'BSES can encash bank guarantees'

LEGAL DIGEST

The Supreme Court on Friday set aside the Madras High Court judgment and allowed BSES Ltd to encash four bank guarantees worth over Rs 1 crore given by Fenner India Ltd.

The high court had passed an injunction against BSES (now Reliance Energy Ltd) invoking the bank guarantees of the State Bank of India. Fenner had been given a sub-contract for building a captive power plant. Following disputes, BSES invoked the bank guarantees.

Fenner then resorted to the arbitration clause. It also moved the Madurai district judge for an injunction against invoking the bank guarantees. It was rejected. But the high court, while dealing with an appeal in the arbitration, granted the injunction. The apex court quashed the order and allowed BSES to encash the bank guarantees.

Cegat order in Hira Cement case set aside

The Supreme Court last week set aside the judgment of the Customs, Excise & Service Tax Appellate Tribunal (Cegat) in the Commissioner of Central Excise vs Hira Cement case, and asked it to reconsider its decision.

Hira Cement is a small-scale industry producing cement in Raipur. It is a proprietary concern. In the same state, there is a company called Hira Industries Ltd producing cement. They shared some common premises and telephone numbers. The excise authorities denied exemption offered to small-scale industries to Hira Cement. When the issue was put before the commissioner, he dropped the proceedings, saying they were not related persons.

The tribunal also held that they were separate juristic persons. On appeal, the Supreme Court asked the tribunal to reconsider the case in the light of some of its leading decisions on this point as the tribunal had not considered them while arriving at its conclusion.

Arbitrator named in Jain Studio case

In the dispute between Thailand satellite services provider Shin Satellite Public Co Ltd and Jain Studios Ltd, the Supreme Court last week appointed retired Justice ML Pendse as arbitrator.

Justice CK Thakker of the Supreme Court, who dealt with the dispute under the Arbitration and Conciliation Act, rejected the objections of Jain Studios. The Indian company had argued that there was no valid arbitration clause in the agreement.

The Thai company disputed it and nominated Justice Pendse as arbitrator. Jain Studios did not name anyone, but raised a dispute in the Supreme Court. Justice Thakker retained Justice Pendse to arbitrate the dispute.

The apex court judge also rejected the prayer of Jain Studios that the venue for arbitration should be shifted to London or Singapore from Delhi, as some other proceedings were being held abroad.

Regularise workers' services, CCL told

The Supreme Court has directed the Central Coalfields Ltd, Ranchi, to regularise 74 civil engineering workers who have been doing casual work since 1973-74 when the Bhurkunda colliery was nationalised.

The central industrial tribunal had passed an award to this effect in 1988 and it had been upheld by the high court. But the orders have not been implemented because of continuing litigation.

Therefore, the court gave the company a two-month time to comply with the award of the tribunal and the high court.

Meanwhile, the workers will be paid Rs 500 per month from the deposit made by the company and held by the registrar of the high court. To avoid further litigation, the apex court directed the management to submit to it a report within three months regarding regularisation of the workers.