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IGNORANTIA FACTI EXCUSAT

Ignorantia Facti Excusat, is a Latin Maxim which means “Ignorance of fact can be excused”. This maxim is the principle behind the concept of fact which is considered a valid and sufficient defense in criminal law. It means that any act done under a mistaken impression of a material fact is excused. In U.S vs Ah Chong (1910), it is explained that ignorance or mistake of fact works an acquittal if it is sufficient to negate a particular intent which under the law is a necessary ingredient of the offense charged. The mistake of fact must be honest and reasonable i.e., bona fide in nature, and must relate to the fact, not to law. A defendant cannot claim later that he was under the mistake of fact when he knew about the situation.

However, Section 76 of the Indian Penal Code, 1860, explains the provision about “mistake of fact”. The exemption on the ground of mistake of fact is based on the principle that a man who is mistaken or ignorant about the existence of a fact cannot establish an intention to constitute a crime, and hence, is not responsible in law for his deeds. Under S. 76 of IPC, nothing is an offence which is done by a person who is, or who by reason of a mistake of fact and not by reason of a mistake of law in good faith believes himself to be, bound by law to do it. For instance, a soldier, fires on a mob by the order of his superior officer, in conformity with the commands of the law. A has committed no offense.In, State of West Bengal vs. Shew Mangal Singh (1981 AIR 1917, 1982 SCR (1) 360), the accused police officers were on patrol when they were attacked by a mob. The Deputy Commissioner of Police ordered to open fire and a constable got injured. It was observed that the accused constables were bound by law to obey the orders of the superior officer. Both the HC and SC ruled that the situation was warranted and justified by the order to open fire and therefore, the accused got protection under section 76 and was held not guilty.

M/s. Fortune Infrastructure (Now Known as M/s. Hicon Infrastructure) & Anr. Vs. Trevor D’Lima & Ors.

Civil Appeal No(s). 3533-3534 0f 2017

Facts of the case: 

In 2011, M/s Fortune Infrastructure had launched a residential housing project under the name “Hicons Onyx” AKA Fortune Residency in which the respondent booked a flat by paying a sale consideration amount of Rs 1,87,00,000/-. The appellant transferred the construction project to another company, M/s Zoy Shelcon Pvt. Ltd. because the former company could not suffice the cost of construction. In 2015, a consumer complaint was filed in the National Consumer Disputes Redressal Commission (NCDRC) against the appellant (M/s Fortune Infrastructure) as they failed to deliver the flat to the aggrieved party. The NCDRC held the appellant liable and ordered the appellant to (a) refund the amount of sale consideration, (b) as compensation to pay a sum of Rs. 3,65,46,000/- plus Rs. 10,000 as cost of litigation and (c) 10% pa of the aforesaid amount from the day of the judgment. The appellant not satisfied with the order, approached the Supreme Court through civil appeals. They reasoned that it was no breach of contract as they have transferred the construction of the building to another company, and they should not be held liable in the present case in a deficiency of service. 

Issues raised:

Hearing both the parties and examining pieces of evidence on record, the Hon’ble court raised two issues:

  1. Whether in the following issue there is a deficiency of service or contractual breach on the part of the appellants?
  2. Whether the awarded compensation was just and reasonable or not?

Judgment:

The Hon’ble court upheld the impugned order of NCDRC giving reasoning that the appellant did not give any valid reason as to why the delay happened concerning the transfer of the flat to the respondent, they have waited for a reasonable amount of time for the completion of contract. There was a contractual obligation between the parties and, the compensation should be awarded to the respondent based on the deficiency of service. 

About the second issue, there is no airtight formula for awarding the compensation. But considering the circumstances of the case, the respondent was deprived of increment of the price of the flat because the appellant failed to deliver it or substitute another property. So, the breach results in damages deem fit and reasonable in the case by fixing the market rate as not to exceed the amount of compensation as gain-based and not actual-loss-based. The court ordered the appellant to (a) refund the sale consideration amount, (b) to pay a sum of Rs. 2,27,20,000/- plus Rs. 20,00,000 compensation of the parking unit, and (c) Rs. 10,000 the cost of litigation within six weeks. 

