Securities Exchange Board of India - Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 1995 - Securities and Exchange Board of India (Stock Brokers and Sub-brokers) Regulations, 1992 - Stock broker - Suspension of certificate of registration - SEBI initiated enquiry proceedings against a stock broker registered with SEBI and a member of NSE, to enquire into alleged violations committed by it while dealing in shares of Company during investigation period - Enquiry Officer found stock broker guilty of violating regns. 4(a),(b),(c) and (d) of PFUTP Regulations and Cls. A(1) to (5) of Code of conduct specified for stock brokers under Stock Brokers Regulations had recommended that its certificate of registration be suspended for a period of 3 months - Notice was issued to stock broker requiring it to show cause as to why action as recommended by Enquiry Officer or any other action as considered appropriate by SEBI should not be taken against it - Hence, present petition for confirmation of suspension of certificate of registration - Held, in order to attribute manipulation and fraud, other attendant factors and circumstances including price rise, circular trading, trade reversals, unfair trade practices and like, over a period of time between parties have to be alleged and established - Simultaneous placing of orders by itself cannot be said to be fraudulent on face of it and that synchronised trades/structured deals are per se not illegal - In the present case, no finding in Enquiry Report as to whether trades of stock broker had artificially increased share price or that same were executed with manipulative intent - Nexus between some of clients and stock broker not established except for observation in Enquiry Report - No material on record in Enquiry Report to show that parties were merely changing positions without actually buying or selling shares - Enquiry Report failed to establish connection between some of clients of stock broker as well as their connection with stock broker - No allegation in notice issued for enquiry or finding in Enquiry Report that share price had artificially increased because of impugned trades of stock broke - Share price was increasing during pre-investigation period with very low volumes - No case that stock broker was involved in trades which were executed during such period - No supporting material to establish that trades of stock broker had artificially influenced price discovery mechanism and satisfy ingredients of regns. 4(a),(c) and (d) of PFUTP Regulations, it cannot be held to be violative of said provisions - Enquiry Officer has not given any finding with supporting material to conclude that trades of stock broker were intended to create artificial volumes and thereby create misleading appearance of trading in shares of Company during relevant period - Even charge of violating regn. 4(b) of PFUTP Regulations could not be sufficiently established - Stock broker entitled for a benefit of doubt in respect of alleged violations of regn. 4(a),(b), (c) and (d) of PFUTP Regulations - As regards violation of provisions of code of conduct for stock brokers, report was silent as to how the violation of provisions was established - Stock broker entitled for a benefit of doubt in respect of charges levelled against it and enquiry proceedings initiated against the stock broker disposed of - Order accordingly.
Saturday, November 20, 2010
Asia Satellite Telecommunications Company Limited vs Dish TV India Limited and others [DELHI HIGH COURT, 08 Oct 2010]
Corporate - Company Act, 1956, ss. 391 and 394 - Present application raising objections to a composite scheme of amalgamation and arrangement propounded by respondents, all of whom have moved a first motion application - Objector has alleged that creditors of demerged company are likely to suffer because substantial assets are sought to be transferred under Scheme, as a result of which, creditors of demerged company - Whether there is an obligation on part of Company Court to issue notices to creditors and shareholders at first motion stage itself? - Held, s. 391(1) is unique and that there is no obligation for Company Court to hear anybody at first motion stage because no prejudice will be caused by not hearing them, for reason that before any effect is given to any outcome which is likely to affect such parties, they will get a chance to be heard - Legal basis for universal rule that no matter be heard without previous notice to other party is that latter may be adversely affected by outcome without being afforded an opportunity of being heard before that outcome is arrived at - It is undisputed that every motion with regard to a proposed Scheme u/s. 391 can only be sanctioned by Company Court after second motion petition is heard, with adequate opportunity to all parties likely to be affected thereby to be heard - Even if such an opportunity is denied at first motion stage, no prejudice can ensue since unique scheme of Companies Act provides necessary safeguards while prescribing a complete code for Amalgamations etc. u/s 391 thereof, and any effort to import procedural considerations applied generally elsewhere would prove deleterious to Scheme of Act and render it unworkable - Objections dismissed
Jagdish Bagri v Rajendra Kumar Luhariwala and another - Date of Judgment: 21/1/2009
Challenge in this appeal is to the order passed by a learned Single Judge of the Calcutta High Court dismissing the application filed under Section 401 read with Section 482 of the Code of Criminal Procedure, 1973 (in short the `Code'). Challenge in the Criminal Revision Petition was to the order passed in Criminal Appeal No.2 of 2004 by learned Additional Sessions Judge, Asansol confirming the judgment and order of conviction and sentence dated 22.4.2004 passed by learned Additional Chief Judicial Magistrate, Asansol.
