NRI Income tax policy in India

Persons liable to tax

Section 4 of the I.T. Act is a charging section. Under this section the Income Tax is charged for any assessment year at the rates prescribed for that year in accordance with the provisions of the I.T. Act in respect of total income of the previous year of any person.

The previous year for the purpose of Income Tax Act would mean a financial year which ends on 31^st March of every year immediately preceding the assessment year.

The person has been defined to include:

i) an individual

ii) a Hindu Undivided Family (HUF)

iii) a company

iv) an association of persons or a body of individuals, whether incorporated or not,

v) a local authority, and every artificial juridical person, not falling within any of the preceding sub-clauses.

Income liable to tax For resident

The resident is charged to tax on all the incomes :-

(i) which is received or is deemed to be received in India

(ii) which accrues or arises or is deemed to accrue or arise in India, and

(iii) which accrues and arises outside India which means the world income is taxable in case of a resident

For resident but not ordinarily resident

Person who is resident but not ordinarily resident is liable to tax the same way as that of resident except that the income which accrues or arises outside India is not taxable in India unless it is derived from a business controlled in or a profession setup in India.

For non residents

In case of a non-resident the income received or deemed to be received in India or income accrues or arises or is deemed to accrue or arise in India only is taxable in India. Thus, the income accruing or arising outside India is not taxable in India.

The following income which might have been payable outside India are deemed to arise in India.

i) dividend paid by an Indian company to a non-resident.

Interest paid on moneys borrowed and brought into India, and

iii) royalty and technical services fees where the royalty is payable in respect of any right or fees are payable in respect of technical services used for business or profession in India which is exempt, if it is payable :

(a) through an agreement made before 1^st April, 1976 which is approved by the Central Government, and

(b) in respect of computer software supplied by a non-resident manufacturer along with a computer or computer based equipment under approved specified scheme of the Government of India.

A person having been a non-resident for a continuous period of 2 years on his return, will remain "not ordinary resident" for all least for 8 subsequent years. A not ordinary resident person will have the advantage of both (1) he will be liable to pay income tax on his Indian income only and (2) his foreign income will be free from Indian income tax.

Nomination facility in Indian Banks

The Banking Companies (Nomination) Rules, 1985 framed under Banking Regulation Act, 1949 enable to accept nominations. Nomination can be made by the account holder or, as the case may be, by all the joint account holders together, in respect of an account held by them with a bank in India. The nomination can be made only in respect of a deposit held in the individual capacity as a holder of an office or otherwise. The nomination has to be made in favour of only one individual. The nominee may be a minor but in that case the account holder should, while making the nomination, appoint another individual (who is not a minor) to receive the amount of deposit on behalf of the nominee during his minority, in case of need. The nomination made can be varied or cancelled by the account holder any time during the currency of the account by filing an application in the prescribed form.
Nomination facility for non resident accounts
The nomination facility is also available to holders of non-resident accounts. However, in case of deposits held in FCNR and NRE accounts, the deceased account holders nominees (who could also be residents in India) would not be automatically entitled to the right of repartriation of the funds acquired by them. Similarly credit of the amount becoming payable to a nominee to his NRE/FCNR account requires prior permission of Reserve Bank of India. In such cases, the nominees are required to make separate applications to Reserve Bank of India, which would be considered in the light of the residential status of individuals nominees and the relevant Exchange Control Regulations. Utilisation of the funds in India by the nominees would not, however, need exchange control approval.
The forms prescribed for deposit accounts under the nomination Rules are for nominationForm D1, Form D2for cancellation and Form D3 for variation.
Remittance/Transfer of Funds to Non-Resident Nominees
The Banking Companies (Nomination) Rules, 1985 framed under Banking Regulation Act, 1949 enables banks to pay the amount standing to the credit of the deceased depositor to his nominee. Authorised dealers may allow remittance of funds lying in the NRE/ FCNR accounts of the deceased account holder to their non-resident nominees subject to the following conditions:
(i) Application in is submitted by the nominee (s).
(ii) A valid nomination has been registered in the banks record in favour of the nominees/s in confirmity with the provisions of the Banking Companies (Nomination) Rules, 1985.
(iii) The nominee continues to be non-resident at the time of the claim/remittance sought for from India and that the deceased depositor was non-resident at the time of his/her death.
(iv) All the legal heirs are non-residents. A signed declaration to the effect, duly witnessed, may be submiited by the nominee to the authorised dealer.
Applications in together with the documents/particulars mentioned therein received from the nominees should be scrutinized and after satisfying about the legality of the claim as per the internal guidelines, authorised dealers may settle the claim and allow transfer of fund to the extent of balance held in the deceased depositor’s NRE/FCNR accounts. All other cases which do not fulfill the aforesaid terms and conditions or where the amount in NRE/FCR account is claimed by a person other than the nominee, should be referred to the concerned Regional Office of Reserve Bank for prior approval by authorised dealer in supported by documents indicated therein together with the legal representation issued by an Indian Court.

Bank Accounts of NRI's Some details

Deposits under FCNR scheme were accepted by banks for maturities from 6 months to 3 years. Acceptance of deposits for shorter maturities was discontinued, in a phased manner and with effect from 15th February, 1994, deposits under FCNR scheme can be accepted only for a maturity period of 3 years. However, to enable to NRI depositors to continue with foreign currency deposits of shorter maturities, a new scheme known as Foreign Currency (Non-resident) Accounts (Banks) Scheme (FCNR (Banks) was introduced, with effect from 15th May, 1993. There is basically no difference for the depositor between these two schemes except the period of deposits.
For the banks accepting deposits under this scheme, there are a few changes. Exchange risk cover from Reserve Bank will not be available and will have to be borne by the banks themselves. There will be no obligation under the ‘Statutory Liquidity Ratio’ or priority sector lending. There is also no obligation for Cash Reserve Ratio. Resources mobilised under the scheme can be invested by the banks without any interest rate stipulation. However, non-resident depositors are not affected by these provisions.

