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State of Uttar Pradesh & Ors. Vs. Ajay Kumar Sharma & ANR.
2. Applications for correcting the cause title and all the applications for impleadment as party respondent are allowed.
3. In these Appeals, we are concerned with the renewal as also the appointment of District Government Counsel (Civil and Criminal) in the Subordinate Courts across the State of Uttar Pradesh. The State as the Appellant, has assailed the final judgment and order dated 5.11.2014 in Writ Petition being Misc. Bench No. 9127 of 2012 passed by a Division Bench of the High Court of Judicature at Allahabad, Lucknow Bench.
The High Court in this impugned Order has quashed the Orders of the State Government terminating the appointment of District Government Counsel and has further directed the State Government to reconsider their renewal. Indubitably, the appointments as well as the renewals would have to be in consonance with Section 24 of the Code of Criminal Procedure (Cr.P.C. for brevity) and the Legal Remembrancer Manual (hereinafter referred to as the 'LR Manual') applicable throughout the State of U.P. The Manual which came into force in 1975 inter alia prescribes mandatory 'consultation' with the District Judge and the District Magistrate on the one side and the State on the other.
4. In August 2008, the then State Government, in terms of the Government Order dated 13.8.2008, had amended the LR Manual thereby removing the process of consultation with the District Judge for the appointment of District Government Counsel; effectively, thereafter the LR Manual required the State to only consult with the District Magistrate. It was on the basis of the LR Manual as amended that the Respondents before us came to be appointed as District Government Counsel across the length and breadth of the State of U.P. This is a noteworthy feature on which our decision will turn in some measure.
The State Government's Order, which is dated 13.8.2008, came to be assailed before the High Court of Judicature at Allahabad, Lucknow Bench in a bunch of more than 100 writ petitions, including the lead petition U.P. Shaskiya Adhivakta Kalyan Samiti v. State of U.P. Writ Petition Misc. Bench No. 7851 of 2008 reported as (2012 (30) LCD 1066). By an Order dated 6.1.2012 passed in those proceedings, the High Court directed the State to make fresh appointments expeditiously, and in the interregnum permitted the existing empanelled Advocates to discharge their duties. Shortly thereafter, in Bishan Pal Saxena v. State of U.P.
Writ Petition Misc. Bench No. 8246 of 2011, in terms of its Order dated 12.1.2012 the High Court directed the State of U.P. to reconsider the selection and appointment of Advocates to the "post of Additional District Government Counsel, Assistant District Government Counsel, Panel lawyers and Sub District Government Counsel"; that the persons appointed in pursuance of old provisions would continue till the completion of the reconsideration process; and, all fresh appointments would be carried out strictly in conformity with U.P. Shaskiya Adhivakta Kalyan Samiti and Sadhna Sharma v. State of U.P [Writ Petition Misc. Bench No. 7825 of 2011].
5. Aggrieved by the aforementioned Judgments, the State Government filed Special Leave Petitions No. 4042-4043 of 2012 titled State of U.P. & Ors. v. Sadhna Sharma, during the pendency of which there was a change in the State Government. Immediately thereupon, a prayer was made before this Court for withdrawal of the Special Leave Petitions on the predication that the newly elected State Government had accepted the assailed judgments of the High Court of Allahabad and accordingly intended to implement it in its entirety. In the course of disposing of these SLPs this Court pointedly and poignantly observed that the constitutional validity of Section 24 Cr.P.C. had not been challenged.
"Against the existing vacancies the cases of all the appellants herein, who are in service or are out of service as well as any of the petitioners before the High Courts, whose services were terminated at any point of time including the persons who had filed the Writ Petitions in the High Court during the pendency of writ petition and/or the present civil appeals shall be considered for renewal/reconsideration in accordance with the judgment of this Court within a period of three months from today......" Thirdly, personal responsibility was fastened on the Secretary, Department of Law and Justice, Government of U.P. to complete the above appointments. Writ Petition No. 6069 of 2012 filed by Harsh Gupta and Others [titled Harsh Gupta v. State of U.P.] was disposed of by the High Court on 25.7.2012 in terms of the aforementioned Order of this Court.
6. Consequent upon the passing of the above orders, the State Government issued a Government Order dated 11.6.2012 to the effect that the appointment of all District Government Counsels should be cancelled. However, the incumbents were permitted to continue to discharge their duties till fresh appointments were made. The District Magistrates were to verify the number of vacancies on the Civil, Criminal and Revenue sides.
7. In terms of the Government Order dated 5.9.2012, pursuant to the Judgments of the Supreme Court dated 17.7.2012 and of the High Court on 25.7.2012, the engagement of the Respondents was put to an end and their renewal in the light of consultation reports was awaited. This lead to the filing of writ petitions, including Ajay Kumar Sharma & Anr. v. State of U.P. [Writ Petition Misc. Bench No. 9127 of 2012], terming the cessation of the appointment as arbitrary. However, this Court vide Order dated 13.11.2013 directed that "the cases of renewal of appointment of the existing incumbent shall likewise be considered in accordance with the provisions contained in LR Manual and the judgments of this Court.
This exercise shall be undertaken and completed within a period of four months from today." Eventually, in terms of the final Order dated 5.11.2014, which stands impugned before us, the High Court in Ajay Kumar Sharma & Anr. v. State of U.P. issued a Certiorari quashing the Orders declining renewal of the Respondents; a Mandamus directing the State Government to reconsider their candidature. The High Court had also issued a Mandamus directing the Government to set up a Directorate of Prosecution in pursuance of Section 25-A of Code of Criminal Procedure and lastly passed a direction to the District Judges and District Magistrates to ensure that no person having criminal antecedents should be permitted to work as District Government Counsel.
and therefore the LR Manual is not law under Article 13 of the Constitution of India; and that in Johri Mal this Court has expressed reservations against Kumari Shrilekha Vidyarthi v. State of UP (1991) 1 SCC 212. Mr Sibal has also differentiated the facts before us from those in Kumari Shrilekha Vidyarthi, where all government counsel were terminated en masse by a government order. On the question of maintainability of a writ of Mandamus issued against the State in the impugned order, Mr Sibal contends that the Respondents cannot lay claim to a legal right nor is the Government under a legal duty to continue their engagement, both essential elements for a mandamus.
He rightly concedes that a particular Respondent may seek a Certiorari with respect to the cessation of his individual appointments contrary to the norms of 'Wednesbury reasonableness'. Mr. Sibal has drawn our attention to State of UP v. State of UP Law Officers Association (1994) 2 SCC 204 wherein this Court, while considering the appointments of Chief Standing Counsel, Standing Counsel and Government Advocates, has held that those who are appointed under an arbitrary procedure ought not be heard to complain if the termination of their appointments is equally arbitrary.
Mr. Sibal further submits that the order presently impugned before us is per incuriam for having not adhered to the judgments rendered by the co- ordinate benches of the High Court of Allahabad prior to the judgment impugned before us. He further submits that the aforesaid judgments of the co-ordinate benches, i.e., Ram Charan Singh Prajapati v. State of UP in writ petition (c) 46350 of 2014 and Guru Prasad v. State of UP in writ petition (c) 39935 of 2014 propound the correct view of law, inter alia that allowing renewals to appointments made null and void in law amount to perpetuating an illegality. In parting, learned Senior Counsel also contends that the argument on behalf of the Respondents predicated upon the applicability of de facto doctrine, is without merit.
9. Learned Senior Counsel for the Respondents, Mr. Aman Lekhi has submitted that the State is misguided in its approach, inasmuch as Johri Mal does not detract from Kumari Shrilekha Vidyarthi even on facts as renewal was a question before this Court even in the latter Two-Judge Bench judgment. The only reason why this Court intervened in Johri Mal, and later again in State of UP v. Rakesh Kumar Keshri (2011) 5 SCC 341, was because in the former the recommendation was not in favour, and in the latter the incumbent was incompetent. Mr. Lekhi further submits that the State Government cannot rely upon the fact that the appointments were void because, firstly, the appointments were valid at that time and under extant Rules and also because the 'de facto doctrine' comes to their rescue.
