duty on export - Jurisdiction of Tribunal under Section 35B(1) proviso (b) - Appeal non-maintainable for want of jurisdiction - Revisionary Authority (Additional/Joint Secretary to the Government of India) - Unjust enrichment (relevance to characterisation of rebate)

Rebate of excise duty on export - Jurisdiction of Tribunal under Section 35B(1) proviso (b) - Appeal non-maintainable for want of jurisdiction - Revisionary Authority (Additional/Joint Secretary to the Government of India) - Unjust enrichment (relevance to characterisation of rebate) - Whether the Tribunal has jurisdiction to entertain an appeal against rejection of a rebate claim of excise duty paid on goods exported through merchant exporters. - HELD THAT: - The record shows the appellant claimed rebate of duty on goods exported through merchant exporters. Even though the Commissioner (Appeals) made findings regarding passage of incidence of duty/unjust enrichment, that factual finding does not alter the legal character of the claim which remains a rebate in respect of export of goods. Under the proviso to Section 35B(1) the Tribunal lacks jurisdiction over matters relating to rebate of duty. Consequently, the appeal before the Tribunal is not maintainable on jurisdictional grounds. The appellant retains the statutory remedy of seeking revision before the competent Revisionary Authority (Additional/Joint Secretary to the Government of India). The Tribunal therefore declines to go into the merits and disposes the appeal as non-maintainable for want of jurisdiction. [Paras 5, 6]

Appeal dismissed as non-maintainable for want of jurisdiction; liberty granted to the appellant to file revision before the Revisionary Authority and appeal papers to be returned to the appellant.

Final Conclusion: The appeal was disposed of as non-maintainable because the dispute concerned a rebate of excise duty on export, a matter outside the Tribunal's jurisdiction under Section 35B(1) proviso (b); the appellant was given liberty to approach the appropriate Revisionary Authority and the appeal papers were returned.

Manufacturer - job work - SSI exemption under Notification No.8/2003-CE - clubbing of clearances - liability to pay central excise duty on manufacture - compliance with Rule 4(5)(a) of the Cenvat Credit Rules, 2004 - extended period of limitation

Manufacturer - job work - clubbing of clearances - compliance with Rule 4(5)(a) of the Cenvat Credit Rules, 2004 - SSI exemption under Notification No.8/2003-CE - Whether the appellant can be held liable as manufacturer and have clearances from independent job-workers clubbed with its own clearances so as to deny SSI exemption. - HELD THAT: - The Tribunal held that the taxable event under the Central Excise law is the manufacture of excisable goods and that manufacture occurs upon transformation into a new commercially distinct commodity. Where goods are manufactured by independent job-workers in their own premises, who conduct the manufacturing operations without control, supervision or operation of the principal under the job-worker provisions, the job-workers are the manufacturers liable to pay duty. The appellant had not operated under or complied with the procedure in Rule 4(5)(a) of the Cenvat Credit Rules, 2004 (or the corresponding earlier notifications) nor had it given any undertaking to discharge duty on behalf of the job-workers; therefore the scheme that would render the principal liable was not invoked. In these circumstances mere supply of raw materials or retention of ownership/raising of commercial invoices by the appellant does not convert the appellant into the manufacturer for the purposes of denying SSI exemption under Notification No.8/2003-CE, and the clearances effected by independent job-workers cannot be clubbed with the appellant's clearances to deny the exemption. [Paras 6, 17]

Appellant is not liable to pay central excise duty for goods manufactured and cleared from the job-workers' premises; clearances of job-workers cannot be clubbed with appellant's clearances for denial of SSI exemption.

Extended period of limitation - maintenance of books of account - audit and interpretational dispute - Whether demand could be confirmed by invoking the extended period of limitation. - HELD THAT: - The Tribunal found that the appellant had maintained proper books, registers and vouchers and had disclosed the transactions to other tax authorities. The dispute arose out of an audit and was interpretational in nature; there was no allegation of fraud, suppression or concealment that would justify invocation of the extended period. In the absence of facts bringing the case within the statutory exceptions permitting extended limitation, the demand for the extended period was held not maintainable. [Paras 5, 18]

Demand confirmed by invoking the extended period of limitation is not maintainable.

Final Conclusion: The Tribunal allowed the appeal, set aside the impugned order confirming duty, interest and penalty; appellant entitled to consequential benefits in accordance with law.

