Legal News & Views

The Supreme Court has ruled that claim of compassionate appointment under the scheme of a particular year cannot be decided in view of a subsequent scheme that came into force much after the claim was made. Justices R Banumathi and TS Thakur ruled this while upholding a High Court ruling to allow a related petition against Canara Bank. It directed the bank to consider the claim according to its own scheme in vogue in 1993 when death of the employee concerned occurred. The court rejected the bank’s contention that ‘dying in harness scheme’ is a non-statutory scheme and is in the form of a concession and it does not create a vested right in favour of the claimant/respondent. The bank had argued that compassionate appointment is justified when granted to provide immediate succour but cannot be granted on the passage of time. In all the cases that the court considered in a batch, the employee concerned died about two decades ago. The High Court was not justified in directing the ...

There is nothing illegal about government servants being placed under suspension on the last day of their service, the Madras high court has said, refusing to quash the suspension of a civil supplies officer on the eve of his retirement. Justice S Vaidyanathan, dismissing the petition filed by V Murugan, who was slapped with five charges a few days ahead of his April 1, 2015 retirement and placed under suspension on March 30, said: "There is no hard and fast rule that an employee cannot be placed under suspension on the last day of his service. If the prayer of this petitioner is allowed, then persons like him may commit misconduct during the last month of their service and take a plea that no charge memo or suspension order can be levied against the employee." As long as there is an employee-employer relationship, the employer has got every right to issue charge memo and place the employee under suspension and proceed against the employee as per rules and regulations, Ju...

A city-based gynecologist and an insurance company will have to shell out Rs 8 lakh with 9% interest for 12 years for forgetting a mop inside a patient's body after a surgical procedure. Gynecologist Dr Vandana Amin ran a nursing home in Patan in 2002. One Mitaben Patel consulted her after the bleeding in her uterus did not stop even after a laser therapy. The gynecologist advised her to remove the uterus and a surgery was performed on the patient in October 2002. After the surgery, patient encountered another problem. A sonography report revealed a piece of gauze was present in the body. It was found attached with the intestine and was creating multiple problems for her. Mitaben had to undergo another surgery and the mop was removed more than a year after her first operation. In 2003, Mitaben moved a consumer court in Surat, where she used to live. She demanded Rs 10 lakh compensation for the doctor's negligence. The court concluded that the mop had damaged the intestine...

The Pune district consumer disputes redressal forum has held that allegations of cheating, fraud and forgery cannot be resolved in a summary proceeding. "Such matters need detail investigation, inquiry and examination of witnesses for adjudication of dispute," a three-member bench of the forum, headed by its president V P Utpat, has ruled. In a judgment pronounced on May 16, the forum dismissed the complaint by a Bhosalenagar couple who alleged deficient service on the part of the Bank of Baroda and Bank of Maharashtra branches at Yeshwantnagar and Ganeshkhind Road respectively, following an alleged fraudulent encashment of Rs 3 lakh cheque from their account. The forum held that it has no jurisdiction to entertain the complaint as the dispute between the complainant and the two banks involved complicated questions of law and facts that required thorough inquiry, examination of witnesses and the same was not possible in summary proceeding. The forum relied on a August 3...

The Bombay high court has ruled that a woman is not entitled to claim maintenance in divorce cases if she is wealthy herself and is able to maintain her lifestyle despite the estrangement. The recent judgment was awarded by a division bench comprising justice AK Menon and justice AS Oka, while rejecting an application filed by a resident of Nariman Point, seeking enhancement of the alimony granted to her by a family court. The 47-year-old woman and her husband, both residents of south Mumbai, were granted a divorce by the Bandra family court in 2002, after nine years of marriage. The court directed the husband to pay a monthly alimony of Rs 25,000 to the woman, and another Rs 25,000 each month towards the expenses of their daughter. The woman, however, approached the Bombay high court, seeking that her alimony be enhanced to at least Rs 75,000 per month, considering her ex-husband was “extremely wealthy.” However, in course of court proceedings, it was revealed that the woman h...