He has placed reliance upon Dr. A. R. Sircar v. State of UP (1993) Supp 2 SCC 734 to substantiate this submission. Secondly, on the application of the doctrine of 'comity of instrumentalities', Mr. Lekhi learned Senior Counsel argues that the Executive cannot be permitted to overreach or nullify judicial pronouncements. Thirdly, that there is an element of continuity in these appointments as emphasised in Kumari Shrilekha Vidyarthi. Mr. Manoj Goel learned Counsel for some of the other Respondents further submits that on a proper perusal of Andi Mukta Sadguru Shree Muktajee Vandas Swami Suvarna Jayanti Mahotsav Smarak Trust v. V. R. Rudani (1989) 2 SCC 691 and the Constitutional Bench in Zee Telefilms Ltd. v. Union of India (2005) 4 SCC 649, it is manifest that a mandamus cannot be denied on the ground that the duty to be enforced is not imposed by a statute and, in fact, may even be passed in order to enforce a contract.
He has emphasised that a Mandamus is the appropriate remedy in light of Kumari Shrilekha Vidyarthi because a public element is involved in the appointment of DGCs and ADGCs which itself is ample reason to attract Article 14 and judicial review under the Constitution of India. Our attention has also been drawn to State of UP v. Ashok Kumar Nigam (2013) 3 SCC 372 where this Court has reiterated that reasoning is the sine qua non for refusal under the concerned provisions of LR Manual which they claim is not a valid basis for en masse rejection.
On the issue that the impugned Judgment of the Lucknow Bench is per incuriam, Mr Lekhi has submitted that the impugned Order has rightly ignored the decisions of the co-ordinate Bench at Allahabad in Ram Charan Singh Prajapati v. State of UP and Guru Prasad v. State of UP because the Allahabad Bench itself passed orders which are per incuriam. Learned Senior Counsel, Mr. Jitendra Mohan Sharma also submits that the State Government has already agreed to reconsider the case of renewal of government lawyers in SLP(C) 4042-43 of 2012, State of UP v. Sadhna Sharma, and the State cannot take a different stand now. However, it is to be noted that the State Government withdrew the appeal with a view to implement the judgment of the High Court in UP Shaskiya Adhivakta Kayan Samiti and had not agreed to reconsider the case of renewal of government lawyers as put forth by Mr. Sharma.
10. Time and again this Court has emphatically restated the essentials and principles of 'Precedent' and of Stare Decisis which are a cardinal feature of the hierarchical character of all Common Law judicial systems. The doctrine of Precedent mandates that an exposition of law must be followed and applied even by coordinate or co-equal Benches and certainly by all smaller Benches and subordinate courts. That is to say that a smaller and a later Bench has no freedom other than to apply the law laid down by the earlier and larger Bench; that is the law which is said to hold the field. Apart from Article 141, it is a policy of the courts to stand by precedent and not to disturb a settled point.
The purpose of precedents is to bestow predictability on judicial decisions and it is beyond cavil that certainty in law is an essential ingredient of rule of law. A departure may only be made when a coordinate or co-equal Bench finds the previous decision to be of doubtful logic or efficacy and consequentially, its judicial conscience is so perturbed and aroused that it finds it impossible to follow the existing ratio. The Bench must then comply with the discipline of requesting the Hon'ble Chief Justice to constitute a larger Bench.
11. If binding precedents even of co-ordinate strength are not followed, the roots of continuity and certainty of law which should be nurtured, strengthened perpetuated and proliferated will instead be deracinated. Although spoken in a totally different context, we are reminded of the opening stanza of the poem 'The Second Coming' authored by William Butler Yeats. The lines obviously do not advert to the principle of precedent but they are apposite in bringing out the wisdom of this ancient and venerable principle. "Turning and turning in the widening gyre The falcon cannot hear the falconer; Things fall apart; the centre cannot hold; Mere anarchy is loosed upon the world."
"25. It is not necessary to refer to all the cases on the point. The broad guidelines are easily deducible from what has gone before. The possibility of further defining these guiding principles can be envisaged with further juridical experience, and when common jurisprudential values linking different national systems of law may make a consensual pattern possible. But that lies in the future.
26. There was some debate on the question whether a Division Bench of Judges is obliged to follow the law laid down by a Division Bench of a larger number of Judges. Doubt has arisen on the point because of certain observations made by Chinnappa Reddy, J. in Javed Ahmed Abdul Hamid Pawala v. State of Maharashtra. Earlier, a Division Bench of two Judges, of whom he was one, had expressed the view in T.V. Vatheeswaran v. State of Tamil Nadu that delay exceeding two years in the execution of a sentence of death should be considered sufficient to entitle a person under sentence of death to invoke Article 21 of the Constitution and demand the quashing of the sentence of death.
This would be so, he observed, even if the delay in the execution was occasioned by the time necessary for filing an appeal or for considering the reprieve of the accused or some other cause for which the accused himself may be responsible. This view was found unacceptable by a Bench of three-Judges in Sher Singh v. State of Punjab, where the learned Judges observed that no hard and fast rule could be laid down in the matter. In direct disagreement with the view in T.V. Vatheeswaran, the learned Judges said that account had to be taken of the time occupied by proceedings in the High Court and in the Supreme Court and before the executive authorities, and it was relevant to consider whether the delay was attributable to the conduct of the accused.
As a member of another Bench of two Judges, in Javed Ahmed Abdul Hamid Pawala Chinnapa Reddy, J. questioned the validity of the observations made in Sher Singh and went on to note, without expressing any concluded opinion on the point, that it was a serious question: "Whether a Division Bench of three-Judges could purport to overrule the judgment of a Division Bench of two Judges merely because three is larger than two.
The Court sits in Divisions of two and three-Judges for the sake of convenience and it may be inappropriate for a Division Bench of three- Judges to purport to overrule the decision of a Division Bench of two Judges. (Vide Young v. Bristol Aeroplane Co. Ltd.) It may be otherwise where a Full Bench or a Constitution Bench does so." It is pertinent to record here that because of the doubt cast on the validity of the opinion in Sher Singh, the question of the effect of delay on the execution of a death sentence was referred to a Division Bench of five Judges, and in Triveniben v. State of Gujarat, the Constitution Bench overruled T.V. Vatheeswaran.
27. What then should be the position in regard to the effect of the law pronounced by a Division Bench in relation to a case raising the same point subsequently before a Division Bench of a smaller number of Judges? There is no constitutional or statutory prescription in the matter, and the point is governed entirely by the practice in India of the courts sanctified by repeated affirmation over a century of time. It cannot be doubted that in order to promote consistency and certainty in the law laid down by a superior Court, the ideal condition would be that the entire Court should sit in all cases to decide questions of law, and for that reason the Supreme Court of the United States does so.
It is in order to guard against the possibility of inconsistent decisions on points of law by different Division Benches that the Rule has been evolved, in order to promote consistency and certainty in the development of the law and its contemporary status, that the statement of the law by a Division Bench is considered binding on a Division Bench of the same or lesser number of Judges. This principle has been followed in India by several generations of Judges. We may refer to a few of the recent cases on the point. In John Martin v. State of West Bengal, a Division Bench of three-Judges found it right to follow the law declared in Haradhan Saha v. State of West Bengal, decided by a Division Bench of five Judges, in preference to Bhut Nath Mate v. State of West Bengal decided by a Division Bench of two Judges.
Again in Indira Nehru Gandhi v. Raj Narain, Beg, J. held that the Constitution Bench of five Judges was bound by the Constitution Bench of thirteen Judges in Kesavananda Bharati v. State of Kerala. In Ganapati Sitaram Balvalkar v. Waman Shripad Mage, this Court expressly stated that the view taken on a point of law by a Division Bench of four Judges of this Court was binding on a Division Bench of three-Judges of the Court. And in Mattulal v. Radhe Lal, this Court specifically observed that where the view expressed by two different Division Benches of this Court could not be reconciled, the pronouncement of a Division Bench of a larger number of Judges had to be preferred over the decision of a Division Bench of a smaller number of Judges.
This Court also laid down in Acharya Maharajshri Narandraprasadji Anandprasadji Maharaj v. State of Gujarat that even where the strength of two differing Division Benches consisted of the same number of Judges, it was not open to one Division Bench to decide the correctness or otherwise of the views of the other. The principle was reaffirmed in Union of India v. Godfrey Philips India Ltd. which noted that a Division Bench of two Judges of this Court in Jit Ram Shiv Kumar v. State of Haryana had differed from the view taken by an earlier Division Bench of two Judges in Motilal Padampat Sugar Mills v. State of U.P. on the point whether the doctrine of promissory estoppel could be defeated by invoking the defence of executive necessity, and holding that to do so was wholly unacceptable reference was made to the well accepted and desirable practice of the later Bench referring the case to a larger Bench when the learned Judges found that the situation called for such reference.
