From IBC to motor accident claim payment, here are key court orders

IBC not meant to recover dues
 

The Insolvency and Bankruptcy Code cannot be invoked when there is a dispute over dues and the IBC machinery cannot be made a substitute to a recovery forum, the Supreme Court stated last week while setting aside an order of the National Company Law Appellate Tribunal, New Delhi, in the case, Transmission Corporation of Andhra Pradesh vs Equipment Conductors & Cables. The Supreme Court stated that in this case, the tribunal presumed that the Transmission Corporation, a state undertaking, owed money to the opposite party. The tribunal, therefore, warned the corporation to settle the claim, otherwise, it would pass an order initiating the Corporate Insolvency Resolution Process. On the other hand, the corporation disputed the claim and asserted that it owed no amount to the other company. The arbitration tribunal had rejected the claim of the company against the Transmission Corporation. Therefore, there was a dispute. The dispute had travelled a long winding way from courts in Punjab and Andhra Pradesh to the apex court. The Supreme Court pointed out that the appellate tribunal had not discussed the merits of the case and also not stated how the amount is payable. Instead, the tribunal gave a “veiled threat” to the state corporation by giving just one chance to settle the claim, failing which it would pass “appropriate orders”. Thus, the appeal was allowed.

Compensation for delayed flat delivery
 

The Supreme Court last week asked Supertech to pay compensation to a buyer, Rajni Goyal, for delay in delivering the flat she had booked in Noida. Earlier, she had taken her complaint to the National Consumer Commission, which directed the real estate company to pay her compensation for the delay. The builder appealed to the apex court. It argued the delay was caused by certain orders of the National Green Tribunal on environmental issues. It pointed out that the contract had provided for the rate of interest to be paid in case of delay.  It argued that the National Commission had gone beyond the contractual terms. The Supreme Court accepted its contention regarding the interest for the delayed period, but upheld the rest of the order of the Commission.

 SC hikes motor accident claim payment
 

The Supreme Court has blamed the Orissa High Court for reducing the compensation granted to the claimants in a fatal motor accident without giving a reason for doing so. The tribunal had awarded Rs 4.1 million but the high court reduced it to Rs 3.6 million. On appeal in the case, Sebastiani Lakra vs National Insurance Company, the apex court increased the compensation to Rs 5 million. The judgment stated that deductions cannot be allowed from the amount of compensation either on account of insurance or on account of pension benefits or gratuity or grant of employment to a kin of the deceased.  It said all these amounts are earned by the deceased on account of contractual relations between him and others.  It cannot be said that these amounts accrued to the dependents or legal heirs of the deceased on account of his death in the accident. The claimants/dependents are entitled to ‘just compensation’ under the Motor Vehicles Act, the judgment emphasised. 

A win for bank in suspected cheque case
 

A bank is not called upon to be “overtly suspicious” when a cheque is presented before it. “The standard of care expected from a banker in collecting the cheque does not require him to subject the cheque to a minute and microscopic examination. The collecting bank has its remedies against its clients for indemnification by asking them to return the money. In turn, the clients have remedies against the drawer of the cheque or her customer to recover the amount from them as per law,” the Delhi High Court stated in its judgment in the case, Adya Global Export Inc vs Canara Bank. In this case, the firm, which exports basmati rice, presented a cheque, issued by a US branch of Bank of America, to Canara Bank. The amount was paid and the rice consignment was sent to Uganda. Later, it was found that the cheque was tampered with. The bank demanded the money back and it started litigation at several levels. The High Court dismissed the appeal of the firm against the order of the debt recovery tribunal, stating that the bank was not negligent in this case. 

Danish firm gets injunction on Rockwool
 

The Delhi High Court has restrained Thermocare Rockwool (India) from using the word 'Rockwool' as a trademark, including on its brochure, in conjunction with its trademark 'Sunrock'. All references to the word 'Rockwool' must be removed within a month. The order was passed in an application moved by Denmark firm Rockwool International A/S. The foreign company claimed that its trademark is registered in several countries and is a well-known name even in India. It makes stone wool fibre products which control the environment in all seasons. The Indian firm countered that 'rockwool' is a generic name found in dictionaries and other places. The court noted that the Indian firm itself has applied for a trademark registration for Rockwool and, therefore, it had prima facie admitted that it was not a generic name. The court also directed it to file its annual sales turnover since 2011, when it had given an undertaking before the Registrar of Trademarks not to use the disputed name.

Railways to compensate for theft
 

The National Consumer Commission last week reiterated that the Railways is responsible for the theft of luggage from a running train and the passenger must be compensated for deficiency in service. The railway had denied responsibility in the district consumer forum and the state commission and lost its case. On appeal, the National Commission admonished the Railways for continuing to avoid liability despite the law laid down by it. In this case, Indian Railways vs Sunil Kumar, the passenger and his family boarded a coach of the Coimbatore-Jaipur Express train. On way, some persons entered the coach and took away their belongings. The family lodged a complaint of theft and moved the consumer forum, which found deficiency in service on the part of the Railways and awarded compensation. On appeal, the National Commission upheld the compensation and asked the chief executive of the Railways to look into its laws, rules and policy in respect of safety and security of persons and baggage. If the Railways want to deny responsibility, the passengers must be told its policy beforehand and not harassed after the incident with legal technicalities, the judgment said.