The apex consumer commission has directed an insurance firm to pay Rs 50 lakh to a pilot of a private airline for wrongly denying a policy claim, saying he was made to "take a dollop of injustice" from the company. National Consumer Disputes Redressal Commission, presided by Justice J M Malik, asked New India Assurance Company Ltd to pay the money to east Delhi resident Capt Anant Kumar Singh who worked as a pilot with JetLite. "The purpose of law is to prevent the strong always having their way. An insured, like a pilot, should be dealt with kid gloves, but in this case, he was made to take a dollop of injustice from the insurance company, who was in a position to call the shots," the commission said. The bench, also comprising its member S M Kantikar, said "the whole gamut of the facts and circumstances leans in favour of the complainant (Singh). We, therefore, allow the complaint and direct the insurance company, to pay a sum of Rs 50 lakh in favour of...

A real estate firm has been directed by the apex consumer commission to pay Rs 4.77 crore to seven consumers for "huge delay" in handing over apartments to them noting that the builder had attempted to make profit at the cost of others. The National Consumer Disputes Redressal Commission bench presided by Justice J M Malik noted that the apartments booked nine years ago in Greater Noida were yet to be delivered by Unitech Reliable Projects Pvt Ltd and asked it to pay Rs 4,77,58,658 with 18 per cent interest to the seven consumers. "There is a magic in that little word 'home'. It is a mystic circle and surrounds comforts and virtues, never known beyond its hollowed limits. However, customers are exasperated by senseless delay made by the Builder of a colony," the commission said. "It must be borne in mind that there is a huge delay in handing over possession of the premises in dispute, i.E., about 9 years. The Opposite Party (builder) has made an a...

An arbitration clause is a separate and independent agreement. The arbitration agreement survives and does not necessarily come to an end even if the MoU does not materialize into a full-fledged agreement. Parties are bound to refer disputes arising out of and in relation to the MoU to arbitration if provided in the dispute resolution clause. INTRODUCTION The Supreme Court of India (“Supreme Court”) in the recent case of Ashapura Mine-Chem Ltd(“Appellant”) v. Gujarat Mineral Development Corporation1 (“Respondent”) has addressed the issue of separability and survival of an arbitration clause contained in a Memorandum of Understanding (“MoU”). The Supreme Court held that the arbitration agreement in the MoU was valid as it constitutes a stand-alone agreement independent from its underlying contract. FACTS The parties entered into a MoU in 2007 for setting up an alumina plant in Gujarat by way of a Joint Venture with a Chinese company. The MoU provided for an arbitration agree...

S. 194-I/ 194-J: Meaning of expression "rent" and "fees for technical services" explained in the context of transmission & wheeling charges paid by electricity company (i) The argument of the revenue that Transmission charges and / or Wheeling charges amounts to “rent” for purposes of TDS u/s 194-I cannot be accepted. According to the Black’s Law Dictionary, ‘Rent’ is defined as consideration paid for periodical use or occupancy of property. Various types of rent are contemplated such as ceiling rent, crop rent, ground rent, etc. Even taking the widest possible definition of rent, in our view the WT charges cannot be considered as rent. It is well settled that the Court may in its discretion construe the legislative provisions so as giving effect to the intended use and applying the test of contextual interpretation. We are of the view that the expression ‘rent’ used in Section 194-I does not apply to WT charges or any other part thereof; (ii) The expression...

Supreme Court of United Kingdom- Deciding the appeal filed by the prosecution in a money laundering case wherein the respondents were charged with breach of Section 328(1) of the Proceeds of Crime Act, 2002 (POCA), four main issues were raised, namely, whether Section 328 POCA requires property to constitute “criminal property” prior to the arrangement operating, whether “criminal property” has to exist when the defendant enters or becomes concerned with the arrangement, whether the sums received into the bank accounts constituted “criminal property” before being paid into the account, whether the actus reus of Section 328 POCA offence was committed. The Court in order to reach a decision explained and interpreted various provisions of POCA, Council Directives 91/308/EEC and 2005/60/EC as well as referred to cases on “criminal property”. As per the facts, a fraudster, B, established 4 “ghost” websites falsely pretending to offer cut-price motor insurance. He also recruited associa...