Company formation by NRIs

Promotion Stage: The stage of conceiving an idea and its working is termed as promotion of a company. The person involved in this task is termed as “Promoter”. There are certain important decisions which are taken before the formation of the company. There first important matter to decide could be either :-

(1) To start a new business altogether, or
(2) To acquire an already running business, if it is available at considerable attractive terms and conditions. Some time it does happen that some people may start a business without having sufficient knowledge or sufficient experience or sufficient funds and later on they decide to dispose of that business to avoid huge losses. In such a case it may be better to acquire a running business with favorable terms and conditions and it may prove to be a good decision.

The other important matters be decided before the formation of the company could be the decision regarding the product to be produced, the size of the company, the capital involved in the project, the sources of the capital and whether it shall be a Private Company or a Public Company.

Any of the above decisions i.e., to start a new business altogether or to acquire an already running business, along with the other matters shall have to be taken by some person or persons who are at the helm of the affairs. They are called PROMOTERS.

Where it has been decided to form a Private Company 2 persons and where it has been decided to form a Public Company at least 7 persons shall subscribe their names to a Memorandum of Association and they shall also comply with the other formalities in respect of the registration of the company under the Indian Companies Act, 1956.

Document to be filed with the Registrar: It is desirable to ascertain from the Registrar (Registrar of the State in which the Registered office of the company shall be situated) of the companies that whether the proposed name of the company shall be approved if registration is sought for a new company with such name.

Where already a company with such name is existing, it shall not be allowed by the Registrar, because tow companies with the similar name cannot be registered.

But if he says yes, because no other company is registered with that name, an application for the registration of the company should be presented to the Registrar of the State in which the Registered office of the company shall be situated. The appl9ication along with necessary fee shall be presented along with the following documents :

(1) The Memorandum of Association.
(2) The Articles of Association, if any which should be signed by the subscribers to the Memorandum of Association.
(3) Any agreement with the individual persons who are proposed to e appointed as Managers, Directors or Managing Director of the company.
(4) A statement of the nominal capital of the Company.
(5) A notice of address of the registered office of the company.
(6) A list of the Directors who have agreed to become the first Directors of the company along with their consent to act as Directors and to take up the qualification shares of the company in the case of a public company.
(7) A declaration that all the requirements of the Companies Act have been complied with, shall also be submitted, which shall be signed by one nay of the following persons :

(i) An advocate of the Supreme Court or High Court, or
(ii) An attorney or a pleader entitled to appear before a High Court, or
(iii) A Secretary or a Chartered Accountant in whole time practice in India, who is engaged in the formation of the company, or
(iv) A person named in the Articles as a Directors, Manager or Secretary of the company.

Where the Registrar of Companies is satisfied that all the requirement have been complied with, he will register the company and enter the name of the company in the Register of Companies.

2. Incorporation Stage : Where the Registrar of Companies is satisfied that all the requirements have been complied with, he will register the company, and enter the name of the company in the Register of Companies.

When a company is registered and its name in entered in the register of companies, the Registrar will issue a Certificate of Incorporation in which he certifies that the company is incorporated under his hand and in the case of a limited company that the company is a Limited Company.

Effects of Registration and Incorporation of A Company
Distinction Between A Public Company And a Private Company
Company Law - Tips for Lawyers and Layman

NRO Account

The depositor under both the schemes are accepted in Indian rupees on non-repatriation basis. The main points of distinction under both the schemes are as under :

(a) Accounts under NR (NR) Scheme can be opened only with proceeds of fresh remittances from abroad or by transfer from existing NR (E) FCNR Accounts of the depositor, whereas legitimate local resources may be utilised to open NRO Accounts.

(b) Advances against security of deposit under NRO Scheme are governed by directives of Reserve Bank of India, whereas banks have freedom to determine rates of interest, margin etc. while granting advances against security of deposits held under NR (NR) Scheme.
In order to simplify the procedures applicable to operation of bank accounts and financial transactions in India by non-resident individuals of Indian nationality/persons of Indian origin, it was decided to introduce, with effect from 15th April 1999, a new type of account viz., Non-Resident (Special) Rupee (NRSR) Account for such persons who would voluntarily undertake not to seek repatriation of funds held in these, with the exception that investment of funds held in these accounts in shares/securities and immovable property will be governed by the extant exchange control regulations. For opening of NRSR account, the applicant should submit an application in Form NRSR to an authorised dealer, together with the undertaking contained therein duly signed. Authorised dealers may, on receipt of the application and the undetaking open the account and allow all financial transactions therein freely without going into the details of sources of credits and purposes of debits. This facility will, however, not be available to overseas corporate bodies.

The non-resident individuals of Indian nationality /persons of Indian origin maintaining Non-Resident (Ordinary) Account have the option of converting these accounts into Non-Resident (Special) Rupee Accounts. Similarly, when a resident becomes a non-resident by virtue of going abroad on emigration/employment etc. he will also have an option of designating his account as Non-Resident Ordinary Account or Non-Resident (Special) Rupee Account. There will be no need for completion of Form A4 either for approval or for reporting the transactions in Non-Resident (Special) Rupee Accounts.

NRSR accounts may be current, savings, recurring or fixed deposits accounts. Requirements in regard to resident accounts, including nomination facility, shall apply to NRSR accounts. Opening of and operations on the accounts of individuals of Pakistani/Bangladeshi/Sri Lankan nationality require approval of Reserve Bank.

Accout Opening by NRIs in INDIA

When an Indian national or person of Indian origin residing in India leaves India for a foreign country (other than Nepal and Bhutan) for taking up employment, business or vocation outside India, or for any other purpose, indicating his intention to say outside India permanently or for an indefinite period, he becomes a person resident outside India. His bank account, if any, in India is designated as an Ordinary Non-resident Account (NRO Account). Such accounts can also be opened with funds remitted from abroad. . As funds in this type of account are non repatriable, they cannot be remitted abroad to the account holders or transferred to their NRE Accounts without the Reserve Bank’s prior permission. Interest earned on these deposits is not exempt from Indian Income-tax.

