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--------------- Print Magazine --------------
  May 2016
  April 2016
DISHONOUR OF CHEQUE:Default in Payment of Compensation

A sentence of imprisonment can be granted for default in payment of compensation under Section 357(3) of the Code of Criminal Procedure. This grant of compensation is sometimes in lieu of sending a person behind bars or in addition to a very light sentence of imprisonment. Hence on default of payment of this compensation, there must be a just recourse. Not imposing a sentence of imprisonment would mean allowing the accused to get away without paying the compensation and imposing another fine would be impractical. While passing an order under Section 357(3), CrPC, it is imperative for the courts to look at the ability and capacity of the accused to pay the same amount, otherwise the very purpose of granting an order of compensation would stand defeated.

K.A. Abbas H.S.A. v. Sabu Joseph, Crl. A. No. 1052 of 2010; Decided on 11-5-2010 (SC) [P. Sathasivam and H.L. Dattu, JJ.]

NATURAL RESOURCES: Duty of State to Protect

The natural resources are vested with the Government as a matter of trust in the name of the people of India. Thus, it is the solemn duty of the State to protect the national interest. Natural resources must always be used in the interests of the country, and not private interests.

The Constitution of India envisages exploration, extraction and supply of gas to be within the domain of governmental functions. It is the duty of the Union to make sure that these resources are used for the benefit of the citizens of this country. The Government is empowered not only to determine the basis of valuation of gas, but also its price. Before the contractor sells the gas the price of such gas must be approved by the Government. The Government cannot be divested of its supervisory powers to regulate the supply and distribution of gas. Though the contractor has the marketing freedom to sell the product from the contract area to other consumers, this freedom is not absolute. The price at which the produce will be sold to the consumer would be subject to government's approval.

Reliance Natural Resources Ltd. v. Reliance Industries Ltd., CA No. 4273 of 2010; Decided on 7-5-2010 (SC) [K.G. Balakrishnan, CJI and B. Sudershan Reddy, J.]

LIVE-IN RELATIONSHIP : Legitimacy of Children

Live-in-relationship is permissible only in unmarried major persons of heterogeneous sex. In case, one of the said persons is married, man may be guilty of offence of adultery as it would amount to an offence under Section 497, Indian Penal Code.

Section 16 of the Hindu Marriage Act, providing for legitimacy of children of void and voidable marriages, intends to bring about social reforms in conferment of social status of legitimacy on a group of children, otherwise treated as illegitimate, as its prime object. In view of the legal fiction contained in Section 16, the illegitimate children, for all practical purposes, including succession to the properties of their parents, have to be treated as legitimate. They cannot, however, succeed to the properties of any other relation on the basis of this rule, which in its operation, is limited to the self acquired properties of the parents. A child born of void or voidable marriage is not entitled to claim inheritance, in ancestral coparcenary property but is entitled only to claim share in their self-acquired properties, if any.

Bharatha Matha v. R. Vijaya Ranganathan, C.A. No. 7108 of 2003; Decided on 17-5-2010 (SC) [Dr. B. S. Chauhan and Swatantar Kumar, JJ.]

RENT CONTROL: Amalgamation of Landlord Company

Amalgamation of a company with another company has different legal consequences on the rights of the company in a case where it is a tenant of a building entitled to the benefits of the Rent Control Act and in a case where company which amalgamates with another company is a landlord of the building, there is no forfeiture of any right of the landlord under the provisions of the Act or under the Transfer of Property Act. When a company which is a tenant amalgamates with another company, the amalgamating company loses its identity. It would, in law, amount to the amalgamating company, inter alia transferring its right under the lease even if it be constructed as an involuntary transfer. Such amalgamation, when it is without the written consent of the landlord, it would result in forfeiture of the tenancy.

In a case where a company is a tenant, amalgamation is the cause of action for the landlord to sue the tenant company for eviction on the ground of subletting without the consent of the landlord.

M/s. Speedline Agencies v. M/s. T. Stanes & Co. Ltd., C. A. No. 4481 of 2010; Decided on 14-5-2010 (SC) [P. Sathasivam and J. M. Panchal, JJ.]