In a case of a company involved in a dispute and undergoing arbitration, a bench comprising of G.S. Patel, J. directed its lenders to wait for the passing of interim award before taking steps to get their money back. In the instant case, a company was incorporated to construct a bridge on a build, operate and transfer basis. A tax policy announced subsequently gave vehicles operating within a 5 km radius a substantial discount in toll rates, which affected the profitability and feasibility of the project. As the plaintiffs were unable to service their debts, the lender banks moved to sell off the pledged shares. The plaintiff company then approached the Court to restrain the lender banks from selling off the pledged shares before the passing of interim award in an arbitration between the company and State Government as they were expecting a favourable decision. The Court held the request of the plaintiffs to be ‘reasonable’ and ‘moderate’ and in interest of both the parties and there...

The bench of Dr. A.K. Sikri and R.F. Nariman, JJ., dealt with three writs based on similar facts and observed that the marketability of the good in an essential condition for levying of taxes. The question before the Court was whether excise duty is payable on an intermediate product, namely, Transmission Assembly which comes into existence during the manufacture of tractors. Considering the definition of the term “goods” under Art. 366(12) of the Constitution which says that “goods” includes all materials, commodities and articles, it was held that although the definition of “goods” is an inclusive one, it is clear that materials, commodities and articles spoken of in the definition take colour from one another. In order to be “goods” it is clear that they should be known to the market as materials, commodities and articles that are capable of being sold. In the present case, the respondents denied that no commercial identifiable Transmission Assembly emerges in their production of ...

S.22/28: Law on whether income from letting of properties is assessable as "business profits" or as "Income from house property" explained The Supreme Court had to consider whether the income from letting of property is assessable as “profits and gains of business” or as “income from house property” and what are the tests to be applied. HELD by the Supreme Court: (i) A mere entry in the object clause showing a particular object would not be the determinative factor to arrive at an conclusion whether the income is to be treated as income from business and such a question would depend upon the circumstances of each case, viz., whether a particular business is letting or not; (ii) Each case has to be looked at from a businessman’s point of view to find out whether the letting was the doing of a business or the exploitation of his property by an owner. We do not further think that a thing can by its very nature be a commercial asset. A commercial asset is only an ...

In an appeal before this court filed by the plaintiff for declaration of permanent prohibitory injunction against the State Government from taking possession and in alternative for possession against the defendants of 'nautor land', a bench of Rajiv Sharma J, dismissed the appeal stating that the suit land could not be allotted in favour of the plaintiff as the land in question is a forest land which cannot be regularized by the revenue authorities. In the instant case, the petitioner claimed himself to be in possession of suit land (nautor land) which was granted by way of regularization by Deputy Commissioner, Bilaspur. A review application was filed against this order which was accepted by the Deputy Commissioner. Consequently the petitioner filed suit before the Civil Judge and then an appeal before the District Judge wherein an order was passed for the State Government to take possession of the remaining land as well. Aggrieved by this order, petitioner filed an appeal b...

In an interesting case where petitioner has filed a writ petition seeking quashing of order for recovery of vacation salary granted to the petitioner by the respondents, the division bench of Mansoor Ahmad Mir, C.J and Tarlok Singh Chauhan, J accordingly quashed the said order and directed the respondents not to effect the recovery of the said amount from the petitioner and if the recovery is already made, must be refunded to the petitioner. In the instant case the petitioner has not played any role, played fraud or misrepresentation in release of the vacation salary. The Court while deciding the petition extensively relied on the judgment of the Supreme Court in State of Punjab v. Rafiq Masih (2015) 4 SCC 334, wherein the Court laid down the parameters of fact situations such that employees, who are beneficiaries of wrongful monetary gains at the hands of the employer, may not be compelled to refund the same. The Court further observed in the abovestated case that an action of the S...

