Weekly Legal Updates ( 3 March to 9 March 2024)

Weekly Legal Updates main objective is to update the legal knowledge of law students, lawyers, academicians and other professionals. If we do not update our legal knowledge regularly, our knowledge become redundant.

Mining companies oppose state tax on minerals in Supreme Court

SC is hearing a batch of more than 80 appeals dealing with the question whether royalty charged on mining is a tax and whether states have legislative competence to levy taxes.

States cannot impose tax on mineral rights as this relates to mineral development on which any law to be framed is exclusively reserved for the Centre, argued mining companies in Supreme Court.

The nine-judge bench of the Supreme Court is deciding the validity of state laws imposing tax related to mineral rights.

Opposing the state laws creating an additional financial burden on private miners, senior advocate Harish Salve appearing for a group of mining companies said, “If taxing mineral rights becomes incompatible with the architecture of law on mineral development, the state’s power to tax stands denuded.”

The bench headed by Chief Justice of India (CJI) Dhananjaya Y Chandrachud, which began hearing a batch of over 80 appeals last week, asked Salve, “We then have to make a hypothesis that any power to tax impinges on mineral development.

Salve, who represented Eastern Zone Mining Association, submitted, “Leaving it to each individual state to add yet another layer of economic burden will impinge on mineral development. The Mines and Minerals (Development and Regulation) Act, 1957 contemplates conservation of minerals.”

Salve supported the Centre which had argued last week that states cannot be allowed to tax on minerals as this was never contemplated under the Constitution as it will unjustly enrich states rich in minerals pushing up prices of minerals, that form core of development of key industries in economy, and further lead to inflation.

This was the fourth day of arguments.

The bench, also comprising justices Hrishikesh Roy, AS Oka, BV Nagarathna, JB Pardiwala, Manoj Misra, Ujjal Bhuyan, Satish Chandra Sharma and Augustine George Masih, said, “There can be various kinds of exaction on mineral rights. If the royalty on minerals (regulated by Centre under the MMDR Act) is a species of exaction which is taken away from states under Entry 50 of List 2 (State List), can royalty substitute all kinds of exaction.”

Entry 50 deals with (tax on mineral rights) which along with Entry 23 (regulation of mines and mineral development) are subject to any law related to List 1 (Union List) or law made by Parliament.

The Centre claimed that its right over minerals is sourced from Entry 54 of List 1 which deals with “regulation of mines and mineral development”.

It is under this entry, the Parliament enacted the MMDR Act, which governs the field, and this Entry 54 is a limitation on the power of states to demand or impose similar levies or charges.

Accepting this argument, Salve said, “While minerals vest in states, mineral development is entirely with the Union. If Entry 54 makes a declaration that development and regulation of minerals rests with Centre, the state’s power under Entry 23 or any other entry related to minerals stands denuded.”

He further stated, “The mineral rights, under the present legal system in India, in most cases, vest in the state and thus a tax on mineral rights as such cannot be imposed, over and above the exaction by law made by Parliament (MMDR Act) that provide for payment of royalty… The state is, as the sovereign, the owner of mineral rights but may part with these rights under a lease which is in accordance with the MMDR Act. Under the Act, the state acts as a delegate of the Union government.”

Salve will continue his arguments on Wednesday.

The Court is hearing a batch of more than 80 appeals dealing with the question whether royalty charged on mining is a tax and whether states have legislative competence to levy taxes on minerals and mineral-bearing lands in addition to the royalty imposed by Centre.

The issue has larger implications on the state’s revenue-earning capacity and the authority of states on minerals extracted from their land.

The matter was referred to a 9-judge bench in March 2011 as the top court found a conflict between two previous judgments on this issue.

One was a 1989 verdict in India Cements Limited versus State of Tamil Nadu case decided by a 7-judge bench which held royalty is a tax under MMDR Act.

The other decision was a 5-judge bench decision of 2004 in State of West Bengal versus Kesoram Industries which held that in India Cements, the Court had mistakenly written “royalty is a tax” while it meant that “cess on royalty is a tax”.

(Courtesy:- Hindustan Times, 6 March 2024)

SBI misses Supreme Court deadline for information on electoral bond declaration

State Bank of India (SBI) missed the Supreme Court deadline (March 6) for disclosing information regarding electoral bonds encashed by political parties. SBI had requested an extension until June 30th to reveal details of each electoral bond encashed by political parties, but the apex
court has not yet scheduled a hearing for their plea.

