The Supreme Court has set aside the judgment of the Gauhati high court and upheld the award of the arbitrator in the dispute over delay in the construction of the extension of the Guwahati airport terminal. The contracted period for completion of the project was 21 months, but it was extended twice. The contractor and the government blamed each other for the delay, and ultimately the government cancelled the contract. The dispute was referred to arbitration and the award was in favour of the construction firm. However, the high court set aside the award, leading to the appeal in the Supreme Court (J G Engineers Ltd vs Union of India). The court held that the contractor was entitled to extension of the period for completion of the work, as the delay was caused by the government. The firm was also entitled to escalation costs for the work done during the extended period. It cannot be imposed penalty for the delay. Moreover, since the delay was caused by the government, it cannot make counter-claims against the firm, the judgment said.
Supreme Court dismisses Bansal Wire Industries’ appeal
The Supreme Court has upheld the Allahabad high court judgment and dismissed the appeal of Bansal Wire Industries Ltd which had challenged the higher central sales tax on its steel products. The question involved was whether stainless steel wire, manufactured by the company, fell within the definition of ‘tools, alloy and special steels’ mentioned in the Central Sales Tax Act. The company claimed that stainless steel wire is one of the species of ‘iron and steel’ which attracted a lower duty. The high court, and now the Supreme Court, rejected the argument and affirmed that stainless steel wire was not covered under ‘tools, alloy and special steels’ as mentioned in Section (iv)(ix) of the central law.
Bombay HC suggests changes in rules on sugar mill location
A division bench of the Bombay high court has observed that according to it, some changes in the ‘minimum distance condition’ for the location of sugar mills are necessary taking into account the availability of water in Maharashtra. In order to avoid unhealthy competition amongst the sugar factories to procure sugarcane, a minimum distance of 15 km was prescribed by the Sugar Control Order. This distance was required to be observed between an existing sugar mill and a new mill. However, a strict adherence to the rule might affect competition. Therefore, the court suggested to the Maharashtra government to look into certain modifications in the rule. According to the court, in districts like Kolhapur, Sangli, Satara, Solapur, Pune and Ahmednagar the distance of separation should not been less than 25 km, and for the other revenue divisions like Nasik, Aurangabad, Amravati and Nagpur the minimum distance to be recommended by the state government should be more than 50 km. “However, it is for the state government to consider the same as a matter of policy for the future,” the court said in the judgment, Khandoba Prasanna Sakhar Karkhana Ltd vs Union of India.
EEMA petition on framing standards for levying royalties dismissed
The Delhi high court has dismissed the petition of the Event & Entertainment Management Association seeking a direction to the Union of India, Ministry of Human Resource Development, to frame objective standards for determination and levying of royalties of various copyrighted works administered by Phonographic Performance Ltd and the Indian Performing Right Society Ltd and the mode of enforcing and administering such royalties. The association had also sought a further direction for investigation of the books of account of the two copyright societies to ascertain whether they have paid their dues to the owners/authors of copyrights. The association alleged that the government has failed to set down any objective standards and criteria for charging of royalties by the two societies, and the latter are therefore acting arbitrarily in fixing tariffs. The high court rejected the prayers stating that the fixation of tariff or royalties by the two companies in exercise of their powers under the Copyright Act is not arbitrary or unreasonable. The judgment explained that the law itself provided a mechanism for fixing tariffs and the matter can be dealt with by the copyright board.
IHHR Hospitality application for injunction rejected
The Delhi high court has rejected the application of IHHR Hospitality Ltd for injunction against Bestech India Ltd in a dispute over the name, Ananda. IHHR is in luxury business and owns hotels and spas in the foothills of the Himalayas and Mauritius. They are named Ananda. It alleged that Bestech, a builder of Gurgaon, near Delhi, promoted a residential complex called Park View Ananda. This, it argued, will confuse its international clients because of the similarity in names. The Gurgaon builder contended that it had named its complex ‘Bestech Parkview Ananda’ and it was written in a typical artistic script. Moreover, Ananda is a Sanskrit word over which none can claim rights; and several Indian companies have branded products with the word. The business fields of the two firms are different. The high court accepted the latter argument and observed: “Considering the origin of the word Ananda which means nothing but bliss and which is used primarily to express a state of mind of a human being, it is difficult to say that this word has become distinctive with the spa company and the builder is trying to take an unfair advantage by using this word as a part of the name being used by it to promote its housing project in Gurgaon.”