A person who is delegated certain power cannot delegate it further, unless it is sanctioned by law, the Supreme Court stated while dealing with an offence under the Air Pollution Act, P Pramila vs state of Karnataka. The charge was stockpiling iron ore at various places without pollution measures. The regional officer (environment) filed a criminal complaint but the owner challenged it in the high court. It refused to quash the complaint. On further appeal, Supreme Court found that the complaint was filed by an officer who is not authorised to do so. The pollution control board or its chairman can file the complaint but they cannot delegate the power to another officer. On this ground the complaint was quashed, but the court asked the board to file a legally proper complaint within two months. Article referred: http://www.business-standard.com/article/opinion/excise-duty-at-point-of-sale-sc-115050300727_1.html

The interpretation of the terms of a contract is primarily for the arbitrator to decide. He is entitled to take the view which he holds to be the correct one. The court while considering a challenge to an arbitral award would not sit in appeal over the arbitrator's decision unless it is totally unreasonable, the Supreme Court has stated while dismissing a large batch of appeals by National Highways Authority of India (NHAI) against mining companies. The dispute related to the liability of NHAI when the royalty payable to the firms was revised upwards. NHAI maintained that the additional amount was not payable to the firms in view of certain terms in the contract. The dispute was decided by arbitration which went against NHAI. Its appeal was dismissed. Article referred: http://www.business-standard.com/article/opinion/excise-duty-at-point-of-sale-sc-115050300727_1.html

Supreme Court, last week, set aside the judgment of the Karnataka High Court and imposed a fine of Rs 5.55 lakh on the drawer of a cheque for stopping payment in the case, T Vasanthakumar vs Vijayakumari. The magistrate had imposed the fine or in default five months imprisonment on the woman, who issued the cheque. She was a partner in a film distribution firm and the opposite party was a theatre owner. They had commercial transactions during which disputes arose. The question involved was who had the burden of proof to show that the cheque was issued in discharge of a debt or liability. The court ruled that the woman had the duty to prove that in this case, but as it was not done, she should suffer the punishment. Article referred: http://www.business-standard.com/article/opinion/excise-duty-at-point-of-sale-sc-115050300727_1.html

The Supreme Court, last week, came to the rescue of a purchaser of mortgaged property which was auctioned for recovery of debt and which he had held in possession for eight years while the disputes were going on. In this case, Central Bank of India vs C L Vimla, her sons took a loan from a bank to start business which failed. The bank started recovery proceedings and this started a series of litigation in the debt recovery tribunal, the Karnataka High Court and Lok Adalat. Meanwhile, the property was auctioned and the purchaser paid the value in full. However, litigation continued and the high court held the sale invalid stating that the purchaser was party to the negligence of the recovery officer. Setting aside the high court ruling, Supreme Court observed that since the purchaser paid the amount in full in a bona fide manner and suffered for a long time, "equity and good conscience" demanded that his possession should not be disturbed at this stage. Article referred: htt...

Excise duty is normally charged at the factory gate when the goods are taken out. However, it need not always be so. The sale can take place at the buyer's premises. Therefore, the duty can be charged there. The test is the point where the sale takes place, the Supreme Court ruled in the case, Commissioner of Excise vs Roofit Industries Ltd. The revenue authorities alleged that the company was evading duty by not computing the value of finished goods and it was deducting the amount of freight, insurance and unloading charges from the price of excisable goods though the place of removal of finished goods was not factory gate but the buyer's premises. The firm challenged the demand of duty before the excise appellate tribunal. It allowed its petition which led to the appeal before Supreme Court. Allowing the appeal, Supreme Court stated that "it is to be seen at what point of time the sale is effected, namely whether it is at the factory gate or later, that is, when the deli...

Getting a first information report (FIR) registered at police stations has become something of a headache in many cases. Complainants are forced to knock the doors of the court to obtain direction to police to conduct enquiry and register a case if a cognizable offence is made out. Though it is the duty of police to file an FIR based on a complaint raised by the petitioner, many police officers are reportedly reluctant to take the complaints forward for reasons best known to them. Affected petitioners on the condition of anonymity alleged that police officers dragged the case either to demand bribe or to keep crime rates down. As a result, many petitioners are forced to move court. In an order dated March 26, 2015, Madurai bench of Madras high court judge C T Selvam directed Trichy city, Trichy rural and Pudukkottai police, among some other southern districts, to file FIR on the complaints filed by 35 people. The superintendent of police, Manikandam police, Kattuputhur police and...