Last month, the Chief Justice-led constitution bench declared the electoral bonds scheme as unconstitutional and directed SBI to disclose details of each bond encashed by political parties,
including the date and denomination of the bonds. SBI argued that retrieving information from various sources and matching them would be a time-consuming process. The bench also instructed the Election Commission (EC) to publish the information provided by the SBI on its official website by March 13th.

(Courtesy:- The Times of India, 7 March 2024)

Educate cops on free speech: Supreme Court quashes FIR on Article 370 protest, greeting Pakistan

Underlining that it is time to sensitise and “educate our police” on freedom of speech and expression and “the extent of reasonable restraint”, the Supreme Court Thursday set aside a Bombay High Court order and quashed an FIR against a Maharashtra college professor booked for his WhatsApp status critical of the abrogation of Article 370 and for wishing Pakistan on its independence day.

The bench of Justices A S Oka and Ujjal Bhuyan said, “Every citizen of India has a right to be critical of the action of abrogation of Article 370 and the change of status of Jammu and Kashmir.”

It said “describing the day the abrogation happened as a ‘Black Day’ is an expression of protest and anguish. If every criticism or protest of the actions of the State is to be held as an offence under Section 153-A, democracy, which is an essential feature of the Constitution of India, will not survive”.

Section 153-A of the Indian Penal Code penalises “promoting enmity between different groups on grounds of religion, race, place of birth, residence, language, etc., and doing acts prejudicial to maintenance of harmony”.

The bench’s ruling came on a plea by Javed Ahmad Hajam, who was a professor at a college in Kolhapur. On April 10, 2023, the Bombay High Court had turned down his plea for quashing the FIR.

Between August 13 and August 15, 2022, while being part of a WhatsApp group of parents and teachers, he allegedly posted two messages as status: “August 5-Black Day Jammu & Kashmir” and “14th August Happy Independence Day Pakistan.” This apart, the WhatsApp status included the message: “Article 370 was abrogated, we are not happy.” Based on these allegations, an FIR was registered under IPC Section 153-A by the Hatkanangale police station in Kolhapur.

In its ruling Thursday, the bench of Justices Oka and Bhuyan said, “The right to dissent in a legitimate and lawful manner is an integral part of the rights guaranteed under Article 19 (1) (a). Every individual must respect the right of others to dissent. An opportunity to peacefully protest against the decisions of the Government is an essential part of democracy. The right to dissent in a lawful manner must be treated as a part of the right to lead a dignified and meaningful life guaranteed by Article 21.”

“But the protest or dissent,” it said, “must be within four corners of the modes permissible in a democratic set-up. It is subject to reasonable restrictions imposed in accordance with clause (2) of Article 19. In the present case, the appellant has not at all crossed the line”.

Pointing to “the WhatsApp status of the appellant” Hajam, it said, “This is an expression of his individual view and his reaction to the abrogation of Article 370 of the Constitution of India” and “does not reflect any intention to do something which is prohibited under Section 153-A. At best, it is a protest, which is a part of his freedom of speech and expression guaranteed by Article 19(1)(a).”

Setting aside the High Court ruling, the bench said “the High Court has held that the possibility of stirring up the emotions of a group of people cannot be ruled out… As held by Vivian Bose, J, the effect of the words used by the appellant on his WhatsApp status will have to be judged from the standards of reasonable women and men. We cannot apply the standards of people with weak and vacillating minds. Our country has been a democratic republic for more than 75 years. The people of our country know the importance of democratic values. Therefore, it is not possible to conclude that the words will promote disharmony or feelings of enmity, hatred or ill-will between different religious groups.”

“The test to be applied,” it said, is “not the effect of the words on some individuals with weak minds or who see a danger in every hostile point of view. The test is of the general impact of the utterances on reasonable people who are significant in numbers. Merely because a few individuals may develop hatred or ill will, it will not be sufficient to attract clause (a) of sub-section (1) of Section 153-A of the IPC”.

