From Land acquisition to trademark violations, here're the key court orders

A weekly selection of key court orders

Land acquisition for rapid transit projects

Claims of landowners against the metro railway projects in Kolkata and Chennai were resolved by the Supreme Court in two recent judgments. In R B Dealers Pvt Ltd vs Metro Railway, Kolkata, the issue was calculation of payment of solatium under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. Is it to be calculated only on the market value and assets, or the sum total of the market value, the assets and additional 12 per cent per annum on the market value stipulated in the Act? The appellate authority and the Calcutta High Court differed in their views. On appeal by the landowners, the Supreme Court held that solatium has to be calculated only on the market value plus the value of the assets attached to the land, which shall not include the additional amount of 12 per cent.  In the Chennai case, the owners had failed in their challenge to the takeover of land for the mass transit transport system. The Madras High Court, however, asked the Tamil Nadu government to consider their prayer for alternative housing sites as a special category. The state government moved the SC against it. Setting aside the high court direction, it held that the displaced persons have been adequately compensated and they should not ask for more from the government or the housing board.

Work-at-home staffers also get PF

Those who work from home for piece-rate wages for a company are also its ‘employees’ and the company is bound to pay their provident fund (PF) contribution, the Supreme Court ruled last week in its judgment in Officer, Provident Fund vs Godavari Garments Ltd. The company is a Maharashtra government undertaking, established to promote garment manufacturing. It employed women to stitch garments on their machines at home with raw materials provided by the firm. When PF authorities demanded contribution for the wages paid to the women, the firm argued that they were not employees as defined in the PF Act. The women could engage others to do the job and there was no regular attendance. The management had no supervisory control over them. The Bombay High Court agreed with these arguments. However, on appeal, the apex court set aside the high court judgment and emphasised that the women were employees according to the Act and the precedents set in the case of beedi workers. Since the firm had the right to reject the stitched garments, it had supervisory control over the employees, the judgment emphasised.

Arbitrator disqualified on suspected bias

The Supreme Court last week quashed the Bombay High Court judgment in an arbitration case observing that even a perception of bias by a party is enough to disqualify the arbitrator. In this case, Vinod Jain vs Wadhwani Cold Storage Ltd, a lawyer who acted as counsel for the company was nominated the arbitrator. This was opposed by Jain. The high court rejected his allegation of bias. The SC allowed his appeal observing that the lawyer himself should have withdrawn as he was disqualified under Section 12 of the Arbitration Act and as a matter of propriety. The apprehension of bias might be a perception, but even then, “no room should be given for even such a feeling”. In arbitration, the parties can choose arbitrator, unlike in ordinary litigation where a judge cannot be chosen.

CCI order without judicial member okayed

The problem of tribunals working without judicial and technical members cropped up again in the Delhi High Court in the case, Cadd Systems & Services Ltd vs Competition Commission. The company engaged in GPS survey and other business contended the orders passed by the commission without the presence of a judicial member were in contravention of the law laid down by the court.  The high court rejected the contention quoting Section 15 of the Competition Act.  According to it, no Act or proceeding of the commission shall be invalid merely by reason of any vacancy in, or any defect in the constitution of the commission. The judgment declared that notwithstanding that a judicial member is required to be appointed to the CCI, the orders passed by the CCI pending such appointment cannot be called into question.

Trademark violations in cyberspace

With the spread of information technology, the argument over jurisdiction of the court in trademark cases seems to be fading. Corporations use various social media platforms such as LinkedIn, Facebook, Twitter, and YouTube for advertising and conducting business. In the case, Exxon Mobil Corporation vs Exoncorp Ltd, the Delhi High Court ordered an injunction against Exoncorp for using the similar-sounding name, though it claimed to be operating in Chennai and had no office in Delhi.  The suit was about the trademark 'Exxon' claimed by the US petroleum company and the use of the mark 'Exon' by the opposite company rendering information technology services. Exon resisted the suit arguing that it has no presence in Delhi and, therefore, the high court has no jurisdiction in this matter. The court rejected the contention while passing the injunction, stating that the nature of IT services is such that the same can be provided from any corner of the globe. Facts showed that the Indian company did not limit its business operations only to Chennai or Tamil Nadu, and it has been marketing its services to Indian and international customers. It used not only its website but also several other channels and platforms. Thus, there was clear use of the mark within the territorial jurisdiction of the Delhi High Court.

Award quashed for patent illegality

The Bombay High Court has set aside an arbitration award in a dispute between Container Corporation of India and Kandla Cargo Handlers as it suffered from “patent illegality as the conclusions for granting the claim as made by the claimant are without any basis”.  The high court noted that its jurisdiction to interfere in arbitration matters is limited, but in gross cases, it has the power to correct patent errors. In this case, the two parties had an agreement on cargo handling at Nagpur Container Terminal.  After some time, disputes arose over payments and the matter was referred to arbitration. According to the award, the Container Corporation was obliged to pay the opposite party for Rs 242,016,921 with 18 per cent interest. This was challenged by the state corporation successfully in the high court. The judgment stated that though the award was voluminous with 336 pages, the conclusions were not supported by evidence.