The Supreme Court has ruled that Paradeep Port Trust was justified in terminating the licences of some 50 firms, which had held plots for handling iron ore and other materials for export. Several firms, some of these that had been successful in auction or tenders, were aggrieved that their licences were not renewed. The port trust submitted that it did so to provide better facilities at the port using additional space. Earlier, the dispute was decided by the Orissa High Court in favour of the plot holders. But on appeal, the court held in the judgment, Yazdani International Ltd vs Auroglobal Comtrade Ltd, that a licence did not create an indefeasible legal right. Second, in view of the existing iron ore traffic which is showing a growth rate of 159.56 per cent during the current financial year, lack of infrastructure amenities is likely to cause huge financial loss to the port. If facilities are not improved, it would result in idling of the existing iron ore handling plant for which significant amounts have already been spent. Already, iron ore traffic is moving to nearby private ports due to non-availability of sufficient facilities in the port, the court said.
Legislative howlers alive for 20 years
The Supreme Court has regretted that the formula provided in the Motor Vehicles Act to calculate compensation in case of road accident is full of errors and it has not been amended for nearly 20 years despite repeated calls to do so by the court. Therefore, the court has directed the Ministry of Road Transport to amend the Second Schedule immediately. An amendment Bill was passed by the Rajya Sabha, proposing to revise the compensation amount every three years, but it has not been considered by the Lok Sabha. Til the Bill is passed, the court asked the tribunals to follow a new formula set by the court itself. In view of the defective schedule under Section 163A, the forums below are awarding miserable amounts. In this case, Puttamma vs Oriental Insurance Company, the tribunal awarded Rs 9 lakh for the death of a 48-year-old man which was marginally enhanced by the Karnataka High Court to Rs 11 lakh. The Supreme Court raised it to Rs 24 lakh with 12 per cent interest which it considered as "just compensation".
In a large number of appeals moved by the central government, the Supreme Court has ruled in favour of the revenue authorities, approving of the tough stand they took against firms, which wrongfully availed of modified value-added tax (MODVAT) credit in respect of duty paid on high speed diesel (HSD) oil. The government had specifically declared as early as in 1995 that the oil used as input for producing electricity would not be eligible for the benefit. In the leading case, Union of India vs Maharaja Shree Umaid Mills, the firm was using HSD oil to generate power to manufacture yarn and fabrics. It availed of the credit, leading to a showcause notice. It was contested in various forums, including the Rajasthan High Court. Ultimately, the Supreme Court upheld the view of the excise department. It also declared its demand to return the amount wrongly availed of with 24 per cent was also fair.
Resumption of mining disallowed
The Supreme Court has dismissed the appeal of a mining firm operating in Madurai district of Tamil Nadu, PRP Exports, which is accused of illegal mining to the tune of Rs 4,124 crore. A geological report has estimated that the total volume of illegal mining by all firms in the district was around Rs 12,390. This company has moved the Madras High Court against suspension of its operation under the Granite Conservation Rules. It pleaded in the Supreme Court, through counsel Harish Salve, that it may be allowed to resume its operations. The court rejected the request.
'Full and final settlement' of dispute
When a party to a contract claims that the dues were paid according to a "full and final settlement" receipt and the opposite party denies it, the issue could be referred to an arbitrator. While dismissing an appeal, Gayatri Project Ltd vs Sai Krishna Construction, the Supreme Court said in this case, there was no acceptance of the full and final settlement and, therefore, the issue had to be adjudicated by the arbitrator appointed by the Andhra Pradesh High Court. The irrigation department of the Andhra Pradesh government gave a work to Gayatri, the main contractor. Some work was sub-contracted to Sai Krishna. It was executed and the main contractor was paid by the government. However, the sub-contractor's complaint was that it was not paid its dues corresponding to the payment received by the main contractor from the government. The main contractor claimed the dues were paid "in full and final settlement". This was disputed by the sub-contractor, who moved the high court, where it won. Gayatri's appeal was dismissed. Since the dispute was over a decade old, the court asked the arbitrator to give his award as early as possible.