Type of Account

The accounts may be maintained in the form of savings or current or term deposit accounts. The accounts can also be opened jointly by non-residents with their close relatives resident in India and operations thereon by the resident account holders can be made freely. If an account is used only for the personal or business needs of the resident account holder, it may be opened jointly even with a person who is not a close relative but this needs prior permission of the Reserve Bank. Interest earned on balances in NRO Accounts is not exempt from Indian Income-tax instead Income-tax (at present @ 20%) is deducted at source i.e. at the time of payment of interest by the bank. Balance held in NRO Account can neither be repatriated nor any remittance in foreign currency is allowed without prior approval of Reserve Bank.

Operation of the Account

There are not many restrictions on the operation of this account and a number of credit and debit transactions can be made after filling up Form A4. The following credit transactions can be made :

(a) Proceeds of remittances received in any permitted form through normal banking channels.

(b) Proceeds of foreign currency notes/traveller cheques tendered by the account holder during his temporary visit to India.

(c ) Remittance by way of transfer from rupees accounts of non-resident banks.

(d) Legitimate dues in rupees of the account holder in India.

Certain credits to the accounts such as proceeds of foreign inward remittances, dividend and interest earned on shares/securities acquired with the Reserve Bank’s permission (wherever necessary ) and held in India by the account holder, sale proceeds/maturity proceeds of shares/securities, surrender value of life insurance policies of the account holder and proceeds of cheques for small amounts upto specified limits can be made by banks without the Reserve Bank’ permission.

Following debit transactions can also be made after filling Form A4

(a) All local payments in rupees.

(b) Debits for investment and credits representing sale proceeds of investments may also be permitted by banks.

Withdrawals from these accounts can be freely made for local disbursements as well as for investments in Units of UTI, Government securities and National Plan/Savings Certificates, without prior approval of the Reserve Bank.

Change of Status from Resident to Non-resident Account vice versa

All resident accounts of a person with banks in India will automatically be treated ordinary non-resident accounts on his becoming non-resident.

Similarly NRO account may be redesignated as resident accounts on the account of holder becoming resident in India. It may be noted that residential status of a person will be determined as per the definition under Foreign Exchange Regulation Act, 1973.
With a view to providing further incentives and wider options to persons of Indian Nationality/Origin residing abroad (NRIs) and Overseas Corporate Bodies predominantly owned by NRIs (OCBs) as well as giving opportunities to persons of non-Indian origin and overseas corporate bodies owned by them for making investments in India, Reserve Bank has formulated Non-resident (Non-repatriable) Rupee Deposit Scheme. The Scheme came into effect from 15th June, 1992.

The scheme is open to all non-residents including foreign citizens of non-Indian origin (except Pakistani and Bangladeshi Nationals) and Overseas Corporate Bodies owned by them. Accounts under the Non-resident (Non-Repatriable ) Rupee Deposit Scheme may be opened in Indian rupees by authorised dealers out of the funds in freely convertible foreign exchange transferred for the purpose to India in an approved manner from the county of residence of the prospective non-resident account holder or from any other country. Accounts may also be opened by transfer of funds from the existing NRE/FCNR Accounts of the non-resident account holder. No penal interest is charged in case of premature withdrawal of existing NRE/FCNR deposits for the purpose of making investment under the scheme.

Letting out Immovable property

Reserve Bank of India has granted general permission to Foreign Citizens of Indian Origin (whether resident in India or not) and Non-residents of Indian nationality and origin (except citizens of Pakistan, Bangladesh, Nepal, Bhutan, Afganistan and Sri Lanka ) to let out, either their commercial or residential premises, to persons in India, subject to the following conditions:

a) The rental income and the proceeds of any investment, out of such income, shall be repatriable (due to current account convertibility); otherwise

b) The rental income shall be credited in the owner’s Non-Resident (Ordinary) Rupees Account or to the Non-Citizen’s Resident Rupee Account maintained with a Bank in India.

Further, it must be noted that there seems to be no direct reference to Foreign Citizens of Non-Indian Origin, for the above relaxation. In their cases, therefore, it may be necessary to take Reserve bank of India’s prior approval before renting out their properties.

Acquisition of Immovable property by NRIs(Contd..)

The relatives of NRIs often wish to bequeath properties to non-residents in their wills. For such cases, Reserve Bank of India has granted general permission to non-residents of Indian Origin (irrespective of their citizenship) to acquire immovable properties by way of inheritance and also to hold and enjoy these properties acquired by them.

However, Reserve Bank of India has not granted any repatriation facilities for sale proceeds of such inherited properties. This is because there is no convertibility of the Indian Rupee on capital account.

Acquisition of Immovable property by NRIs by gifts

Non-residents have also been granted general permission to acquire such properties by way of gifts. However, the gift must be from/to a relative who may be either an Indian Citizen or a person of Indian Origin who may or may not be a Resident in India. “Relative” is to be construed as per definition given under section 6 of the Companies Act, 1956.

Acquisition of immovable properties by NRIs

There are no formalities under FERA in case of a Non-Resident Indian who is an Indian Citizen and who wishes to sell his immovable property in India. Even if the non-resident is a foreign citizen (regardless of origin), he has been granted general permission by Reserve Bank of India to sell his immovable property situated in India.

However, while a Non-Resident Indian can sell his immovable property without Reserve Bank of India’s permission, as per FERA, a Resident Indian cannot make any payment including the purchase price for the property to a non-resident without RBI’s prior permission. Section 9 of FERA prohibits any payment by a resident to any non-resident except with prior general or special permission from Reserve Bank of India. For purchase and sale of a flat, while the non-resident is under no obligation to obtain any permission from Reserve Bank of India to sell his flat, the resident should seek prior permission to make payment (including the purchase consideration) to a non-resident. The resident should not pay without RBI’s permission, even the earnest or token money to the non-resident, as a mark of completion of the negotiations for the transaction.

NRIs Investment oppertunities

NRIs can make direct investments in proprietary / partnership concerns in India as also in the primary issues of shares / debentures of Indian companies. They can also make portfolio investments, i.e. purchase of shares / debentures of Indian companies through stock exchanges in India. These facilities are available on both repatriation and non-repatriation basis.

