BITCOIN Virtual Currency -Supreme Court issues directions to High Courts

The Supreme Court has asked high courts across the country not to entertain any petition relating to the circular issued by the Reserve Bank of India on “Prohibition on dealing in Virtual Currencies’. A bench headed by the Chief Justice of India Dipak Misra issued this order while staying further proceedings pending before Delhi and Calcutta high courts.

The court was hearing a writ petition filed by Siddharth Dalmia and transfer petitions seeking transfer of cases pending before Delhi and Calcutta high courts. The bench directed the registry to register transfer petitions and to issue notice and tag them with the writ petition.

The court has posted the matter for further hearing on 20th July 2018. RBI Circular The Reserve Bank of India had issued a circular cautioning users, holders and traders of virtual currencies, including Bitcoins, regarding various risks associated with dealing with such virtual currencies.

The circular, issued on 6th April 2018, reads: “In view of the associated risks, it has been decided that, with immediate effect, entities regulated by the Reserve Bank shall not deal in VCs or provide services for facilitating any person or entity in dealing with or settling VCs. Such services include maintaining accounts, registering, trading, settling, clearing, giving loans against virtual tokens, accepting them as collateral, opening accounts of exchanges dealing with them and transfer/receipt of money in accounts relating to purchase/sale of VCs. Regulated entities which already provide such services shall exit the relationship within three months from the date of this circular”

 

Arrest under SC & ST Act, 1989 must be made with prior approval of SSP concerned, and only after recording reasons of arrest in writing

Madhya Pradesh High Court: While disposing off the present appeal wherein the appellant was charged under Section 3(2)(va) and 3(1)(d) of Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act, 1989, the Bench of J.P. Gupta, J., reiterated the recent Supreme Court decision in Subhash Kashinath Mahajan v. State of Maharashtra, 2018 SCC OnLine SC 323, holding that a police officer, who intends to arrest a person, who is not a government servant and is accused of the offence punishable under the 1989 Act, such arrest should be made with prior approval of the S.S.P concerned, only after recording the reasons of arrest in writing.

As per the facts, the appellant was the owner of the bus on which the complainant was working as a Driver. It was alleged that when the complainant demanded arrears of salary, he was abused publicly by referring to his caste. The complainant belongs to the Scheduled Tribe community. The appellant’s counsel Harshwardhan Singh Rajput refuted the allegations and prayed before the Court to issue directions in sync with the guidelines laid down in the aforementioned Supreme Court judgment.

On perusal of the facts, the Court observed that there is no evidence to show that the FIR against the appellant was filed with malafide intentions, therefore the appellant is not entitled to get anticipatory bail. The Court however also noted that the nature of the offence is not very severe and prima facie, the appellant’s arrest is not warranted for the purpose of investigation and his presence may be secured during trial by directing him to appear before the Magistrate/Court concerned in case of filing of the charge-sheet. Furthermore the Court stated that an accused, who is not entitled to get the benefit of anticipatory bail, cannot be denied the protection available under the law with regard to unjustified and unwarranted arrest, as before arresting an accused, it is the duty of the police officer to examine and record the reasons of arrest in writing subject to scrutiny of the Magistrate/Court.

[Ajeet Jain v. State of Madhya Pradesh, CRA No. 1757 of 2018, decided on 04.04.2018]

Maximum period of 90 days to file a written statement as prescribed under CPC is to be extended only in exceptional cases

Hyderabad High Court: A revision petition filed against the order of the Principal Junior Civil Judge whereby he rejected the I.A filed by the petitioner herein, was allowed by M.S. Ramchandra Rao, J.

Brief facts of the case were that the respondent (original plaintiff) filed a writ against the petitioner (original defendant). The defendant filed a counter claim to the suit. The plaintiff filed a written statement to the counter claim after a gap of nine years without leave of the court. The defendant filed an I.A before the Civil Judge which was dismissed. Present revision was filed against the said order of dismissal of I.A by the Civil Judge.

The Court referred to Order VIII Rule I of CPC and held that it provides that a written statement to a suit as also to a counter claim shall be filed within 30 days, extendable up to a maximum of 90 days. Relying on decisions of the Supreme Court, the Court held that such maximum period as prescribed in the CPC could be extended by the Court in exceptional cases only after recording the reasons in writing. However, in the present case, the Court held that the Civil Judge dismissed the I.A filed by the defendant without considering the fact that no reasons were recorded by the Court before admitting the written statement filed by the plaintiff beyond the maximum period of 90 days. Thus, the present revision was allowed and the impugned order was set aside. The written statement field by the plaintiff in response to the counter claim filed by the defendant was struck down.

