 "Partnership Act does not bar arbitration")
Though arbitral proceedings have certain shades of civil suits, they are different in substance. Therefore, the bar on suits imposed in the Partnership Act in certain circumstances will not come in the way of taking disputes to arbitration, the Supreme Court has held in its judgment, Umesh Goel vs Himachal Coop Housing Society. The partnership firm undertook to build a project that ended in disputes. The matter was taken to an arbitrator who ruled in favour of the firm. The society moved the Delhi High Court, raising the objection that under Section 69(3) of the Act, suits are barred and so arbitration was also banned. The high court agreed with it, but the Supreme Court quashed that judgment and ruled that arbitration proceedings would not come under the expression "other proceedings" in the Act and the bar has no application to arbitration or the award.
Govt arms at each other's throats
The Supreme Court has again lamented that government corporations are fighting fratricidal litigation despite earlier attempts to send them to conciliation tables. In the preface to the judgment in Northern Coalfields Ltd vs Heavy Engineering Corporation, the court stated that "this is yet another case that brings to fore a sad state of affairs when it comes to resolving disputes between two government-owned corporations. What adds to the enigma of apathy towards realism in official circles is the fact that HECL has with considerable tenacity opposed the move aimed at a quick and effective resolution of the conflict and resultant quietus to the controversy by a reference of the disputes to arbitration." The judgment traced earlier attempts to set up permanent disputes resolution mechanism and their failure. In this dispute going back to 1997, the court quashed the Delhi high court order and appointed former chief justice of India, K G Balakrishnan, as the sole arbitrator.
A Delhi High Court judgment expressed another distressing phenomenon facing the judiciary when it opened the discussion thus: "The greatest challenge before the judiciary today is frivolous litigation. The judicial system in the country is choked with false claims and such litigants are consuming courts' time for a wrong cause. False claims are a huge strain on the judicial system." It recalled 2014 Supreme Court in the Sahara case, where it called for evolving a system to deter litigants from their "compulsive obsession towards senseless and ill-considered claims." The high court was dealing with an arbitration award in the dispute between the Airports Authority of India and Hotel Leelaventure Ltd. The company benefited from the award by getting exemption from paying royalty under the lease. But, the high court found that it had grossly abused the process of law. The court remarked that it was of the prima facie view that the company had OM.P. No.1206/2012 Page 94 of 95 made a false claim before it, which amounted to a criminal offence. However, before initiating action against it, the court granted two weeks to the company to enable it to "introspect and file an undertaking to pay the arrears of royalty and not to resort to any frivolous proceedings in future." It also imposed Rs 2 lakh as costs.
Encroachers cut short litigation
A 2002 land acquisition in Delhi followed by decade-old litigation in the high court and the Supreme Court came to an end when the Delhi Development Authority reported that the Mehrauli area has been heavily built-up by now and it was not practical to acquire it after demolition. The Delhi high court had upheld the acquisition in 2005, rejecting the petition of Competent Automobiles Ltd. In its appeal, the Supreme Court called for an inspection report by the authorities. It stated that the land was full of monuments from the Sultanate era and "the acquisition of built-up land would involve massive demolition and cause hardships to the occupants. Therefore, it has been decided not to pursue the acquisition proceedings." Following this statement, the Supreme Court set aside the acquisition.
Insurer told to pay for road deaths
The Supreme Court has directed the insurance company to pay compensation for a road accident causing three deaths, setting aside the judgment of the Punjab & Haryana high court in the case, Rakesh Kumar vs United India Insurance. The insurer had alleged that the driver of the truck which hit the three wheeler in which the deceased were travelling had no valid licence. The high court had accepted the plea and held the owner of the truck liable to compensate. He appealed to the Supreme Court. It ruled that the insurance company could not prove that the truck driver had no valid licence and therefore it was liable to pay.
Tobacco dealers win gutka case
The Patna High Court last week quashed the order of the Bihar Commissioner of Food Safety prohibiting the manufacture and sale of Zarda, Pan Masala and Gutkha. In this batch of petitions by dealers in tobacco products (Omkar Agency vs Food Safety Authority), they contended that they are selling scheduled tobacco products and are not in the food business. So they are not covered by regulations under the food laws. The judgment agreed that the prohibition against tobacco and nicotine was "arbitrary and beyond the scope of the Food Act". The court, however, noted that the issue is also before the Supreme Court in a PIL and it has asked chief secretaries of all states to file affidavits about compliance of its orders.
Plea to bar toy designs rejected
The Delhi High Court has rejected the prayer of OK Play India Ltd to stop Playwell Impex Ltd from manufacturing and selling toys allegedly infringing its designs and copyrights in them. Earlier the court had passed an injunction order against Playwell and ordered its commissioner to confiscate its products. In the new order, the court ordered their release and ruled that since OK Play had not registered its designs under the Designs Act, it could not claim any intellectual property rights in them. OK Play is the assignee of a British company which is a leading brand in toys and educational material for schools. The Indian firm accused Playwell of imitating its designs and get-up, infringing its trade marks. Rejecting the contentions, the court stated that there was no registration of the design, and even if there was one, its validity was only for 15 years whereas OK Play had claimed that it sold the goods since 1992.