3. Since the appellant did not appear when the matter was called, the matter was taken ex-parte. The High Court noted that a sum of Rs.2,30,000/- was payable to the complainant-respondent No.1 herein by the present appellant -accused and since the payment was not made there was an agreement between the parties to stipulate the mode of payment. A sum of Rs.2,30,000/- was to be paid in 8 installments and the first installment was of a sum of Rs.50,000/- payable by 22.6.2002 and the 8th installment of Rs.10,000/- was payable by 28.2.2003. As a security for the payment, the appellant issued three cheques. One of the cheques was of Rs.1 lakh and that is the subject matter of present controversy. Stand was taken that since the cheque was issued as a security, the provisions of Section 138 of the Negotiable Instruments Act, 1881 (in short the `Act') had no application. The High Court noticed that the appellant failed to pay Rs.2,30,000/- in 2 installments as agreed to and therefore because of default of payment cheque of Rupees one lakh was presented. In that sense there is no question of any security.
4. Learned counsel for the appellant submitted that because of unavoidable difficulties there was no appearance when the matter was called. It was submitted that the matter was suddenly appeared in the list and due to some unavoidable difficulties, the appellant's advocate could not appear at the time of hearing before learned Single Judge.
5. Learned counsel for the respondents on the other hand submitted that on two dates the appellant did not appear and, therefore, the Court had no option but to dismiss the revision petition on merits. It appears from the records that case was filed in 2005 and was listed on 17.3.2008 for the first time and on the next day it was dismissed for non prosecution.
6. Learned counsel for the appellant highlighted several difficulties which stood on the way of learned counsel for the appellant to appear before the Court when the matter was taken up. It is true that the lawyers are expected to be vigilant once they accept a brief. But on the peculiar facts of 3 the case we set aside the impugned order and remit the matter to the High Court for a fresh consideration on merits. To avoid unnecessary delay the parties are directed to appear before the concerned Court on 28.1.2009. The learned Chief Justice of the High Court is requested to assign the case to an appropriate Bench.
7. The appeal is disposed of accordingly
3. Since the appellant did not appear when the matter was called, the matter was taken ex-parte. The High Court noted that a sum of Rs.2,30,000/- was payable to the complainant-respondent No.1 herein by the present appellant -accused and since the payment was not made there was an agreement between the parties to stipulate the mode of payment. A sum of Rs.2,30,000/- was to be paid in 8 installments and the first installment was of a sum of Rs.50,000/- payable by 22.6.2002 and the 8th installment of Rs.10,000/- was payable by 28.2.2003. As a security for the payment, the appellant issued three cheques. One of the cheques was of Rs.1 lakh and that is the subject matter of present controversy. Stand was taken that since the cheque was issued as a security, the provisions of Section 138 of the Negotiable Instruments Act, 1881 (in short the `Act') had no application. The High Court noticed that the appellant failed to pay Rs.2,30,000/- in 2 installments as agreed to and therefore because of default of payment cheque of Rupees one lakh was presented. In that sense there is no question of any security.
4. Learned counsel for the appellant submitted that because of unavoidable difficulties there was no appearance when the matter was called. It was submitted that the matter was suddenly appeared in the list and due to some unavoidable difficulties, the appellant's advocate could not appear at the time of hearing before learned Single Judge.
5. Learned counsel for the respondents on the other hand submitted that on two dates the appellant did not appear and, therefore, the Court had no option but to dismiss the revision petition on merits. It appears from the records that case was filed in 2005 and was listed on 17.3.2008 for the first time and on the next day it was dismissed for non prosecution.
6. Learned counsel for the appellant highlighted several difficulties which stood on the way of learned counsel for the appellant to appear before the Court when the matter was taken up. It is true that the lawyers are expected to be vigilant once they accept a brief. But on the peculiar facts of 3 the case we set aside the impugned order and remit the matter to the High Court for a fresh consideration on merits. To avoid unnecessary delay the parties are directed to appear before the concerned Court on 28.1.2009. The learned Chief Justice of the High Court is requested to assign the case to an appropriate Bench.
7. The appeal is disposed of accordingly
Sunday, November 14, 2010
Supreme Court :Govt can acquire land even without issuing notice to land owners
Supreme Court :Govt can acquire land even without issuing notice to land owners
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The court rejected the plea which had said that the provisions of Section 9 of the act was mandatory in nature and non-compliance thereof would vitiate the award and all other consequential proceedings. It said that “The issue is to be examined having regard to the context, subject matter and object of the statutory provisions in question. The court may find out as what would be the consequence which would flow from construing it in one way or the other and as to whether the statute provides for a contingency of the non-compliance of the provisions and as to whether the non-compliance is visited by small penalty or serious consequence would flow there from and as to whether a particular interpretation would defeat or frustrate the legislation and if the provision is mandatory, the act done in breach thereof will be invalid,” remarked Justice Chauhan writing the verdict for the bench.