In order to facilitate NRIs to set up new companies in India, Reserve Bank vide its Notification NO. FERA 143/93 RB dated 26^th April 1993, has granted general permission to NRIs to subscribe to the Memorandum and Articles of Association and to take up the shares of Indian companies for their incorporation. The general permission empowers such Indian companies to issue shares to NRIs provided the total face value of the shares to be issued does not exceed Rs. 10,000/- and the company is not engaged into activity relating to agricultural and plantation.

A. DIRECT INVESTMENT

NRIs are permitted to make direct investment in partnership/ proprietorship concerns in India as also by way of subscription to shares/ debentures of Indian companies. They are also permitted to place funds in company deposits. Similar facilities are also available to OCBs with certain exceptions. Investments made will either be on repatriation or on non repatriation basis depending on the terms and conditions applicable under the existing schemes for NRI investment Wherever the investments are allowed with repatriation benefits, the funds for the purpose should be received by inward remittances from abroad or from the investor’s NRE/ FCNR Accounts. However, in respect of investment on non repatriation basis, funds in NRO Accounts could also be used.

Non resident Indians resident in Nepal will be permitted to make investments in India provided the funds for the purpose are remitted in free foreign exchange through proper banking channels.

I. Investments Without Repatriation Benefits NRIs / OCBs who undertake not to seek at any time repatriation of the capital invested in India and the income earned thereon are permitted to invest on non repatriation basis. The income earned on these investments as and when accrued are required to be credited to the Ordinary Non Resident Rupee (NRO) account of the investor. Reserve Bank would, however, permit repatriation of the net (i.e. after payment of tax) income / interest earned during the financial year 1994/95 and onwards on such investments/ deposits in accordance with the procedure laid down. The categories of investment under this head are the following

Investment in Partnership/ Proprietorship Concerns

Investment in New Issues of Shares/ debentures of Indian Companies

Investment in Non Convertible Debentures of Indian companies

Purchase of Shares of Indian Companies by Private Arrangement

Investment in Domestic Public Sector and Private Sector Mutual Funds

Investment in Money Market Mutual Funds (MMMFs)

Acceptance of deposits by proprietary concerns/firms/companies in India on Non-repatriation basis.

and meny more to add.. The above topics will be discussed in detail frm tommrow on wards

Gold and Silver Allowed for NRIs

The Government has permitted NRI’s to legally import gold (Maximum 5 kgs. w.e.f. 1-1-97, duty of Rs. 220 per 10 grams increased to Rs. 250 from June, 1998 and Rs. 400 from 5^th January, 1999) and silver (100 Kgs. Per passenger, duty of Rs. 500 per Kg.). The NRI should be coming to India, after a period of not less than six months stay abroad and the duty has to be paid in convertible foreign exchange. Gold or Silver, in any form, including ornaments (excluding studded with stones or pearls) is allowed to be imported. Octroi duty will also be payable, outside the airports, as per the municipal rule.

When gold is sold in India, the profit is liable to tax as business income or capital gains, depending on the facts of each case i.e., the intention of the NRI. If his intention was to take advantage of the business opportunity and sell gold/ silver, it will be treated as business profit. If his intention was to hold it as a capital asset, it will be treated as capital gains.

Most NRIs want to take advantage of the business opportunity and buy gold/silver before coming to India and sell it soon. In such circumstances, it will be treated as business income. From the sale proceeds of the metal, the cost and expenses incurred for the sale can be deducted and profits worked out.

In a majority of the cases, the NRI would have purchased the precious metal just prior to his return to India and sold it within short time after his arrival in India, such a transaction would constitute an "adventure in the nature of trade" and the income from the sale would be taxable as business income. It is a well settled principle that income from a single transaction could also constitute business income. Hence the profit on sale of gold/silver would be treated as business income.

If the NRI has acquired the precious metal as a capital assets, the income will be treated as short-term or long-term capital gains depending on the period of holding.

NRI 'S concessions

NRIs, who return to India after 18^th April,. 1992 after having been "a person resident outside India" for a continuous period of at least one year, have been granted the following general permissions on their return to India:

(a) To maintain and operate, their foreign currency accounts with banks abroad. Funds held in these accounts can be used by resident account holders for making any payments to persons resident outside India. There will be no restrictions on utilisation of the balances in these accounts for any bona fide payments in foreign currency. The funds can also be utilised for making further investments in shares/ securities or immovable properties etc. abroad provided the cost of such investment and/or any subsequent payments required therefore are met exclusively out of foreign currency held in these accounts.

(b) To hold, transfer or dispose of their other foreign currency assets like shares, securities, life insurance policies, and immovable properties, abroad . In case of the NRI who wants to retain his link abroad through business, vocation or employment, then his investments or interest in business abroad can continue as usual even after his return to India.

(c) To enjoy absolute freedom for utilisation of their foreign currency assets, including freedom to gift or settle their foreign currency assets to anybody, anywhere.

(d) To earn and retain abroad pension and retirement benefits, after return to India.

(e) To earn, hold or dispose off or invest, in any manner they deem fit, incomes on their foreign currency assets.

(f) To make any payments to or make any further investments abroad, provided that the payments and the cost of such fresh investments and any subsequent payments required thereof, are met exclusively out of the foreign currency assets.

However, to earn the above facilities, it is necessary that foreign currency assets should have been acquired by the returning NRI lawfully without any contravention of FERA when he was living abroad and carrying on employment, business or vacation outside India.

A judgement from S.C.in sec 138 of Cr.P.C.

