Legal News & Views

The South Goa Consumer Disputes Redressal Forum (SGCDRF) dismissed a complaint filed by parents of a deceased victim of a fatal accident that took place in Ponda in 2004, against the New India Assurance Company, Margao, as the deceased Sunil N Kadam was riding the vehicle with a learner's license. The order stated that the claim of the complaint, the father of the victim, Narsing Nana Kadam, was rightly repudiated by the insurance company. Kadam, a resident of Bicholim, had filed a complaint under Section 12 of the Consumer Protection Act, 1986, alleging deficiency-in-service against the insurance company praying for a sum of 2 lakh alongwith 18% interest and also for a sum of 50,000 towards costs and legal expenses. As per the facts of the case, the deceased who was employed as a mechanical engineer at a pharma company located at Verna Industrial estate owned a motor cycle insured with the insurance company under a policy that was valid up to July 25, 2005. On No...

I: A consumer forum has held that an insurance company cannot reject a claim merely on the ground that the premium was received late. The forum directed IFFCO Tokio General Insurance Company to pay Andheri (E) resident Arvind Pithva the insured amount of Rs1.25 lakh for his stolen autorickshaw along with Rs55,000 compensation. Pithva had purchased the rickshaw on a loan for Rs1.25 lakh and it was insured with the company. The insurance was valid from June 21, 2008 to June 21, 2009. According to a complaint filed with the Mumbai District Consumer Disputes Redressal Forum, he had parked the rickshaw in front of his house on June 26, 2008, but the next morning, he could not find it. Pithva filed a complaint with the Andheri police, intimated the company about the theft and filed his claim. But the insurance claim was rejected. The company told Pithva that since the premium was paid on June 25, 2008, it was not liable to pay the insurance amount. The police informed the court that the...

A consumer forum has said Rotational Field Quantum Magnetic Resonance (RFQMR), a non-invasive osteoarthritis treatment, could not be called an alternative or experimental therapy and ordered an insurance firm to pay up for rejecting two claims. Dismissing New India Assurance Co's argument that the treatment was not recognized by the Indian Medical Council, the forum asked it to pay first complainant Sanyuktaben Shah the insured amount of Rs 1.05 lakh with a compensation of about Rs 46,000, and second complainant Bhisham Lambh Rs 1.30 lakh with a compensation of Rs 40,000. The forum held that the insurance company had not produced any evidence to show that RFQMR was not recognized by the Indian Medical Council. "Only mentioning the same in the mediclaim policy clause would not be held just and proper for repudiating the claim," it said. Vile Parle resident Sanyuktaben Shah, in her complaint on 2010, said she came to know about RFQMR about five years ago when osteoa...

The District Consumers’ Grievances Redressal Forum has fined an insurance company for denying the mediclaim provision despite the insured party being fully eligible for it. The Forum, in its final order passed on Aug. 3, 2013, has directed the company to pay Rs. 4,814.30 as the balance amount of hospital bill, Rs. 5,000 as compensation to the complainant for mental torture and Rs. 2,000 for the expenses incurred on the case proceedings within a period of two months, failing which an interest of 9% will be charged on the total amount of Rs. 11,814.30. The complainant also has the option of lodging a criminal case against the insurance company under Column 27 of the Consumers’ Protection Act. The complainant, S.S. Padmaraj, 55, a businessman residing in Lakshmipuram in city, had availed a Mediclaim insurance policy 26 years ago from United India Insurance Company Limited, Direct Agents Branch, Mysore covering the lives of the policy holder, his wife and daughter. Under the said insu...

SpiceJet has been directed by a consumer forum here to pay Rs one lakh to a passenger for not allowing all members of his family to board the plane despite having confirmed tickets and making them travel on two different flights while returning to Delhi from Goa. The East District Consumer Disputes Redressal Forum noted that it was "cruelty" on the part of SpiceJet to split the family into two groups especially when they had children with them and held it guilty of unfair trade practice. The forum noted that since the airline had not opposed the family's contention, that four passengers who arrived after them were allowed to board and then only three members of their group were later accommodated on the plane, it showed that SpiceJet had overbooked their flight. "Allegation of the complainant has not been specifically denied (by airline)... Entire conduct of respondent (SpiceJet) is such which points only towards one conclusion that the airline had infact over...

