Brief case: Bidder can quote affiliate's expertise

A weekly selection of key court orders

In awarding tenders, the technical experience of a subsidiary company can be taken into account and the parent company cannot be ousted only because it has no experience on its own, the Supreme Court  said while upholding the award of a Metro rail project to a Chinese government company. In this judgment, Consortium of Titagarh Firema Adler SPA vs Nagpur Metro Rail Corporation, the contract for 69 passenger cars and training of personnel was awarded to the Chinese company, though its bid was only marginally lower than that of the consortium.  Therefore, it moved the Bombay High Court (HC), challenging the award to the Chinese firm. It argued the firm itself did not fulfill the technical criteria but it invoked the experience of its subsidiaries. It was neither a consortium nor a joint venture (JV); therefore, it was disqualified in the bid. The HC rejected the argument, which was raised again in the appeal. The SC dismissed the appeal, saying the concept of “government-owned entity” could not be given a narrow meaning. It would include its subsidiaries if the owner who called the tender was satisfied. Moreover, the bids were vetted at each stage by KfW Development Bank of Germany. The court also said reiterated that judicial review in tenders is exercised in rare instances.

 
SBI to pay interest for late payment
 
The Supreme Court (SC) has asked State Bank of India to pay Rs 2 lakh as interest for delay in payment of an award in favour of an employee. The award was passed in 2005, P James vs SBI but it was implemented only after six years. When the employee sought interest for the period, the bank argued the award did not direct it to pay interest and it should not be compelled to pay interest. The court said even if the award did not speak about interest, there was long delay in implementing it. Therefore, it asked the bank to pay interest but clarified this would not be a precedent in other such cases.

 

Probe into excise raid practices
 
The Delhi High Court (HC) last week slammed the central excise authorities for claiming on behalf of the raid parties that they have “the discretion to decide on the spot what the evaded duty amount is; to collect such duty by way of cheques; to decide again on the spot the terms on which such duty should be paid; to decide again on the spot whether to grant such duty evader the facility of postponement/late payment by ‘agreeing’ not to put any date on such cheques.”  In this case, Digipro Import vs Union of India, the premises of the importer of mobile phone parts were visited by the excise officers who found the firm had paid less than the duty prescribed. They took five undated cheques worth Rs 1.25 crore. The importer disputed the amount and moved the high court. It called for the cheques and the records, and found the officers acting without authority. It directed the commissioner to find out the persons who accepted the cheques and referred the case to the Chief Vigilance Commissioner. The excise commissioner has been asked to appear in person to answer the court’s questions. The court observed this was a practice not confined to the excise department. Unauthorised collections of differential duty, even in cash, have come to the notice of the court from Vat and other departments, the court said.

 
Is cell phone user a consumer?
 
The question whether an aggrieved person can complain of ‘deficiency in service’ of a cell phone service provider before a consumer court or approach authorities under the Indian Telegraph Act is before a larger Bench of the National Consumer Commission. Vodafone Mobile Services raised the issue before the Calcutta High Court (HC) last week when the West Bengal state consumer commission took up the complaint of a person whose connection was unilaterally disconnected. Vodafone argued that consumer forums have no power to hear such complaints. The HC noted that the National Commission has referred this question to a larger Bench of the Commission. However, its President felt the question has already been decided by a larger Bench, which held against the service provider. The HC stated the president was wrong and the larger Bench has not decided the question. So, the state commission cannot deal with the complaint till the issue was finally decided.

 
Frugal award for widow and kids
 
Observing that the motor accident claims tribunals are generally frugal, the Calcutta High Court (HC) enhanced the compensation for the death of a 41-year old man from Rs 3.90 lakh to Rs 10.22 lakh. In this case, Chapa Ghosh vs Cholamandalam General Insurance, the court observed that the tribunal “has made a mess”. The deceased person died when a truck hit him. His widow and two minor children moved the tribunal, which did not take into account several important aspects. For instance, the funeral expense was fixed at Rs 2,000 and the loss of consortium of the wife was Rs 5,000. The dependency of children was also assessed low, as “after suffering the irreparable loss of the protective umbrella of a father, the minor children are exposed to the likely wrath of nature as well as maltreatment at the hands of elders if they are considered a burden.” The HC recalculated the loss suffered by the family and set the funeral expenses at Rs 50,000 and Rs 1 lakh for children. It asked the insurance company to pay interest also from the date of application.

 
Row over poker game website
 
In a dispute over the domain name of poker game websites, the Calcutta High Court (HC) declined to pass an injunction order on the use of thespartanpoker.com because the proceedings are pending in the Trade Mark Registry. The website was started in Kolkata, as the West Bengal Gambling and Prize Competitions Act was liberal towards it, unlike the Maharashtra law. The partnership to exploit the gambling business went on well for some time with the website thespartanpoker.com. However, the partners fell out and the case landed in the HC. In a lengthy judgment, Rajat Agarwal vs Spartan Online Ltd, the court made an interim arrangement with the remark: “The game of dice which led to the epic battle of Kurukshetra has not deterred generations after generations irrespective of ancient or modern to pursue gambling whether we may ensconce it with a game of skill in order to justify its legality and to give legal recognition although the result might be ruinous.”