Judgment: [Arising out of SLP (Crl.) No. 3772 of 2007]S.B. Sinha, J.- Leave granted
Appellant was being prosecuted in the Court of Metropolitan Magistrate, Saidapet, Chennai for alleged commission of an offence under Section 138 of the Negotiable Instruments Act (for short the Act ) on the basis of a complaint petition filed by the respondent herein.
3. In the said proceedings, witnesses on behalf of the prosecution had been examined. Complainant closed her case. A date was fixed for examination of the defence witness and argument on 10.04.2006. However, the appellant filed an application for cross-examination of the complainant herself which was rejected. A revision application was filed thereagainst in the Court of the Sessions Judge.
In the said revision application, no order of stay was passed. Whereas the appellant had continuously remained present before the Trial Judge, the complainant remained absent.
4. On or about 18.04.2006, the appellant filed an application for his acquittal on the ground of absence of the complainant. By an order dated 24.04.2006, the learned Metropolitan Magistrate acquitted the accused under Section 256(1) of the Code of Criminal Procedure stating:
Complainant absent. No representation for several hearings. Accused present. Petition u/s 256(1) Cr. P.C. is allowed. Complainant continuously absent from the hearing date 3.3.05. Hence, Complainant called three times. Neither the complainant nor his counsel represent before the Court till 5.30 p.m. CW1 examined. Hence Accused is acquitted u/s 256(1) of Cr.P.C.
5. An appeal was preferred thereagainst before the High Court. The same was allowed relying on or on the basis of a decision of this Court in Associated Cement Co. Ltd. v. Keshvanand [(1998) 1 SCC 687 : AIR 1998 SC 536].
6. We may, at the outset, notice that before passing the impugned order, the High Court did not choose to serve notice upon the appellant opining that no useful purpose would be served in keeping the appeal pending and one G. Vinodkumar was appointed as a legal aid counsel. Aggrieved thereby, the appellant is before us.
7. It was submitted by Mr. Anand, appearing in person, that the complainant having remained absent for more than one year, the High Court ought not to have interfered with the discretionary jurisdiction exercised by the learned Metropolitan Magistrate, particularly when he had been appearing in person and the complainant not only executed a power of attorney in favour of another, a lawyer was also appointed.
Mr. Anand would submit that it was obligatory on the part of the advocate who is an agent of his client to appear on the dates of hearing, more so when an accused had been appearing in person and remained present in court for all the days of hearing. In any event, it was urged, the High Court committed a serious error in disposing of the appeal only upon hearing a legal aid counsel and even the submissions made by him had not been noticed.
8. Mr. A. Regunathan, learned senior counsel appearing on behalf of the respondent, however, submitted that in view of the fact that the matter was adjourned for examination of DWs, the learned Magistrate could not have exercised its jurisdiction under Section 256 of the Code of Criminal Procedure.
9. Chapter XX of the Code of Criminal Procedure deals with trial of summons cases by Magistrates. Section 256 of the Code reads as under:
256. Non-appearance or death of complainant. (1) If the summons has been issued on complaint, and on the day appointed for the appearance of the accused, or any day subsequent thereto to which the hearing may be adjourned, the complainant does not appear, the Magistrate shall, notwithstanding anything hereinbefore contained, acquit the accused, unless for some reason he thinks it proper to adjourn the hearing of the case to some other day:
Provided that where the complainant is represented by a pleader or by the officer conducting the prosecution or where the Magistrate is of opinion that the personal attendance of the complainant is not necessary, the Magistrate may dispense with his attendance and proceed with the case.(2) The provisions of sub-section (1) shall, so far as may be, apply also to cases where the non-appearance of the complainant is due to his death.
10. Section 256 of the Code provides for disposal of a complaint in default. It entails in acquittal. But, the question which arises for consideration is as to whether the said provision could have been resorted to in the facts of the case as the witnesses on behalf of complainant have already been examined.
11. The date was fixed for examining the defence witnesses. Appellant could have examined witnesses, if he wanted to do the same. In that case, the appearance of the complainant was not necessary. It was for her to cross-examine the witnesses examined on behalf of the defence.
12. The accused was entitled to file an application under Section 311 of the Code of Criminal Procedure. Such an application was required to be considered and disposed of by the learned Magistrate. We have noticed hereinbefore that the complainant did not examine herself as a witness. She was sought to be summoned again for cross-examination. The said prayer has not yet been allowed. But, that would not mean that on that ground the court would exercise its discretionary jurisdiction under Section 256 of the Code of Criminal Procedure at that stage or the defence would not examine his witnesses.
13. Presence of the complainant or her lawyer would have been necessary, as indicated hereinbefore, only for the purpose of cross-examination of the witnesses examined on behalf of the defence. If she did not intend to do so, she would do so at her peril but it cannot be said that her presence was absolutely necessary. Furthermore, when the prosecution has closed its case and the accused has been examined under Section 311 of the Code of Criminal Procedure, the court was required to pass a judgment on merit of the matter.
14. We are not concerned herein as to whether the constituted attorney of the complainant could represent the complainant.
Reliance in this behalf having placed on Jimmy Jahangir Madan v. Bolly Cariyappa Hindley (Dead) By Lrs. [(2004) 12 SCC 509] need not, thus, be considered by us.
15. Similar contention of the complainant that the advocate is an agent of his client and it is his duty to appear on behalf of his client, in our opinion, is beyond the scope of this appeal.
16. We, therefore, although do not approve the manner in which the appeal has been disposed of by the High Court, are of the opinion that it is not a fit case where we should exercise our jurisdiction under Article 136 of the Constitution of India.
17. However, keeping in view of the fact that the complaint petition was filed as far back on 10.01.2002, the learned Trial Judge should proceed with the matter in accordance with law and dispose of the case as expeditiously as possible. On the date(s) on which the accused remains present, the complainant would not take any adjournment and in the event she does not choose to be represented in the court, the court shall proceed in the matter in accordance with law. Both the accused and complainant are directed to appear in the Trial Court within two weeks from date.17. The appeal is dismissed with the aforementioned observations.

CASE IN RESPECT OF SEC.498 OF I.P.C

Section 113-B reads as follows:-

"113-B: Presumption as to dowry death-When the question is whether a person
has committed the dowry death of a woman and it is shown that soon before
her death such woman has been subjected by such person to cruelty or
harassment for, or in connection with, any demand for dowry, the Court
shall presume that such person had caused the dowry death.

Explanation-For the purpose of this section `dowry death' shall have the
same meaning as in Section have the same meaning as in Section 304-B of the
Indian Penal Code (45 of 1860)."