Govt arms at each other's throats
The Supreme Court has again lamented that government corporations are fighting fratricidal litigation despite earlier attempts to send them to conciliation tables. In the preface to the judgment in Northern Coalfields Ltd vs Heavy Engineering Corporation, the court stated that "this is yet another case that brings to fore a sad state of affairs when it comes to resolving disputes between two government-owned corporations. What adds to the enigma of apathy towards realism in official circles is the fact that HECL has with considerable tenacity opposed the move aimed at a quick and effective resolution of the conflict and resultant quietus to the controversy by a reference of the disputes to arbitration." The judgment traced earlier attempts to set up permanent disputes resolution mechanism and their failure. In this dispute going back to 1997, the court quashed the Delhi high court order and appointed former chief justice of India, K G Balakrishnan, as the sole arbitrator.
More From This Section
'Frivolous cases choke courts'
A Delhi High Court judgment expressed another distressing phenomenon facing the judiciary when it opened the discussion thus: "The greatest challenge before the judiciary today is frivolous litigation. The judicial system in the country is choked with false claims and such litigants are consuming courts' time for a wrong cause. False claims are a huge strain on the judicial system." It recalled 2014 Supreme Court in the Sahara case, where it called for evolving a system to deter litigants from their "compulsive obsession towards senseless and ill-considered claims." The high court was dealing with an arbitration award in the dispute between the Airports Authority of India and Hotel Leelaventure Ltd. The company benefited from the award by getting exemption from paying royalty under the lease. But, the high court found that it had grossly abused the process of law. The court remarked that it was of the prima facie view that the company had OM.P. No.1206/2012 Page 94 of 95 made a false claim before it, which amounted to a criminal offence. However, before initiating action against it, the court granted two weeks to the company to enable it to "introspect and file an undertaking to pay the arrears of royalty and not to resort to any frivolous proceedings in future." It also imposed Rs 2 lakh as costs.
Encroachers cut short litigation
A 2002 land acquisition in Delhi followed by decade-old litigation in the high court and the Supreme Court came to an end when the Delhi Development Authority reported that the Mehrauli area has been heavily built-up by now and it was not practical to acquire it after demolition. The Delhi high court had upheld the acquisition in 2005, rejecting the petition of Competent Automobiles Ltd. In its appeal, the Supreme Court called for an inspection report by the authorities. It stated that the land was full of monuments from the Sultanate era and "the acquisition of built-up land would involve massive demolition and cause hardships to the occupants. Therefore, it has been decided not to pursue the acquisition proceedings." Following this statement, the Supreme Court set aside the acquisition.
Insurer told to pay for road deaths
The Supreme Court has directed the insurance company to pay compensation for a road accident causing three deaths, setting aside the judgment of the Punjab & Haryana high court in the case, Rakesh Kumar vs United India Insurance. The insurer had alleged that the driver of the truck which hit the three wheeler in which the deceased were travelling had no valid licence. The high court had accepted the plea and held the owner of the truck liable to compensate. He appealed to the Supreme Court. It ruled that the insurance company could not prove that the truck driver had no valid licence and therefore it was liable to pay.
Tobacco dealers win gutka case
The Patna High Court last week quashed the order of the Bihar Commissioner of Food Safety prohibiting the manufacture and sale of Zarda, Pan Masala and Gutkha. In this batch of petitions by dealers in tobacco products (Omkar Agency vs Food Safety Authority), they contended that they are selling scheduled tobacco products and are not in the food business. So they are not covered by regulations under the food laws. The judgment agreed that the prohibition against tobacco and nicotine was "arbitrary and beyond the scope of the Food Act". The court, however, noted that the issue is also before the Supreme Court in a PIL and it has asked chief secretaries of all states to file affidavits about compliance of its orders.
Plea to bar toy designs rejected
The Delhi High Court has rejected the prayer of OK Play India Ltd to stop Playwell Impex Ltd from manufacturing and selling toys allegedly infringing its designs and copyrights in them. Earlier the court had passed an injunction order against Playwell and ordered its commissioner to confiscate its products. In the new order, the court ordered their release and ruled that since OK Play had not registered its designs under the Designs Act, it could not claim any intellectual property rights in them. OK Play is the assignee of a British company which is a leading brand in toys and educational material for schools. The Indian firm accused Playwell of imitating its designs and get-up, infringing its trade marks. Rejecting the contentions, the court stated that there was no registration of the design, and even if there was one, its validity was only for 15 years whereas OK Play had claimed that it sold the goods since 1992.