Independent application of mind by Assessing Officer - non-reliance on Enforcement Wing/ISIC proposals - power of Assessing Authority to deviate from audit reports and inspection proposals

Independent application of mind by Assessing Officer - non-reliance on Enforcement Wing/ISIC proposals - power of Assessing Authority to deviate from audit reports and inspection proposals - Proceedings founded solely on Enforcement Wing/ISIC audit reports or inspection proposals were set aside and remitted for independent disposal by the Assessing Officer in accordance with the Commissioner's Circular No.3 dated 18.01.2019. - HELD THAT: - The Court held that an Assessing Officer, being a quasi-judicial authority, must independently consider audit reports and inspection proposals and must not be guided solely by proposals of the Enforcement Wing or ISIC authorities. Earlier writ decisions of this Court were noted to support that principle. The Commissioner of State Tax, Chennai, by Circular No.3 dated 18.01.2019, expressly empowered Assessing Authorities to deviate from such proposals where they are not in conformity with law or established judicial principles and to record reasons for such deviation. Applying that ratio and the Circular, the Court set aside the impugned proceedings which proceeded on the basis of Enforcement/ISIC proposals and remitted the matter to the Assessing Officer for fresh consideration. The assessee was granted liberty to file objections with supporting documents within 30 days; on receipt, the Assessing Officer must afford opportunity of personal hearing (including by Video Conferencing if necessary) and endeavor to conclude assessment independently within 12 weeks. If objections are not filed within 30 days, the Assessing Officer shall commence proceedings thereafter. [Paras 2, 3, 4, 5]

Impugned proceedings based on Enforcement Wing/ISIC proposals are quashed and remitted to the Assessing Officer to be independently reconsidered in conformity with Circular No.3 dated 18.01.2019, with liberty to the assessee to file objections and with specified timelines for hearing and disposal.

Final Conclusion: Writ petition allowed; impugned assessment proceedings set aside and remitted for independent disposal by the Assessing Officer in accordance with the Commissioner's Circular No.3 dated 18.01.2019, with prescribed opportunity to the assessee and timelines for completion.

Prima facie case - pre-deposit condition for entertaining appeal - discretion to waive pre-deposit (reasons to be recorded) under Section 76(4) of the DVAT Act - application of mind by appellate authority - balance of convenience - irreparable loss/irreparable injury - public interest / interest of the revenue

Prima facie case - pre-deposit condition for entertaining appeal - discretion to waive pre-deposit (reasons to be recorded) under Section 76(4) of the DVAT Act - application of mind by appellate authority - balance of convenience - irreparable loss/irreparable injury - public interest / interest of the revenue - Scope of inquiry required of the Appellate Tribunal while exercising discretion under Section 76(4) to waive or reduce pre-deposit. - HELD THAT: - The Court held that the proviso to Section 76(4) is an exception to the main requirement of pre-deposit and vests a wide but judicially reviewable discretion in the Tribunal to waive or reduce the pre-deposit on furnishing of security if it 'thinks fit' and records reasons in writing. That discretion must not be exercised mechanically. The Tribunal is required to consider, by way of a cursory but real inquiry, the prima facie merits of the appeal alongside other established interlocutory principles - balance of convenience, irreparable injury, and public interest (including revenue interest) - before dispensing with the pre-deposit. Absence of explicit words such as 'hardship' in the statute does not preclude consideration of undue hardship or the assessee's financial condition as relevant factors. While a strong prima facie case is not alone determinative, where on a cursory glance the demand appears wholly without foundation or the purpose of the appeal would otherwise be frustrated, the Tribunal should consider appropriate relief. The exercise of discretion must be supported by cogent reasons showing application of mind; non-speaking or mechanical orders are liable to be quashed. [Paras 17, 29, 34, 39]

The Tribunal must examine the prima facie merits and related considerations (balance of convenience, irreparable loss, public interest/revenue interest) and record cogent reasons when deciding waiver or reduction of the pre-deposit under Section 76(4).

Application of mind by appellate authority - pre-deposit condition for entertaining appeal - Validity of the impugned non-speaking order directing fixed percentage pre-deposit without considering the Appellant's grounds. - HELD THAT: - The Court found that the Appellate Tribunal's impugned order declined to examine the Appellant's pleaded grounds and did not record any cogent reasons demonstrating application of mind to whether a prima facie case existed or other relevant considerations. Such a mechanical direction to deposit specified percentages of tax, interest and penalty without cursorily evaluating the merits is inconsistent with the legal requirements of the proviso and established principles governing stay/dispensation of pre-deposit. Consequently, the impugned order failed the requirement of reasons to be recorded and was legally infirm. [Paras 38, 39, 40]

Impugned order set aside for being non-speaking and issued without application of mind; matter remanded to the DVAT Appellate Tribunal to decide the Section 76(4) application afresh after hearing the parties and considering the factors indicated by this Court.

