Exim policy to electricity theft, here's a weekly selection of court orders

Consumer court can't examine Exim policy

A person who has a claim under a replenishment (REP) licence issued in terms of the import and export policy is not a ‘consumer’ and providing benefits under the terms of the Exim policy is not ‘service’ as defined in the Consumer Protection Act, the Supreme Court has stated in its judgment in Ministry of Commerce vs Vinod & Co. According to the Exim policy existing at the relevant time, exporters were entitled to a 20 per cent premium on the exports. Later, the scheme was discontinued. The exporter, in this case, requested revenue authorities to pay the premium, which was refused as the scheme was discontinued. The exporter moved the Delhi consumer forum, which ordered the government to pay the premium plus compensation for causing mental agony and legal expenses. The authorities moved the state commission and the National Consumer Commission without success. But in the final appeal, the Supreme Court agreed with the authorities and asserted that the exporter could not move the consumer fora. He was not a consumer in the first place and the benefit given to exporters is not a service. The government was implementing a policy to promote exports and regulate imports. On both counts, the fora below were wrong, the Supreme Court ruled.

Electricity theft trial in the fast lane

A serious offence is normally referred to a sessions court for trial by a magistrate. But this procedure prescribed in the Criminal Procedure Code need not be followed in the case of theft or other offences under the Electricity Act. It has a provision which enables the power authority to move the special court straightaway. In the case of A M C S Swamy vs Mehdi Agah, a consumer was found tampering with the electricity meter two times and his power line was cut off and prosecution initiated against him. He moved the Telangana High Court against the prosecution. The high court quashed the action, taking the view that the power authority cannot move the special court without the case being committed to it for trial by a magistrate. The authority appealed to the Supreme Court. It set aside the high court judgment; which means that the consumer will stand trial in the special court set up to deal with power thefts.

Business slump no excuse for rent default

A slump in the business cannot justify default in payment of the lease rent, the Supreme Court observed last week in the judgment in Chandigarh Administration vs Hari Ram. In this case, a 99-year lease was given to Hari Ram for a commercial space in 1996. After a few instalments, he defaulted on paying the dues. The Chandigarh Administration gave 26 opportunities to clear the dues, but still, the payment was not made. So it invoked the Public Premises (Eviction of Unauthorised Occupants) Act and tried to evict him. However, the Punjab & Haryana High Court stopped the action holding that the cancellation of allotment would cause hardship to the lessee and one more opportunity must be given to him to pay the outstanding dues. The Chandigarh Administration appealed to the Supreme Court. It allowed six months to the lessee to clear arrears amounting to Rs 10.25 lakh, failing which he can be evicted.

Law on insurer’s burden in a flux

The liability of an insurance company to compensate a road accident victim when the terms of the policy have been violated came in for examination again in the Bombay High Court in United India Insurance Co vs Sukumarbai. In several cases, the Supreme Court had asked the insurance company to pay the victim and then recover the amount from the owner or driver who is guilty of rash driving. But those orders were passed by the Supreme Court under Article 142 of the Constitution which grants it special powers to do “complete justice”. The question of whether other courts can also pass orders to the insurer to pay and then recover it from the owner or driver of the vehicle which caused the accident is still debated. Case law is often cited from both sides. The Supreme Court has not decided the question finally though it was before it for a long time. In this case, the tribunal followed the Supreme Court, believing that “pay and recover” is the norm. But on appeal by the insurance company, the high court asserted that when the terms of the policy were violated, the insurer must be exonerated and the liability fell entirely on the owner or driver.

Water levy on mined-out pits upheld

The Chhattisgarh High Court has dismissed the challenge made by cement firm ACC Ltd against the levy on water collected in the coal mine pits for industrial use. The firm argued that the state has no power to do so under the Irrigation Act. On extraction of minerals, rainwater gets collected in the mined-out pits and that water is being used for various activities, including manufacturing processes. The state authorities found it illegal and demanded water charges. That demand was resisted by ACC on various grounds. Rejecting them, the high court emphasised that under the Irrigation Act, all rights over the water of any river or other natural collection of water shall vest in the government. It is open for the government to fix conditions for the supply of water for industrial purposes not connected with agriculture.

Bank to pay for losing bounced cheque

The National Consumer Commission has directed Bank of Baroda to pay Rs 3.6 lakh to a customer whose cheque the bank had lost. The customer had received a cheque from another person and he deposited it in the bank. But it bounced. Therefore, he wanted to initiate proceedings under the Negotiable Instruments Act against the drawer. The customer, Chitrodaya Babuji, asked the bank to return the invalid cheque, along with the memo to pursue his case. But the bank had lost the cheque and memo, disabling Babuji from pursuing the criminal case. He moved the district forum, which granted him only a meagre compensation. He moved the Gujarat state consumer commission, which asked the bank to pay the full cheque amount to Babuji. The bank came in appeal, and the National Commission upheld the state commission order. “The bank has failed to return the cheque and so Babuji was deprived of his legal right to file a case against the account holder. Thus, he had to suffer a loss of Rs 360,000. When the cheque had been lost by the bank, it is its responsibility to compensate the loss,” the judgment said.