Publication of tender notices

LEGAL DIGEST

The Supreme Court has set aside the Madras High Court ruling in the case of Secretary, PWD vs DP Constructions. The dispute arose over lack of publicity in inviting tenders. This aspect comes under the Tamil Nadu Transparency in Tenders Rules.

Giving its ruling, the court observed, "We direct the authorities to see to it that the rules are scrupulously followed. The court will take a serious view of the matter if it comes to its notice that tender notices are published in a selective manner, or are not published in the manner required by the rules. If need be, the government may amend the rules to enforce their strict compliance."

Tax exemption for new units

Dismissing an appeal of the UP Commissioner of Trade Tax, the Supreme Court has held that new units were eligible for tax exemption according to the 1991 notification under the UP Trade Tax Act.

A number of units like Modipan Fibres Company, which had undertaken expansion and modernisation, were denied tax exemption by the authorities as per their interpretation of the notification.

The judgement said, "The intention of the legislature is clear and unambiguous. Exemption is to be given on the turnover of sale of goods in an assessment year in excess of the base production. Simply because the dealer has to file returns every month and deposit the admitted tax, does not mean that the question of exemption on the turnover of production in excess of the base production can be considered only after the base production is achieved."

'Oppression' of board members

The Supreme Court has ordered the convening of a fresh meeting of the board of Ruby General Hospital Ltd, a project which was set up with NRI finance in Kolkata. The earlier resolutions of the company stripping the founders of their top posts were set aside.

The court directed that Kamal Kumar Dutta, ousted managing director, would preside over the fresh meeting. Going through the facts, the judges remarked that there could not be a better instance than this of oppression of the board members and bringing about material changes in the management (Sections 397 and 398 of the Companies Act).

The Supreme Court criticised the Calcutta High Court for asking the oppressed directors to file a suit for redressal of grievances, instead of granting relief.

Fraud accused continues in service

The Supreme Court has quashed a judgement of the Bombay High Court by which an officer of State Bank of India charged with fraud was allowed to continue in his job, even against the finding of the disciplinary committee.

The Supreme Court criticised the high court for going through the facts of the case already decided by the committee.

It said, "When a bank officer commits misconduct for his personal ends and against the interest of the bank and the depositors, he must be dealt with iron hands and he does not deserve to be dealt with leniently."