From trademark row to SC speeds up arbitration, here are key court orders | Business Standard Column

Supreme Court speeds up arbitration

The Supreme Court last week exercised its extraordinary constitutional power to appoint a sole arbitrator as the proceedings had a long chequered history. In this case, Rajasthan Small Industries Corporation vs Ganesh Containers Movers Syndicate, disputes arose over transit penalty imposed by the corporation on the contractor. At the request of the contractor, an IAS officer was appointed the arbitrator. But the proceedings did not progress satisfactorily and therefore, the managing director of the corporation was appointed as arbitrator. Still, there was no progress in the arbitration. The corporation alleged that the contractor was dragging proceedings. Ultimately, the high court appointed a district judge as the arbitrator. It was challenged by the corporation in the Supreme Court. It appointed the new managing director of the corporation as the sole arbitrator. The court did so exercising its powers under Article 142 of the Constitution, which allows the court to do any act to achieve “complete justice”. This phrase has “width and elasticity” to meet myriad situations, the judgment asserted. In this case, the dispute was before different arbitrators since 2009. Therefore, the court felt it was justifiable to appoint an arbitrator who will take up the issues where others had left and give an award expeditiously.

A second notice in cheque case valid

If a cheque bounces for want of insufficient funds, the payee can present the cheque again to the bank. If it bounces again, the drawer can send another notice as required under the Negotiable Instruments Act. After the first notice, the latter notices would not become invalid, the Supreme Court ruled in its judgment in the case, Sicagen India Ltd vs Mahindra. The Madras High Court had held a contrary view. It had quashed the prosecution of the drawer on the ground that successive notices were not valid and the law provided only for one notice. The Supreme Court overruled it, stating that the law did not forbid the holder of the cheque to make a successive presentation and institute criminal complaint based on the second or successive dishonour of the cheque on its presentation. Taking a contrary view would defeat the purpose of the Act, which is to compel the drawers to honour their commitments made in the course of their business or other affairs. The Supreme Court revived the prosecution of the drawer of the cheque in this case.

Employer’s onus after duty hours

The obligation of an employer under the Employees Compensation Act does not end after the working hours. According to the Supreme Court, all activities integral to the employment are covered under the concept of ‘notional extension’ of employment. The court applied this principle last week in its judgment in the case, Leela Bai vs Seema Chouhan. In this case, a driver of a bus stayed back at night so that the morning trip could start on time. If he had gone home, the passengers would have been inconvenienced in the morning. He took meals at night on top of the bus, but while descending he fell down and died. His wife claimed compensation under the Act. The owner of the bus argued that his employee had finished the day’s trip and was out of the working hours. The Supreme Court rejected the contention and stated that the driver was staying on the bus not out of choice but for the efficient running of transport, which benefited the bus owner. It said that the time and place can be reasonably extended to grant benefit to an employee, who dies or suffers an injury while working for his or her employer.

Assam power suppliers lose appeals

The Supreme Court last week dismissed a batch of appeals by suppliers of electrical conductors, pre-stressed concrete poles and other goods to the Assam State Electricity Board, claiming interest on delayed payments. Several of them were small scale units. They invoked the Interest on Delayed Payments to Small-scale Ancillary Industrial Undertaking Act of 1993 to claim interest on payments already made by the board. The appeals had come to the Supreme Court before, and it had laid down the rules. The small scale units went back to the Gauhati High Court, which rejected their demand and accepted that of the board. According to the board, the orders were made before the 1993 Act, though the supplies were made later. Therefore, the claims were time-barred, according to the board. The Supreme Court largely agreed with the board while deciding issues in each supplier-companies’ appeals, led by Shanti Conductors Ltd vs Assam SEB.

Ticket booking portals in trademark row

Two entertainment booking portals using the prefix “book my” fought a trademark battle at the Delhi High Court, which ruled last week that these are generic words and there could be no exclusive claim over them. Bigtree Entertainment, which has been using ‘bookmyshow’, argued that it was using the trademark since 2007 and its portal had earned a good reputation for entertainment booking in the country. It alleged that another website appeared with a similar name, ‘bookmyevent’, violating its mark. It sought a permanent injunction against its rival. Four years ago, the court had passed an ex parte injunction. In this judgment, the high court stated that the words were found in the dictionary and they are not invented by the company. “In fact, it is an apt description of a business that is involved, namely, booking of tickets for shows, events, films, etc,” the judgment explained, and added that “the fact as to whether this prefix ‘bookmy’ has been accorded a secondary meaning and distinctiveness can only be established after the parties have led their evidence.”

NTPC told to follow terms of contract

“All actions of the State, whether administrative or otherwise, have to be fair, reasonable and informed by reason. It is not open for any agency of the State to enter into a contract and not perform the obligations undertaken thereunder,” the Delhi High Court observed while asking two disputing companies to hold “good faith discussions” before approaching the court. In this case, BGR Mining & Infra Ltd vs NTPC, the government power corporation had selected the mining and infrastructure company for developing and operating the Chatti Bariatu coal block in Jharkhand. Later, the CBI filed a first information report involving directors of both companies and others. While investigations were on, NTPC threatened to terminate the project agreement because of alleged corruption. The high court stated that before taking that step, they should follow the ‘good faith discussion’ provided in the project agreement. It pointed out that both parties had agreed on a three-tier dispute resolution mechanism and the discussion was part of it.

via From trademark row to SC speeds up arbitration, here are key court orders | Business Standard Column

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