28. We are of opinion that a pronouncement of law by a Division Bench of this Court is binding on a Division Bench of the same or a smaller number of Judges, and in order that such decision be binding, it is not necessary that it should be a decision rendered by the Full Court or a Constitution Bench of the Court. We would, however, like to think that for the purpose of imparting certainty and endowing due authority decisions of this Court in the future should be rendered by Division Benches of at least three- Judges unless, for compelling reasons, that is not conveniently possible."
"22. A careful perusal of the above judgments shows that this Court took note of the hierarchical character of the judicial system in India. It also held that it is of paramount importance that the law declared by this Court should be certain, clear and consistent. As stated in the above judgments, it is of common knowledge that most of the decisions of this Court are of significance not merely because they constitute an adjudication on the rights of the parties and resolve the disputes between them but also because in doing so they embody a declaration of law operating as a binding principle in future cases. The doctrine of binding precedent is of utmost importance in the administration of our judicial system.
"But if a Bench of two learned Judges concludes that an earlier judgment of three learned Judges is so very incorrect that in no circumstances can it be followed, the proper course for it to adopt is to refer the matter before it to a Bench of three learned Judges setting out, as has been done here, the reasons why it could not agree with the earlier judgment. If, then, the Bench of three learned Judges also comes to the conclusion that the earlier judgment of a Bench of three learned Judges is incorrect, reference to a Bench of five learned Judges is justified."
" Applying Sub-Inspector Rooplal v. Lt. Governor (2000) 1 SCC 644, this Court in Government of Andhra Pradesh v. A. P. Jaiswal, (2001) 1 SCC 748 has said that: "Consistency is the cornerstone of the administration of justice. It is consistency which creates confidence in the system and this consistency can never be achieved without respect to the rule of finality. It is with a view to achieve consistency in judicial pronouncements, the courts have evolved the rule of precedents, principle of stare decisis etc. These rules and principles are based on public policy and if these are not followed by courts then there will be chaos in the administration of justice, which we see in plenty in this case."
14. Sitting in a Division Bench of two, we at present can do no better than apply the rules of precedent as have been left for us to follow. The law pertaining to the appointment of Additional District Government Counsel, Assistant District Government Counsel, Panel lawyers and Sub District Government Counsel was directly in issue before the Three-Judge Bench in State of U.P. v. Johri Mal (2004) 4 SCC 714 where the law has been comprehensively clarified. No purpose is served by discussing Kumari Shrilekha Vidyarthi or any judgments rendered thereafter.
15. In Johri Mal, this Court perused the LR Manual as also the Code of Criminal Procedure and reiterated that the District Counsel stood professionally engaged; that the State Government was free to determine the course of action after being satisfied of their performance, and that the Courts must be circumspect in the exercise of judicial review on matters which fell within the discretion of the State Government, i.e. appointment of their counsel or advocates.
"40. So long as in appointing a counsel the procedures laid down under the Code of Criminal Procedure are followed and a reasonable or fair procedure is adopted, the court will normally not interfere with the decision. The nature of the office held by a lawyer vis-�-vis the State being in the nature of professional engagements, the courts are normally chary to overturn any decision unless an exceptional case is made out. The question as to whether the State is satisfied with the performance of its counsel or not is primarily a matter between it and the counsel. The Code of Criminal Procedure does not speak of renewal or extension of tenure. The extension of tenure of Public Prosecutor or the District Counsel should not be compared with the right of renewal under a licence or permit granted under a statute. The incumbent has no legal enforceable right as such. ..."
41. In Om Kumar v. Union of India (2001) 2 SCC 386 it was held that where administrative action is challenged under Article 14 as being discriminatory, equals are treated unequally or unequals are treated equally, the question is for the Constitutional Courts as primary reviewing courts to consider the correctness of the level of discrimination applied and whether it is excessive and whether it has a nexus with the objective intended to be achieved by the administrator.
44. Only when good and competent counsel are appointed by the State, the public interest would be safeguarded. The State while appointing the Public Prosecutors must bear in mind that for the purpose of upholding the rule of law, good administration of justice is imperative which in turn would have a direct impact on sustenance of democracy.
46. The Code of Criminal Procedure does not provide for renewal or extension of a term. Evidently, the legislature thought it fit to leave such matters at the discretion of the State. It is no doubt true that even in the matter of extension or renewal of the term of Public Prosecutors, the State is required to act fairly and reasonably. The State normally would be bound to follow the principles laid down in the Legal Remembrancer's Manual.
... 75. In the matter of engagement of a District Government Counsel, however, a concept of public office does not come into play. However, it is true that in the matter of counsel, the choice is that of the Government and none can claim a right to be appointed. That must necessarily be so because it is a position of great trust and confidence. The provision of Article 14, however, will be attracted to a limited extent as the functionaries named in the Code of Criminal Procedure are public functionaries. They also have a public duty to perform. If the State fails to discharge its public duty or acts in defiance, deviation and departure of the principles of law, the court may interfere. The court may also interfere when the legal policy laid down by the Government for the purpose of such appointments is departed from or mandatory provisions of law are not complied with. Judicial review can also be resorted to, if a holder of a public office is sought to be removed for reason dehors the statute. "
16. It is beyond cavil that it is in the interest of the dispensation of criminal justice that competent counsel possessing integrity should alone be appointed, since otherwise, there is a strong possibility of miscarriage of justice. In choosing them, the State will not only have to be satisfied of their forensic competence, but also that they are bereft of any criminal antecedents. This, however, does not mean that the persons presently discharging the duties of Additional District Government Counsel, Assistant District Government Counsel, Panel lawyers and Sub District Government Counsel stand appointed to civil posts, thereby creating a right of continuity.
In our opinion, which is an echo of that articulated in Johri Mal, the State, like any other litigant, must have the freedom to appoint counsel in whom they repose trust and confidence. The only expectation is that the choice made by the State should not be such as could defeat the sacred and onerous responsibility of ensuring that the justice is meted out to all citizens. In Johri Mal, this Court has categorically rejected the claim of an advocate to continuous renewal or re-appointment as a Government Advocate. We entirely agree with this exposition of the law. We think that the correct approach is to ensure the competency of advocates being considered for appointment of Additional District Government Counsel, Assistant District Government Counsel, Panel lawyers and Sub District Government Counsel.
It seems to us that it would be an incorrect approach to start this process by considering the re-appointment or renewal of existing Government Counsels since that would dilute, nay, dissolve the discretion of the Government to appoint advocates whom they find trustworthy. The High Court has followed the second approach leading to the dissatisfaction of the State Government and their resentment that their realm of discretion has been eroded for no justifiable reason.
17. The Appeals are allowed. The impugned Judgment is set aside, but without imposition of costs. Fresh appointments to be made expeditiously.
State of U.P. & Ors. Vs. Ajay Kumar Sharma & ANR.
1. I have had the benefit of reading the scholarly judgment of my learned Brother Justice Vikramajit Sen and I am in respectful agreement with his opinion. I, however, add only few words of concurrence.
2. I entirely agree with my learned Brother that the issues which are the subject matter of these appeals such as issues relating to scope and interpretation of Section 24 of the Code of Criminal Procedure, 1973 (in short "Cr.P.C."), the issues relating to appointment, renewal, extension of tenure of Public Prosecutor/District Government Counsel, their nature and lastly provisions of (UP Government) Legal Remembrance's Manual and, in particular, provisions dealing with such appointment/renewal/extension of tenure etc. remain no more res-integra and stand authoritatively decided by a Bench of three judges in State of U.P. vs. Johri Mal (2004) 4 SCC 714.
This decision was followed consistently by this Court as and when these issues arose for consideration (see State of U.P. & Ors. vs. Rakesh Kumar Keshari & Anr. (2011) 5 SCC 341, Centre for Public Interest Litigation & Ors. vs. Union of India & Ors., (2012) 3 SCC 117, Deepak Aggarwal vs. Keshav Kaushik & Ors. (2013) 5 SCC 277 and State of U.P. & Ors. vs. Satyavrat Singh (2014) 14 SCC 548).
3. In these circumstances and keeping in view the authoritative pronouncement rendered in Johri Mal' case (supra), there does not arise any occasion to again examine the same issues more so when in these very proceedings though at the instance of some other persons, these issues had reached to this Court on previous occasions as mentioned by my learned Brother in the main judgment which also came to be decided by this Court.
