Dresser Rand's plea dismissed

LEGAL DIGEST

The Supreme Court last week dismissed the appeal of Dresser Rand SA against Bindal Agro Chem Ltd and KG Khosla Compressors Ltd stating that there was no arbitration agreement between the foreign company and its Indian counterparts in their international contract.

Bindal and KG Khosla had moved the Delhi High Court arguing that there was no such agreement and Dresser Rand should be restrained from proceeding with the arbitration before the International Chamber of Commerce, Paris.

Dresser insisted that there was such a clause and the suits in the high court should be stayed under the Foreign Awards (Recognition and Enforcement) Act.

The high court passed an injunction restraining the foreign company from proceeding with the arbitration. Dresser went up in appeal against the order. But the Supreme Court affirmed the high court order after examining the facts and finding that there was no arbitration clause in the agreement between the parties.

Parikh's prosecution in co-op bank case

The Supreme Court last week dismissed the appeal of Rameshchandra Parikh, former managing director and chairman of Madhavpura Mercantile Co-operative Bank Ltd, challenging criminal investigation and prosecution against him in connection with the co-operative bank scam of Gujarat.

In a public interest litigation, Parikh and several others were named as responsible for advancing huge sums to persons of dubious antecedents in violation of the banking procedures.

The bank also had filed criminal complaints against its former chief. The high court ordered a Central Bureau of Investigation (CBI) probe with the co-operation of the Gujarat Criminal Investigation Department (CID).

The CBI registered a case against him and the magistrate initiated prosecution. Parikh moved the high court to recall the magistrate's order. The high court dismissed his petition. On further appeal, the Supreme Court declined to interfere with the high court order and allowed the prosecution to continue.

'Magistrate can register fraud case'

In another case relating to fraudulent transactions in the banking sector, the Supreme Court asserted the power of the magistrate to register a case of fraud.

The Allahabad High Court had ruled that he had no such power. In this case, Mohd Yousuf vs Smt Afaq Jahan, Yousuf received a notice from the Union Bank of India for repayment of loan of the woman for whom he had allegedly stood guarantor.

Yousuf denied such undertaking and accused the bank manager for collaborating in the fraud committed by the woman and her husband.

He moved the magistrate's court, which directed investigation of the case and registration of a first information report. But the high court set aside the order. The Supreme Court has now reversed the order and the prosecution will continue.

Kerala asked to pay to contractor

The Supreme Court has quashed the judgment of the Kerala High Court and ordered payment of damages to a contractor who had suffered losses because of the negligence of the state authorities.

The construction was delayed because of the inordinate delay on the part of the government authorities. Moreover, the government blamed the contractor and denied payment to him.

He went to the district court, which found the government responsible for the delay and awarded damages to the contractor. The high court, however, reversed that order. On appeal, the Supreme Court upheld the order of the trial court, in the KC Skaria vs Government of Kerala case.