Final Conclusion: The impugned stay/pre-deposit order is quashed for lack of reasoned satisfaction; the matter is remanded to the DVAT Appellate Tribunal to rehear and decide the Section 76(4) application expeditiously after a cursory assessment of prima facie merits, balance of convenience, irreparable injury and revenue/public interest (including financial hardship where relevant), with reasons recorded in writing.

Cancellation of registration certificate under Central Sales Tax registration regime - entitlement to C forms pending challenge to registration - prima facie applicability of prior High Court precedent - effect of dismissal of Special Leave Petition on precedent

Prima facie applicability of prior High Court precedent - effect of dismissal of Special Leave Petition on precedent - The judgment in Capro/Carpo Power Limited is prima facie applicable to the petitioner's case and the prior decision stands reinforced by dismissal of the Special Leave Petition. - HELD THAT: - The Court examined the petitioner's case against the decision of the Punjab and Haryana High Court in Carpo Power Limited and found, on a prima facie basis, that the legal reasoning in that decision may be applicable to the present case. The Court further noted that the Special Leave Petition filed against that decision was dismissed by the Supreme Court, indicating absence of legal grounds for interference with the precedent. On this prima facie assessment the Court treated the earlier decision as persuasive for the limited purpose of interim relief. [Paras 8]

The Carpo Power precedent is prima facie applicable and its standing is reinforced by the dismissal of the Special Leave Petition.

Cancellation of registration certificate under Central Sales Tax registration regime - entitlement to C forms pending challenge to registration - interim stay of administrative order - Interim relief in the form of stay of the cancellation order and direction to issue C forms was granted until the returnable date. - HELD THAT: - The impugned order cancelled the petitioner's registration certificate with effect from 01.07.2017, which would disqualify the dealer from using C forms after that date. Applying its prima facie view about the applicability of the earlier High Court decision, this Court stayed the impugned cancellation order until the returnable date and directed respondents to issue necessary C forms on the basis of the existing registration certificate for the interim period. The stay and direction are interlocutory measures tied to the returnable date for further hearing. [Paras 6, 9]

The cancellation order is stayed until the returnable date and respondents are directed to issue C forms on the basis of the registration certificate in the interim.

Final Conclusion: On a prima facie assessment the Court treated the earlier High Court decision as applicable and, by way of interim relief, stayed the cancellation of the petitioner's registration certificate and directed issue of C forms pending further consideration; matter to be listed on 27.10.2020.

Extension of CBDT circular to Wealth Tax appeals - monetary limits for filing appeals - tax effect / low tax effect - revenue audit objection - unbuiltable land in CRZ III - asset under the Wealth Tax Act

Extension of CBDT circular to Wealth Tax appeals - monetary limits for filing appeals - tax effect / low tax effect - Whether the CBDT circular extending monetary limits for filing income-tax appeals to Wealth Tax appeals renders the Tribunal's dismissal of the Department's appeals on account of low tax effect sustainable. - HELD THAT: - The Court relied on CBDT Circular No.5/2019 dated 05.02.2019 which expressly extended, mutatis mutandis, the monetary limits for filing of income-tax appeals to Wealth Tax appeals and defined 'tax effect' for Wealth Tax purposes. In view of that extension and definition, the Tribunal's reliance on low tax effect as a basis for dismissing the Department's appeals cannot be faulted. Consequently, the substantial questions of law challenging the Tribunal's application of the circular and its dismissal on low tax effect were answered against the revenue.

Substantial Questions of Law Nos. 1 and 2 answered against the revenue; Tribunal's dismissal on low tax effect upheld in light of the CBDT circular's extension to Wealth Tax appeals.

Unbuiltable land in CRZ III - asset under the Wealth Tax Act - Whether the subject land, falling within CRZ III and being unbuiltable, is an asset within the meaning of the Wealth Tax Act. - HELD THAT: - On merits the Commissioner of Income Tax (Appeals) found as a factual conclusion that the land falls within CRZ III and is unbuiltable under the applicable coastal regulations, the sale agreement having been cancelled when the parties discovered that construction was not permissible. The CITA held that such land is not 'urban land' and therefore not an asset within the meaning of Section 2(e)(a) of the Wealth Tax Act, a view taken with reference to earlier authority including the decision in Prabhakar Keshav Kunde v. CIT . The High Court found no substantial question of law arising from these findings and declined to interfere with the factual conclusion reached by the CITA.

The finding that the land is unbuiltable CRZ III land and therefore not an asset under the Wealth Tax Act is upheld; no question of law warranted interference.