4. Indeed the principles of "precedent" and "Stare Decisis" command us to follow the law laid down by this Court and more so when it was rendered by a Bench consisted of three judges.
5. I am also of the view that the High Court though dealt with the issues but as aptly put by my learned Brother in paragraph 15 "incorrectly" thereby calling our interference.
6. In my considered opinion, therefore, the fresh appointments to be now made keeping in view the apt observations made especially in the case of Johri Mal (supra) (paras 40 to 44) and what is held hereinabove in main judgment.

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COMMONWEALTH vs. LISA BECKER GRIMSHAW.
In a murder case, the several statements in the prosecutor's closing argument that the defendant contended on appeal were improper constituted proper comments on or reasonable inferences from the evidence, and an improper reference to excluded evidence was harmless error in the circumstances. [506-511] LIACOS, C.J., concurring.
INDICTMENT found and returned in the Superior Court Department on June 19, 1985.
Ariane D. Vuono, Special Assistant District Attorney, for the Commonwealth.
Court affirmed the defendant's conviction. 31 Mass. App. Ct. 917 , 918 (1991). We granted the defendant's application for further appellate review. The defendant makes three arguments on appeal: (1) the trial judge erred in refusing to grant a mistrial or to give specific curative instructions as a result of several alleged improprieties in the prosecutor's closing argument; (2) the judge's refusal to grant immunity to a prospective witness violated the defendant's right to due process under the Fourteenth Amendment to the United States Constitution and art. 12 of the Declaration of Rights of the Massachusetts Constitution, as well as her right to compulsory process under the Federal and State Constitutions; and (3) the sentence imposed by the judge violated the Eighth Amendment to the United States Constitution and art. 26 of the Massachusetts Declaration of Rights. We affirm.
prejudicial and not cured by the judge's general instructions. [Note 2] These statements include: the prosecutor's alleged mischaracterization of the defense; the prosecutor's reference to excluded testimony; and the prosecutor's alleged misstatements concerning evidence. Additionally, although not objected to at trial, the defendant also argues on appeal that another alleged misstatement by the prosecutor and his description of the defendant's expert witness created a substantial risk of a miscarriage of justice. We discuss each alleged impropriety below.
a. Mischaracterization of the defense. In his closing argument, the prosecutor characterized the defense as follows: "[K]eep in mind what they are saying to you. I have the right to be acquitted totally because it's legitimate self-defense, but if you don't buy that, I was intoxicated. But if you don't buy that, then I entered only into the joint venture to the extent of hurting [the victim], not killing him. What is it? Which one is it, A, B, C, D? They wanted [you] to take any of them, A, B, C or D, as long as you don't take the truth, as long as you don't take the truth they will be satisfied." The defendant contends that this statement mischaracterized the defense, and that the prosecutor's comparison of this alleged defense with "the truth" implied that the prosecutor knew the truth and improperly injected his personal belief into his closing argument.
the jury could infer that the defendant was intoxicated at that time. The defendant also stated on more than one occasion in her testimony that she only wanted to hurt the victim. In these circumstances, the prosecutor's suggestion that the defendant presented alternate theories justifying her innocence is supported by the record, and there was no error.
Regarding the prosecutor's use of "the truth" in comparison with the various defense theories, the prosecutor interjected no extraneous material or belief, and, at most, he expressed his view of the strength of the evidence. This argument was proper. See Commonwealth v. Smith, 387 Mass. 900 , 906-907 (1983). Cf. Commonwealth v. De Christoforo, 360 Mass. 531 , 537 (1971) ("I quite frankly think that they hope that you find him guilty of something a little less than first-degree murder").
b. The reference to excluded evidence. Although the judge sustained the defendant's objections to the prosecutor's attempts to inquire into the defendant's possible sexual relationship with one particular witness, Roland Tetreault, the prosecutor argued as follows in his closing argument: "He [Roland Tetreault] told you about that incident in November, didn't deny [the victim] broke in. Use your common sense to draw the inference. He indicated the two of them were on the couch, what that fight must have been about. Use your common sense." These statements by the prosecutor were improper. A prosecutor is barred from referring in closing argument to matter that has been excluded from evidence, Commonwealth v. Burke, 373 Mass. 569 , 575 (1977), and a prosecutor should also refrain from inviting an inference from the jury about the same excluded subject matter.
Mass. 539, 549 (1990). There was already evidence introduced from which the jury could have inferred a relationship between the defendant and Tetreault. [Note 3] There was also evidence that the defendant had had sexual relationships with two other men around the time of the murder. [Note 4] In the circumstances of this case, there is no risk that the prosecutor's statements had an effect on the jury or contributed to their verdict.
c. Misstatements of testimony. There are three instances where the defendant contends that the prosecutor misstated testimony in his closing argument. We conclude that there was no error in any of these statements.
with them. There was also evidence that the defendant and the youths drank alcohol at the defendant's home frequently, including the night of the murder. In these circumstances, the prosecutor's statement was a reasonable inference from the evidence.
The second alleged misstatement involved the prosecutor's argument suggesting to the jury that they infer that the defendant had given a photograph of the victim to one of the assailants, Michael Bruyette, before the night of the murder as part of her preparations for the murder. "In closing argument, counsel may argue the evidence and the fair inferences which can be drawn from the evidence." Commonwealth v. Hoffer, 375 Mass. 369 , 378 (1978). "Counsel may also attempt to assist the jury in their task of analyzing, evaluating, and applying evidence. Such assistance includes suggestions by counsel as to what conclusion the jury should draw from the evidence." Commonwealth v. Ferreira, 381 Mass. 306 , 316 (1980). The defendant argues that the evidence does not support the prosecutor's inference, but we believe that the inference is a fair one.
While in police custody on June 6, 1985, Bruyette turned over to the police a photograph that had been cut and altered to depict only the victim's likeness. The original photograph had included the defendant's likeness as well. Bruyette probably received the picture from either the defendant or the victim, but Bruyette did not know the victim. The defendant argues that Bruyette could have obtained the photograph from the victim's wallet which Bruyette took from the victim on the night of the murder. There was evidence at trial, however, that Bruyette disposed of the contents of the victim's wallet in a trash dumpster shortly after the murder. In these circumstances, it was proper for the prosecutor to suggest to the jury that they infer that the defendant gave Bruyette a photograph of the victim prior to the night of the murder.
The final alleged misstatement, not objected to at trial, involves this statement by the prosecutor: "Roland Tetreault says, you know, she made a statement to me that I'm thinking about doing something crazy towards [the victim]."
While the defendant denied making this statement to Tetreault, and Tetreault himself, at one point in his testimony, characterized the defendant's statement as "thinking about doing something about" her relationship with the victim, Tetreault later testified that he had previously told a detective that the defendant had stated to him, "I'm thinking about doing something crazy about [the victim]." Consequently, there was no misstatement by the prosecutor.
d. The description of the expert witness. The defendant argues that the following description of the defendant's expert witness was improper: "[S]he's a professional witness, you got the dough, I got the testimony, she's a classic example of a hired gun." This court specifically addressed the use of "hired gun" to describe an expert witness in Commonwealth v. O'Brien, 377 Mass. 772 (1979).
The fact that the expert witness was retained by the defense would have been an appropriate subject of argument to the jury. See id. at 778. Additionally, though defense counsel specifically objected in O'Brien, no objection was raised in this case. See id. at 777. While we disapprove of this argument, there is no substantial risk of a miscarriage of justice. See id.
2. Immunity for a prospective defense witness. The defendant next contends that she should have been able to obtain a grant of use immunity for a prospective witness, her mother, Shirley Becker. The defendant argues that Becker's testimony was essential because Becker would have testified that she, not the defendant, discussed the victim's insurance policy with the two youths who killed the victim. According to the defendant, this could have undermined the Commonwealth's theory that the defendant hired two assassins whom she promised to pay with the proceeds of a lapsed insurance policy. Additionally, the defendant had stated on several occasions prior to trial that she had discussed the insurance policy with the youths, but at trial she testified that she made those prior statements only to protect her mother. The defendant contends that Becker's testimony would have corroborated that aspect of the defendant's testimony.