Conclusion:

The Hon’ble court’s discretion while awarding compensation made sure to award an appropriate amount without being unjust to the other party. When there is no set formula present, facts and circumstances of the case decide the quantum of compensation as it should solely be based on an actual-loss formula. 

AWAZ & OTHERS V. RBI & OTHERS

PARTIES OF THE CASE –

  • PETITIONER: Awaz & Others
  • RESPONDENT: Reserve Bank of India & Others

CONSUMER COMPLAINT NO.: 51 OF 2007 

BENCH: J. M.B. Shah, J. Mrs. Rajyalakshmi Rao, J. Mr. Anupam Dasgupta

BRIEF FACTS

The present case arose out of a complaint filed by Awaz, a registered trust and a consumer organization, to protect the consumers from unjustified exploitation of their needs by banks or non-banking financial institutions in their money lending activity.

ISSUE

Whether the then current activities of banks and non-banking financial institutions were exploitative to consumers?

JUDGMENT 

Summons were issued to responsible officers of the RBI. The Registry was also directed to issue summons to the Chief General Manager, Department of Non-Banking Financial Companies and the Chief General Manager, Department of Banking Operations of the RBI, to remain personally present. In the meantime, the commercial banks, which had not filed their written version, were instructed to file the same.
The Court opined that from the scenario, it appeared that both the Union of India and the RBI have given green signal to the NBFCs or the Banks to charge rate of interest depending upon the vulnerable circumstances of the borrower. This is against the spirit and object of the Consumer Protection Act, 1986 and amounts to unfair trade practice and the consumers are to be completely protected from the same. Further, various circulars issued by the RBI while exercising powers under Section 45L of the Reserve Bank of India Act,1934, clearly provided that usurious rate of interest could not be charged. But, as it was, there seemed to be no control on this issue and the banks/non-banking financial institutions were indeed exploiting the situation. Hence the Court rightly decided that the exorbitant rates of interest were against the Consumer Protection Act, 1986.

Magistrate Court Grants Bail to Union Minister Narayan Rane in Defamation case

Union Minister Narayan Rane was alleged to have defamed Chief Minister of Maharashtra Mr. Uddhav Thackeray for which he was arrested by Maharashtra Police as an FIR was lodged against him. Magistrate Court at Mahad in Raigad district of Maharashtra has granted bail to the Union Minister Narayan Rane after furnishing bail of Rs. 15,000/- in the present case.

Union Minister Narayan Rane was alleged to have defamed Chief Minister of Maharashtra Mr. Uddhav Thackeray and was arrested for the same by Maharashtra Police. The First Information Report lodged against him stated that Union Minister Narayan Rane made derogatory remarks about Chief Minister of Maharashtra. Similar FIRs have been observed against Mr. Narayan Rane in the past u/s 500, 153A and 505 (2) of the Indian Penal Code 1860. 

S.500: This section of the IPC lays down the punishment for Defamation, the definition of which is provided for u/s 499 of IPC i.e., ‘Whoever, by words either spoken or intended to be read, or by signs or by visible representations, makes or publishes any imputation concerning any person intending to harm, or knowing or having reason to believe that such imputation will harm, the reputation of such person, is said, except in the cases hereinafter expected, to defame that person.’

S.505 (2): S.505 refers to statements that may lead to public mischief under which sub-clause 2 refers to Statements creating or promoting enmity, hatred or ill-will between classes. The punishment for the same is also prescribed under this section as imprisonment which may extend to three years, or with fine, or with both.

S. 153A: This section refers to Promoting enmity between different groups and prescribed the punishment for the same as imprisonment which may extend to three years, or with fine, or with both. This promotion of enmity may be based on the grounds of religion, race, place of birth, residence, language, caste or community or any other ground whatsoever.

