From defamation to cheque bounce case, here’re the key court orders | Business Standard Column

SC orders execution of minority award

The Supreme Court last week exercised its extraordinary constitutional power under Article 142 of the Constitution to uphold the order of the minority member of a three-member arbitration tribunal, setting aside the judgments of a single judge Bench of the Delhi High Court as well as a division Bench. The court explained that all of them had erred and remitting the matter to further arbitration would cause further delay. It would be contrary to the spirit of the Arbitration and Conciliation Act, which aimed at speedy resolution of disputes. The judgment in the case, Ssangyong Engineering & Construction Co vs National Highways Authority of India, dealt with a dispute over a contract given by the public sector undertaking to the South Korean firm. The dispute arose over the price adjustment formula for the components which went into the making of Highway 26 in Madhya Pradesh. The Ministry of Industrial Development issued a new circular in 2013 changing the computation and it was challenged by the foreign firm in the Madhya Pradesh and the Delhi High Courts. The dispute was referred to arbitration and the claim of the Korean firm was rejected by two arbitrators. The firm appealed to the Delhi High Court, which rejected its claim. Therefore, it approached the Supreme Court. It upheld the minority view which allowed the claim of the construction company in full. Commenting on the award and the high court judgments, the court remarked: “A fundamental principle of justice has been breached, namely, that a unilateral addition or alteration can never be foisted upon an unwilling party.”

Heavy penalty for harassing farmer

The Supreme Court has imposed Rs 5 lakh on the Maharashtra Electricity Distribution Company for taking a decade to provide power connection to a farmer. The judgment pointed out that the farmer, Tukaram, had “suffered hardship and inconvenience as a result of the unexplained delay of a decade in granting electricity connection”. The farmer had applied for the connection in 2005. Instead of power, he got a Rs 1,300 bill as “consumption charges”. This provoked the farmer to take the long road to litigation. He moved the district consumer forum, the state commission and ultimately the National Consumer Commission. In between, there was a writ petition in the Bombay High Court also. The National Commission awarded him a compensation of Rs 2 lakh. On appeal, the Supreme Court found that Rs 2 lakh was not fair compensation and raised it to Rs 5 lakh as his land remained uncultivated due to the deficiency in service of the distribution company.

Partners liable in cheque bounce case

The expression ‘company’ in the Negotiable Instruments Act includes a partnership firm. The partners are its directors, the Supreme Court stated in its judgment in G Ramesh vs Kanike Harish. In this case, Ramesh entered into a contract for data entry with Hyderabad-based Vainqueur Corporate Services. Its cheques were dishonoured two times by banks and therefore, a complaint was filed. The magistrate prosecuted the firm and its partners. One of them moved the high court, which quashed his trial. The high court wrongly applied the law confusing company and partnership. Moreover, the complaint had defined the role of the partners and made them accused. That was enough to proceed against them. The Supreme Court directed that the prosecution must proceed and further pleas could be made at the trial.

Third high court to repeat mistake

The Supreme Court has again found fault with a high court for not framing issues in income tax appeals properly. In recent weeks, the Delhi and Bombay High Courts were told to frame “substantial questions of law” in tax appeals and they were remitted to those high courts for that purpose. Now it was the turn of the Karnataka High Court in the case Ryatar Sahakari vs Asst Commissioner. In this case, both assesse and revenue department framed “substantial” issues according to Section 260-A of the Income Tax Act. But the high court did not frame issues. The Supreme Court reiterated that the questions framed by the parties are not relevant. The court must frame issues on its own. The Karnataka High Court failed to do so. Therefore, the Supreme Court remitted the appeal to the high court asking it to follow the proper procedure.

Govt authorities can’t sue for defamation

In a detailed judgment asserting freedom of the media against government undertakings, the Delhi High Court has asserted that government, local authority and other such institutions cannot file defamation suits. Once a matter is of public interest, the right to privacy no longer subsists and it becomes a legitimate subject for comment by the media. In the case of public officials, the right to privacy is simply not available with respect to their conduct in discharging official duties. It is so even where the publication is based on information and statements which are not true, unless the official establishes that the publication was made in bad faith, with reckless disregard for the truth. The media house need not prove that what was published is true if it had reasonably verified the content. These statements were made in the judgment in Indian Potash Ltd vs Media Contents and Communication Services. Star News had telecast a programme alleging adulteration of milk with urea and detergents. It linked the name of the government company with the distribution of synthetic milk in western Uttar Pradesh. So it sued the media company demanding Rs 11 crore as damages. The high court dismissed the suit.

Trademark row over medical disposables

The prefix ‘Dispo’ used by two manufacturers of disposable medical accessories has resulted in trademark suits in the Delhi High Court. These accessories are used to prevent contagious diseases like HIV/AIDS spreading through repeated use of syringes or similar products. In this case, Disposafe Health & Life Care vs Hindustan Syringes & Medical Device Ltd, each of them used Dispo before trade names of their products, resulting in the suits. A single judge Bench of the court had earlier passed an injunction against Disposafe from using the marks Dispovan and Dispocann. It appealed to the division Bench. The court ordered that Disposafe should not use the marks Dispocann and Dispovan. The court observed that ‘Dispo’ marks were “portmanteau words”, i.e. words formed out of fragments or parts of two separate words. It was a descriptive word and no one can make an exclusive claim on it unless it has acquired a close association with one manufacturer in the market.

via From defamation to cheque bounce case, here’re the key court orders | Business Standard Column

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s