The Supreme Court last week ruled that an arbitration clause in a contract would not exclude the power of the high courts or the Supreme Court to decide disputes between the parties. The court thus dismissed the appeal of East Central Railway in the case, Union of India vs Tantia Construction Ltd. In this case, the railway awarded a project to the construction firm. Later, additional work had to be done and the firm was asked to undertake that too, at the cost dictated by the railway. This was resisted by the firm which moved the Patna high court. It stated that the entire work could not be thrust on the firm at its risk and cost. The government appealed to the Supreme Court, arguing that it could vary the nature of the work according to the terms of the contract. The government also argued that the courts could not interfere in the dispute as there was an arbitration clause. The Supreme Court rejected both the arguments and emphasized that the courts need not force the parties to go for the alternative remedy of arbitration every time. “Injustice, whenever and wherever it takes place, has to be struck down as anathema to the rule of law and the provisions of the Constitution,” the judgment said.
SC dismisses Tamil Nadu govt appeal in India cements tax case
The Supreme Court last week dismissed the appeal of the Tamil Nadu government which denied sales tax benefits to India Cements Ltd. The high court had held that the cement firm was entitled to the benefit of deferral of sales tax as claimed by it under the interest free sales tax deferral scheme. With a view to promote industrialisation, the Government of Tamil Nadu had declared 105 taluks as industrially backward for the purpose of grant of interest free sales tax loan, interest free sales tax deferral, state capital subsidy etc. Among them, 30 taluks were declared most backward, offering them further incentives. It was directed that the new industries to be set up in these 30 most backward taluks as also in the three industrial complexes of the State Industries Promotion Corporation, in addition to the existing concessions, would be entitled to full waiver of sales-tax dues for a period of five years up to a ceiling of the total investment made in the fixed assets. However, dispute arose over whether the criterion for the benefit was the volume of sales or production. The court ruled that the benefit should be given when one of the criteria was fulfilled.
SC rules that KIADB was wrong in raising the price of industrial plots
The Karnataka Industrial Areas Development Board (KIADB) was wrong in raising the price of industrial plots arbitrarily, the Supreme Court stated while dismissing its appeal against the high court ruling. The board had allotted plots after receiving payment. But 13 years later, it asked the allottees to pay more. This was challenged by the allottees. The board claimed that it has power under the rules to raise the demand. The high court rejected this stand. The Supreme Court also underlined that though the rules may grant undefined power to fix the final price, the power would have to be exercised “in accordance with the principle of rationality and reasonableness.”
Delhi HC restrains tyre company selling tyres bearing similar China trademark
The Delhi high court last week restrained Trans Tyres (India) Pvt. Ltd. from selling any tyre or tube bearing the trademark Double Coin or a mark deceptively similar to it unless that product has been manufactured by Double Coin Holdings Ltd of China. The court passed the order on an application for injunction moved by the Chinese firm seeking an injunction till the court finally decides the trade mark dispute. The judgment said: “If the quality of the Indian product is not found to be as good as that of the products being manufactured and sold by Double Coin Holdings Ltd, China, that may affect the reputation and credibility of Double Coin Holdings Ltd and value of its brand not only in India, but also in other countries.”
Bombay HC verdicts against foreign company’s winding up business of JV
The Bombay high court has stated that according to Section 591 of the Companies Act a foreign company is one which has a “place of business” within India. The mere fact that a company is doing business in India or that it is a party to a joint venture in India would not mean that it has established a place of business in India, the high court stated in the judgment, Willis Europe BV vs Willis India Insurance Brokers (P) Ltd. The case was about winding up of a company which was a joint venture with a Dutch insurance company doing business in India but had no place of business here.