Magistrate Court at Mahad in Raigad district of Maharashtra has granted bail to Union Minister Narayan Rane after furnishing bail of Rs. 15,000/- in the present case on the grounds that; S. 500 of IPC would not fall in effect as it was a non-cognisable offence and not filed by victim himself & that Mr. Rane’s health conditions made him vulnerable. It was also argued in Mr. Rane’s defense that all offenses made against Mr. Rane were punishable for less then 7 years and hence no custody was necessary.

Vineeta Sharma v. Rakesh Sharma

Citation: Civil Appeal No. Diary No.32601 Of 2018

Corum: Justice Arun Mishra, Justice S. Abdul Nazeer, Justice M.R. Shah

Facts: 

Ms. Vineeta Sharma,(Appellant), filed a case against her two brothers viz. Mr. Rakesh Sharma & Satyendra Sharma, and her mother,(Respondents). Sh. Dev Dutt Sharma who was the father of the appellant, expired on December 11, 1999. He left behind three sons, one daughter, and a wife. One of his sons who was unmarried expired on July 1, 2001. The Appellant claimed 1/4th share in the property of her father, being the daughter. The Respondents stated that after her marriage, she ceased to be a member of the Joint family and on that ground, The Hon’ble Delhi High Court disposed of the appeal stating that the amendments of 2005 did not benefit the Appellant, as the father of the Appellant passed away on  December 11, 1999. This judgment was similar to the one of Prakash & Ors. v. Phulavati & Ors. But the conflict arose when a judgment contrary to this was found in the case of Danamma @ Suman Surpur & Anr. v. Amar & Ors. A Larger bench was referred in this case to settle on the conflicting judgment. 

Issues:

  • Whether the position of the daughter in HUF is of coparceners?
  • What will be the effect of the death of the father before amendment 2005, on the daughter’s right over the property?
  • Whether the application of amendment of 2005 is retrospective?

Judgment:

Before 1956, the Shastric and Customary Law varied from region to region governed by Hindus. The two main schools of Hindu Succession law were Dayabhaga and Mitakshara. Sometimes it also varied in the same region on a caste basis. But after 1956, with the introduction of the Hindu Succession Act, 1956, Ancestral property started getting devolved by survivorship rule only. Only the males were the coparceners up to three generations. Women were not recognized as coparceners. 

In 2005, the legislature through a progressive amendment to the Hindu Succession Act 1956 granted coparcenary rights to daughters under section 6 like the sons have. The Survivorship Rule was abrogated. Daughters were also recognized as coparceners. Succession was either ‘Testamentary’ or ‘Intestate Succession’. Enforcement Date of the Amendment Act was 9th September, 2005. Although the legislative intent of the Amendment was clear, it became a subject matter of intense legal debate and resulted in various courts interpreting the same in divergence. 

The Apex Court in the case of Prakash & Ors. v. Phulavati and Ors. laid down that the provisions of the amendment are applicable to living daughters of living coparceners as of 9th September, 2005, irrespective of when such daughters are born. It stated that the father has to be alive on the date of enforcement of the 2005 amendment and only then, daughters can claim the benefit under the 2005 Amendment. It also said that the retrospective effect of the Amendment was applicable till 20th November 2004 and thus Phulavati was not considered as a coparcener. 

However, in the case of Danamma @ Suman Surpur & Anr. v. Amar & Ors (2018), the Court granted the rights to a coparcener who had died much before 9.9.2005. Though the case didn’t specifically focus on the concept of Living Daughter of a Living Coparcener, it opined that the daughters have equal rights as the son on the ancestral property even though the coparcener had died before the amendment. This judgment was contradictory to the judgment of Prakash & Ors. V. Phulavati and Ors., creating confusion regarding the status of daughters as a coparcener. 

The Supreme Court in this particular case stated the nature of the rights of the members of a coparcenary under the Hindu Law, and proceeded to hold the right of the daughters under the Amendment of 2005 to be retroactive rather than prospective. The Court disagreed with the judgment of 2016. It stated that the father need not be alive on the date of enforcement of the 2005 Amendment. It stated that the daughters have coparcenary rights over the ancestral property since birth like sons. The court by this judgment recognized that gender cannot be a justification for denial of anyone’s inheritance right. This interpretation by the Supreme Court has removed male superiority over Hindu ancestral property. It gave the daughters the equal coparcenary rights in consonance with the spirit of equality, under Article 14 of the Indian Constitution.