[Y. Venkata Ramana v. Yellaboyani Venkatamma, 2018 SCC OnLine Hyd 53; dated 23.04.2018]

Prosecution can be directed under Section 340 CrPC, if wife misuses women-centric law

Gujarat High Court: The Single Bench of Sonia Gokani, J. has held that when a wife misuses women-centric laws by declaring completely incorrect facts, the trial court can direct her prosecution, at the time of considering the case, under Section 340 of the Code of Criminal Procedure, 1973.

In the instant case, the petitioner wife had made an application under Section 125 of CrPC seeking maintenance for herself and her son. She had submitted an affidavit, wherein she had declared herself a housewife having no source of income. Later, her husband moved an application to the trial Court contending that his wife was earning Rs. 40,000 per month and had produced false evidence on oath. The trial court, accordingly, directed the initiation of prosecution against the wife under Section 195 read with Section 340 of CrPC for committing offences under Sections 191, 192 and 193 of the Penal Code. The High Court noted that the action can be taken under Section 340 of CrPC when it is expedient in the interests of justice, and the impact on the administration of justice by misuse of women-centric laws would make it expedient for the trial Court to direct the prosecution. The Court further added that the trial court had elaborately discussed the law and applied the said law to the facts to hold that the petitioner has not stated the correct facts on oath. Therefore, the Court refused to interfere with the order. [Sejalben Tejasbhai Chovatiya v. State of Gujarat, 2016 SCC OnLine Guj 6333, decided on October 20, 2016]

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Negotiable Instruments Act: Cabinet approves amendment to provide interim compensation

The move would help in augmenting the trade and commerce, notably the MSME sector, and further order to elevate the credibility of the cheque as a financial statement.

The amendment seeks to provide for interim compensation to the payee of a cheque, both at the trial stage and at the appellate stage, and further allows a court to order interim compensation to the payee of a cheque, a part of the amount at the trial stage itself.

And furthermore, if the drawer is acquitted, the court may direct the payee to repay the amount paid as interim compensation with interest. Similarly, the appellate courts will be enabled to order the appellant to deposit a part of the compensation awarded by the trial court at the time of filing an appeal.

The move follows from the representations from the public and the trading community regarding the injustice caused to payees as a result of pendency of cheque dishonour cases.

STATEMENT OF OBJECTS AND REASONS

1. The Negotiable Instruments Act, 1881 (the Act) was enacted to define and amend the law relating to Promissory Notes, Bills of Exchange and Cheques. The said Act has been amended from time to time so as to provide, inter alia, speedy disposal of cases relating to the offence of dishonour of cheques. However, the Central Government has been receiving several representations from the public including trading community relating to pendency of cheque dishonour cases. This is because of delay tactics of unscrupulous drawers of dishonoured cheques due to easy filing of appeals and obtaining stay on proceedings. As a result of this, injustice is caused to the payee of a dishonoured cheque who has to spend considerable time and resources in court proceedings to realise the value of the cheque. Such delays compromise the sanctity of cheque transactions.

2. It is proposed to amend the said Act with a view to address the issue of undue delay in final resolution of cheque dishonour cases so as to provide relief to payees of dishonoured cheques and to discourage frivolous and unnecessary litigation which would save time and money. The proposed amendments will strengthen the credibility of cheques and help trade and commerce in general by allowing lending institutions, including banks, to continue to extend financing to the productive sectors of the economy.

3. It is, therefore, proposed to introduce the Negotiable Instruments (Amendment) Bill, 2017 to provide, inter alia, for the following, namely:—

(i) to insert a new Section 143A in the said Act to provide that the Court trying an offence under Section 138 may order the drawer of the cheque to pay interim compensation to the complainant, in a summary trial or a summons case, where he pleads not guilty to the accusation made in the complaint; and in any other case, upon framing of charge. The interim compensation so payable shall be such sum not exceeding twenty per cent. of the amount of the cheque; and
(ii) to insert a new Section 148 in the said Act so as to provide that in an appeal by the drawer against conviction under Section 138, the Appellate Court may order the appellant to deposit such sum which shall be a minimum of twenty per cent. of the fine or compensation awarded by the trial court.