Consequences of cruelty which are likely to drive a woman to commit suicide
or to cause grave injury or danger to life, limb or health, whether mental
or physical of the woman is required to be established in order to bring
home the application of Section 498A IPC. Cruelty has been defined in the
explanation for the purpose of Section 498A. It is to be noted that
Sections 304-B and 498A, IPC cannot be held to be mutually inclusive. These
provisions deal with two distinct offences. It is true that cruelty is a
common essential to both the Sections and that has to be proved. The
explanation to Section 498A gives the meaning of `cruelty'. In Section 304-
B there is no such explanation about the meaning of `cruelty'. But having
regard to common background to these offences it has to be taken that the
meaning of `cruelty' or `harassment' is the same as prescribed in the
Explanation to Section 498A under which `cruelty' by itself amounts to an
offence.

The object for which Section 498A IPC was introduced is amply reflected in
the Statement of Objects and Reasons while enacting Criminal Law (Second
Amendment) Act No. 46 of 1983. As clearly stated therein the increase in
number of dowry deaths is a matter of serious concern. The extent of the
evil has been commented upon by the Joint Committee of the Houses to
examines the work of the Dowry Prohibition Act, 1961. In some cases,
cruelty of the husband and the relatives of the husband which culminate in
suicide by or murder of the helpless woman concerned, which constitute only
a small fraction involving such cruelty. Therefore, it was proposed to
amend IPC, the Code of Criminal Procedure, 1973 (in short `the Cr.P.C.')
and the Evidence Act suitably to deal effectively not only with cases of
dowry deaths but also cases of cruelty to married women by the husband, in
laws and relatives. The avowed object is to combat the menance of dowry
death and cruelty.

One other provision which is relevant to be noted is Section 306 IPC. The
basic difference between the two Section i.e. Section 306 and Section 498A
is that of intention. Under the latter. cruelty committed by the husband or
his relations drag the women concerned to commit suicide, while under the
former provision suicide is abetted and intended.

It is well settled that mere possibility of abuse of a provisions of law

MARRIAGE FOR ?????

Section 498 reads as follows:

"498A: Husband or relative of husband of a woman subjecting her to cruelty-
Whoever being the husband or the relative of the husband of a woman,
subjects such woman to cruelty shall be punished with imprisonment for a
term which may extend to three years and shall also be liable to fine.

Explanation-For the purpose of this section `cruelty' means-

(a) any wilful conduct which is of such a nature as is likely to drive the
woman to commit suicide or to cause grave injury or danger to life, limb or
health (whether mental or physical) of the woman; or

(b) harassment of the woman where such harassment is with a view to
coercing her or any person related to her to meet any unlawful demand for
any property or valuable security or is on account of failure by her or any
person related to her to meet such demand."

Cheque bounce cases

In the era of liberalisation with several financial institutions having direct impact on consumers, the Supreme Court has extended the scope of vicarious liabilities in the cheque bouncing cases apart from criminal liabilities, holding that the trial courts can grant compensation to victims who suffered injury due to the dishonouring of cheques.

Making a distinction between fine imposed for criminal liabilities and the grant of compensation, the court ruled that where the offenders sentenced to jail term but no fine is imposed, they are liable to pay compensation to the complainant in terms of the provision of section 375 of the Criminal Procedure Code (CrPC).

Though the fine could be imposed in terms of the provision of the Negotiable Instrument Act applicable to cheque bouncing cases, but “when the fine is not imposed, compensation can be directed to be paid for loss or injury cause to the complainant by reasons of commission of the offence,” a Bench of justice S.B. Sinha and justice Dalveer Bhandari ruled.

Although the purpose of section 375 was to achieve the same, fixing vicarious liabilities on offenders, but legal difference between fine and compensation was that the amount of compensation can be directed to be recovered and the fine is imposed, thus the fine stands on a higher footing than compensation awarded by the courts.

Ordinarily, the fine should be lesser than the amount, which could be granted as compensation by the civil court upon appreciation of the evidence for losses, which might have been reasonably suffered by the complainant, the apex court said.

“The jurisdiction of civil court, in this behalf, for realisation of the amount (of cheque) in question must also be borne in mind. A criminal case is not a substitution for a civil suit.”

“While the trial courts shall give due weight to the need of the victims, it cannot ignore the right of the accused… the discretionary jurisdiction must be exercised judiciously,” the court said.

The ruling came in a cheque bouncing case filed against Goodvalue Marketing Company Ltd by Kotak Mahindra and the trial court in Mumbai imposing a fine of Rs 25,000 on the former, failing which its chairman was sentence to a month’s jail term.

Besides, the Goodvalue chairman was directed by the trial court to pay Rs 15 lakh as compensation for dishonouring the cheque issued by the company.

When the case went in appeal before the High Court, it directed Goodvalue and its chairman to deposit Rs 5 lakh each within four weeks towards the compensation amount with it, which the company challenged in the apex court. The apex court, however, ruled that the compensation of Rs 1 lakh would be the reasonable compensation for the loss suffered by Kotak Mahindra.

Courtesy:By Sri S.S.Negi

The Supreme Court on the High Court's powers after Investigation

When investigation is incomplete, it is impermissible for the High Court to look into the materials; the acceptability is essentially a matter for trial. Even at the stage where charge is framed, the court has to prima facie be satisfied about the existence of sufficient grounds for proceeding against the accused and for that limited purpose it can evaluate material and documents on record, but it cannot appreciate the evidence.

The Supreme Court made these observations while hearing an appeal filed by the State of Orrissa challenging an order of the High Court which had quashed proceedings at a stage when the investigation in a criminal case was incomplete.

A Division Bench comprising Justice Arijith Pasayat and Justice Tarun Chatterjee while setting aside the order of the High Court observed that the inherent power under Section 482 of the Cr. PC is to be exercised sparingly by the courts and that too in the rarest of rare cases. No hard and fast rule can be laid down as regards cases where such power can be exercised, but the High Court being the highest court of the State should normally refrain from giving a decision in a case where the entire facts are incomplete and hazy.

Further the Bench observed that the exercise of power under Section 482 Cr. PC is the exception and not the rule. The section does not confer any new powers on the High Court. It only saves the inherent power which the court possessed before the enactment of the Cr PC. While exercising powers under Section 482 Cr PC, the High Court does not function as a court of appeal or revision. Inherent powers under the section, though wide have to be exercised sparingly.

