The Supreme Court has ruled that a company which has amalgamated with another can evict a tenant of the old firm from its premises for bona fide requirement of the new company which has come into existence. In this case, Speedline Agencies vs T Stanes & Co, the landlord company in Coimbatore had merged in another and formed a new one. The original company had won the eviction of a tenant company from its premises. The tenant company resisted the implementation of the decree as the original landlord was no longer in existence after the amalgamation and the new landlord company had no right to evict old tenants. The amalgamated company argued that it wanted to expand its activities, and the premises were wanted for that. The court agreed with it and observed: “If a landlord which is a company cannot advance its interest in the business by amalgamating with another company by putting to use its own property, it would be unjust, unfair and unreasonable. In a case of landlord requiring the premises for its own use, the rent control law may clash with the provisions of the Companies Act. The two Acts have to be harmoniously interpreted and not interpreted as to result in the one Act destroying a right under the other Act.”
Dispute over shareholding in hotel
The Supreme Court has appointed its former judge, Justice M Jagannadha Reddy, as the arbitrator in a dispute involving three companies and the Andhra Pradesh Tourism Development Corporation over the development of Hotel Ritz as a ‘heritage grand’ hotel. In this case, Anil Kumar vs BS Neelkanta, the corporation awarded lease in favour of Goldstone Teleservices for the hotel project. It entered into an agreement with a new company, Varsha Hill Fort Resorts Ltd, to execute the project. Disputes arose over the shareholding of the companies. The Andhra Pradesh high court appointed an arbitrator. This led to an appeal to the Supreme Court. In order to end the dispute, the Supreme Court appointed a new arbitrator.
Securitisation Act gets primacy
The Bombay high court has dismissed the petition of Nouveaw Exports Ltd against the ruling of the Appellate Authority for Industrial and Financial Reconstruction which allowed the auction and sale of assets of a sick company by the sole creditor bank. The creditor bank invoked the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act to sell the property. The company argued that since the revival of the unit under the Sick Industries Act was pending, the bank could not have sold the property. The high court rejected this contention and gave primacy to the Securitisation Act.
Indian firm held guilty of ‘passing off’ trade mark
The Delhi high court last week passed a decree in favour of German corporation KSB Aktiengesellschaft against KSB Global Ltd of India in a trade mark suit, preventing the latter from using the letters KSB for its products. The German firm argued that it was using the KSB mark for its products like metal pipes and fittings for 137 years in many countries and was doing business through its subsidiary in India since 1988. KSB was an acronym created from the names of the founders. The Indian firm also argued that the trade mark stood for Kuldip Sing & Co, which was originally a family concern, which later became a company. Both of them were in the same business. The high court ruled that the German company was the registered proprietor of the trade mark KSB and the Indian firm had infringed it and was guilty of ‘passing off’.
Insurance firm asked to compensate company hit by Naxalites
The National Consumer Commission has directed United India Insurance Company to pay compensation to NVC Group Farms in Andhra Pradesh whose drip irrigation system and other properties were destroyed by Peoples War Group militants. The insurance company appointed a surveyor who assessed the losses. However, the company did not settle the claim but two persons, one after the other, were sent to report on the losses. Their reports repudiated the incident of extremist raid at all. Thus the company denied liability. The farm owners moved the state consumer commission which went against them. They appealed to the national commission, which asked the company to pay the compensation. It criticised the insurance company for sending two more persons to study the situation. The commission stated that the procedure was against the Insurance Act and the two persons were not appointed according to law. “The insurance company did not give any reason, what to talk of any valid reasons, as to why the report of the first surveyor was not acceptable to it or what the defects were in the report submitted by the first surveyor. Moreover, it would appear to us that the subsequent surveyors were not formally appointed as no appointment letters were issued.”