The Supreme Court (SC) stated last week that if the selection of distributors of LPG gas of Indian Oil Corporation was tainted with corruption, it should be scrapped altogether. The selection could not be upheld merely because there was no one to challenge it. This ruling was delivered in the case, IOC vs Guru Shakti, while setting aside the judgment of the Allahabad high court which asked the corporation to confirm the selection, though the corporation had found after investigation that the selection process was illegal and irregular. Though one of the failed candidates had challenged the selection process, he died during the litigation. Meanwhile, the corporation on its own conducted a probe which concluded that the selection process was geared to favour one person. He argued that since there was no challenge to his selection after the death of the petitioner, the corporation should retain his selection. The high court agreed with him. But the Supreme Court stated that the high court attitude was wrong.
If the process was illegal, it should be totally scra-pped even in the absence of any protest. The corporation was allowed to start a new selection process.
Arbitrator’s jurisdiction can’t be challenged
Once an arbitrator was appointed by the Chief Justice under the Arbitration and Conciliation Act, neither party can challenge his jurisdiction. In this case, M/s APS Kushwaha vs Municipal Corporation, Gwalior, there was a dispute over payment and an arbitrator was appointed. He gave an award in favour of the contractor. The authorities challenged the jurisdiction of the arbitrator, arguing that under the Madhya Pradesh arbitration law, he had no jurisdiction. On the other hand, the contractor contended that since the arbitration was under the central law, the jurisdiction of the arbitrator could not be challenged, once it was referred to him by the Chief Justice.
The high court dismissed the contractor’s petition, but on appeal, the Supreme Court quashed the high court ruling.
Truant owner of vehicle given insurance benefit
Breach of conditions of permit by the owner of a motor vehicle would not absolve the insurer from paying the compensation awarded, though it can recover the amount from the owner later. In this appeal before the Supreme Court, United India Insurance Co Ltd vs K M Poonam, the jeep had a capacity to carry six persons but it was carrying 15 passengers at the time of the accident which caused death and injuries to them. They claimed compensation which was awarded by the tribunal. The insurance company appealed to the Supreme Court. It asked the insurer to pay the amount and then recover the amount paid to the excess passengers from the owner of the vehicle. The total amount of the six awards which are the highest shall be construed as the liability of the insurance company.
Firm told, not eligible for two simultaneous excise benefits
The Supreme Court last week dismissed the appeal of Uttam Industries, manufacturers of aluminum circles, holding that it was not entitled to claim two benefits on central excise simultaneously. Under two notifications issued by the Haryana government, exemption from levy was available only to those units which did not avail of Modvat credit of duty paid on the inputs. The company argued that the benefits granted by the notifications were not conditional and both benefits could be claimed simultaneously. The customs, excise and service tax appellate tribunal (CESTAT) rejected this contention. The Supreme Court upheld it.
Appeal against car dealer dismissed
The Supreme Court has dismissed an appeal against the order of the National Consumer Commission and held that a dealer of Maruti vehicle was not guilty of deficiency of service. The complaint in the case, Ravinder Raj vs Competent Motors Ltd, was that there was a delay in the delivery of the vehicle by the dealer, by which time the excise duty had gone up. The dealer asked the consumer to deposit the increased levy. This led to a consumer dispute. The court held that the price prevailing on the date of the billing would apply. Moreover, under Section 46A of the Sale of Goods Act, it is the liability of the buyer to pay extra price when the excise duty has been enhanced before the delivery of the vehicle.
Customs commissioner’s appeal against ruling dismissed
The Supreme Court last week dismissed the appeal of the Commissioner of Customs against the ruling of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on the question of ‘proper officer’ who had the power to issue show cause notice. In this batch of appeals, one M/s Handloom Carpet, engaged in the business of carpet manufacture/export, was charged with misusing the Export Pass Book scheme by selling goods cleared duty free in the open market or selling the pass book on premium in violation of rules restricting such sale. Investigations in the matter were conducted by the Marine and Preventive Wing of the Customs. The Assistant Collector of Customs (Preventive), Mumbai, issued show cause notice to the firm. This was challenged before the tribunal. It held that that the Commissioner of Customs (Preventive) did not have jurisdiction to issue the show cause notice as he was not declared to be the ‘proper officer’ as defined under the law.