The court further stated that under this section, the High Court would not ordinarily embark upon an enquiry whether the evidence in question is reliable or not. That is the function of a trial judge. Judicial process should not be an instrument of oppression. At the same time, the section is not an instrument handed over to the accused to short circuit a prosecution and bring about its sudden death.

Man sentenced in cheque bounce case

Ms Anshul Berry, Judicial Magistrate (Class I), has convicted Darshan Lal, Director, M/s Darshan Forging Pvt Limited, in a cheque bounce case. The accused was sentenced to undergo one year imprisonment and a fine of Rs 2,000 was also imposed on him.

However, the court acquitted Madhu, a co-accused with an observation that it was not proved whether she was the Director of firm or not.

The complainant, Mr Surinder Kumar Sood had stated in the court that he was carrying on the business of iron goods at the Jaimal Singh Road, Janta Nagar, under the name of M/s Surinder Kumar Sood and sons. The accused have been purchasing goods from them and making part payments.

In order to discharge their legally enforceable liability, the accused issued a cheque for Rs 1,95,834 in September, 1994, with an assurance that the same would be encashed on presentation. But to his utter surprise when the cheque was presented for collection it was not dishonoured and returned with a memo of “stop payment’”. Thereafter legal notice was served but no payment was made by the accused, added the complainant.

On the other hand the accused, Darshan Lal had submitted that the goods supplied were defective. He had already intimated to the complainant, not to present the cheque in the bank. The co-accused, Madhu, pleaded that she was a housewife and had nothing to do with the affairs of M/s Darshan Forging.

After hearing the rival contentions the Judicial Magistrate said the defence plea seems to be an after thought. There was no proof to show that the goods supplied were defective. The accused had failed to prove his case, remarked the judge, while pronouncing the judgement.

courtesy:Sri Rajneesh Lakhanpal

CHEQUE BOUNCE[SEC.138 & 142 OF Cr.P.C.

Cases of cheque bounce are not uncommon in the courts. Legal experts are of the view a majority of cases fought pertain to cheque bounce under the Negotiable Instruments Act. In this regard, it would be interesting to take note of two very interesting aspects pertaining to cases relating to cheque bounce. An accused whose cheque was dishonoured contended that the cheques issued were blank ones. He also said that a case of cheque bounce cannot be slapped against him if the cheque is given to a party as a security for repayment of a loan. Justice K Sreedhar Rao in his order stated that both points raised by the accused could not be sustained and would attract the provisions under the Negotiable Instruments Act.

Case at a glance:
A lady had borrowed a sum of Rs 75,000 in connection with some personal business. A blank cheque was issued as security. However the cheque was returned for want of sufficient funds, followed which a complaint had been filed. The accused stated before the court that no prosecution under Section 138 of the NI Act can lie in this case. The trial court dismissed the complaint against the accused following which the High Court was moved.

The Verdict: Justice Rao observed, " The dismissal of the complaint on the plea that the cheque was issued only as a security and therefore no prosecution would lie, is an untenable view. A cheque whether issued for repayment of a loan or as a security makes little difference under Section 138 of the NI Act. In the event of a dishonour, legal consequences are same without distinction. When once a cheque is issued and the same is proved, a presumption under Section 139 of the NI Act would arise with regard to consideration."

Legal view:
K M Natraj says once a cheque is issued there is a presumption under the NI Act that the cheque has been issued towards the discharge of a legally enforceable debt. It is a rebuttable presumption. The accused can rebutt that presumption and the burden is on him to dislodge that presumption

Credit Card Fraud

Credit Card Fraud continues to be a major problem for consumers today. Credit cards have become the lifeline necessary for most consumers to function in today’s almost cashless society. Consumers are vulnerable not only to criminals who steal cards or card information to make fraudulent purchases, but also from companies that issue cards utilizing deceptive practices to collect high fees or to charge exorbitant interest rates. The resulting consequences to a consumer who is a victim of credit card fraud can be devastating.

The following tips may help protect a consumer from Credit Card Fraud:

• Check ATM machines for tampering.
• Don’t allow others to enter your PIN number.
• Check for suspicious people or hidden cameras when entering PIN numbers.
• Check bank and Credit Card Statements regularly and report suspicious entries.

The methods and techniques used to commit credit card fraud are many and vary from simple theft of cards to electronic methods that steal a consumer’s information leading to the crime of Identity Theft. The end result may find consumers involved in a long legal process in an attempt to correct the harm to their financial well being. Attacks to consumer’s finances may also come from credit card companies that take advantage of consumers through fraudulent business practices. One of the tactics used may include charging hidden fees for various card transactions. A company may also mask the actual APR charged to a consumer by offering a short term introductory rate. By not posting payments, a company may then include late fees to collect fraudulent additional charges.

Whenever a consumer is a victim of the misuse of their credit cards or been taken advantage of by unscrupulous companies, there are laws to address these issues.

Appeal

There shall lie an appeal to the Court of Session within thirty days from the date on which the order made by the Magistrate is served on the aggrieved person or the respondent, as the case may be, whichever is later

In that Way the needy women can get the assistance of the Court of their place.
They can approach any advocate for further assistance or take the help of the magistrate to suggest any legal counceler for further assistance.

Procedure for the agreived to approach

(1) Save as otherwise provided in this Act, all proceedings under sections 12, 18, 19, 20, 21, 22 and 23 and offences under section 31 shall be governed by the provisions of the Code of Criminal Procedure, 1973 (2 of 1974).(2) Nothing in sub-section (1) shall prevent the court from laying down its own procedure for disposal of an application under section 12 or under sub-section (2) of section 23.
For further clarification Contact:
any Advocate

Jurisdiction

The area under cover for the aggrieved person was defined as ;

(1) The court of Judicial Magistrate of the first class or the Metropolitan Magistrate, as the case may be, within the local limits of which-

(a) the person aggrieved permanently or temporarily resides or carries on business or is employed; or

(b) the respondent resides or carries on business or is employed; or

(c) the cause of action has arisen,shall be the competent court to grant a protection order and other orders under this Act and to try offences under this Act.

(2) Any order made under this Act shall be enforceable throughout India.

. Application to Magistrate

For the help in need apply accordingly.

