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Corruption wipes out oil dealerships

A weekly selection of key court orders

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M J Antony
Last Updated : Sep 22 2014 | 2:20 AM IST
The Supreme Court ruled last week that if the selection process for dealership of petroleum products is vitiated due to political considerations, patronage or other extraneous considerations, the entire allotment is vitiated. There is no automatic allotment in favour of the second or third empanelled candidate when the selection of the first empanelled candidate is cancelled, the court held while allowing the appeal, Indian Oil Ltd vs Sunita Kumari. In this case, the oil corporation invited application for dealers for superior kerosene oil and light diesel oil. The appointment was reserved for women belonging to scheduled castes in Samastipur district. Sunita Kumari was the second choice in the panel shortlisted by the corporation. Soon thereafter, news reports appeared alleging nepotism and favouritism in the allotment of dealership all over the country. The central government therefore scrapped the entire list. This led to a spate of writ petitions in the high courts. They were transferred to the Supreme Court. In the Bihar case, the court cancelled the allotment to the first woman. Sunita Kumari therefore staked claim to the appointment and the Patna High Court granted her request. The oil company's appeal to the Supreme Court was allowed which stated that if the selection process is itself vitiated, there is no question of going down the list of empanelled candidates.

Larger bench to decide on debt recovery
The Supreme Court last week referred to a larger bench a question regarding debt recovery on which there was conflict of opinion in earlier judgments. The issue was "whether having regard to the Recovery of Debts due to Banks and Financial Institutions Act, 1993, a suit containing a counter-claim or claiming a set-off filed by a debtor can be heard and tried before the Debt Recovery Tribunal or must be tried by a civil court alone. "This issue arose once again in the appeal, Bank of Rajasthan vs VCK Shares & Broking Services Ltd. This case was pending in the Calcutta High Court since 1998 and there was no progress till now. "Much progress is not likely to take place for a long time," the court observed while rejecting a plea for stay.

High courts not to review evidence

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A five-judge constitution Bench of the Supreme Court, while resolving earlier conflicting judgments by smaller Benches, has ruled that in tenancy matters, high court shall not exercise its appellate power to re-assess the evidence for coming to a different finding on facts. "Revisional power is not and cannot be equated with the power of reconsideration of all questions of facts as a court of first appeal," the judgment in a batch of
appeals, Hindustan Petroleum Corp Ltd vs Dilbahar Singh, said. There were several appeals involving rent control laws from Haryana, Tamil Nadu and Kerala where the provisions were similar. Clarifying the law, the constitution bench stated that a high court will interfere with the decision of an authority below it only if the finding was found to be "perverse, grossly erroneous and likely to result in gross miscarriage of justice."

Compensation for minor's injury
When calculating compensation for accidents suffered by minors, a notional annual income of Rs 15,000 is not justified, the Supreme Court has ruled in the case, Kumari Kiran vs Sajjan Singh. According to the second schedule of the Motor Vehicles Act, a minimum notional income of Rs 15,000 a year is shown against those who have no income. In this case, two minors were on the pillion while their father was riding a bike. When a tractor hit the bike, all of them were injured and suffered 30 per cent permanent disability. The accident claims tribunal assessed Rs 15,000 a year as notional income for the children. The Madhya Pradesh High Court marginally raised the damages on other counts. However, on appeal, the Supreme Court observed that the courts below not only failed to follow the principles laid down in such matters but also did not show compassion to the minors. "The trauma undergone by the minors could have severe long-lasting effect and their parents have to make arrangements to support their disability in the future," the court pointed out while raising the total compensation to Rs 17 lakh.

Serving notice when cheque bounces
The Supreme Court has set aside the Bombay High Court judgment in a cheque bounce case in which the high court quashed the complaint because there was no evidence of the notice having been served on the drawer by the payee. The apex court stated that under the General Clauses Act, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business. Moreover, said the judgment in the appeal, Ajeet Seeds Ltd vs K Gopala Krishnaiah, that service of notice is a matter of evidence and it would be premature for a high court to use its discretionary power to quash the complaint even before the issue is tested in the court.

Inflating settlement figures
The Supreme Court deprecated the growing tendency of sending settled disputes to Lok Adalats to "inflate" the number of cases brought to an end at such functions. The court made the remark in a case of cheque bounce in which the parties had amicably settled all issues between them. However, the dispute was listed before the Lok Adalat which resurrected the case on a technical point. The Madhya Pradesh Legal Services Authority brought up the issue before the apex court. It said that infructuous cases should not be listed before Lok Adalats for statistical purposes and "window dressing."

Restraint on drug trademark
The Bombay High Court last week restrained Themis Medicare Ltd and Ciron Drugs and Pharmaceuticals Ltd from using certain trademarks for anaesthetics on an application by Neon Laboratories. The court stated that the two companies have adopted a family of marks with 'Xylox', which was deceptively similar to Neon's 'Lox' family of marks. "Any such confusion between products that deal with the same spectrum of health issues, even if sold under prescription, might well be life-threatening," the judgment said and added that "it is human to err; doctors, like the rest of us, are no exception. An incorrect product mistakenly used might well be fatal. There is an overarching public interest that requires a lower threshold of proof of confusing or deceptive similarity where the trademarks in question are applied to pharmaceutical products."

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First Published: Sep 21 2014 | 9:31 PM IST

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