The district consumer disputes redressal forum has directed a Sector 21-based interior designer to pay around Rs 1.17 lakh to two city residents for not completing the work at their house within the deadline. Dr Inderpal Singh Sidhu and his son Manpreet Sidhu accused Amar Partap Singh Sidhu, proprietor of WE Design Interior Contractors and Designers House, Sector 21, of not finishing the renovation work of one of their rooms in the house in four weeks despite taking money. According to the agreement, the work was to be completed in 28 days and payment made in four installments. The first payment was made and work commenced on December 8, 2013. It was to be completed by January 8, 2014. However, even after making most of the payment in three installments, the work was incomplete. The complainants alleged the designer harassed them for making the third installment and assured completion of work by January 15, 2014. "The designer then discontinued the work, disappeared and even...

The National Consumer Disputes Redressal Commission on April 10 has ruled that a survey report is binding unless it can be faulted and the infirmities pointed out. Dev Medical Agency, a partnership firm, was running a medical store at Panipat in Haryana. The company's premises were insured with two separate insurance companies for a total amount of Rs 15 lakh. National Insurance Company gave coverage of Rs 5 lakh under a cover note issued on February 14, 2004, while Rs 10-lakh coverage was given by New India Assurance under a cover note issued on March 2, 2004. There was a theft in the shop in 2004. The partners informed the local police and insurance companies about the theft. The police registered an FIR the next day. The insurance companies deputed a surveyor to assess the loss. The medical store pegged the loss at Rs 10,64,103, and submitted documents. The insurance companies did not find the documentation acceptable and refused to pay the claim. Aggrieved, the medical agen...

Building projects are often delayed due to disputes between a builder, land owner and developer. Builders try to term these as force majeure, which means due to circumstances beyond their control, to avoid being held liable for deficiency in service. In a recent ruling, the National Commission has held that such disputes cannot be termed force majeure, and a consumer would be entitled to claim a refund along with interest and compensation when the builder is unable to complete the housing project in time. However, a builder can neither unilaterally extend the date of possession nor insist on allotting alternate flat or plot to escape refunding the amount. Shahin Mulla wanted to purchase a residential unit in "Amar Prem", a housing project in Goa, to be developed by Utopia Projects. The entire consideration of Rs 30 lakh was paid in two instalments of Rs 15 lakh each. The agreement for construction and sale was executed thereafter on February 24, 2012. It stipulated that p...

Kerala High Court: In a recent case where respondent authorities illegally seized the passport of the dependants (wife and children) of victim of human trafficking in USA and denied them to travel to America, a bench of A.V.R. Pillai J, held that the denial of the same is not only violation of the fundamental rights of the petitioners but also detrimental to the very concept of right, duties and obligations in matrimonial living of spouses. The counsel for the petitioner M.P. Ramnath contended that when the petitioners are having due visas granted by the Government of USA and when there is nothing illegal about the petitioners duly traveling to USA to join their husband /father (victim of human trafficking in USA), it is absolutely illegal and baseless to restrain the petitioners to travel to USA. The counsel for the respondent N. Nagaresh contended that if the petitioners are permitted to go abroad, it would be against the provisions of the Victims of Trafficking and Violence Prote...

Kerala High Court: Considering the increasing rate of crimes against women, a bench of Vinod Chandran J, in order to ensure safety of the working women held that women cannot be asked to work in night shifts between 10 P.M. to 6 A.M. The instant petition was filed by the women employees of the Seetharam Textiles Limited, Thrissur. V.M. Krishna Kumar, the counsel for the petitioner contended that asking women to work beyond 7 P.M. and prior to 6 A.M. is violation of Section 66 (1)(b) of the Factories Act, 1948. P. Vijayamma, the counsel for the respondent contended that the proviso to the above-mentioned Section enables the State Government to vary the limits provided thereto by notification in the official gazette with respect to any factory or group or class or group of description of factories. The Court read the circular dated 7.6.2003 issued by the Government of Kerala which stated that women can be employed till 10 P.M. provided that the employer must provide free transport f...