Revenue audit objection - application of Board Circulars - Whether the existence of a purported revenue audit objection prevented application of the Board circular or required a different treatment by the Tribunal. - HELD THAT: - The Court observed that the nature of the revenue audit objection was not made clear on the record. Having decided the matter on merits in favour of the assessee, the Court held that the question whether the audit objection would have taken the case outside the scope of the circular was unnecessary to decide. Thus the contention that the Board circular could not be applied because of a revenue audit objection was not entertained as a live issue.

Substantial Question of Law No. 3 held unnecessary in the facts; no separate adjudication on the alleged audit objection was required.

Final Conclusion: The appeals filed by the revenue are dismissed. Substantial Questions of Law Nos. 1 and 2 are answered against the revenue (the CBDT circular extending monetary limits to Wealth Tax appeals applies and justified the Tribunal's low tax effect dismissal); Question No. 3 is held unnecessary as the Court upheld the CITA's merits finding that the land in CRZ III is not an asset under the Wealth Tax Act.

Presumption under Section 139 of the Negotiable Instruments Act - rebuttable presumption under Section 118 of the Negotiable Instruments Act - offence under Section 138 of the Negotiable Instruments Act - conviction sustained on appreciation of evidence - scope of revisionary interference with concurrent findings of fact - conversion of sentence into fine and compensation

Offence under Section 138 of the Negotiable Instruments Act - presumption under Section 139 of the Negotiable Instruments Act - rebuttable presumption under Section 118 of the Negotiable Instruments Act - Whether the accused was rightly convicted under Section 138 of the Negotiable Instruments Act on the evidence and statutory presumptions - HELD THAT: - The court examined the statutory scheme that once execution of the cheque is proved or admitted, Sections 118 and 139 raise presumptions that a negotiable instrument was executed for consideration and that the cheque was issued for discharge of any debt or liability. Those presumptions are rebuttable but require the accused to adduce cogent evidence to shift the burden back to the complainant. In the present case the complainant proved execution and delivery of the cheque and presented evidence of the underlying debt; the accused failed to lead cogent evidence to rebut the statutory presumptions or establish that the cheque was not issued to discharge a debt. The appellate court applied Section 139 correctly and the finding that the offence under Section 138 was proved was maintained.

Conviction under Section 138 of the Negotiable Instruments Act is upheld as the accused failed to rebut statutory presumptions.

Scope of revisionary interference with concurrent findings of fact - conviction sustained on appreciation of evidence - Whether the High Court should interfere with concurrent factual findings of the trial and appellate courts - HELD THAT: - The court applied the settled principle that concurrent findings of fact by trial and appellate courts are not to be upset in revision in the absence of perversity. The appellate court's appreciation of evidence and application of presumptions under Section 139 were not perverse, and there was no basis for re analysis or re interpretation of the evidence in revision.

No interference with the concurrent findings of the trial and appellate courts; revision on merits on this aspect is dismissed.

Conversion of sentence into fine and compensation - Modification of the sentence imposed for the offence under Section 138 - HELD THAT: - Recognising that punishment under Section 138 may be by imprisonment, fine or both, the court exercised judicial moderation to modify the sentence. The custodial sentence as confirmed was converted into a monetary sentence: the accused is ordered to pay a specified fine, with default simple imprisonment for a limited period. Time was granted for payment in view of the Covid 19 pandemic, and provision was made that the fine, if paid, would be released to the complainant as compensation in accordance with law.

Sentence modified to payment of fine with conditional default simple imprisonment; time granted for payment and fine to be released as compensation if deposited.

Final Conclusion: The revision petition is allowed in part: the conviction under Section 138 of the Negotiable Instruments Act is upheld, concurrent factual findings are not disturbed, but the sentence is modified to a monetary fine with conditional simple imprisonment in default and provision for release of the fine to the complainant as compensation.

Territorial jurisdiction in proceedings under Section 138 of the Negotiable Instruments Act - effect of the Negotiable Instruments (Amendment) Act, 2015 on jurisdiction under Section 142(2) - deemed place of presentation under the Explanation to Section 142(2) - presentation at non-home branch and its effect on jurisdiction