The judge denied the defendant's pretrial motion and her motion during trial concerning immunity for Becker. On appeal, the defendant makes two arguments: that there is no public interest in preserving the prosecutor's discretion to prosecute Becker, and that the novel circumstances of the case constituted "unique circumstances" that required a grant of immunity. By her first argument, the defendant would shift the onus of proof onto the Commonwealth in witness immunity questions. This court has already held that, barring unique circumstances, "any inquiry into the question of immunity is foreclosed if the prospective witness is an actual or potential target of prosecution." Commonwealth v. Doherty, 394 Mass. 341 , 345 (1985). The prosecutor's motive in opposing immunity revolved around the potential prosecution of Becker, if and when reliable or corroborative evidence implicating her in the conspiracy became available, and the judge found no suggestion by the defendant of any prosecutorial misconduct or any ulterior motive in the prosecutor's opposition to immunity. There is no merit in the defendant's first argument.
Similarly, there is no merit in the defendant's argument concerning the unique circumstances of this case. Although this court has stated that "in some unique circumstances . . . due process may require the granting by a judge of a limited form of immunity," Commonwealth v. Curtis, 388 Mass. 637 , 646 (1983), we have never defined what those "unique circumstances" may entail. That this case involved a battered woman syndrome defense, which the jury probably accepted in the light of their verdict of manslaughter, does not create a unique circumstance of the sort that existed in Government of the V.I. v. Smith, 615 F.2d 964 (3d Cir. 1980), where the United States Attorney, who lacked jurisdiction to prosecute the witness, refused to consent to immunity. Id. at 967, 969. See Commonwealth v. Curtis, supra at 644-645. Consequently, there was no error in the judge's denial of the defendant's request for immunity for Becker.
cruel or unusual punishment. The defendant appealed from her sentence to the Appellate Division of the Superior Court which, in accordance with G. L. c. 278, Section 28B (1990 ed.), has final authority for review of sentences, and, pursuant to that authority, dismissed her appeal. While this court should review sentences for errors of law or constitutional violations, we should not do so merely for matters concerning alleged disparities in sentencing, which is the major thrust of the defendant's argument. See Commonwealth v. Longval, 378 Mass. 246 , 252-253 (1979). The sentence imposed was within the maximum authorized by the Legislature, see G. L. c. 265, Section 13 (1990 ed.), and we find no argument of constitutional dimension within the defendant's claim that the judge acted with undue severity.
conform to the testimony at trial. Contrary to the prosecutor's statement to the jury, Tetreault's testimony does not indicate in any way that the defendant or Tetreault was "on the couch." Tetreault's testimony reveals only that the defendant and Tetreault were in the defendant's apartment at the time of the attack. [Note Concur-1] The prosecutor's unfounded reference to a traditionally compromising situation served only to encourage the jury to draw an inference of sexual activity that was not warranted by the evidence presented at trial.
It is clear that the prosecutor's statements invited the jury to infer that the victim's November 21, 1984, attack was caused not by the victim's abusive nature toward his wife but by the defendant's extramarital sexual activity with Roland Tetreault. In my view, such an argument creates a dangerous risk of insinuating to jurors that they properly can conclude that the victim was justified in beating his wife for her infidelity. In order to avoid this risk, this type of evidence should be admitted rarely and only in limited circumstances, (e.g., pertaining to the defendant's state of mind), and only when accompanied by stringent limiting instructions from the trial judge. Unfortunately, the prosecutor's improper introduction of this issue during his closing argument to the jury effectively prevented the trial judge from exercising these controls.
prosecutor's statements extends beyond the defendant's history of extramarital sexual activity.
A central pillar of the defendant's case was that at the time of the homicide she suffered from battered woman syndrome, a posttraumatic stress disorder allegedly caused by the victim's constant and habitual abuse. Evidence of the victim's attack on November 21, 1984, played a crucial role in the defendant's attempts to establish that the victim regularly abused her, thereby causing her to suffer from battered woman syndrome. In the words of the defendant's expert witness on battered woman syndrome, this attack was "the significant incident, one of the worse [sic] incidents that occurred in November of 1984 that pushed [the defendant's relationship with the victim] over the danger level" (emphasis added).
The prosecutor's improper and unfounded statements allowed the jury to infer that the November 21 attack was not an example of the victim's ongoing abuse, as was suggested by the defendant, but was merely an isolated incident caused by the victim's rage at witnessing his wife's infidelity. Such an inference certainly would have harmed the defendant's attempts to establish that she suffered from battered woman syndrome due to chronic abuse. Accordingly, the potential impact of this inference should have been considered by the court in assessing the harm caused by the prosecutor's error. In the circumstances of the present case, however, it appears that the error was rendered harmless because the jury's verdict of manslaughter suggests that the jury accepted the defendant's claim that she suffered from battered woman syndrome at the time of the homicide. In short, the good sense of the jurors saved a prosecutor from the consequences of his own folly. Accordingly, I concur.
[Note 1] The issue whether the judge properly allowed the admission of expert testimony on the battered woman syndrome is not before this court. Whether such evidence is admissible in Massachusetts has yet to be decided. See Commonwealth v. Lazarovich, 410 Mass. 466 , 473 (1991); Commonwealth v. Moore, 25 Mass. App. Ct. 63 , 66 (1987). Therefore, we take no position on the matter at this time.
[Note 2] The judge instructed the jury that "[t]he closing arguments you heard here this morning are not evidence."
[Note 3] The defendant and Tetreault lived together for several months during 1984 and 1985.
[Note 4] These two men were Michael Bruyette, one of the youths who murdered the victim, and Darryl Fredette, the father of the defendant's first child and one of her alleged batterers.
[Note Concur-1] Similarly, the defendant's testimony regarding the November 21, 1984, attack does not describe either herself or Tetreault as being "on the couch."

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A chapter 13 bankruptcy is also called a wage earner’s plan. It enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years. If the debtor’s current monthly income is less than the applicable state median, the plan will be for three years unless the court approves a longer period “for cause.” If the debtor’s current monthly income is greater than the applicable state median, the plan generally must be for five years. In no case may a plan provide for payments over a period longer than five years. 11 U.S.C. §1322(d). During this time the law forbids creditors from starting or continuing collection efforts.
An individual cannot file under chapter 13 or any other chapter if, during the preceding 180 days, a prior bankruptcy petition was dismissed due to the debtor’s willful failure to appear before the court or comply with orders of the court or was voluntarily dismissed after creditors sought relief from the bankruptcy court to recover property upon which they hold liens. 11 U.S.C. §§ 109(g), 362(d) and (e). In addition, no individual may be a debtorunder chapter 13 or any chapter of the Bankruptcy Code unless he or she has, within 180 days before filing, received credit counseling from an approved credit counseling agency either in an individual or group briefing. 11 U.S.C. §§ 109, 111. There are exceptions in emergency situations or where the U.S. trustee (or bankruptcy administrator) has determined that there are insufficient approved agencies to provide the required counseling. If a debt management plan is developed during required credit counseling, it must be filed with the court.
The courts must charge a $235 case filing fee and a $46 miscellaneous administrative fee. Normally the fees must be paid to the clerk of the court upon filing. With the court’s permission, however, they may be paid in installments. 28 U.S.C. § 1930(a); Fed. R. Bankr. P. 1006(b); Bankruptcy Court Miscellaneous Fee Schedule, Item 8. The number of installments is limited to four, and the debtor must make the final installment no later than 120 days after filing the petition. Fed. R. Bankr. P. 1006(b). For cause shown, the court may extend the time of any installment, as long as the last installment is paid no later than 180 days after filing the petition. Id. The debtor may also pay the $46 administrative fee in installments. If a joint petition is filed, only one filing fee and one administrative fee are charged. Debtors should be aware that failure to pay these fees may result in dismissal of the case. 11 U.S.C. § 1307(c)(2).
4. A detailed list of the debtor’s monthly living expenses, i.e., food, clothing, shelter, utilities, taxes, transportation, medicine, etc. Married individuals must gather this information for their spouse regardless of whether they are filing a joint petition, separate individual petitions, or even if only one spouse is filing. In a situation where only one spouse files, the income and expenses of the non-filing spouse is required so that the court, the trustee and creditors can evaluate the household’s financial position.
When an individual files a chapter 13 petition, an impartial trustee is appointed to administer the case. 11 U.S.C. § 1302. In some districts, the U.S. trustee or bankruptcy administrator appoints a standing trustee to serve in all chapter 13 cases. 28 U.S.C. § 586(b). The chapter 13 trustee both evaluates the case and serves as a disbursing agent, collecting payments from the debtor and making distributions to creditors. 11 U.S.C. § 1302(b).