4. The Bill seeks to achieve the above objectives.

Cabinet

 

Tenants have a right to approach DRT under S. 17(4-A) of SARFAESI Act

Karnataka High Court: A Single Judge Bench comprising of Vineet Kothari, J., decided a writ petition filed under Articles 226 and 227 of the Constitution, wherein a stay was granted on the possession notice issued by the respondent Bank to the petitioner, directing the petitioners to approach the Debt Recovery Tribunal in proper proceedings.

The petitioners were tenants of Respondent 1 who was a debtor of Respondent 2 State Bank of India. Respondent 1 defaulted in re-payment of the loan and respondent 2-SBI issued notice to Respondent 1 to repay the loan within sixty days. Also, respondent 2 SBI issued notices to the petitioners-tenants, to evict the building within seven days which was a Secured Asset and would be taken over in the condition of non-payment of the loan, under the provisions of SARFAESI Act, 2002. Aggrieved by the said notices, the petitioners field the instant petition.

The Court perused the record and placing reliance on its earlier decisions held that the tenants too have a right to approach Debt Recovery Tribunal under Section 17(4-A) of SARFAESI Act. Holding that since the petitioners had an alternate and efficacious remedy available to them under the said Act, the Court declined to consider the petitions on merit. The petitioners were given liberty and directions to approach the DRT under proper proceedings within one month. Further, SBI was directed not to take any action for eviction of the petitioners for a period of four weeks.

The petitions were accordingly disposed of. [Aravindamma v. K.S. Jayalakshmammanni, WPs Nos. 10172-174 of 2018 (GM-RES), order dated 5.3.2018]

 

Accused under S. 138 of NI Act acquitted on grounds of limitation

 

Karnataka High Court: A Single Judge Bench comprising of K. Somashekar, J., decided a criminal appeal, wherein order of acquittal of the accused passed by the trial court was upheld holding that the recovery of loan in the given case was hit by limitation.

The petitioner was prosecuted for offence punishable under Section 138 of Negotiable Instruments Act, 1881. The complainant alleged that the accused took a hand loan from him and issued cheques in lieu thereof. However, when the said cheques were presented in the bank, they were dishonoured and returned with a memo marked ‘insufficient funds’. The complainant issued a demand letter to the accused as required by the Act. However, the accused did not repay the loan even after the demand letter was issued to him. Consequently, the accused was prosecuted under the Act. The trial court, inter alia, found that the time gap between the giving of loan by the complainant to the accused and presenting of cheques for recovery thereof, was more than three years. Trial court held the case to be hit by limitation and acquitted the accused.

The High Court perused the record as well as provisions of the NI Act and the Limitation Act. The Court observed that the limitation period for recovery of a hand loan is three years from the date the loan is given. The Court found that, in the instant case, the loan was given in the year 2004 and the cheques were presented for its recovery only in the year 2008. The Court also held that there was no part repayment of the loan to the complainant by the accused, nor the accused acknowledged the presence of debt in this period to start a fresh period of limitation. The High Court, inter alia, held that the case of the complainant was barred by limitation of three years as provided in the Limitation Act.

Accordingly, the petition filed by the complainant against the order of acquittal of the accused passed by the trial court, was dismissed. [K.N. Raju v. Manjunath T.V., Crl. Appeal No. 302 of 2010, decided on 16.3.2018]

Marriage with Minor Girl is neither valid & nor Invalid but voidable Marriage – Madras High Court

Marriage of a person with a girl whose age is below 18 is voidable. It will subsist until it is annulled by a court under the Prohibition of Child Marriage Act, the Madras High Court said on Monday.

Such a marriage is not a “valid marriage” in the strict sense; but it is “not invalid,” it said.

In a judgment, a Full Bench, comprising Justices K.N. Basha, T. Sudanthiram and S. Nagamuthu, said that the adult male in a child marriage would not be the natural guardian of the female child. This was in view of the implied repealing of section 6 (c) of the Hindu Minority and Guardianship Act.

As per the provision, in the case of a married minor girl, the husband should be the natural guardian. Impliedly the provision stood repealed by the Prohibition of Child Marriage Act.

Earlier, the father of a minor girl filed a habeas corpus petition seeking a direction to the Tiruvallur Town police station to secure his daughter aged 17 years from the illegal custody of a person, produce her before the court and hand her over to him.