Territorial jurisdiction in proceedings under Section 138 of the Negotiable Instruments Act - deemed place of presentation under the Explanation to Section 142(2) - presentation at non-home branch and its effect on jurisdiction - Whether the trial court at Chennai has territorial jurisdiction to take cognizance of a complaint under Section 138 when cheques issued and the account of the drawer are at Calcutta but the cheques were presented at a Chennai branch of the payee bank. - HELD THAT: - The court applied the law as explained by the Supreme Court in Dashrath Rupsingh Rathod and the subsequent effect of the Negotiable Instruments (Amendment) Act, 2015 as interpreted in M/s. Bridgestone India Pvt. Ltd. The amended Section 142(2)(a) and the Explanation thereto vest jurisdiction inter alia in the court where the cheque is delivered for collection through an account of the branch of the bank in which the payee/holder in due course maintains the account, and the Explanation deems presentation at any branch of the payee bank to be presentation to the branch in which the payee maintains the account. Applying these principles, although the cheques were physically presented at a Chennai branch, the payee/complainant bank maintained the account only at Calcutta; therefore presentation at Chennai is to be deemed presentation at the Calcutta branch. Reliance on Good Luck Traders was considered on the effect of presentation at a non-home branch, which supports that presentation at a non-home branch does not alter the character of the drawee branch or confer territorial jurisdiction where the account is maintained elsewhere. In the facts before the court the respondent did not give any reason for presenting the cheques at Chennai instead of Calcutta. Consequently, the VII Metropolitan Magistrate, George Town, Chennai did not have territorial jurisdiction to take cognizance of the complaint and the cognizance was liable to be quashed. [Paras 14, 17, 18]

Cognizance taken by the VII Metropolitan Magistrate, George Town, Chennai is quashed and the complaint is to be returned so the complainant may present it before the court having territorial jurisdiction at Calcutta.

Final Conclusion: The petition is allowed; territorial jurisdiction lies with the courts at Calcutta because presentation at the Chennai branch is to be deemed presentation at the Calcutta branch where the payee bank maintains the account, and accordingly the cognizance by the Chennai Magistrate is quashed and the complaint returned for presentation before the competent forum at Calcutta.

Offence under section 138 of the Negotiable Instruments Act - dishonour of cheque for insufficiency of funds - legal notice demanding cheque amount - set-off in proceedings under section 138 of the Negotiable Instruments Act - burden of proof for affirmative defence of payment - concurrent findings and scope of appellate/revisional interference

Offence under section 138 of the Negotiable Instruments Act - dishonour of cheque for insufficiency of funds - legal notice demanding cheque amount - concurrent findings and scope of appellate/revisional interference - The conviction under section 138 of the N. I. Act and its confirmation by the appellate court were not vitiated by illegality or perversity. - HELD THAT: - The trial court and the sessions court concurrently found that the accused issued the cheque for the invoice amount, the cheque was presented and returned unpaid with endorsement of insufficiency of funds, and a legal notice demanding payment was issued and received. Those factual findings are not specifically disputed in the revision petition and therefore do not require reappreciation. In view of these proved facts, the courts were justified in convicting the accused under section 138 of the N. I. Act, and there is no ground for interference in revisional jurisdiction. [Paras 10]

Conviction under section 138 of the N. I. Act and confirmation by the sessions court are upheld.

Set-off in proceedings under section 138 of the Negotiable Instruments Act - The accused could not claim set-off in the prosecution under section 138 where the alleged counter-liability arose from a distinct later transaction. - HELD THAT: - The invoice which gave rise to the complainant's demand (exhibit P2) predated the invoice on which the accused relies (exhibit D2). As the counter-claim/ liability in favour of the accused arose on a later date than the transaction that prompted issuance of the cheque, the two are separate transactions. The court held that set-off of a later, distinct liability cannot be pleaded to defeat prosecution under section 138. Consequently the trial and appellate courts rightly rejected the set-off defence. [Paras 11]

Set-off not permissible where counter-liability arose from a separate subsequent transaction; defence of set-off rejected.

Burden of proof for affirmative defence of payment - The defence that the accused paid a sum to a third party at the complainant's instance was not proved for want of cogent evidence or witness testimony. - HELD THAT: - The accused produced bank statements showing payments to a third party, but the complainant did not admit those payments as satisfying the demand and the third party was not examined. As the contention related to an affirmative defence of payment purportedly at the complainant's behest, the accused was required to produce cogent supporting evidence or call the payee as a witness. The trial and appellate courts appropriately disbelieved the uncorroborated contention and rejected the defence. [Paras 12]

Defence of prior payment to a third party not proved; rejected by the courts.

Concurrent findings and scope of appellate/revisional interference - Sentence imposed was proportionate and there was no ground to interfere with quantum of sentence in revision. - HELD THAT: - Having upheld the conviction on the proven facts and having found no illegality or perversity in the judgments below, the High Court found the quantum of sentence to be proportionate to the proven guilt and saw no necessity to alter it. [Paras 13]

Sentence upheld as proportionate; no interference warranted.

Final Conclusion: Revision petition dismissed; concurrent findings of conviction under section 138 of the Negotiable Instruments Act, rejection of set-off and unproved payment defence, and the sentence are upheld.