Between 21 and 50 days after the debtor files the chapter 13 petition, the chapter 13 trustee will hold a meeting of creditors. If the U.S. trustee or bankruptcy administrator schedules the meeting at a place that does not have regular U.S. trustee or bankruptcy administrator staffing, the meeting may be held no more than 60 days after the debtor files. Fed. R. Bankr. P. 2003(a). During this meeting, the trustee places the debtor under oath, and both the trustee and creditors may ask questions. The debtor must attend the meeting and answer questions regarding his or her financial affairs and the proposed terms of the plan.11 U.S.C. § 343. If a husband and wife file a joint petition, they both must attend the creditors’ meeting and answer questions. In order to preserve their independent judgment, bankruptcy judges are prohibited from attending the creditors’ meeting.
U.S.C. § 341(c). The parties typically resolve problems with the plan either during or shortly after the creditors’ meeting. Generally, the debtor can avoid problems by making sure that the petition and plan are complete and accurate, and by consulting with the trustee prior to the meeting.
The plan must pay priority claims in full unless a particular priority creditor agrees to different treatment of the claim or, in the case of a domestic support obligation, unless the debtor contributes all “disposable income” – discussed below – to a five-year plan. 11 U.S.C. § 1322(a).
debtor) less amounts reasonably necessary for the maintenance or support of the debtor or dependents and less charitable contributions up to 15% of the debtor’s gross income. If the debtor operates a business, the definition of disposable income excludes those amounts which are necessary for ordinary operating expenses. 11 U.S.C. § 1325(b)(2)(A) and (B). The “applicable commitment period” depends on the debtor’s current monthly income. The applicable commitment period must be three years if current monthly income is less than the state median for a family of the same size – and five years if the current monthly income is greater than a family of the same size. 11 U.S.C. § 1325(d). The plan may be less than the applicable commitment period (three or five years) only if unsecured debt is paid in full over a shorter period.
If the court confirms the plan, the chapter 13 trustee will distribute funds received under the plan “as soon as is practicable.” 11 U.S.C. § 1326(a)(2). If the court declines to confirm the plan, the debtor may file a modified plan. 11 U.S.C. § 1323. The debtor may also convert the case to a liquidation case under chapter 7. 11 U.S.C. § 1307(a). If the court declines to confirm the plan or the modified plan and instead dismisses the case, the court may authorize the trustee to keep some funds for costs, but the trustee must return all remaining funds to the debtor (other than funds already disbursed or due to creditors). 11 U.S.C. § 1326(a)(2).
received over the six calendar months before commencement of the bankruptcy case, including regular contributions to household expenses from nondebtors and including income from the debtor’s spouse if the petition is a joint petition, but not including social security income or certain payments made because the debtor is the victim of certain crimes. 11 U.S.C. § 101(10A).
2. In North Carolina and Alabama, bankruptcy administrators perform similar functions that U.S. trustees perform in the remaining forty- eight states. The bankruptcy administrator program is administered by the Administrative Office of the United States Courts, while the U.S. trustee program is administered by the Department of Justice. For purposes of this publication, references to U.S. trustees are also applicable to bankruptcy administrators.


Final Business/Corporate/Partnership Provisions in Tax Cuts and Jobs Act of 2017.
Here is a comparison chart that briefly summarizes the major provisions affecting our business clients, including corporations, partnerships, and sole proprietorships.
Effective date Unless otherwise indicated, business changes are permanent, generally, for tax years beginning after 12/31/17.
Corporate tax rates 21% flat tax rate. Also applies to PSCs.
deduction Corporations are allowed a deduction with respect to dividends received from other taxable domestic corporations. The dividends-received deduction has been reduced from 70% to 50% (and from 80% to 65% for a 20% owned corporation).
Territorial The provision generally establishes a participation exemption system for foreign income. This exemption is provided for by means of a 100% deduction for the foreign-source portion of dividends received from specified 10% owned foreign corporations by domestic corporations that are United States shareholders of those foreign corporations.
Repatriation All controlled foreign corporations (CFCs) and all foreign corporations (other than PFICs), in which a US person owns a 10% voting interest, must pay a 15.5% tax rate on accumulated post-1986 foreign earnings held in the form of cash or cash equivalents, and 8% tax rate on all other earnings. This increased tax liability generally may be paid over an eight-year period. This is effective for the last taxable year of a foreign corporation that begins before January 1, 2018, and with respect to US shareholders, for the taxable years in which or with which such taxable years of the foreign corporations end.
Carried interest A carried interest (profits interest) is taxed at long-term capital gains rates only if the interest is held more than three years (was one year).
§199A deduction 20% deduction. New §199A provides that an individual taxpayer generally may deduct 20% of qualified business income from a partnership, S corporation, or sole proprietorship, REIT dividends, cooperative dividends, and publicly traded partnerships. The deduction may not exceed 20% of the taxpayer’s taxable income (reduced by net capital gains).
Qualified business income. Qualified business income (QBI) is determined for each qualified trade or business. QBI is the net income of the US business. It does not include any investment income (interest, dividends, capital gains, and losses). Reasonable compensation in the S corporation and guaranteed payments in the partnership reduce QBI. If the net amount of qualified business income from all qualified trades or businesses during the taxable year is a loss, it is carried forward and reduces QBI in the next taxable year. QBI includes both passive and active income.
W-2 limits. Subject to a taxable income threshold, the deductible amount for each qualified trade or business is the lesser of (a) 20% of the taxpayer’s qualified business income with respect to the trade or business, or (b) the greater of 50% of the W-2 wages with respect to the trade or business or the sum of 25% of the W-2 wages with respect to the trade or business and 2.5% of the unadjusted basis, immediately after acquisition, of all qualified property.
Phase-in of W-2 wages limitation. The W-2 wage limitation does not apply for a taxpayer with taxable income less than a threshold amount. The “threshold amount” is $315,000 MFJ ($157,000 if single) and is indexed for inflation. For those with income above the threshold amount, the deduction phases out over $100,000 MFJ ($50,000 single).
Specified service trades or businesses. Subject to a taxable income threshold, the deduction is not allowed with respect to “specified service trades or businesses.” Specified service trades or businesses are any trade or business involving the performance of services in the fields of health, law, accounting, actuarial science, performing arts, consulting, athletics, financial services, brokerage services, including investing and investment management, trading, or dealing in securities, partnership interests or commodities, and any trade or business where the principal asset of such trade or business is the reputation or skill of one or more of its employees. Engineers and architects are omitted from specified service trades or businesses.
Phase-in of specified service business limitation. The exclusion from the definition of a qualified business for specified service trades or businesses does not apply for a taxpayer with taxable income less than a threshold amount. The “threshold amount” is $315,000 MFJ ($157,000 if single) and is indexed for inflation. For those with income above the threshold amount, the deduction phases out over $100,000 MFJ ($50,000 single).
Other items. Deduction does not reduce SE tax or AGI. Trusts may qualify for the deduction on their pass-through income.
Loss limitation rules §461 Excess business losses of a taxpayer other than a corporation are not allowed for the taxable year. An excess business loss for the taxable year is the excess of aggregate deductions of the taxpayer attributable to trades or businesses of the taxpayer (determined without regard to the limitation of the provision), over the sum of aggregate gross income or gain of the taxpayer plus a threshold amount. The threshold amount for a taxable year is $500,000 MFJ (250,000 single). Excess business losses not allowed are carried forward and treated as part of the taxpayer’s NOL carryforward. This limit applies at the partner or shareholder level. Each partner’s distributive share and each S corporation shareholder’s pro rata share of items of income, gain, deduction, or loss of the partnership or S corporation are taken into account in applying this limitation. This limitation applies after the passive loss rules.
Cash method of accounting For taxpayers with less than $25 million in average gross receipts (was $10 million) may use the cash method of accounting regardless of entity structure or industry.
Accounting for inventory Taxpayers with average gross receipts of less than $25 million (was $10 million) may account for inventories as materials and supplies that are not incidental (or conform to the taxpayer’s financial accounting treatment).
UNICAP §263A The threshold for the UNICAP rules (§263A) increases from $10 million to $25 million.
All events test All events occur fixing right to receive income when income can be determined with reasonable accuracy, but no later than when item included in applicable financial statement (AFS) starting in 2018.
Long-term contracts §460 Generally, the percentage of completion method of accounting is required for long-term contracts. For businesses with less than $25 million in gross receipts (was $1 0 million), the completed contract method of accounting can be used for construction contracts lasting less than two years.
