Legal News & Views

The Supreme Court has ruled that those employees getting the benefit of the Employees State Insurance Act are not entitled to compensation invoking the Workmen's Compensation Act. In this case, Dhropadabai vs M/s Technocraft Toolings, the employee suffered chest pain at the work place and he was taken to a hospital where he died. His widow and children demanded compensation under the Workmen's Compensation Act, as he had died in the course of employment. The employer denied this and in addition argued that those who are covered by the ESI Act are not entitled to compensation. The labour court rejected this argument and awarded Rs 4 lakh to the widow. On appeal, the Bombay High Court denied compensation, as he was an insured person. That view was upheld by the Supreme Court. The court had earlier asked the employer to deposit Rs 4 lakh in the registry and the widow had withdrawn it. The court stated that the amount should not be recovered from the widow now as she had fought th...

A high court cannot go into the factual aspects of a dispute over stop-payment of cheques and they should be tested during the trial, the Supreme Court stated in the judgment, HMT Watches Ltd vs M A Abida. The latter was a re-distribution stockist of the firm and she issued 57 cheques which bounced. The company filed complaints under the Negotiable Instruments Act. She argued that the cheques were given as security and therefore there was no liability, the main ingredient in Section 138 of the Act. Moreover, the cheques were stopped not because of insufficiency of fund. The Kerala High Court accepted her arguments and quashed the complaints. The firm appealed to the Supreme Court which stated that the high court had exceeded its jurisdiction by analysing disputed facts. It asked the trial court to proceed with the criminal complaint. Article referred: http://www.business-standard.com/article/opinion/caution-on-injunctions-against-banks-115032900673_1.html

Injunctions against banks for making payments to the beneficiary must be given cautiously, as judicial interference in the normal practices of the market can have disastrous consequences. It would affect the trustworthiness of Indian banks and markets, the Supreme Court stated in its judgment last week in the case, Millenium Wires vs State Trading Corporation. The two firms entered into an agreement for importing copper wire from Singapore and Malaysian companies. STC opened four letters of credit with Allahabad Bank, the issuing bank, and Malayn Banking BHD, the confirming bank. The latter bank released payments on presentation of letter of credit, which was opposed by Millenium Wires. It sought injunction from the Delhi High Court. It was rejected, leading to the appeal in the Supreme Court. On injunctions, the court emphasised that courts must be slow in granting injunctions restraining the realisation of a bank guarantee or letter of credit. Business persons take risks which are n...

The apex consumer commission has asked national carrier Air India to pay Rs 1.7 lakh to a woman, who was not allowed to board a London-Delhi flight, saying it cannot afford to "harass" its passengers. National Consumer Disputes Redressal Commission (NCDRC) bench, presided by Justice J M Malik, directed the airline to pay the money to Delhi resident Geetika Sachdeva, who was made to buy fresh tickets after borrowing money, noting that she was made to "pay through the nose". "Air India cannot afford to harass and cause anger, anguish, frustration, sadness to its customers like this," it said. The apex commission passed the order while dismissing Air India's appeal against the order of state commission, with a cost of Rs 25,000 saying the "incident highlights arrogance, highhandedness and despotic attitude of the opposite party (Air India)". The carrier was asked to pay Rs 1,45,000 to the woman towards ticket price and compensation and ...

General Ctrcular No. O5/2O15 F. No. 1/8/2013-CL-V Government of India Ministry of Corporate Affairs 5th Floor, A Wing, Shastri Bhavan, Dr R.P. Road, New Delhi. Datedt 30th Match, 2015 ................ Stakeholders have sought clarifications as to whether amounts received by private companies from their members, directors or their relatives prior to 1st April, 2014 shall be considered as deposits under the Companies Act, 2013 as such amounts were not treated as 'deposits' under section 58A of the Companies Act, 1956 and rules made thereunder. 2.The matter has been examined in consultation with RBI and it is clarified that such amounts received by private companies prior to 16t April, 2Ol4 shall not be treated as 'deposits' under the Companies Act,2013 and Companies (Acceptance of Deposits) Rules, 2014 subject to the condition that relevant private company shall disclose, in the notes to its financial statement for the financial year commencin...

Binani Cement Ltd vs. CIT (Calcutta High Court) March 26th, 2015 S. 37(1): Expenditure on an aborted capital project is revenue in nature & can be claimed as deduction in year of abandoning the project (i) Expenditure made for construction/acquisition of new facility subsequently abandoned at the work-in-progress stage is allowable as incurred wholly or exclusively for the purpose of assessee’s business. It is revenue expenditure as it does not result in the acquisition of an asset or an advantage of an enduring nature; (ii) The expenditure has to be claimed in the year in which the decision is taken to abandon the project. There would have been no occasion to claim the deduction if the work-in-progress had completed its course. Because the project was abandoned the work-in-progress did not proceed any further. The decision to abandon the project was the cause for claiming the deduction. The decision was taken in the relevant year. It can therefore be safely concluded that ...

