The disinvestment plan for ITDC’s Ashok Yatri Niwas has been caught in multiple litigation and the Supreme Court last week asked the Delhi high court to decide the issues as early as possible in the order, Ram Parshotam Mittal vs Hillcrest Realty Sdn Bhd. Hotel Queen Road (Private) Ltd was incorporated as a special purpose vehicle for taking over the assets of Ashok. Hillcrest Realty, a Malaysian company, bought redeemable shares from the private company. But it did not get dividends.
There were disputes between the parties over holding of an extraordinary general meeting for choosing directors and passing resolutions changing the nature of the company to a public company. The status of Hotel Queen, whether it is a private or public company, is the crucial issue, according to the Supreme Court. While holding ‘prima facie’ view that it was a public company, it asked the high court to delve into the details and give a final decision “so that the management and affairs of Hotel Queen are not left in a state of ncertainty.”
Arbitrator for theme park case
The Supreme Court last week appointed its former judge, Justice S N Variava, as arbitrator in the dispute among the shareholders of Splash Mountain Water Park Ltd of Pune. The project was started by a US citizen of Indian origin and his wife with shareholdings by other Indians who were doing business in the US . When disputes arose, one group wanted arbitration, while the other resisted it. However, the Supreme Court, after hearing the parties in the case, Vanna Claire Kaura vs Gauri Anil Indulkar, felt that there were issues to be adjudicated in this international arbitration and appointed the ex-judge as the sole arbitrator.
In another dispute between Malaysian firm Sime Darby Engineering and Engineers India, regarding the offshore work undertaken for ONGC, the Supreme Court appointed its former judge, justice D P Wadhwa as the sole arbitrator.
HC judgement on expenditure on machinery set aside
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The Supreme Court last week set aside the judgement of the Madras high court which had declared that the expenditure on replacement of machinery was revenue in nature and thus allowable as deduction under the Income Tax Act. The textile mill in the case, Commissioner of Income Tax vs Sri Mangayarkarasi Mill Ltd, had claimed deduction on replacement of spare parts in the spinning unit, maintaining that it amounted to revenue expenditure. The assessing officer had rejected the claim of the textile mill and held the expenditure to be of a capital nature. The high court, however, accepted the mills’ argument. The revenue department’s appeal was allowed by the Supreme Court.
Toll on weigh bridges
The Meghalaya government has given an undertaking before the Supreme Court that it will set down rules under the Motor Vehicles Act to stop demands by innumerable entities at several points for tolls on weighbridges and other fees. Even the tribal chiefs have set up toll gates claiming customary rights. One main road has 16 points where money is collected from truck operators. They moved the Gauhati high court against this menace in Meghalaya and Assam, and the high court asked the Meghalaya government to lay down rules. An appeal was filed in the Supreme Court by a group of truck owners.
The Meghalaya government then promised to declare the rules in two months.