Self-created Property Gain or loss from the disposition of self-created property is treated as ordinary income/loss. Self-created property includes patents, inventions, models or designs, and secret formulas. Musical compositions and copyrights are still a capital asset.
Like-kind exchanges The §1031 like-kind exchange rules are modified to provide that the nonrecognition is limited to real property that is not held primarily for sale. Generally applies to exchanges completed after 12/31/17. However, an exception is provided for any exchange if the property disposed of by the taxpayer in the exchange is disposed of on or before 12/31/17, or the property received by the taxpayer in the exchange is received on or before such date.
Meals and entertainment disallowed Expenses for entertainment, amusement, and recreation are not deductible. Dues for a club organized for business, pleasure, or social purposes are not deductible. Meals provided for the convenience of the employer at or near the employer’s premises are not deductible.
Listed property Home computers and peripheral equipment, including laptops, are no longer listed property.
Luxury auto limits For luxury autos placed in service after 12/31/17 for which the bonus depreciation is not claimed, depreciation amounts are increased.
Transportation fringe benefits The $20/month fringe benefit provision for bicycling to work is repealed.
Interest expense For businesses with more than $25 million of gross receipts, interest expense deductions are limited to interest income + 30% of adjusted taxable income plus interest on floor plan financing. Limitations apply at the partner/shareholder level; any excess is carried forward. Allocated excess business interest reduces basis. If ownership interest is disposed of with excess business interest that reduced basis, reverse the reduction.
§179 amount The §179 expensing amount is increased to $1 million (was $510,000). The phase-out starts at $2,500,000 (was $2,030,000), both being indexed for inflation, as well as the $25,000 sports utility vehicle limitation.
§179 qualified real property The definition of qualified real property eligible for §179 expensing is expanded to include any of the following improvements to nonresidential real property placed in service after the date such property was first placed in service: roofs; heating, ventilation, and air-conditioning; fire protection and alarm systems; and security systems.
§168(k) bonus depreciation Bonus depreciation is increased to 100% (was 50%) of qualifying property placed in service after 9/27/2017 and before 1/1/2023. A phase-out starts 12/31/2022. The requirement that property must be new to qualify for bonus depreciation has been repealed.
Net operating loss The two-year carryback and the special carryback provisions have been repealed, except for a two-year carryback for farming losses. NOLs may be carried forward indefinitely. The NOL deduction is limited to 80% of taxable income (determined without regard to the deduction) for losses arising in taxable years beginning after Dec. 31, 2017.
§199 deduction The §199 domestic production activity deduction is repealed.
Farm changes— depreciation and excess farm losses The seven-year recovery period for any machinery or equipment (other than any grain bin, cotton ginning asset, fence, or other land improvement) used in a farming business has been shortened to five years if the original use of which commences with the taxpayer and is placed in service after Dec. 31, 2017. Also repealed is the required use of the 150% declining balance method for property used in a farming business (i.e., for three-, five-, seven-, and ten-year property). Lastly, the excess farm losses limitation has been repealed.
Business credits—family leave credit For 2018 and 2019, a new employer credit is available for wages paid under a written plan during family or medical leave when the employer pays at least 50% of normal wages. The credit is 12.5% but increases by 0.25% (but not above 25%) for each 1% where rate of pay exceeds 50%. Limited to 12 weeks.
Rehab of historic structure credits The 10% credit for pre-1936 buildings has been repealed. The 20% credit for qualified rehabilitation expenditures with respect to a certified historic structure is allowable for a taxable year during the five-year period beginning in the taxable year in which the qualified rehabilitated building is placed in service.
Occurrence of a specified event such as (a) stock becoming readily tradable, (b) employee becomes excluded, or (c) §83(i) election revoked.
The corporation has a written plan under which, in the calendar year, not less than 80% of all employees who provide services to the corporation are granted stock options, or restricted stock units (RSUs), with the same rights and privileges to receive qualified stock.


text:
As Amended April 30, 1973.
Martha Goldin, Atty. (argued), Alan Saltzman, Saltzman & Goldin, Hollywood, Cal., for defendant-appellant.
Paul H. Sweeney, Asst. U. S. Atty. (argued), Los Angeles, Cal., for plaintiff-appellee.
Before WRIGHT and WALLACE, Circuit Judges, and EAST,a District Judge.
Appellant was convicted on three counts of an indictment charging him with violating 50 U.S.C. App. Sec. 462(a). In Count I he was charged with refusing to submit to induction on May 25, 1971. In Counts II and III he was charged with willfully failing to provide the local board with his current mailing address on two occasions in 1967, once about June 26 and once about December 12. We affirm the judgment of conviction on Count I and employ the concurrent sentence principle to decline review of Counts II and III.
Appellant contends that his conviction on Count I should be reversed because (1) there was no basis in fact for his I-A classification, and (2) the local board failed to consider his late request for a hardship deferment.
The district court found that appellant's failure to exhaust his administrative remedies1 within the Selective Service System precluded the court from considering the contention that there was no basis in fact for the I-A classification. Appellant had contended that unusual circumstances gave the district court discretion to excuse the failure to exhaust. The court felt that it had no such discretion in this case. A recitation of the facts is in order.
Appellant first registered with a local board in Santa Barbara, California on January 9, 1967. He was classified I-A on June 15, 1967 and found physically acceptable for service on March 5, 1968. On April 9, 1968 he was ordered to report for induction on May 6. He reported as ordered but refused to submit to induction.
On May 17 appellant wrote to the local board explaining that he had refused to submit to induction because of conscientious objection to war. In November of that year he requested, received, completed and returned SSS Form 150, the special form for registrants claiming conscientious objector (I-O or I-A-O) status.
On February 19, 1969 the United States Attorney's office declined to prosecute the May 6 refusal and suggested to the local board that it should consider the merits of appellant's I-O claim. The local board did so on April 7, 1969 and decided not to reopen appellant's classification. Appellant was sent SSS Form C-140L advising him of this action, the form containing no advice of appeal rights as none existed from the refusal of a local board to reopen a classification.
On May 13, 1969 appellant was again ordered to report for induction. At appellant's request the place of reporting was moved to Oakland and he reported there as ordered on July 9, 1969 but refused induction. For this refusal he was tried and acquitted in October 1970.
On February 8, 1971 the State Director ordered appellant's local board to reopen his classification and consider the merits of his I-O claim. This was done and the board rejected his claim on March 2. On March 8 appellant was sent SSS Form 110 notifying him of his I-A classification and advising him of his right to appeal. Appellant requested neither a personal appearance nor an appeal. On April 22 he was ordered to report for induction on May 25. It was appellant's refusal to submit to induction on May 25 that caused this prosecution.
Appellant contends that on these facts the district court should have exercised its discretion and excused the failure to appeal from the I-A classification of March 8, 1971 because appellant was unaware that his I-O claim had been rejected. In support of this contention he cites numerous cases in which the courts have relaxed the exhaustion requirement. None is in point, however, in the present case.
In Glover v. United States, 286 F.2d 84 (8th Cir. 1961) the court reversed a judgment of conviction, finding that no basis in fact existed for defendant's I-A classification and that his failure to exhaust administrative remedies should be excused because of "extremely exceptional and unusual circumstances." Id. at 91.
In Glover, the facts were that the registrant had appealed once from the denial of his claim for conscientious objector status. Although he had submitted no additional information in support of his claim his classification (and those of all others who had claimed but not been granted I-O status) had been reopened at the direction of National Headquarters for re-examination in light of two recent Supreme Court decisions. Defendant did not appeal from the I-A classification issued as a result of reopening but the court of appeals concluded that it would be inequitable to apply the exhaustion doctrine to bar review of his classification under these facts. In view of his earlier, unsuccessful appeal, the court felt that defendant was justified in believing that another appeal would be "repetitious, fruitless and vain." Id. at 90. See also United States v. Hayden, 445 F.2d 1365 (9th Cir. 1971); United States v. Goss, 6 SSLR 3044 (N.D.Cal.1972); but see United States v. Holby, 345 F.Supp. 639 (S.D. N.Y.1972).
Even if we followed Glover, it would not govern the present case because appellant here had never appealed from the issuance of a I-A classification. It would have been totally unreasonable for him to dismiss as an idle gesture the opportunity to appeal his classification. United States v. Deans, 436 F.2d 596 (3d Cir. 1971).