While deciding on the issue of rejection of claim on the ground of inordinate delay and laches in an industrial dispute, the bench of Sanjay Karol, J. held that delay in raising the dispute and referring the same to the Labour Court for adjudication is not erroneous and it also does not debar the workman from claiming rightful relief from his employer. The Court relying on Raghubir Singh v. General Manager, Haryana Roadways, (2014) 10 SCC 301, stated that the workman is entitled for reinstatement, back wages and consequential benefits from the date of raising the industrial dispute. Giving reasons, the Court observed that it is reasonable to adjudicate the industrial dispute in spite of the delay in raising and referring the matter, since there is no mention of any loss or unavailability of material evidence due to the delay. It further stated that the Labour Court is statutorily duty bound to answer the points of dispute referred to it by deciding the same on merits of the case, an...

The Supreme Court has said that it was incumbent upon courts to bear in mind the impact of the offence on the society including on the victim and there should be proportionality between the offence committed and the penalty imposed. Holding that "sentencing for any offence has a social goal", a bench of Justice Dipak Misra and Justice Prafulla C. Pant in a recent judgment said: "It is obligatory on the part of the Court to keep in mind the impact of the offence on the society, and its ramification including the repercussion on the victim." "For the purpose of just and proper punishment, not only the accused must be made to realize that the crime was committed by him, but there should be proportionality between the offence committed and the penalty imposed," said Justice Pant pronouncing the judgment. "In each case, facts and circumstances of that case are always required to be taken into consideration," the court said, while upholding the ...

Holding that mere confession in the absence of evidence cannot be the basis for filing chargesheet, Madras High Court has quashed a murder case against a man, charged with killing his wife, and six others, accused of abetting it. The accused need not be made to go through the rigour of trial, as the entire case had been built on mere confessions made by key suspects to police, Justice R S Ramanathan said allowing a petition by the accused seeking quashing of the case in a magistrate court. "Charge sheet cannot be filed against the accused solely on the basis of confession, which does not lead to recovery (of evidence). In this case, except the confession, there is no recovery. Therefore, the confession cannot be the basis for conviction, even accepting it as true," the Judge ruled. Quoting Supreme Court verdicts, he said "When the confession does not lead to recovery, the confession is inadmissible in law, and the chargesheet based on such confession has ...

The Hyderabad High Court has ruled that  a court has the power to receive additional evidence only in exceptional circumstances and only when the court thinks that refusal  to receive such evidence would result in failure of justice in a criminal revision case. Even the provision for receiving additional evidence in a criminal appeal has to be sparingly used by courts, the High Court has observed. Justice R Kantha Rao passed this order while dismissing a revision petition filed by one Y Ram Naresh Naidu challenging the dismissal of his revision petition by the sessions judge of fast-track court at Narsapur in West Godavari district of Andhra Pradesh. The sessions judge had held that the court of revision dealing with criminal revision petition can only examine the legality, propriety or correctness of the order sought to be revised and there is no specific provision in the CrPC permitting additional evidence in revision petitions and the revision petition was, therefore, ...

CIT vs. M/s SMSL-UANRCL (JV) (Bombay High Court) The High Court had to consider whether the entire income earned by the joint venture company is liable to be taxed in the hand of one of the members of the assessee company without appreciating the fact that the contract was awarded to the assessee company and not to the individual member of the assessee company. It also had to consider the impact of C.H. Acthaiya 218 ITR 239 (SC) and Murugesa Naicker Mansion 244 ITR 461 (SC) wherein it was held that AO is not precluded from taxing the right person merely on the ground that a wrong person is taxable. HELD by the High Court dismissing the appeal: The ITAT has as a matter of fact found that the assessee/ joint venture did not execute the contract work and the said work was done by one of its constituents namely SMS Infrastructure Limited. It is also found that the receipts for the said project work are reflected in the books of account of SMS Infrastructure Limited and in return, said...

S. 10(23C)(v) & (vi): Mere surplus does not mean institution is existing for making profit. The predominant object test must be applied. The AO must verify the activities of the institution from year to year The Supreme Court had to consider appeals arising from the judgements of the Uttarakhand High Court in Queens Equcational Society 319 ITR 160 and the Punjab and Haryana High Court in Pine Grove International Charitable Trust v. Union of India (2010) 327 ITR 273 concerning the interpretation of s.10(23C) (iiiad) and (vi) of the Income-tax Act. HELD by the Supreme Court reversing Queens Equcational Society and affirming Pine Grove International Charitable Trust v. Union of India: (1) Where an educational institution carries on the activity of education primarily for educating persons, the fact that it makes a surplus does not lead to the conclusion that it ceases to exist solely for educational purposes and becomes an institution for the purpose of making profit. (2) The p...

