In a judgment that grants relief to tenants, the Supreme Court has declared that the provisions of the Securitisation Act (Sarfaesi) cannot be used to override the provisions of the Rent Control Act. The Supreme Court, while setting aside judgments in several cases of the Bombay High Court, underlined that the Rent Control Act is a social welfare legislation and must be construed as such.
In the case, Vishal Kalsaria vs Bank of India, the court further explained that while Sarfaesi is concerned with non-performing assets of banks and financial institutions, the Rent Control Act governs the relationship between a tenant and the landlord and specifies the rules of ejectment with respect to tenants.
The banks had proceeded to take possession of the properties of landlords, who had defaulted on payments for the loans taken by mortgaging the properties. The tenants were caught in between. "If the contentions of the banks are to be accepted," the judgment said, "it would render the entire scheme of all rent control Acts operating in the country as useless and nugatory. Tenants would be left wholly to the mercy of their landlords and in the fear that the landlord may use the tenanted premises as a security interest while taking a loan from a bank and subsequently default on it.
For critical defence spare parts like submarine batteries, there cannot be any open tenders. Advertisements can call for tenders only for commonly used items, which are normally available in the open market with a wide range of sources, the Supreme Court stated in its judgment, Union of India vs HBL Nife Power Systems.
The court was dealing with the tender for submarine batteries, in government's appeal against the Delhi High Court judgment. This commodity did not fall under the category of common use items. The apex court agreed with the "justifiable reasons" cited by the government to classify submarine batteries as critical and specialised defence product to be procured only from duly approved suppliers under the close watch of the Directorate General Quality.
The dispute arose when HBL Power Systems wanted an opportunity to supply the batteries but was not given by the government, which gave the contract to its usual approved supplier. The judgment stated that the lives of defence personnel could not be put at risk merely on the basis of the company's claim to have the capability to supply submarine batteries.
HC should not review evidence
The Supreme Court has set aside the ruling of the Karnataka High Court in the case of a work contract and reiterated that an appellate court should not go into evidence in detail and must leave that exercise to the trial court. It should also not introduce the concept of arbitration when it was not invoked by the parties.
In this case, Venkatesh Construction Co vs Karnataka Vidyuth Karkhane Ltd, the construction firm was given a project. When the work started, it was found that the soil at the site was loose and the foundation had to be dug deeper. It increased the cost. The Vidyuth Karkhane asked the firm to stop work till a new design was given. It was not given for a long time. So the contractor filed a suit for compensation.
The trial court granted it. But the high court quashed the order, leading to the appeal to the Supreme Court. Allowing the appeal, the judgment said that "the amount awarded by the trial court under various heads is based on evidence and material on record…The high court veered away from the main issue and went on to elaborate on the law of arbitration and the mode of setting aside the arbitral award under Section 34 of the Arbitration Act, which in our view, was not warranted." Since the case was two decades old, the Supreme Court only reduced the interest due from 12 to six per cent.
Court can't short-circuit labour rules
Under the Timely Payment of Wages Act, disputes raised by workers must be referred by the government to the labour court; the high court cannot pass a peremptory order directly to the labour court. In this case, Rahman Industries vs State of UP, the Allahabad High Court directed the labour court to consider the claims raised by the employees of the firm.
On appeal, the Supreme Court stated that the issues must be examined by the state government to see whether there exists a dispute and it is for the government to refer them for adjudication by the labour court.
The judgment stated that in the scheme of the Industrial Disputes Act, "it is not as if the government has to act as a post office by referring each and every petition received by them. The government is well within its jurisdiction to see whether there exists a dispute worth referring for adjudication…Only in case, on judicial scrutiny, the court finds that the refusal of the government to make a reference of the dispute is unjustified on irrelevant factors, the court may issue a direction to the government to make a reference."
Family dispute in 'Shri Ram' name
In a business family dispute over the name 'Shri Ram', the Delhi High Court last week directed Shri Ram Education Trust to display a disclaimer on its signboards and on all stationery material that it has no connection with the schools of SRF Foundation.
The order was passed in a suit filed by one brother against another, both sons of industrialist late Bharat Ram and grandsons of Sir Shri Ram. It is claimed that the SRF Foundation was set up by Arun Bharat Ram and the rival trust by Vivek Bharat Ram.
The SRF filed the suit alleging that the name Shri Ram was theirs for several decades and the other brother started his schools capitalising on the goodwill of the former. The high court observed that "both the brothers having common lineage, prima facie have common rights and cannot exclude the other. It is not disputed that the name Shri Ram was first used by late Sir Shri Ram, who established educational institutions. When the name has been first adopted by the grandfather, SRF cannot appropriate the same to the exclusion of his brother. The goodwill and reputation in the trademark adopted by the grandfather shall enure to the benefit of all the heirs, unless something to the contrary is shown so as to exclude the other heirs. One member of the family cannot, without something more being shown to the contrary, claim exclusive ownership of the mark."