When the matter came up before a Division Bench, the minor girl appeared and filed an affidavit that she had fallen in love with a person and married him in July this year. After considering the rival submissions, the Bench directed that the girl be kept in a government’s children’s home.

It referred the matter to a Full Bench to decide the questions, including whether a marriage of a person with a female of less than 18 years could be said to be a valid marriage and the custody of the girl be given to the husband, and whether a minor could be said to have reached the age of discretion and, thereby, walk away from the lawful guardianship of her parents and refuse to go in their custody.

The male who married a child falling within the provision of Section 12 of the Hindu Marriage Act was not a husband of the minor in the legal sense. Therefore, as per the Hindu Minority and Guardianship Act, he would not acquire the status of natural guardian of such a child at all.

Though such a voidable marriage subsists, until it was either accepted expressly or impliedly by the child after attaining the eligible age or annulled by a court of law, such marriage could not be equated to a “valid marriage”.

The Bench said since the parties in the case were Hindus, it was confining its discussions only to laws relating to that religion. It said the male who married a child would not be entitled to custody of the child even if she expressed her desire to go with him.

However, in the interest of the girl’s welfare, he may move the court to set her at liberty if she was illegally detained by anybody.

In a habeas corpus petition, while granting custody of a minor girl, the court should consider the paramount welfare including the minor girl’s safety notwithstanding the legal right of the persons who sought custody.

Customers in a brothel house are not offenders under the Immoral Traffic (Prevention) Act, 1956

Karnataka High Court: A criminal petition was filed under Section 482 CrPC to quash the proceedings in a criminal case filed under the Immoral Traffic (Prevention) Act, 1956, where a Single Judge Bench comprising of K.N. Phaneendra, J. held that the offences under ITP Act or under Section 370 IPC are not attracted as far as the customers in a brothel house are concerned.

The petitioners in the instant petition were customers in a brothel house found by the police during a raid. The petitioners were charged as accused in a criminal case for offences punishable under Sections 3, 4, 5 and 7 of the ITP Act. The High Court perused the entire charge-sheet papers and also referred to a few of the earlier decisions pronounced by it on the same or similar matter.

On perusal of the earlier decisions as well as various provisions of the ITP Act, the High Court was of the view that offences under the said sections were not attracted to the customers in a brothel house. It was observed that though the customers virtually encourage prostitution, but in the absence of any specific penal provision, they can not be said to be liable for prosecution for the above said offences. Accordingly, the petitions were allowed and all the proceedings pending against the petitioners in the said criminal case were quashed.

[Chandru S v. State, Crl. Petition No. 5059 of 2017, order dated December 7, 2017]

Father Wins custody of a 5 Year child – SC

Supreme Court: Setting aside the Delhi High Court order where a father was directed to hand over the custody of his 5-year-old son to his mother, the bench of Dipak Misra, CJ and Amitava Roy, J held that unless, the continuance of the child in the country to which it has been removed, is unquestionably harmful, when judged on the touchstone of overall perspectives, perceptions and practicabilities, it ought not to be dislodged and extricated from the environment and setting to which it had got adjusted for its well-being.

Considering the facts of the case where the child was barely 2½ years old when he came over to India and had stayed with his father since then, the Court said that since he has stayed in US in his infant years, the duration is too little for the required integration of his with the social, physical, psychological, cultural and academic environment of US to get totally upturned by his transition to this country, so much so that unless he is immediately repatriated, his inherent potentials and faculties would suffer an immeasurable set back.

Hence, the verdict that was penned by Roy, J said:

“a child of tender years, with malleable and impressionable mind and delicate and vulnerable physique would suffer serious set-back if subjected to frequent and unnecessary translocation in its formative years.”

The Court also took note of the fact that no material was brought on record, persuasive and convincing enough, to take a view that immediate restoration of the custody of the child to the mother in the native country is obligatorily called for in its interest and welfare.

The Court noticed that the child is growing in a congenial environment in the loving company of his grand-parents and other relatives and has been admitted to a reputed school and contrary to the nuclear family environment in US, he is exposed to a natural process of grooming in the association of his elders, friends, peers and playmates, which is irrefutably indispensable for comprehensive and conducive development of his mental and physical faculties.

The Court, hence, directed that the child, till he attains majority, ought to continue in the custody, charge and care of his father. [Prateek Gupta v. Shilpi Gupta, 2017 SCC OnLine SC 1421, decided on 06.12.2017]