In a significant pro-consumer move, life insurance companies will now not be able to deny an insurance claim after three years of commencement of policy on any ground. This has become possible after the amendment passed by Parliament last week in the Insurance Laws (Amendment) Bill, 2015. According to the amendment, no policy will be called into question on any ground after three years. Life insurance companies will have to prove within three years from the commencement of the policy that the policy-holder had suppressed any health-related information or committed fraud. “People take insurance to ensure that after their death, people who are dependent on them can still manage with their day-to-day needs. However, sometimes insurance companies unnecessarily reject claims on the basis that the policy-holder had not made full discourse. This had to some extent generated mistrust among people about insurance companies and had hindered their penetration,” government sources said. It is e...

The Supreme Court has held that development officers working in Life Insurance Corporation of India (LIC) cannot be put in the category of "workmen" under the provisions of Industrial Disputes Act. A bench of justices Dipak Misra and Prafulla C Pant upheld the decision of Allahabad High Court which had said that the development officers could not be treated as workmen. "We conclude and hold that the development officers working in LIC are not 'workmen' under Section 2(s) of the Industrial Disputes Act and accordingly we do not find any flaw in the judgment rendered by the High Court," the bench said. The apex court was hearing an appeal by few development officers of LIC, who had challenged the decision of the high court which had overturned the award passed by the Industrial Tribunal on the ground that that the aggrieved persons were not adjudicable by the tribunal as it had no jurisdiction to entertain the dispute. The high court had held that the...

The Madras high court on Tuesday struck down several key provisions of the Trademarks Act, 1999, which established the Intellectual Property Appellate Board (IPAB), intellectual property expert and petitioner Shamnad Basheer confirmed. A two-judge bench headed by chief justice Sanjay Kishan Kaul declared the provisions of the Trademarks Act important to the IPAB’s composition unconstitutional. The high court ruled the provision allowing members of the Indian Legal Services to become judicial members of IPAB was invalid. Further, the tribunal was to be have mainly judges or those who were qualified to be judges, the court said. Article referred: http://www.livemint.com/Politics/vqmsCh6gKzt1mWcunIzBNK/Key-provisions-in-Trademarks-Act-are-unconstitutional-HC.html

Testimony of an alleged rape survivor stands on a higher pedestal but courts should not blindly rely upon such statements, the Supreme Court has ruled. A bench of Justices Dipak Misra and N V Ramana said courts should try to find out direct or circumstantial evidence for conviction in rape cases if testimony of the survivor was not reliable and in such cases medical evidence should be taken into account. "The grammar of law permits that the testimony of a prosecutrix can be accepted without any corroboration without material particulars, for she has to be placed on a higher pedestal, but when a court, on studied scrutiny of the evidence, finds it difficult to accept the version of the prosecutrix because it is not unreproachable, there is requirement for search of such direct or circumstantial evidence which would lend assurance to her testimony," the court said. The court acquitted a man of rape and kidnapping charges after coming to the conclusion that the testimony ...

If in case of a death due to rash and negligent driving, the driver is unable to pay adequate compensation to the victim's family because of his poor financial status, the state government must step in and pay the amount, the Supreme Court has ruled. "We are of the view that where the accused is unable to pay adequate compensation, the court ought to have awarded compensation under Section 357A from the funds available under the Victim Compensation Scheme framed under the said section," a bench of justices T S Thakur and A K Goel said. It increased the amount of compensation awarded by Himachal Pradesh high court to family members of a girl who died in a road accident from Rs 40,000 to Rs 4 lakh. Considering the poor financial health of the convicted truck driver, the bench directed him to pay Rs one lakh and asked the state government to pay Rs three lakh. The bench said if the driver failed to pay the amount, he had to undergo six months' jail term and in tha...

Amid the controversy over “ghar wapsi”, the Supreme Court on Thursday ruled that a person who “reconverts” from Christianity to Hinduism shall be entitled to reservation benefits if his forefathers belonged to a Scheduled Caste and the community accepts him after “reconversion”. Citing articles by B R Ambedkar and James Massey, and reports by Mandal Commission and Chinappa Commission, the court said: “There has been detailed study to indicate the Scheduled Caste persons belonging to Hindu religion, who had embraced Christianity with some kind of hope or aspiration, have remained socially, educationally and economically backward.” The bench of Justices Dipak Misra and V Gopala Gowda held that a person shall not be deprived of reservation benefits if he decides to “reconvert” to Hinduism and adopts the caste that his forefathers originally belonged to just because he was born to Christian parents or has a Christian spouse. Expanding the scope of a previous Constitution benc...