“As regards the picture containing ‘Chand’ and below that the words ‘14th August-Happy Independence Day Pakistan’, we are of the view that it will not attract clause (a) of sub-section (1) of Section 153-A of the IPC… every citizen has the right to extend good wishes to the citizens of the other countries on their respective independence days,” it said.

“If a citizen of India extends good wishes to the citizens of Pakistan on 14th August, which is their Independence Day, there is nothing wrong with it. It’s a gesture of goodwill. In such a case, it cannot be said that such acts will tend to create disharmony or feelings of enmity, hatred or ill-will between different religious groups. Motives cannot be attributed to the appellant only because he belongs to a particular religion,” the bench said.

“Now, the time has come to enlighten and educate our police machinery on the concept of freedom of speech and expression guaranteed by Article 19 (1) (a) of the Constitution and the extent of reasonable restraint on their free speech and expression. They must be sensitised about the democratic values enshrined in our Constitution,” it said.

(Courtesy:- The Indian Express, 8 March 2024)

No rape on false promise if woman already married: Supreme court

The Supreme Court has held that a rape case on the false pretext to marry cannot be prosecuted by a married woman involved in a consensual relationship without getting a divorce.

A bench headed by justice CT Ravikumar quashed a rape case against the accused, whose identity was not revealed, and set aside an August 1, 2022 Madhya Pradesh high court order that refused to scrap the case registered against him at a Mahila police station in Satna on December 11, 2020.

The decision of the court came in a peculiar set of facts where the accused had a physical relationship with his landlady, who was 10 years older than him, and even solemnised their marriage at a temple in January 2019 under the impression that she had divorced her earlier husband. Though they were in a relationship since 2017, the two began to live together after their informal marriage in the same house where the woman was staying with her parents and a teenage daughter from the first marriage.

Things took a turn after the accused refused a court marriage, leading to the woman filing a criminal case against him under Section 376(2)(n) of the Indian Penal Code (IPC). This section prescribes punishment for a person who “commits rape repeatedly on the same woman”, and the minimum sentence is 10 years in prison extending up to a life term.

The petition, on behalf of the accused, was filed by lawyer Ashwani Kumar Dubey.

The bench, also comprising justice Rajesh Bindal, noted that contrary to the woman’s claim in the FIR that she got a divorce from her husband on December 10, 2018, the original record proved that the decree of divorce by mutual consent was dated January 13, 2021. This showed that she was in a relationship with the accused even when her earlier marriage was subsisting.

Justice Bindal, writing the judgment for the bench, said, “It is not a case where the complainant (woman) was of an immature age who could not foresee her welfare and take right decision. She was a grown up lady about 10 years elder to the appellant. She was mature and intelligent enough to understand the consequences of the moral and immoral acts for which she consented during subsistence of her earlier marriage.”

The court added: “In fact, it was a case of betraying her husband.”

During arguments, it was established that the accused who was a tenant at the complainant’s property had to shift in 2018 to Maharashtra for his job. He used to come and stay with her family, and the court found evidence to show that they were living as husband and wife. The accused took an insurance policy where he named the complainant as a nominee, and took care of the daughter of the complainant. He also advanced a loan of ₹1 lakh to the complainant that was not returned to him.

“From the contents of the complaint, on the basis of which FIR was got registered and the statement got recorded by the complainant, it is evident that there was no promise to marry initially when the relations between the parties started in the year 2017. In any case, even on the dates when the complainant alleges that the parties had physical relations, she was already married,” the court said.

“For the reasons mentioned above, the order passed by the High Court (on August 1, 2022) is set aside. FIR No 52 dated December 10, 2020, registered under Section 376(2)(n) and 506 IPC at Police Station, Mahila Thana, District Satna (MP) and all subsequent proceedings thereto are quashed,” the judgment held.

Last year, the top court decided a case on a set of similar facts in Naim Ahamed v State of NCT, where rape charges were set aside on identical grounds. In that case, the complainant was a married woman with three children. She alleged rape on false promise of marriage five years after she began to cohabit with the accused, and had a child from this relationship without obtaining a divorce in her earlier marriage. The court held that it could not be said that the woman had given her consent for a sexual relationship under any misconception.

(Courtesy:- Hindustan Times, 8 March 2024)

*Disclaimer: – Always check with the original copy of judgment from the Court website.

Legal News in this Weekly Legal Update are compiled by Team www.deepakmiglani.com

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