Borrower's undertaking invalid
The Supreme Court has ruled that a written undertaking given by a borrower that he would not dispose of his properties during the currency of the loan cannot be enforced, unless it is registered. Even if it is written on a stamped paper, the undertaking will not create a charge on the properties. In this case, Haryana Financial Corporation vs Gurcharan Singh, the proprietor of a steel manufacturing unit took a loan which it could not repay. The corporation sold his properties and appropriated the proceeds on the ground that the proprietor had given an undertaking that he would not dispose of his properties during the pendency of the loan. The proprietor moved the court and won. Dismissing the appeal of the corporation, the Supreme Court clarified there will be no charge on the properties, unless there is deposit of title deeds or an undertaking through a registered document.
Legislative howlers alive for 20 years
The Supreme Court has regretted that the formula provided in the Motor Vehicles Act to calculate compensation in case of road accident is full of errors and it has not been amended for nearly 20 years despite repeated calls to do so by the court. Therefore, the court has directed the Ministry of Road Transport to amend the Second Schedule immediately. An amendment Bill was passed by the Rajya Sabha, proposing to revise the compensation amount every three years, but it has not been considered by the Lok Sabha. Til the Bill is passed, the court asked the tribunals to follow a new formula set by the court itself. In view of the defective schedule under Section 163A, the forums below are awarding miserable amounts. In this case, Puttamma vs Oriental Insurance Company, the tribunal awarded Rs 9 lakh for the death of a 48-year-old man which was marginally enhanced by the Karnataka High Court to Rs 11 lakh. The Supreme Court raised it to Rs 24 lakh with 12 per cent interest which it considered as "just compensation".
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MODVAT credit wrongly claimed
In a large number of appeals moved by the central government, the Supreme Court has ruled in favour of the revenue authorities, approving of the tough stand they took against firms, which wrongfully availed of modified value-added tax (MODVAT) credit in respect of duty paid on high speed diesel (HSD) oil. The government had specifically declared as early as in 1995 that the oil used as input for producing electricity would not be eligible for the benefit. In the leading case, Union of India vs Maharaja Shree Umaid Mills, the firm was using HSD oil to generate power to manufacture yarn and fabrics. It availed of the credit, leading to a showcause notice. It was contested in various forums, including the Rajasthan High Court. Ultimately, the Supreme Court upheld the view of the excise department. It also declared its demand to return the amount wrongly availed of with 24 per cent was also fair.
Resumption of mining disallowed
The Supreme Court has dismissed the appeal of a mining firm operating in Madurai district of Tamil Nadu, PRP Exports, which is accused of illegal mining to the tune of Rs 4,124 crore. A geological report has estimated that the total volume of illegal mining by all firms in the district was around Rs 12,390. This company has moved the Madras High Court against suspension of its operation under the Granite Conservation Rules. It pleaded in the Supreme Court, through counsel Harish Salve, that it may be allowed to resume its operations. The court rejected the request.
'Full and final settlement' of dispute
When a party to a contract claims that the dues were paid according to a "full and final settlement" receipt and the opposite party denies it, the issue could be referred to an arbitrator. While dismissing an appeal, Gayatri Project Ltd vs Sai Krishna Construction, the Supreme Court said in this case, there was no acceptance of the full and final settlement and, therefore, the issue had to be adjudicated by the arbitrator appointed by the Andhra Pradesh High Court. The irrigation department of the Andhra Pradesh government gave a work to Gayatri, the main contractor. Some work was sub-contracted to Sai Krishna. It was executed and the main contractor was paid by the government. However, the sub-contractor's complaint was that it was not paid its dues corresponding to the payment received by the main contractor from the government. The main contractor claimed the dues were paid "in full and final settlement". This was disputed by the sub-contractor, who moved the high court, where it won. Gayatri's appeal was dismissed. Since the dispute was over a decade old, the court asked the arbitrator to give his award as early as possible.
Borrower's undertaking invalid
The Supreme Court has ruled that a written undertaking given by a borrower that he would not dispose of his properties during the currency of the loan cannot be enforced, unless it is registered. Even if it is written on a stamped paper, the undertaking will not create a charge on the properties. In this case, Haryana Financial Corporation vs Gurcharan Singh, the proprietor of a steel manufacturing unit took a loan which it could not repay. The corporation sold his properties and appropriated the proceeds on the ground that the proprietor had given an undertaking that he would not dispose of his properties during the pendency of the loan. The proprietor moved the court and won. Dismissing the appeal of the corporation, the Supreme Court clarified there will be no charge on the properties, unless there is deposit of title deeds or an undertaking through a registered document.