In a recent case, the Bombay High Court has ruled that merely agreeing to allow one party to appoint arbitrators does not, in any way, forfeit the other party's right to object to the actual appointment. One valid ground for raising such an objection is questionable bias. The court ruling also establishes that once a party raises the objections, the arbitrator must give them a chance to present their case. Passing an award without hearing these objections, even if it is not addressed through a formal application, will be considered illegal. However, the arbitral tribunal itself will deal with such matters, even in cases involving a sole arbitrator. Therefore, if the tribunal is of the opinion that the appointment is fair and just, it will continue with the proceedings and pass the award. The landmark judgement In 2011, The Loot (India) Private Ltd took a Rs 2 crore loan from Reliance Capital. As per the signed agreement, the latter reserved the right to appoint a sole arbitrat...

The District Consumer Dispute Redressal Forum has directed the M O P Vaishnav College for Women in Chennai to refund tuition fee amounting to 28,430 with 9% interest to a student for having withheld her original certificates for two years. In its order, issued in the month of May, the forum also directed the college to pay 20,000 as compensation for mental agony caused to the student and another 2,000 as cost to be paid to her father. Nithyusha, daughter of K L N Phani, got admission for the MA Visual Communication course in the college, but discontinued after nine days. Dr Phani, a senior scientist at CSIR-Central Electrochemical Research Institute in Karaikudi, lives in Kumaran Nagar, Trichy. Phani paid a fee of 29,430 to get his daughter into the course in July 2011. Nithyusha discontinued her studies after she fell ill due to food poisoning in the hostel. When Phani requested the institution to return the original certificates and refund the tuition fee, it demanded that the e...

Budget carrier SpiceJet has been directed by a consumer forum here to pay a compensation of Rs 28,000 to a couple for failing to take care of their luggage, which was damaged and tampered with while in transit. The South West District Consumer Disputes Redressal Forum noted that the luggage was intact when it was checked-in by the complainants at Srinagar Airport, but on reaching Delhi Airport one of the bags was found to be damaged with its lock removed. "The tampering has been done during transit, when the baggage was in the custody of the opposite party (SpiceJet), which failed to take proper and adequate care of the properties entrusted to them by a consumer and are liable for deficiency in service," a bench presided by Narendra Kumar said. The forum directed the airline to pay the complainants, Delhi residents R Raja and M Nuthan R Ballal, Rs 20,289 towards items found missing from their luggage and Rs 8,000 as compensation and litigation cost. The couple had su...

A builder will have to pay a Chembur resident Rs 23.8 lakh for not handing possession of a 680-sq ft flat booked for Rs 2.72 lakh in 1994. P K Constructions and its former partners will also have to pay the complainant, Lokeshwar Singh Kshatriya, compensation of around Rs 6.5 lakh. Kshatriya bought the flat in an upcoming housing complex known as Mahaveer Nagar in Mira Road. He paid Rs 2.72 lakh, along with Rs 35,320 towards maintenance charges, etc. Though the builder had agreed to grant possession soon, there was no development for several years. Kshatriya alleged that he eventually learnt that in April 2009 the builder had demolished the building where the flat was situated and so the possibility of getting the flat vanished. In 2010, he filed a complaint in the Maharashtra State Consumer Disputes Redressal Commission, praying for either possession of the flat in the same project or any other project undertaken by the builder. Alternatively, he claimed compensation of Rs 23.8 l...

The state consumer commission has penalised a builder for failing to hand over the possession of a ready flat booked by a Dombivli resident four years ago, despite receiving a substantial part of the payment. The Maharashtra State Consumer Disputes Redressal Commission has directed Aditi Land & Infrastructure Developers to pay Pushpa Mehta a compensation of Rs2 lakh for not giving her the Ghatkopar flat, even though she had paid Rs32 lakh of the Rs35 lakh due to them. The commission has given the developer two months to hand over the 675-sq ft flat, failing which the developer will have to shell out an additional penalty of Rs1,000 a day. Pushpa and her late husband Jayantilal had booked the flat In July 2009. The developer executed a sale deed after they paid a booking amount of Rs12 lakh. The couple then got a home loan from the Zoroastrian Co-operative Bank, which advanced them Rs13 lakh, credited directly to the developer’s account. They also got insurance for the flat...