Nova Constitutio Futuris Formam Imponere Debet, Non Praeteritis

Nova Constitutio Futuris Formam Imponere Debet, Non Praeteritis means a new law has to be prospective and not retrospective in its operation. Hence, a new statute of law has to affect the future, not the past. For instance- a new tax law cannot levy a tax on previous income, it can levy a tax on future income. This maxim implies that except in special cases the new law has to read to interfere as little as possible with already vested rights. It incorporated a particular rule of establishment which is constructive only when the words of the Act of the Parliament are vague and plain. So, if any enactment requires to be performed as retrospective it must be interpreted. 

However, it is presumed that the legislature does not intend to prejudice the tendency against giving certain Statutes a retrospective operation. As a rule, new Statutes are construed as operating only in cases or facts that come into existence after the enactment. It is also settled that no Statute shall be construed to have a retrospective effect unless such enactment appears very clearly in the terms of the acts or arises by necessary and distinct implication.

The wording of the Constitution and judicial review is constructed in such a way that no existing law will be struck down as a whole but only to the extent of its inconsistency. In Keshavan Madhavan Menon v. State of Bombay AIR (1951 S.C 128), the question arose whether the fundamental rights and freedom guaranteed to each citizen has a retrospective effect or prospective effect? The court held that the language of Art. 13 did not allow retrospective operation and will not render the law void ab initio.

There are many established principles in respect of retrospective effects of statues. Such as in Amireddi Raja Gopala Rao v. Amireddi Sitharamamma – “Every statute, which takes away or impairs vested rights acquired under existing laws, or creates a new obligation or imposes a new duty, or attaches a new disability in respect of transactions already past, must be presumed to be intended not to have a retrospective effect”. “As a logical corollary of the general rule, that retrospective operation is not taken to be intended unless that intention is manifested by express words or necessary implication, there is a subordinate rule to the effect that a statute or a section in it is not to be construed to have a larger retrospective operation than its language renders necessary” (Reid v. Reid). In other words, “close attention must be paid to the language of the statutory provision for determining the scope of the retrospective intended by Parliament”- (Union of India v. Raghubir Singh)

Bombay High Court denies petition by Raj Kundra, held that accused cannot indulge in destruction of evidence after service of notice under Section 41A of CrPC.

A petition was filed in the High Court of Bombay by Counsel for Raj Kundra and his accomplice Ryan Thorpe under Article 227 of the Constitution and under Section 482 of the CrPC, 1973 for release from custody.

The facts of the case are that a notice under Section 41A (1) of Cr.P.C. was served upon the Petitioners and they were called upon to attend the office of the investigating agency but the petitioner refused to accept the notice. After that the petitioners were taken to the office of the investigation agency and later on arrested. Subsequently they were produced before the Additional Chief Metropolitan Magistrate, who remanded them. It was also alleged that the petitioners tried to disturb the investigation by deleting evidence.

The Counsel for the petitioner submitted that in pursuance of the case Joginder Kumar v State of UP, Section 41A was introduced by the Parliament in 2010 and said Section applies where arrest of a persion is not required under Section 41(1). The Counsel argued that notice under Sectoin 41A was never served upon by the petitioner and therefore Section 41A (4) applies and the police needed to have taken orders from the Magistrate before arresting the petitioner.

Further relying on Arnesh Kumar v State of Bihar, the Supreme Court had issued directions wherein the police were obliged to give notice of 2 weeks for appearance in terms of Section 41(A) of the Act.  Moreover in the case of Munawar v State of Madhya Pradesh, the Court released the accused on ad-interim bail for non compliance of the procedure in Section 41 of CrPC.