RECRUITMENTS: Illegality in Selection Procedure

Where the written test conducted was vitiated by serious irregularities like mass copying, impersonation and leakage of question paper, etc., the examination as a whole had to go. Even a minute leakage of question paper would be sufficient to besmirch the written test and to go for a re-test so as to achieve the ultimate object of fair selection.

Chairman, All India Railway Recruitment Board v. K. Shyam Kumar, 2010 (5) SCALE 391; Decided on 6-5-2010 (SC) [Aftab Alam and K.S. Radhakrishnan, JJ.]


It is well settled that while an employee can be reverted to a lower part or service, he cannot be reverted to a post lower than the post in which he entered service. Further it is also well settled that reversion to a lower post or service does not permit reversion to a post outside the cadre that is from regular post to a daily wage post.

In the instant case, the delinquent employee while working as Bus Conductor was found guilty of misconduct of allowing ticketless passenger to travel in the bus and possession of excess amount in the cash bag. Accordingly the disciplinary authority inflicted the punishment and relegated the delinquent employee, a conductor to the status of Daily Rated Conductor. The Supreme Court held that the punishment inflicted did not come within the ambit of reduction to a lower post or grade as contemplated under Regulation 36(5) of the South Bengal State Transport Corporation Service Regulations.

South Bengal State Transport Corporation v. Ashok Kumar Ghosh, C.A. No. 4338 of 2010; Decided on 6-5-2010 (SC) [R.V. Raveendran, R.M. Lodha and C.K. Parsad, JJ.]


The foremost consideration for directing the transfer of cases under Section 406 of the Code of Criminal Procedure is to examine what is expedient in the ends of justice.

In order to ensure that a fair trial takes place, the Courts must account for the interests of all stakeholders, namely the accused, the witnesses, the prosecutors, the near relatives of the victims as well as society at large. In the instant case, the respondent had been accused of the kidnapping and murder of three government employees of the State of Manipur. These killings had provoked an outcry in the State of Manipur and protests were held by several groups. In addition to the social unrest created in wake of the killings, there was also an apprehension of conflict between persons belonging to two communities. CBI urged that the trial in these cases be transferred to Delhi, in view of the specific threat to the life of the accused, since there were 52 cited witnesses, CBI had undertaken to arrange for their travel between Manipur and Delhi. The Supreme Court allowed the petition holding that it would be expedient in the ends of justice to conduct the trial in Delhi.

CBI v. Hopeson Ningshen, 2010 4) SCALE 540; Decided on 3-5- 2010 (SC)

BANK LOANS: Public Acountability of Bank and its officials

Significant element of discretion is vested in the officers/ officials of the Bank while sanctioning and disbursing the loans but this discretion is circumscribed by the inbuilt commercial principles as well as that such decisions should be free from arbitrariness, unreasonableness and should protect the interest of the Bank in all events.

Principle of public accountability is applicable to such officers/officials with all its vigour. Greater the power to decide, higher is the responsibility to be just and fair. The scheme of the Recovery of Debts due to Banks and Financial Institutions Act and language of its various provisions imposes an obligation upon the Banks to ensure a proper and expeditious recovery of its dues. Banks are instrumentalities of the State and thus all administrative norms and principles of fair performance are applicable to them with equal force as they are to the Government department, if not with a greater rigour. Inaction, arbitrary action or irresponsible action would normally result in dual hardship. Firstly, it jeopardizes the interest of the Bank and Public funds are wasted and secondly it even affects the borrower's interest adversely provided such person was acting bona fide. Both these adverse consequences can easily be avoided by the authorities concerned by timely and coordinated action.

Eureka Forbes Ltd. v. Allahabad Bank, C. A. No. 4029 of 2010 @ SLP © No. 3883 of 2008; Decided on 3- 5-2010 (SC) [B. Sudershan Reddy and Swatanter Kumar, JJ.]

RITA ARYAN LL.M. (Medalist)

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