A fall at home due to slipping of foot is an accident and claim is payable under an accident policy. Background: When an old person slips at home, resulting in subsequent death, can the insurance company reject a claim on the presumption that the fall was age-related and hence the death was due to a natural cause? In a recent judgment delivered by S M Ratnakar, along with member S S Patil, the South Mumbai district consumer forum ruled that a claim cannot be rejected on such a pretext. Case Study: Dr Shirish Vakil had taken Janata Personal Accident Insurance Policy from National Insurance Co when he was 69 years old for a period of 12 years (November 12, 1997-November 11. 2009) with a sum insured of Rs 5 lakh. Shirish, though retired, was in good health. On November 3, 2009, he slipped and fell at home. The fall impacted the rear portion of his head, making him feel giddy. There was no serious injury visible externally. But at night, his condition deteriorated and he was ta...

It has come to the notice of Income Tax Department that many times the tax deductors, after deducting TDS from specified payments, are deliberately not depositing the taxes so deducted in Government account and continue to deploy the funds so retained for business purposes or for personal use. Such retention of Government dues beyond the due date is an offence liable for prosecution under Section 276B of the Income Tax Act, 1961. The defaulter, if convicted, can be sentenced to Rigorous Imprisonment (RI) for a term which can extend upto seven years. The TDS units of Income Tax Department have been taking up prosecution proceedings in suitable cases where TDS has been retained beyond the due date. The Central Board of Direct Taxes has partly modified existing guidelines for identification of cases for launching prosecution. As per the revised guidelines, the criterion of minimum retention period of 12 months has been dispensed with. For the benefit of public at large, it is now clari...

An employee covered under the employees provident fund (EPF) act will not cease to enjoy the benefit merely on being transferred to another division of a organization, the apex consumer commission has ruled. "Once an employee is transferred to another division within the organization, his coverage under the EPF Act is not suspended," the National Consumer Disputes Redressal Commission (NCDRC) said. A bench headed by Justice KS Chaudhari made the observation while upholding the orders of the Odisha state and district consumer fora which had directed the Regional Provident Fund Commissioner (RPFC) to pay the pension amount for GSN Reddy's service since 1981 with the Podagada and Kapur dam divisions till his death in 1987. RPFC had contended that Reddy was not entitled to pension as there was a break in his membership under the EPF scheme when he was transferred from one division to another in November 1983. The Odisha state commission had upheld a district...

The Kerala High Court has held as arbitrary and illegal the decision of the State Bank of India to publish the photographs of loan defaulters in newspapers. Allowing writ petitions filed by two defaulters against the SBI notice, the court on Tuesday observed that the threat held out by banks to publish the photographs of defaulters in newspapers lacked legislative sanction. Justice V. Chitambaresh said: “The practice of exhibiting a photograph of a person and shamming him in public for the sin of being in an impecunious condition cannot be encouraged in civilised societies like ours.” The judge further observed that there was nothing immoral in their failure to repay the loans owing to a floundering business or other unavoidable reasons. The court added that some of the borrowers might even be driven to commit suicide fearing ignominy on account of their photographs being published in newspapers. “It will remain a permanent taboo for their family,” the court observed. The mo...

The State Consumer Disputes Redressal Commission has held that repudiation of an insurance claim by invoking an exclusion clause which was not brought to the notice of the insured is arbitrary and not sustainable in the eyes of law. Holding Bajaj Allianz General Insurance Co Ltd guilty of deficiency in service, the commission directed it to pay the widow of a biker who died in an accident in 2009 the Rs 5 lakh insurance amount along with compensation of Rs 1.60 lakh. The company had repudiated the claim on the ground that 121 mg/ltr of ethyl alcohol was found in the blood sample of the insured victim at the time of the mishap, which violated the policy's terms and conditions. On December 24, 2009, Achala Marde's husband Rudrani met with an accident and died before being admitted to the hospital. Subsequently, Achala's insurance claim was rejected; following which a district forum rejected her complaint. Aggrieved, in 2011, she filed an appeal in the state commission. ...