The other cases cited by appellant are further from the mark. In Donato v. United States, 302 F.2d 468 (9th Cir. 1962), we remanded for further consideration by the district court because of a showing by the defendant that he may have been physically prevented from taking an appeal within the allotted time. See also United States v. Peeler, 5 SSLR 3633 (E.D.N.C.1972).
In Wills v. United States, 384 F.2d 943 (9th Cir. 1967), we excused the defendant's failure to exhaust administrative remedies for two reasons: first, because his objection to his classification raised a constitutional question "on which the courts have little reason to defer to administrative determination . . ." Id. at 945,2 and second, because the notice of classification from which defendant had not taken an appeal did not tell the full story, to wit, that defendant had been declared a delinquent. The notice of delinquency was not sent until after the time for appeal had expired. Neither factor is present in the instant case.
In United States v. Davis, 413 F.2d 148 (4th Cir. 1969), the court reversed a judgment of conviction because the failure of the local board to advise defendant of the availability of a government appeal agent, as required by Local Board Memorandum 82, deprived defendant of a substantial procedural right. The court held that failure to exhaust appellate remedies is no bar to the presentation to the court of facts showing that the local board failed properly to advise the registrant of his right to appeal. This holding makes eminently good sense but it has no application where, as here, the local board did follow prescribed procedures in notifying appellant of his right to appeal.
Finally, United States v. Thompson, 5 SSLR 3595 (D.Or.1972), heavily relied upon by appellant, is also factually inapposite. There the court found that the combination of three unique factors was "sufficient to mislead the defendant and to cause his failure to appeal." These were (a) the unusual classification language written on his Form 110, (b) the fact that unlike on previous occasions no Form 217 (advice of appeal rights) was sent (although the Form 110, as in the present case, did contain such an advice of rights), and (c) the fact that within the time allowed for taking an appeal defendant was sent a notice cancelling an outstanding induction order. Under these circumstances, the court felt that defendant was justified in believing that no action had been taken on his I-O claim. As the present case is factually distinguishable we need not decide whether this court should follow Thompson.
"[I]n view of the ease with which appellant could have inquired of the board and learned the true status of his claim, we do not think it unreasonable to hold that he had no privilege to remain in ignorance. . . ."
We conclude that the district court was correct in deciding that under the facts of this case it had no discretion to excuse the exhaustion requirement. This case falls well within the settled rule in this circuit that failure to exhaust administrative remedies precludes a registrant from raising as a defense in a criminal prosecution the claim that his classification had no basis in fact. United States v. Maciel, 469 F.2d 718 (9th Cir. 1972); Lockhart v. United States, 420 F.2d 1143 (9th Cir. 1969); United States v. Deans, supra. See also McGee v. United States, 402 U.S. 479, 91 S.Ct. 1565, 29 L.Ed.2d 47 (1971); United States v. Zmuda, 423 F.2d 757 (3d Cir. 1970).
B. The claim for a hardship deferment.
On April 28 and May 21, 1971, subsequent to his receipt of the order to report for induction, appellant told the local board that he was married and that his wife was expecting a child in July and he asked to be considered for a hardship deferment. The clerk conveyed this to the board members who decided that the new informations submitted by appellant did not justify a delay of induction.
Appellant contends that the record shows the information was communicated to the members of the board only in the context of a request for postponement of his induction and that his request for reopening his classification was not considered as such. Assuming that the record supports this contention it is of no help to appellant.
The failure of the board to consider this request for a different classification was prejudicial only if the information made out a prima facie case for a different classification because of a change in circumstances (1) subsequent to the mailing of the induction order (2) beyond the control of the registrant. United States v. Stacey, 441 F.2d 508 (9th Cir. 1971).
The information submitted did not make out such a case. Appellant's marriage, even if subsequent to April 22, was not an event beyond his control. United States v. Dell'Anno, 436 F.2d 1198 (9th Cir. 1971). If appellant's wife was expecting a child in July it is apparent that they had anticipated it long before April 22. There was no post-induction order change of status. United States v. Hulphers, 421 F.2d 1291 (9th Cir. 1969).
The conviction on Count I is affirmed.
It is better to distinguish such cases from our present situation. See McKart v. United States, 395 U.S. 185, 204-207, 89 S.Ct. 1657, 23 L.Ed.2d 194 (1969) (opinion of Mr. Justice White, concurring in the result). Only misleading conduct on the part of the Selective Service System or its agents will excuse the failure by the registrant to present his claim for an exemption or deferment to the local board in the first instance. United States v. Sanders, 470 F.2d 937 (9th Cir. 1972); United States v. Timmins, 464 F.2d 385 (9th Cir. 1972). Accord: United States v. Cordova, 454 F.2d 763 (10th Cir. 1972); United States v. Wilson, 345 F.Supp. 894 (S.D.N.Y. 1972). But see United States v. Fargnoli, 458 F.2d 1237 (1st Cir. 1972). And such misleading conduct operates not to relax the exhaustion doctrine but as a complete defense to the charge.

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Several months ago, we told you about Ambuild Company v. LLC v. U.S., a very important case pending before the Court of Federal Claims (“COFC”). The AmBuild case was of particular interest to our firm because it concerned the interpretation of a Department of Veterans’ Affairs (“VA”) regulation, which the VA revised following an adverse ruling in our case, Miles Construction, LLC v. United States. AmBuild was of particular interest to SDVOSBs because of its potential impact on their due process rights in the context of status protests.
Well, the COFC issued its opinion. The decision is a major victory for veteran-owned businesses, wherein the Court rejects the VA’s attempt to circumvent the ruling in Miles, and reaffirms that the VA cannot cancel a concern’s SDVOSB status without first allowing it an opportunity to respond to potential eligibility issues.
Following the Miles decision, the VA revised its regulations. The amended version of 48 C.F.R. § 819.307 (which went into effect on September 30, 2013) added language that gave the VA the ability to determine the status of a protested concern based upon “a totality of the circumstances.” (48 C.F.R. 819.307(e)). In AmBuild, the VA relied on this language, arguing that it allowed the VA to consider facts or issues not specifically raised by the protesting party when reviewing a concern’s SDVOSB status. In effect, the VA argued that “totality of the circumstances” meant that it could review any potential issue affecting a concern’s eligibility under the SDVOSB Program, whether or not it was raised as part of a protest.
In the AmBuild decision, the COFC squarely rejected the VA’s argument. The Court again emphasized the importance of a protested party’s due process rights, and the necessity of giving a protested party a chance to respond to any allegations affecting its status. It stated that: “The requirements of due process rest at the core of our nation’s Constitution and governmental institutions and are ingrained in our national traditions. . .” As a result, “[b]efore adverse action is to be taken by an agency, the individual immediately concerned should be apprised not only of the contemplated action with sufficient precision to permit his preparation to resist, but, before final action, he should be apprised of the evidence and contentions brought forward against him so that he may meet them.” Accordingly, the Court reasoned that the VA’s “strained construction” of 48 C.F.R. § 819.307 “would convert [the VA’s] scope of review into a general license to act on a protest without giving notice of issues not raised by the protesting party or contracting officer but rather generated sua sponte by [the VA]. The requirements of procedural due process cannot be so easily cast aside.” The Court concluded that the 2013 amendment to 48 C.F.R. § 819.307 may be interpreted to establish a scope of review only – not to abrogate the requirements of procedural due process. Thus, going forward, the “totality of the circumstances” language in 48 C.F.R. § 819.307(e) must be read to include only those issues to which the protested party was afforded an opportunity to respond. That is, the VA may consider the totality of the information available relating to a protested concern’s eligibility for the SDVOSB Program, but only within the context of the issues raised in the protest itself. The Court ruled that AmBuild was entitled to reinstatement to the VetBiz database, that it must be considered for the award of the contract at issue in the protest, and that AmBuild was entitled to its costs of suit.
This is a major victory for VOSB/SDVOSBs. AmBuild reaffirms that the VA cannot cancel a concern’s VOSB/SDVOSB status without explicitly notifying that concern of any and all potential issues concerning its eligibility status, giving that concern an opportunity to provide a meaningful response, and allowing that concern to participate in the investigatory process. It will be interesting to see if the VA attempts to amend its regulations again to circumvent the ramifications of this decision.
Edward T. DeLisle is a Partner in the firm and a member of the Federal Contracting Practice Group. Ed frequently advises contractors on federal contracting matters including bid protests, claims and appeals, procurement issues, small business issues and dispute resolution.
Maria L. Panichelli is an Associate in the firm’s Federal Contracting Practice Group.