(1) An aggrieved person or a Protection Officer or any other person on behalf of the aggrieved person may present an application to the Magistrate seeking one or more reliefs under this Act:

Provided that before passing any order on such application, the Magistrate shall take into consideration any domestic incident report received by him from the Protection Officer or the service provider.

(2) The relief sought for under sub-section (1) may include a relief for issuance of an order for payment of compensation or damages without prejudice to the right of such person to institute a suit for compensation or damages for the injuries caused by the acts of domestic violence committed by the respondent:Provided that where a decree for any amount as compensation or damages has been passed by any court in favour of the aggrieved person, the amount, if any, paid or payable in pursuance of the order made by the Magistrate under this Act shall be set off against the amount payable under such decree and the decree shall, notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908), or any other law for the time being in force, be executable for the balance amount, if any, left after such set off.

(3) Every application under sub-section (1) shall be in such form and contain such particulars as may be prescribed or as nearly as possible thereto.

(4) The Magistrate shall fix the first date of hearing, which shall not ordinarily be beyond three days from the date of receipt of the application by the court.

(5) The Magistrate shall endeavour to dispose of every application made under sub-section (1) within a period of sixty days from the date of its first hearing.

Definition of domestic violence.-

For the purposes of this Act, any act, omission or commission or conduct of the respondent shall constitute domestic violence in case it -

(a) harms or injures or endangers the health, safety, life, limb or well-being, whether mental or physical, of the aggrieved person or tends to do so and includes causing physical abuse, sexual abuse, verbal and emotional abuse and economic abuse; or

(b) harasses, harms, injures or endangers the aggrieved person with a view to coerce her or any other person related to her to meet any unlawful demand for any dowry or other property or valuable security; or

(c) has the effect of threatening the aggrieved person or any person related to her by any conduct mentioned in clause (a) or clause (b); or(d) otherwise injures or causes harm, whether physical or mental, to the aggrieved person.

Explanation I.-For the purposes of this section,-

(i) "physical abuse" means any act or conduct which is of such a nature as to cause bodily pain, harm, or danger to life, limb, or health or impair the health or development of the aggrieved person and includes assault, criminal intimidation and criminal force;

(ii) "sexual abuse" includes any conduct of a sexual nature that abuses, humiliates, degrades or otherwise violates the dignity of woman;

(iii) "verbal and emotional abuse" includes-

(a) insults, ridicule, humiliation, name calling and insults or ridicule specially with regard to not having a child or a male child; and

(b) repeated threats to cause physical pain to any person in whom the aggrieved person is interested.

(iv) "economic abuse" includes-

(a) deprivation of all or any economic or financial resources to which the aggrieved person is entitled under any law or custom whether payable under an order of a court or otherwise or which the aggrieved person requires out of necessity including, but not limited to, household necessities for the aggrieved person and her children, if any, stridhan, property, jointly or separately owned by the aggrieved person, payment of rental related to the shared household and maintenance;

(b) disposal of household effects, any alienation of assets whether movable or immovable, valuables, shares, securities, bonds and the like or other property in which the aggrieved person has an interest or is entitled to use by virtue of the domestic relationship or which may be reasonably required by the aggrieved person or her children or her stridhan or any other property jointly or separately held by the aggrieved person; and

(c) prohibition or restriction to continued access to resources or facilities which the aggrieved person is entitled to use or enjoy by virtue of the domestic relationship including access to the shared household.

Explanation

II.-For the purpose of determining whether any act, omission, commission or conduct of the respondent constitutes "domestic violence" under this section, the overall facts and circumstances of the case shall be taken into consideration.

ACTS FOR WOMEN

Law to curb atrocities on women

After reports of atrocities on women who are branded as witches in Chhattisgarh, the Raman Singh government is bringing a legislation soon to make witchcraft a non-bailable offense with a rigorous prison term for five years.

"For the first time Chhattisgarh has come forward in this direction and we have decided to bring in a legislation next week in the monsoon session to stop harassment and atrocities on women in the name of witchcraft," Law Minister Brij Mohan Agrawal told PTI here.

Under this Act, not only the people claiming to be witch doctors, but also those involved in harassing anyone accusing her of being a witch, will be punished, Agrawal said.

The law will cover persons who claim to possess powers of black magic, evil eyes or who claim to be witch doctors, Women and Child Welfare Department sources said.

The state government has also bracketed the persons who identified others as witches under the prepared law with punishment upto three years rigorous imprisonment and fine.

Upto five years rigorous imprisonment and fine will be slapped for harassing women in the name of withcraft as also to punish those who claim to be witch doctors.

Interestingly if anyone claims to be a witch herself, she would be subjected to one year imprisonment and fine, the sources said adding every offence would be treated as cognizable and non-bailable.

This legislation is being enacted by the state government on instructions from the National Commission for Women which had conducted open hearing in many parts of the state on the issue recently.

Courtesy:

The article of Sri PRAKASH C HOTA RAIPUR, JULY 18 (PTI)

Water law

Have a nice day.
Today is World Water Day. The law behind water management is as follows. Have any doubts please post a comment to receive advise on any legal problems.
Water Law (an attempt to bring the knowledge about)

Water law is the field of law dealing with the ownership, control, and use of water as a resource. It is most closely related to property law, but has also become influenced by environmental law. Because water is vital to living things and to a variety of economic activities, laws attempting to govern it have far-reaching effects.

Water has unique features that make it difficult to regulate using laws designed mainly for land. Water is mobile, its supply varies by year and season as well as location, and it can be used simultaneously by many users. As with property (land) law, water rights can be described as a "bundle of sticks" containing multiple, separable activities that can have varying levels of regulation. For instance, some uses of water divert it from its natural course but return most or all of it (eg. hydroelectric plants), while others consume much of what they take (especially agriculture), and still others use water without diverting it at all (eg. boating). Each type of activity has its own needs and can in theory be regulated separately. There are several types of conflict likely to arise: absolute shortages; shortages in a particular time or place; diversions of water that reduce the flow available to others; pollutants or other changes (such as temperature or turbidity) that render water unfit for others' use; and the need to maintain "in-stream flows" of water to protect the natural ecosystem.