Singhania & Co

Call now +91-22-2202 0320 / 21 / 22

about Us

Recent News

Bank to pay for losing bounced cheque 2019-08-12

The National Consumer Commission has directed Bank of Baroda to pay Rs 3.6 lakh to a customer whose cheque the bank had lost. The customer had received a cheque from another person and he deposited it in the bank. But it bounced. Therefore, he wanted to initiate proceedings under the Negotiable Instruments Act against the drawer. The customer, Chitrodaya Babuji, asked the bank to return the invalid cheque, along with the memo to pursue his case. But the bank had lost the cheque and memo, disabling Babuji from pursuing the criminal case. He moved the district forum, which granted him only a meagre compensation. He moved the Gujarat state consumer commission, which asked the bank to pay the full cheque amount to Babuji. The bank came in appeal, and the National Commission upheld the state commission order. “The bank has failed to return the cheque and so Babuji was deprived of his legal right to file a case against the account holder. Thus, he had to suffer a loss of Rs 360,000. When the cheque had been lost by the bank, it is its responsibility to compensate the loss,” the judgment said.

Source: Business Standard, Mumbai edition, August 12th, 2019.

Water levy on mined-out pits upheld 2019-08-12

The Chhattisgarh High Court has dismissed the challenge made by cement firm ACC Ltd against the levy on water collected in the coal mine pits for industrial use. The firm argued that the state has no power to do so under the Irrigation Act. On extraction of minerals, rainwater gets collected in the mined-out pits and that water is being used for various activities, including manufacturing processes. The state authorities found it illegal and demanded water charges. That demand was resisted by ACC on various grounds. Rejecting them, the high court emphasised that under the Irrigation Act, all rights over the water of any river or other natural collection of water shall vest in the government. It is open for the government to fix conditions for the supply of water for industrial purposes not connected with agriculture.

Source: Business Standard, Mumbai edition, August 12th, 2019.

Law on insurer’s burden in a flux 2019-08-12

The liability of an insurance company to compensate a road accident victim when the terms of the policy have been violated came in for examination again in the Bombay High Court in United India Insurance Co vs Sukumarbai. In several cases, the Supreme Court had asked the insurance company to pay the victim and then recover the amount from the owner or driver who is guilty of rash driving. But those orders were passed by the Supreme Court under Article 142 of the Constitution which grants it special powers to do “complete justice”. The question of whether other courts can also pass orders to the insurer to pay and then recover it from the owner or driver of the vehicle which caused the accident is still debated. Case law is often cited from both sides. The Supreme Court has not decided the question finally though it was before it for a long time. In this case, the tribunal followed the Supreme Court, believing that “pay and recover” is the norm. But on appeal by the insurance company, the high court asserted that when the terms of the policy were violated, the insurer must be exonerated and the liability fell entirely on the owner or driver.

Source: Business Standard, Mumbai edition, August 12th, 2019.

Business slump no excuse for rent default 2019-08-12

A slump in the business cannot justify default in payment of the lease rent, the Supreme Court observed last week in the judgment in Chandigarh Administration vs Hari Ram. In this case, a 99-year lease was given to Hari Ram for a commercial space in 1996. After a few instalments, he defaulted on paying the dues. The Chandigarh Administration gave 26 opportunities to clear the dues, but still, the payment was not made. So it invoked the Public Premises (Eviction of Unauthorised Occupants) Act and tried to evict him. However, the Punjab & Haryana High Court stopped the action holding that the cancellation of allotment would cause hardship to the lessee and one more opportunity must be given to him to pay the outstanding dues. The Chandigarh Administration appealed to the Supreme Court. It allowed six months to the lessee to clear arrears amounting to Rs 10.25 lakh, failing which he can be evicted.

Source: Business Standard, Mumbai edition, August 12th, 2019.

Electricity theft trial in the fast lane 2019-08-12

A serious offence is normally referred to a sessions court for trial by a magistrate. But this procedure prescribed in the Criminal Procedure Code need not be followed in the case of theft or other offences under the Electricity Act. It has a provision which enables the power authority to move the special court straightaway. In the case of A M C S Swamy vs Mehdi Agah, a consumer was found tampering with the electricity meter two times and his power line was cut off and prosecution initiated against him. He moved the Telangana High Court against the prosecution. The high court quashed the action, taking the view that the power authority cannot move the special court without the case being committed to it for trial by a magistrate. The authority appealed to the Supreme Court. It set aside the high court judgment; which means that the consumer will stand trial in the special court set up to deal with power thefts.

Source: Business Standard, Mumbai edition, August 12th, 2019.

Consumer court can not examine Exim policy 2019-08-12

A person who has a claim under a replenishment (REP) licence issued in terms of the import and export policy is not a ‘consumer’ and providing benefits under the terms of the Exim policy is not ‘service’ as defined in the Consumer Protection Act, the Supreme Court has stated in its judgment in Ministry of Commerce vs Vinod & Co. According to the Exim policy existing at the relevant time, exporters were entitled to a 20 per cent premium on the exports. Later, the scheme was discontinued. The exporter, in this case, requested revenue authorities to pay the premium, which was refused as the scheme was discontinued. The exporter moved the Delhi consumer forum, which ordered the government to pay the premium plus compensation for causing mental agony and legal expenses. The authorities moved the state commission and the National Consumer Commission without success. But in the final appeal, the Supreme Court agreed with the authorities and asserted that the exporter could not move the consumer fora. He was not a consumer in the first place and the benefit given to exporters is not a service. The government was implementing a policy to promote exports and regulate imports. On both counts, the fora below were wrong, the Supreme Court ruled.