Buying extra floor space index or paying a penalty cannot be a way to regularize an unauthorized construction, the Bombay high court has ruled. Refusing to come to the aid of a seven-storey building in the Campa Cola compound in Worli, Justice Roshan Dalvi upheld an order vacating the stay on the demolition of the top two floors of Shubh apartments. "Purchase of the FSI cannot legalize such unauthorized construction," said the judge. The court said that if the building rights in the form of FSI of a plot or layout were exhausted, then additional unauthorized construction cannot be authorized in violation of the sanctioned plans. "Just as all constructions must conform within the extent of the FSI for its regularization on an individual plot, all construction in a layout must conform to the total FSI of the plot in that layout. That having been exceeded, the construction would be in violation of the Municipal Act. That would also be wholly unauthorized construction...

The Calcutta High Court on Wednesday directed that no prisoner could be handcuffed or chained without magisterial permission, while asking the West Bengal government to pay compensation of Rs 15,000 to a youth, who was subjected to such treatment at a hospital in Siliguri. A division bench comprising Chief Justice Arun Mishra and Justice Joymalyo Bagchi ordered that no prisoner could be handcuffed or chained, while directing that in case of prisoners perceived to be dangerous, the police would have to take prior permission of a magistrate for handcuffing or chaining them. The police could use such measures on its own only when an accused perceived to be dangerous was being taken to the police station following arrest. A PIL had been moved before the high court claiming that Santosh Sahani was arrested in Siliguri on April 10 during a protest by Left organisations over the death of a student while being taken to jail after courting arrest in a law-violation programme. Sahani, w...

Even if a criminal case is pending against a person the passport office can't as a rule revoke his passport, Delhi high court has clarified. The court said a passport can be impounded only in "appropriate cases" where cogent reasons have to be given in writing by the RPO. Accepting the plea of a man, facing trial in a matrimonial case lodged by his wife, Justice V K Jain directed the passport authority to release his passport which was revoked on the ground of criminal charges against him. The court, however, directed him not to leave the country without its permission and also asked him to attend the ongoing criminal proceedings. Allowing Manish Kumar Mittal's plea against the passport authority, Justice Jain noted, "The order passed by the Regional Passport Officer directing the petitioner (Mittal) to surrender his passport as well as the order passed by the appellate authority are, hereby, set aside. The respondents (authorities) are directed to release t...

Central Excise – Liability of new owner of property The Supreme Court, recently, set aside the judgment of the Allahabad High Court and ruled that the buyer of an industrial unit in auction "free from all encumbrances" is not bound to pay the excise duty arrears of the previous owner. The sale deed in this case included a clause which said that "all these statutory liabilities arising out of the land shall be borne by purchaser". The Supreme Court stated that it was only that statutory liability arising out of the land, building and machinery which is to be discharged by the purchaser. Fact: One M/s. P.J. Steels Pvt. Ltd. (borrower) had taken loans/financial accommodation from the Uttar Pradesh Financial Corporation (UPFC). Because of the consistent default on the part of the said borrower in re-paying the loans, the UPFC took possession of the land and building of the borrower which were mortgaged/kept as security with the UPFC. This action was taken under S...

A secured creditor has two options when the borrower or the guarantor defaults in repaying the loan. Under Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (Sarfaesi), the creditor can either take possession of the asset on his own or employ Section 14 and seek the help of the magistrate to get possession. It is not necessary that the first course should be adopted and having failed, the second course should be resorted to. This was stated by the Supreme Court last week while allowing the appeals of Standard Chartered Bank and State Bank of India in two appeals against the Madras High Court judgment. The Supreme Court stated that the high court view was wrong and observed: "No doubt that a secured creditor may initially resort to Section 13 and on facing resistance he may still approach the magistrate under Section 14. But it is not mandatory for the creditor to make attempt to obtain possession on his own before a...