Putting an end to the judicial tendency to interpret dowry in a narrow sense, the Supreme Court has said any demand made by the husband or his relatives before or after the marriage would come within the definition of dowry. Expanding the ambit of dowry, the court overruled its earlier verdicts in which it had said that demand for money for meeting some urgent domestic expenses could not be termed as dowry demand. A bench of Justices T S Thakur, R F Nariman and Prafulla C Pant said dowry must be given a pragmatic interpretation to fulfill the objectives of the Dowry Prohibition Act. "Any money or property or valuable security demanded by any of the persons mentioned in Section 2 of the Dowry Prohibition Act, at or before or at any time after the marriage which is reasonably connected to the death of a married woman, would necessarily be in connection with or in relation to the marriage unless, the facts of a given case clearly and unequivocally point otherwise," it sai...

The Delhi High Court on Tuesday said the office of Attorney General of India (AGI) is a public authority falling under the ambit of Right to Information (RTI) Act as the top law officer performed public functions and his appointment was governed by the Constitution. “It is not disputed that the functions of AGI are also in the nature of public functions. The AGI performs the functions as are required by virtue of Article 76(2) of the Constitution of India. ..., a Constitution bench of the Supreme Court held the office of the AGI to be a public office. “In this view also, the office of the AGI should be a public authority within the meaning of section 2(h) of the RTI Act,” Justice Vibhu Bakhru said while setting aside a December 2012 Central Information Commission (CIC) order that the office of AGI is not a public authority. The court also refused to consider the government’s argument that there is a practical difficulty in providing information under the Act as the office of the...

The Supreme Court on Thursday ruled that high courts cannot interfere with orders of civil courts while exercising writ jurisdiction relating to their power to quash orders of inferior courts. "We are of the view that judicial orders of civil courts are not amenable to a writ of certiorari (writ issued by SC or HCs for quashing orders of inferior courts, tribunals and quasi-judicial bodies) under Article 226 (power of High Court to issue certain writs)," a three-judge bench of Chief Justice HL Dattu and justices AK Sikri and Adarsh Kumar Goel said. The decision came on a reference sent to the CJI for an authoritative pronouncement by a two-judge bench of the apex court on whether the a writ can be issued under Article 226 of the Constitution even against a judicial order of a civil court, questioning the court’s view taken in a 2003 case called Surya Dev Rai vs Ram Chander and Ors. The two-judge bench had differed with the earlier verdict on the issue and had referred the...

Swissmarine Services SA v Gupta Coal India Private Limited [2015] EWHC 265 (Comm) The Claimant and Defendant entered into a COA which contained an English law and jurisdiction clause. When the Defendant failed to comply with the terms due to difficulties in despatching and shipping the cargo, the Claimant brought a claim for breach of contract. The Defendant subsequently commenced proceedings in India, claiming damages for defamation and an anti-suit injunction to restrain the English proceedings. After almost two years, the Indian proceedings were dismissed due to lack of jurisdiction. The Claimant alleged that it had suffered loss as a result of the Defendant’s breach of the English jurisdiction clause. It claimed as damages its costs incurred in the Indian proceedings, which the Court awarded. The Court found that the contract was clear as to law and jurisdiction, and the Defendant had been well aware of this, but had nevertheless commenced the Indian proceedings. The Claimant ...

The Bombay High Court asked the Insurance Regulatory and Development Authority to ensure that insurance companies did not involve Third Party Administrators (TPA) in the claim settlement. The TPAs act as intermediaries between hospitals, insurers and consumers. "IRDA shall inform insurers to implement (Health Insurance) Regulation 12 in letter and spirit to see that the decision for rejecting or allowing claims are taken by the companies and not the TPAs," a division bench headed by Chief Justice Mohit Shah said on a PIL. Gaurang Damani, the petitioner, has highlighted the problems faced by mediclaim policy holders and lack of transparency in claim settlement. He had argued that despite the regulation 12(b), the TPAs settle the claims. He also referred to IRDA's affidavit admitting to lapses by four insurers and five TPAs. The Association of TPAs admitted that some of its members may still be doing it and added that they were in the process of complying with the ...

The Competition Commission today slapped a fine of Rs 14.24 lakh on All India Motor Transport Congress (AIMTC) and asked the grouping to "cease and desist" from indulging in anti-competitive practices with respect to truck freight rates. The ruling comes after a detailed probe by the fair trade regulator found that AIMTC, an apex body of road transporters, had uniformly hiked the truck freight rates across the country on account of diesel price hike in 2012. The association has been penalised for indulging in unfair business practices and also not being able to "explain as to how the said conduct did not foreclose competition". "...AIMTC through its impugned action has tried to determine the price of freight rates and, as such, such action squarely fell within the presumption raised in...The (Competition) Act," the Competition Commission of India said in an order dated February 16 but released today. According to the regulator, the members of AIMT...