SC allows FCI appeal

LEGAL DIGEST

The Food Corporation of India won its dispute with Laxmi Cattle Feed Industries after 20 years when the Supreme Court overruled the orders of the Delhi High Court and the district judge.

The corporation had invited tenders for selling damaged foodgrain. Laxmin Cattle Feed was one of the successful bidders. It paid the stipulated amount but requested the corporation to refund the amount for part of the contract which could not be executed.

The corporation did not agree and asked it to lift the balance stocks. The company rejected the demand and filed a suit. The district judge and the high court held that the corporation had committed breach of contract. The Supreme Court allowed the corporation's appeal.

Cosmetics vs drugs

The Supreme Court has laid down guidelines to test whether a product is a medicine or a cosmetic for purposes of central excise in the judgment, Puma Ayurvedic Herbal Pvt Ltd vs Commissioner of Central Excise.

Firstly, the court should go by the common parlance test, or how the item is commonly understood in the market. Secondly, whether the ingredients are mentioned in the authoritative text books. The opinion of the chief chemist appointed under the law has authoritative value.

The quantity of medicament used in a particular product is also not relevant. It is not necessary that a medicine should always be sold under a doctor's prescription. Following these tests, the court ruled that a number of company's herbal formulations for the body were not cosmetics but medicines, attracting lower duty.

Bharti told to pay up

The Monopolies and Restrictive Trade Practices Commission has ordered Bharti Cellular Ltd to pay a fine of Rs 2,000 fine for violating its orders. The company had apologised for wrongly charging a customer for a service and the commission had accepted it.

However, the consumer returned to the commission, complaining that the company had re-imposed the charge. The company apologised again. However, this time, the commission said it took a "very dim view of attempting to get away from the interim orders by tendering unqualified apologies time and again." It asked the company to pay the fine to the Delhi legal aid panel within four weeks.

Only registered mail

The Supreme Court has stated in the judgment, State of Maharashtra vs Rashid, that a certificate of posting is not a proof of sending the letter. Only a communication sent by registered post is recognised as valid evidence.

The court said, "When a letter is sent by registered post, a receipt with serial number is issued and a record is maintained by the post office. But when a mere certificate of posting is sought, no record is maintained. The ease with which such certificates can be procured by affixing antedated seal with the connivance of any employee of the post office is a matter of concern. The Department of Posts may have to evolve some procedure whereby a record in regard to the issuance of certificates is regularly maintained showing a serial number, date, sender's name and addressee's name to avoid misuse."