Mr. Chandrachud, learned counsel appearing for the Petitioner Ryan Thorpe submitted that, his client had accepted notice issued by the police under Section 41A of Cr.P.C. and therefore Section 41A (3) of Cr.P.C. would come in operation. He submitted that, Section 41A (3) of Cr.P.C. requires that such a person cannot be arrested in respect of the offence referred to in the notice, unless for the reasons to be recorded that he ought to be arrested. Without granting an opportunity to the petitioner to comply with the said notice, he has been directly arrested and therefore, his arrest is bad in law. 

The Counsel for the respondent argued that after service of notice under Section 41A of CrPC, it is expected under the law that the accused would cooperate in the process of investigation and not to indulge into destruction of incriminating material/evidence against him/her, which the investigating agency intends to seize or to take it into its custody for the purpose of investigation of a crime.

The Court ruled that the arrest and remand of the petitioner is within law, and that the order passed by the Magistrate does not suffer from any error, therefore, petitions were dismissed.

Delhi High Court could not answer whether a lower Court is bound by the decision of Supreme Court when the same has been referred to a larger bench by another Supreme Court bench of equal strength.

In the case of Bhagwati Devi Gupta v Star Infratech Pvt. Ltd., the Delhi High Court was faced with the question of the validity of an arbitration clause when the agreement is invalid on the grounds of not having paid stamp duty. The Court considered multiple judgements but when faced with two contradicting Supreme Court judgements of equal strength, decided to not adjudge upon it and referred the case to the Arbitrator, leaving for him to decide the same.

The petition was filed under Section 11(5) of the Arbitration and Conciliation Act, 1996. The dispute related to the appointment of the arbitrator. Since both the parties could not agree upon one arbitrator, they decided to approach the abovementioned Court.

The learned Counsel for the Respondent had raised the objection that the agreement between the parties is inadequately stamped. He has relied on the judgment of the Supreme Court in N.N. Global Mercantile Pvt. Ltd. v. M/s Indo Unique Flame Ltd. to contend that, till this defect is rectified, the Court cannot refer the dispute to arbitration. On the other hand, the Counsel for the petitioner submits that the arbitration agreement is not insufficiently stamped and that, even if it were, this aspect could be decided by the learned Arbitrator.

The judgment in N. N. Global Mercantile is of import here. It states that “On the basis of the doctrine of separability, the arbitration agreement being a separate and distinct agreement from the underlying commercial contract would survive independent of the substantive contract. The arbitration agreement would not be rendered invalid even if the substantive contract …cannot be acted upon on account of non-payment of Stamp Duty.

On the other hand, a three Judge Bench of the Supreme Court held in Vidya Drolia v Durga Trading Corporation that “Existence and validity are intertwined, and arbitration agreement does not exist if it is illegal or does not satisfy mandatory legal requirements. Invalid agreement is no agreement.

Therefore, the Court was in a dilemma that if once a bench of the Supreme Court has doubted the correctness of an earlier bench of co-equal strength and referred the issue to a larger bench, whether Courts of lower hierarchy should continue to follow the earlier decision.

The Counsel for the Respondent agreed to refer the dispute to an Arbitrator. The Court held that an Arbitrator would be appointed and would decide upon the consequences of non-stamping of the agreement. The petition stood disposed.

Second Marriage after Divorce does not come under the definition of Domestic Violence under the Protection of Women from Domestic Abuse Act, 2005.

In an appeal filed before the Bombay High Court to quash proceedings under Protection of Women from Domestic Abuse Act, 2005 in the subordinate judiciary, the Court allowed the appeal and quashed the said proceedings and other related proceedings, on the ground that second marriage after a valid divorce cannot be taken as a cause of action for Domestic violence.

The facts of the case are pertinent to the conclusion drawn by the Court. The facts are that the Appellant and the Respondent got married in 2011 but due to discord in the relations filed for divorce in the Family Court a few years later. The divorce was granted to the Appellant on the ground of cruelty towards him. Moreover, an application for restitution of conjugal rights filed by the Respondent was denied in the impugned judgement. 

This order was challenged before the High Court and the Supreme Court, all of which upheld the divorce. The Special Leave Petition filed by the Respondent were denied in the Supreme Court.