In the case, Vishal Kalsaria vs Bank of India, the court further explained that while Sarfaesi is concerned with non-performing assets of banks and financial institutions, the Rent Control Act governs the relationship between a tenant and the landlord and specifies the rules of ejectment with respect to tenants.
The banks had proceeded to take possession of the properties of landlords, who had defaulted on payments for the loans taken by mortgaging the properties. The tenants were caught in between. "If the contentions of the banks are to be accepted," the judgment said, "it would render the entire scheme of all rent control Acts operating in the country as useless and nugatory. Tenants would be left wholly to the mercy of their landlords and in the fear that the landlord may use the tenanted premises as a security interest while taking a loan from a bank and subsequently default on it.
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Tenders waived in defence spares
For critical defence spare parts like submarine batteries, there cannot be any open tenders. Advertisements can call for tenders only for commonly used items, which are normally available in the open market with a wide range of sources, the Supreme Court stated in its judgment, Union of India vs HBL Nife Power Systems.
The court was dealing with the tender for submarine batteries, in government's appeal against the Delhi High Court judgment. This commodity did not fall under the category of common use items. The apex court agreed with the "justifiable reasons" cited by the government to classify submarine batteries as critical and specialised defence product to be procured only from duly approved suppliers under the close watch of the Directorate General Quality.
The dispute arose when HBL Power Systems wanted an opportunity to supply the batteries but was not given by the government, which gave the contract to its usual approved supplier. The judgment stated that the lives of defence personnel could not be put at risk merely on the basis of the company's claim to have the capability to supply submarine batteries.
HC should not review evidence
The Supreme Court has set aside the ruling of the Karnataka High Court in the case of a work contract and reiterated that an appellate court should not go into evidence in detail and must leave that exercise to the trial court. It should also not introduce the concept of arbitration when it was not invoked by the parties.
In this case, Venkatesh Construction Co vs Karnataka Vidyuth Karkhane Ltd, the construction firm was given a project. When the work started, it was found that the soil at the site was loose and the foundation had to be dug deeper. It increased the cost. The Vidyuth Karkhane asked the firm to stop work till a new design was given. It was not given for a long time. So the contractor filed a suit for compensation.
The trial court granted it. But the high court quashed the order, leading to the appeal to the Supreme Court. Allowing the appeal, the judgment said that "the amount awarded by the trial court under various heads is based on evidence and material on record…The high court veered away from the main issue and went on to elaborate on the law of arbitration and the mode of setting aside the arbitral award under Section 34 of the Arbitration Act, which in our view, was not warranted." Since the case was two decades old, the Supreme Court only reduced the interest due from 12 to six per cent.
Court can't short-circuit labour rules
Under the Timely Payment of Wages Act, disputes raised by workers must be referred by the government to the labour court; the high court cannot pass a peremptory order directly to the labour court. In this case, Rahman Industries vs State of UP, the Allahabad High Court directed the labour court to consider the claims raised by the employees of the firm.
On appeal, the Supreme Court stated that the issues must be examined by the state government to see whether there exists a dispute and it is for the government to refer them for adjudication by the labour court.
The judgment stated that in the scheme of the Industrial Disputes Act, "it is not as if the government has to act as a post office by referring each and every petition received by them. The government is well within its jurisdiction to see whether there exists a dispute worth referring for adjudication…Only in case, on judicial scrutiny, the court finds that the refusal of the government to make a reference of the dispute is unjustified on irrelevant factors, the court may issue a direction to the government to make a reference."
Family dispute in 'Shri Ram' name
In a business family dispute over the name 'Shri Ram', the Delhi High Court last week directed Shri Ram Education Trust to display a disclaimer on its signboards and on all stationery material that it has no connection with the schools of SRF Foundation.
The order was passed in a suit filed by one brother against another, both sons of industrialist late Bharat Ram and grandsons of Sir Shri Ram. It is claimed that the SRF Foundation was set up by Arun Bharat Ram and the rival trust by Vivek Bharat Ram.
The SRF filed the suit alleging that the name Shri Ram was theirs for several decades and the other brother started his schools capitalising on the goodwill of the former. The high court observed that "both the brothers having common lineage, prima facie have common rights and cannot exclude the other. It is not disputed that the name Shri Ram was first used by late Sir Shri Ram, who established educational institutions. When the name has been first adopted by the grandfather, SRF cannot appropriate the same to the exclusion of his brother. The goodwill and reputation in the trademark adopted by the grandfather shall enure to the benefit of all the heirs, unless something to the contrary is shown so as to exclude the other heirs. One member of the family cannot, without something more being shown to the contrary, claim exclusive ownership of the mark."