The state can acquire land
even if owners have not been issued a notice, this is what Supreme Court (SC)has affirmed, SC ruled that land acquisition will not be illegal even if Govt does not issue notice under section 9 of Land Acquisition Act or there is some discrepancies in the notice served to affected owners. The apex court added that land acquisition will not be illegal even if there are discrepancies in the notice served to affected owners under the provisions of the Land Acquisition Act.
“Section 9 of the act (Land Acquisition Act, 1894) provides for an opportunity to the ‘person-interested’ to file a claim petition with documentary evidence for determining the market value of the land and in case a person does not file a claim under Section 9 even after receiving the notice, he still has a right to make an application for making a reference under Section 18 of the act.”
“Therefore, scheme of the act is such that it does not cause any prejudicial consequence in case the notice under Section 9(3) is not served upon the person interested,” said a vacation bench comprising Justice B S Chauhan and Justice Swatanter Kumar.
even if owners have not been issued a notice, this is what Supreme Court (SC)has affirmed, SC ruled that land acquisition will not be illegal even if Govt does not issue notice under section 9 of Land Acquisition Act or there is some discrepancies in the notice served to affected owners. The apex court added that land acquisition will not be illegal even if there are discrepancies in the notice served to affected owners under the provisions of the Land Acquisition Act. “Section 9 of the act (Land Acquisition Act, 1894) provides for an opportunity to the ‘person-interested’ to file a claim petition with documentary evidence for determining the market value of the land and in case a person does not file a claim under Section 9 even after receiving the notice, he still has a right to make an application for making a reference under Section 18 of the act.”
“Therefore, scheme of the act is such that it does not cause any prejudicial consequence in case the notice under Section 9(3) is not served upon the person interested,” said a vacation bench comprising Justice B S Chauhan and Justice Swatanter Kumar.
The court said: “The land vests in the state free from all encumbrances when possession is taken under Section 16 of the act. Once land is vested in the state, it cannot be divested even if there has been some irregularity in the acquisition proceedings. In spite of the fact that Section 9 notice had not been served upon the person interested, he could still claim the compensation and ask for making the reference under Section 18 of the act. There is nothing in the act to show that non-compliance thereof will be fatal or visit any penalty.”
The court rejected the plea which had said that the provisions of Section 9 of the act was mandatory in nature and non-compliance thereof would vitiate the award and all other consequential proceedings. It said that “The issue is to be examined having regard to the context, subject matter and object of the statutory provisions in question. The court may find out as what would be the consequence which would flow from construing it in one way or the other and as to whether the statute provides for a contingency of the non-compliance of the provisions and as to whether the non-compliance is visited by small penalty or serious consequence would flow there from and as to whether a particular interpretation would defeat or frustrate the legislation and if the provision is mandatory, the act done in breach thereof will be invalid,” remarked Justice Chauhan writing the verdict for the bench.
It said, “failure of issuance of notice under Section 9(3) would not adversely affect the subsequent proceedings including the award and title of the government in the acquired land. So far as the person interested is concerned, he is entitled only to receive the compensation and therefore, there may be a large number of disputes regarding the apportionment of the compensation. In such an eventuality, he may approach the district collector to make a reference to the court under Section 30 of the act”.