After dismissal the Respondent filed a case under Section 12 to 23 of the Protection of Women from Domestic Abuse Act, 2005 with allegations similar to those made in the proceedings pertaining to the divorce decree and the application for restitution of conjugal rights. She claimed that the Appellant had performed cruelty by solemnizing a second marriage. The Respondent therein demanded monthly maintenance, compensation, residence order and other monetary relief.

The Appellant approached the High Court praying for quashing of the proceedings in the Family Court. The Court thereafter stayed the proceedings until further orders. The Counsel for the petitioner submitted that the proceedings initiated by the Respondent were untenable since same facts and incidents that were referred to and relied upon in the earlier set of proceedings pertaining to the divorce decree and rejection of the application for restitution of conjugal rights, were relied upon in the said application. It was also submitted that performing a second marriage could not be an incident for which the respondent could invoke provisions of the D.V. Act.  

The Court held that contentions alleged by the respondent had been considered and decided by the Family Court and that the findings had attained finality up to the Supreme Court. Therefore, the Respondent cannot be permitted to reiterate the same by filing application under the provisions of the D.V. Act, three months after the Supreme Court dismissed her Special Leave Petition.

The Court further held that Section 3 of the D.V. Act defines ‘domestic violence’ in an elaborate manner and it refers to physical abuse, sexual abuse, verbal abuse, emotional abuse, and economic abuse. It is in the context of a domestic relationship shared between the aggrieved person and the respondent. Merely because the Applicant performed a second marriage cannot come within the definition of Domestic Violence.

Thereby appeal was allowed.

Karvy Wealth faces challenge in Delhi High Court for fraudulent activities.

On 13th August, 2021 clients of Karvy Private Wealth, a wealth management company, filed a case against it under Section 7 of the Insolvency and Bankruptcy Code on the ground that the Company did not provide restitution to financial creditors in cases where the corporate debtor raised money through fraudulent schemes. The clients were promised assured returns and buyback schemes. The investment received from schemes had in turn been disbursed to builders in different parts of the country who defaulted in their payments.

The clients have filed a number of cases against Karvy in different forums including the Supreme Court, Delhi High Court, National Company Law Tribunal, Delhi and National Company Law Tribunal, Chandigarh. The cases have been filed not only against Karvy Private Wealth but also against the different builder companies which had taken the investments from Karvy and had defaulted on the payments to the clients. 

In the instant case, the petition has been filed against the resolution process of C and C Towers Pvt. Ltd. (Herein after “Company”), a builder developing a Bus Terminal in Mohali, Punjab. The builder had taken funds from the Karvy Private Wealth for completion of the project and had offered buyback schemes and promised assured returns. Karvy Realty Ltd, a part of the parent company Karvy Stock Broking, hid essential information from the clients while marketing the Company for investment. It hid the fact that the project was severely delayed and that accounts of the Company have been declared NPA.

The Company was unable to fulfil its promise and defaulted on its payment. Thereafter, the Company went into insolvency proceedings. The Resolution Plan accepted by the CoC proposed an 87% cut to the creditors. The retail investors categorically rejected the aforementioned resolution plan but since they were in a minority, Edelweiss Asset Reconstruction Company with 60% voting share was able to approve it to the detriment of the investors.

Apart from the specific instances of Karvy and its builder clients, the petitioners have also challenged various provisions of laws related to investor rights. The petitioners had first challenged the -minimum 10% requirement from a class of investors for initiating insolvency proceedings- which was introduced through an amendment in the IBC. The Supreme Court however ruled against them and upheld the amendment. 

The petition filed against Karvy also challenges provision of the Banning of Unregulated Deposit Schemes Act, 2020 for providing a savings clause in favour of IBC and SARFASI Act under Clause 12 of the impugned Act. The petition further prays for the Court to fill the lacuna in the IBC relating to the redress the grievances of individual retail investors who have been fraudulently lured into investing in Ponzi schemes by declaring it violative of Article 14 and 21 of the Constitution.