Source: Business Standard, Mumbai edition, August 12th, 2019.

Right to wage till retrenched 2019-08-05

An employer cannot dispute his liability to pay wages because of the sickness of the unit or pendency of a BIFR rehabilitation scheme. The proceeding for the recovery of wages under the UP Timely Payment of Wages Act cannot be stopped on those pleas. The Allahabad High Court stated so in its judgment, Modi Rubber vs State. The company was not functioning after a strike in 2001. Later, there were two settlements with one group of workers. The labour commissioner issued a recovery order in favour of workers. The company challenged it in the high court, arguing that it was before BIFR. Dismissing the petition, the court stated that “the employer cannot dispute its liability because of the sickness of the unit. The relationship between master and servant continues until employee is retrenched or terminated. The workers who are not signatories to the settlements can enforce recovery.”

Source: Business Standard, Mumbai edition, August 5th, 2019.

Niggardly towards lifetime disability 2019-08-05

The Supreme Court last week criticised the Calcutta High Court for dismissing the appeal of a woman without giving reasons. She had appealed on behalf of her 10-year-old son who suffered a permanent disability of 70 per cent in a road accident. The motor accident compensation tribunal awarded Rs 2 lakh to him. The mother appealed to the high court against the miserly amount. But the high court summarily dismissed it. Allowing her appeal, Rupa Roy vs New India Assurance, the Supreme Court observed that “in the absence of any discussion and reasoning, we are at a loss to know as to what persuaded the high court to dismiss the appeal". It stated that in view of permanent disability and the expense and agony involved in looking after the boy, it would be “just and proper” to raise the compensation to Rs 10 lakh with 6 per cent interest.

Source: Business Standard, Mumbai edition, August 5th, 2019.

Charity dries up after change in IT Act 2019-08-05

Donations to charitable trusts to claim deductions from total income dry up when the government changes rules. Trusts cannot challenge the new rule; it is the donors who have the locus to oppose the withdrawal of the tax benefit, the Supreme Court stated in its judgment, Prashanti Medical Services & Research Foundation vs Union of India. Prashanti charitable trust received donations for three years to build a hospital. Though it received a substantial amount in the first two years, a change in rule in the last year almost dried up donations. The trust challenged the changed rule under Section 35AC of the Income Tax Act in the Gujarat High Court. It dismissed the petition. Its appeal was also dismissed by the Supreme Court observing that other trusts getting donations had not approached the court nor the donors who are the real aggrieved persons, who despite paying donations were not allowed to claim the deduction. Moreover, there was no question of equity or promissory estoppel in tax matters, the judgment asserted.

Source: Business Standard, Mumbai edition, August 5th, 2019.

Amalgamated company cannot be taxed 2019-08-05

The Supreme Court has upheld the judgment of the Delhi High Court in the case, CIT vs Maruti Suzuki India. The high court had agreed with the decision of the Income Tax Appellate Tribunal. The tribunal had held that the assessment made in the name of Suzuki Powertrain India was a nullity since it had been amalgamated into Maruti Suzuki India and was not in existence. The Supreme Court dismissed the appeal of the Commissioner of Income Tax. Its judgment asserted that the legal question raised in this case had already been settled. It observed: “Despite the fact that the assessing officer was informed of the amalgamating company having ceased to exist as a result of the approved scheme of amalgamation, the notice was issued only in its name. The basis on which jurisdiction was invoked was fundamentally at odds with the legal principle that the amalgamating entity ceases to exist upon the approved scheme of amalgamation.” The judgment stressed that there should be certainty in matters of tax. Otherwise, “it will only result in uncertainty and displacement of settled expectations. There is a significant value which must attach to observing the requirement of consistency and certainty. Individual affairs are conducted and business decisions are made in the expectation of consistency, uniformity and certainty. To detract from those principles is neither expedient nor desirable,” the judgment emphasised.

Source: Business Standard, Mumbai edition, August 5th, 2019.

Venue of arbitration only at place named 2019-08-05

When an arbitration contract specifies the jurisdiction of the court at a particular place, only such court will have the jurisdiction to deal with the matter because the parties intended to exclude all other courts. In one case, Brahmani River Pellets vs Kamachi Industries, the parties had agreed that the “venue” of arbitration shall be at Bhubaneswar. When disputes arose, one party moved the Madras High Court for the appointment of an arbitrator. It appointed a former judge of the high court as the sole arbitrator. Its view was that mere designation of “seat” by parties did not oust the jurisdiction of other courts. It further stated that in the absence of any express clause excluding the jurisdiction of other courts, both the Madras High Court and the Orissa High Court will have jurisdiction over the arbitration proceedings. On appeal, the Supreme Court set aside that ruling, observing that the intention of the parties was to exclude all other courts. The contract might not have used expressions like “exclusive jurisdiction”, “only”, “exclusive”, “alone”, but that did not make any difference, the Supreme Court said and asked the parties to go before the Orissa High Court, if advised.

Source: Business Standard, Mumbai edition, August 5th, 2019.

...
  • Image 1
  • Image 2
  • Image 3
  • Image 4
  • Image 5
  • Image 1
  • Image 2
  • Image 3
  • Image 4
  • Image 5