. So far as the person interested is concerned, he is entitled only to receive the compensation and therefore, there may be a large number of disputes regarding the apportionment of the compensation. In such an eventuality, he may approach the district collector to make a reference to the court under Section 30 of the act”. Sunday, November 7, 2010
Public interest under section 397/398 of Companies Act 1956
Dealing with the issue of public interest under section 397/398 of the Companies Act, 1956 and the requirement on the part of the Company Law Board to look into many issues while entertaining a petition under section 397/398 of the Companies Act, 1956.The Hon’ble High Court of Bombay in Bhalchandra Dharmajee Vs. Alcock, Ashdown and Co.Ltd reported in 1972 (42) CC 190 was pleased to observe as follows:
“(6) After the amendment of sections 397 and 398 of the Companies Act by sections 10 and 11 of the Companies (Amendment) Act (LIII of 1963), it would appear that the affairs of the company have to be conducted not only in the best interest of its members for their profit but also in a manner which is not prejudicial to public interest. The element of public interest enters into the management of the companies after 1963. The modern corporation has become the accepted instrument of social policy, because it affects a large part of the economic life of the community.Dealing with the issue of public interest under section 397/398 of the Companies Act, 1956 and the requirement on the part of the Company Law Board to look into many issues while entertaining a petition under section 397/398 of the Companies Act, 1956.The Hon’ble High Court of Bombay in Bhalchandra Dharmajee Vs. Alcock, Ashdown and Co.Ltd reported in 1972 (42) CC 190 was pleased to observe as follows:
“(6) After the amendment of sections 397 and 398 of the Companies Act by sections 10 and 11 of the Companies (Amendment) Act (LIII of 1963), it would appear that the affairs of the company have to be conducted not only in the best interest of its members for their profit but also in a manner which is not prejudicial to public interest. The element of public interest enters into the management of the companies after 1963. The modern corporation has become the accepted instrument of social policy, because it affects a large part of the economic life of the community.It is therefore necessary that pending the hearing and final disposal of these petitions, an arrangement ought to be made for the collection, realisation, preservation and maintenance of those assets of the company which are in the possession of the company. It is also necessary that an investigation ought to be made into the affairs of the company to find out if it is possible to resuscitate the company. It is only after such investigation that one can come to a conclusion as to whether the company ought to be wound up or whether it ought to be kept alive.
“(6) After the amendment of sections 397 and 398 of the Companies Act by sections 10 and 11 of the Companies (Amendment) Act (LIII of 1963), it would appear that the affairs of the company have to be conducted not only in the best interest of its members for their profit but also in a manner which is not prejudicial to public interest. The element of public interest enters into the management of the companies after 1963. The modern corporation has become the accepted instrument of social policy, because it affects a large part of the economic life of the community.Dealing with the issue of public interest under section 397/398 of the Companies Act, 1956 and the requirement on the part of the Company Law Board to look into many issues while entertaining a petition under section 397/398 of the Companies Act, 1956.The Hon’ble High Court of Bombay in Bhalchandra Dharmajee Vs. Alcock, Ashdown and Co.Ltd reported in 1972 (42) CC 190 was pleased to observe as follows:
“(6) After the amendment of sections 397 and 398 of the Companies Act by sections 10 and 11 of the Companies (Amendment) Act (LIII of 1963), it would appear that the affairs of the company have to be conducted not only in the best interest of its members for their profit but also in a manner which is not prejudicial to public interest. The element of public interest enters into the management of the companies after 1963. The modern corporation has become the accepted instrument of social policy, because it affects a large part of the economic life of the community.It is therefore necessary that pending the hearing and final disposal of these petitions, an arrangement ought to be made for the collection, realisation, preservation and maintenance of those assets of the company which are in the possession of the company. It is also necessary that an investigation ought to be made into the affairs of the company to find out if it is possible to resuscitate the company. It is only after such investigation that one can come to a conclusion as to whether the company ought to be wound up or whether it ought to be kept alive.
Grant or refusal to grant injunction in invocation of a Bank Guarantee or a Letter of Credit
The law relating to grant or refusal to grant injunction in the matter of invocation of a Bank Guarantee or a Letter of Credit has been laid out in U.P. State Sugar Corporation Vs. Sumac International Ltd. [(1997) 1 SCC 568], this court considered its various earlier decisions. In this decision, the principle that has been laid down clearly on the enforcement of a Bank guarantee or a Letter of Credit is that in respect of a Bank Guarantee or a Letter of Credit which is sought to be encashed by a beneficiary, the bank giving such a guarantee is bound to honour it as per its terms irrespective of any dispute raised by its customer. Accordingly this Court held that the courts should be slow in granting an order of injunction to restrain the realization of such a Bank Guarantee. It has also been held by this court in that decision that the existence of any dispute between the parties to the contract is not a ground to restrain the enforcement of Bank guarantees or Letters of Credit. However this court made two exceptions for grant of an order of injunction to restrain the enforcement of a Bank Guarantee or a Letter of Credit. (i) Fraud committed in the notice of the bank which would vitiate the very foundation of guarantee; (ii) injustice of the kind which would make it impossible for the guarantor to reimburse himself.
Except under these circumstances, the courts should not readily issue injunction to restrain the realization of a Bank Guarantee or a Letter of Credit. So far as the first exception is concerned, i.e. of fraud, one has to satisfy the court that the fraud in connection with the Bank Guarantee or Letter of Credit would vitiate the very foundation of such a Bank Guarantee or Letter of Credit. So far as the second exception is concerned, this court has held in that decision that it relates to cases where allowing encashment of an unconditional bank guarantee would result in irretrievable harm or injustice to one of the parties concerned.