The Bombay high court on Tuesday observed that a suicide note alone was not enough proof in a case of abetment of suicide and dismissed an appeal against acquittal in one case. In the absence of independent evidence to prove a case of abetment, Justice A H Joshi dismissed the appeal filed by the victim's family. The judge was hearing an appeal filed by the family of a suicide victim against the acquittal. The appeal, filed last year by one Sunil Bhavsar, challenged a sessions court verdict of acquittal. His lawyer argued that it was a case in which a woman was pushed into committing suicide and that a suicide note she left behind "proved the abetment charge". She was harassed and threatened, the lawyer argued. The case was from Nashik and the lawyer said a complaint was filed in 2010 with the Nashik police about the harassment and threats she faced that led to her eventual suicide. Hence, the abetment to suicide charge is proved, he argued and the acquittal ought to ...

ANTI-MONEY LAUNDERING/ COUNTER-FINANCING OF TERRORISM (AML/CFT) - GUIDELINES FOR INSURERS CIRCULAR NO. IRDA/SDD/MISC/CIR/158/08/2013, DATED 8-8-2013 Attention is drawn to Annexure I of the Master Circular 2010 on AML/CFT guidelines - Circular Ref: IRDA/F&I/CIR/AML/158/09/2010 dated 24th September, 2010 and subsequent modification thereto vide Circular Ref: IRDA/SDD/MISC/Cir/261/12/2012 dated, 27th December, 2012. 2. The Authority had vide circular dated 27th December, 2012 stipulated: "Current passbook with details of permanent/present residence address (updated upto the previous month) and Current Statement of bank account with details of permanent /present residence address (as downloaded) were considered as officially valid document towards both identity and address wherein written confirmation from banks need not be insisted upon in case of micro insurance products" 3. The Authority, hereby, extends the above said provision to all the insurance products (and ...

1.     Commissioner of Income-tax-1, Mumbai vs. Yatish Trading Co. (P.) Ltd.                 Fact that assessee was trading in shares would not estop assessee from dealing in shares as investment and to offer such gain for tax under head 'capital gains'.              Held: Gain from sale of shares held as investment to be taxed as capital gains and not as business income -IT 2.     Commissioner of Income-tax, Udaipur vs. Banswara Synthetic Ltd.        Lease rentals paid are allowable as business expenditure and not as interest by treating cost of leased assets as loan amount         Held: Sum paid as rent is a business exp.; can’t be treated as interest by taking cost of leased assets as loan -IT 3. Narasimha Raju Rudra Raju vs. Assistant Commissioner of Income-tax, Circle          Sec. 54F exemption allowe...

In a recent ruling, the Kerala High court, in Kerala Classified Hotels and Resorts Association and others vs Union of India and others (2013-TIOL-533-HC-KERALA-ST), held the levy of service tax on supply of food and beverages by restaurants and services of lodging provided by hotels as unconstitutional. The petitions before the high court involved two specific transactions related to restaurants and hotels on which the court was asked to rule on the Constitutional validity of levy of service tax by the central government on these businesses. The first question was whether the central government has the Constitutional right to levy service tax on the service portion involved in the transaction of sale of food and beverages by restaurants. As per the Constitution of India, the definition of tax on sale or purchase of goods was expanded by the 46th amendment to the Constitution, which inserted the clause 29A to the article 366, to include: "(f) a tax on the supply, by way of o...

No Need to file Service Tax return (ST-3) when no service is rendered during the relevant period and even not required to opt for VCES We are sharing with you an important judgement of the Hon’ble Kolkata Tribunal in the case of M/s Suchak Marketing Pvt Ltd Vs. Comm. of Service Tax, Kolkata [2013 (6) TMI 641] and detailed analysis on following issue: Issue: Whether Service provider is required to file Service Tax Return where no service is rendered? Facts of the case: M/s Suchak Marketing Pvt Ltd (“the Assessee“ or “Suchak”) is registered under the taxable service category of constructions in respect of commercial or industrial building and civil structure services under Chapter V of the Finance Act, 1994 (“the Finance Act”). During the period April, 2005 to March, 2008 the Assessee has not provided any service and also has not filed Service Tax Return. However the Assessee filed six “Nil” belated Service tax return for the period September, 2005 to March, 2008 on November...