U.P. Coop. Federation Ltd. Vs. Singh Consultants and Engineers (P) Ltd. (1988) 1 SCC 174 held as follows:
The fraud must be of an egregious nature such as to vitiate the entire underlying transaction. While coming to a conclusion as to what constitutes fraud, this court in the above case quoted with approval the observations of Sir John Donaldson, M.R. in Bolivinter Oil SA V/s. Chase Manhattan Bank (1984) 1 All ER 351 at p. 352 which is as follows, The wholly exceptional case where an injunction may be granted is where it is proved that the bank knows that any demand for payment already made or which may thereafter be made will clearly be fraudulent. But the evidence must be clear both as to the fact of fraud and as to the bank s knowledge. It would certainly not normally be sufficient that this rests on the uncorroborated statement of the customer, for irreparable damage can be done to a bank s Credit in the relatively brief time which must elapse between the granting of such an injunction and an application by the bank to have it charged. (Emphasis supplied)
12. In Svenska Handelsbanken Vs. Indian ChargeChrome [(1994) 1 SCC 502], it has also been held that a confirmed Bank Guarantee/irrevocable Letter of Credit cannot be interfered with unless there is established fraud or irretrievable injustice involved in the case. In fact, on the question of fraud, this decision approved the observations made by this court in the case of U.P. Coop. Federation Ltd Vs. Singh Consultants and Engineers (P) Ltd. [(1988) 1 SCC 174
The fraud must be of an egregious nature such as to vitiate the entire underlying transaction. While coming to a conclusion as to what constitutes fraud, this court in the above case quoted with approval the observations of Sir John Donaldson, M.R. in Bolivinter Oil SA V/s. Chase Manhattan Bank (1984) 1 All ER 351 at p. 352 which is as follows, The wholly exceptional case where an injunction may be granted is where it is proved that the bank knows that any demand for payment already made or which may thereafter be made will clearly be fraudulent. But the evidence must be clear both as to the fact of fraud and as to the bank s knowledge. It would certainly not normally be sufficient that this rests on the uncorroborated statement of the customer, for irreparable damage can be done to a bank s Credit in the relatively brief time which must elapse between the granting of such an injunction and an application by the bank to have it charged. (Emphasis supplied)
12. In Svenska Handelsbanken Vs. Indian ChargeChrome [(1994) 1 SCC 502], it has also been held that a confirmed Bank Guarantee/irrevocable Letter of Credit cannot be interfered with unless there is established fraud or irretrievable injustice involved in the case. In fact, on the question of fraud, this decision approved the observations made by this court in the case of U.P. Coop. Federation Ltd Vs. Singh Consultants and Engineers (P) Ltd. [(1988) 1 SCC 174
Documents Required for home loan
Obtaining a home loan is comparatively easier now a days. However, there are eligibility criteria that have to be met. You can not get any amount of home loan irrespective of your income. The amount of loan given by financial institutions depend on lots of factors, including your income, age, qualifications, work experience, number of dependents, spouse's income, stability of income and employment, assets, liabilities, etc.
To get any home loan you need to show some relevent documents to support the deal. Self employed and salaried people require different documents to support the deal.
The borrower must submit the following documents along with loan application though it can vary slighly depending on the bank:
• Proof of age
• Proof of identity and residence - passport, PAN card, ration card, voter ID card, etc
• Salary slip of last three months along with salary certificate.
• Proof of continuity in the job for last two years or Form 16.
• Bank statement for last six months.
• Company profile for employees of a private limited company.
• Proof of business address in respect of businessmen/industrialists
• Latest property tax paid receipt.
• Sanctioned plan.
• Receipts towards payments already made.
• Sale agreement and title documents in favour of the seller (old flat or house).
• Sale agreement or construction agreement with builder (new flat).
• Total cost break-up on builder's letterhead (new flat).
To get any home loan you need to show some relevent documents to support the deal. Self employed and salaried people require different documents to support the deal.
The borrower must submit the following documents along with loan application though it can vary slighly depending on the bank:
• Proof of age
• Proof of identity and residence - passport, PAN card, ration card, voter ID card, etc
• Salary slip of last three months along with salary certificate.
• Proof of continuity in the job for last two years or Form 16.
• Bank statement for last six months.
• Company profile for employees of a private limited company.
• Proof of business address in respect of businessmen/industrialists
• Latest property tax paid receipt.
• Sanctioned plan.
• Receipts towards payments already made.
• Sale agreement and title documents in favour of the seller (old flat or house).
• Sale agreement or construction agreement with builder (new flat).
• Total cost break-up on builder's letterhead (new flat).
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