The Supreme Court has stated that the Arbitration and Conciliation Act would apply to all civil disputes, and not merely to commercial disputes. It set aside the view of the Karnataka high court in the case, H Srinivas Pai vs H V Pai, in which the high court remarked that the law will apply only to “commercial agreement matters and international commercial matters.” In that case, the dispute was over partition of property, a civil dispute. Contradicting the high court view, the Supreme Court ruled that the “applicability of the Act does not depend upon the dispute being a commercial dispute. Reference to arbitration and arbitrability depends upon the existence of an arbitration agreement, and not upon the question whether it is a civil dispute or commercial dispute. There can be arbitration agreements in non-commercial civil disputes also.”
Order of consumer commission against financial corp quashed
The Supreme Court has quashed the order of the National Consumer Commission against the Maharashtra State Financial Corporation charging it with deficiency in service in dispersing loan amounts to an industrialist, Sanjay Shankarsa. The corporation sanctioned the loan for a hotel project in Amravati on certain conditions. However, one cheque issued by the debtor was dishonoured and he did not furnish the progress report on the project. So the corporation did not release the balance of the amount. When he moved the national commission, it asked the corporation to pay compensation. The corporation appealed to the Supreme Court. It allowed the appeal stating that the industrialist was a “defaulter right from inception of his dealing with the corporation and fairness cannot be a one-way street. Where the borrower has no genuine intention to repay and adopts pretexts and ploys to avoid payment, he cannot make a grievance that the corporation was not acting fairly.”
I-T component alone can be deducted from deceased’s income
While calculating compensation for the death of a person in a road accident, the income tax component alone can be deducted from his income. The Delhi high court had deducted 30 per cent from the salary of the deceased sub-inspector aged 36 towards taxes while arriving at the income. The widow, three children and parents appealed against this in the case, Shyamwati Sharma vs Karam Singh. While allowing the appeal, the court clarified that deductions shown in the salary certificate as deductions towards provident fund, life insurance premium, loan repayments should not be excluded. But income tax/surcharge should be deducted to arrive at the net income.
Customs’ claim upheld
The Supreme Court has upheld the claim of the customs authorities against N I Systems (India) Ltd, a subsidiary of N I Corporation at Austin, USA, on imports relating to computer-based instrumentation products. The Indian company, which imported various parts from the holding company, claimed that the goods were parts of computers which drew a lesser duty. The goods were PXI controllers, modem units and signal converters. The authorities classified them in a higher-duty category, maintaining that they were not structurally designed to function as a computer and no buyer will purchase the goods as computers because of the price differential between the imported items and computers. They argued that the goods were meant for special purpose, namely, measurement or control of the systems for industrial use. However, the customs tribunal ruled that the goods imported were all automatic data processors. On appeal by the department, the Supreme Court analysed the customs tariff schedule and set aside the view of the tribunal.
Employee evicted from company’s quarters by apex court
In a rare instance, the Supreme Court last week exercised its extraordinary powers under Article 142 of the Constitution to evict an employee from the servant quarters of a Mumbai company. Though the employee had retired in 1992, he was not vacating the company flat for 18 years raising different legal issues. The company invoked Section 630 of the Companies Act to evict him, but it could not, as the magistrate’s court and the Bombay high court passed orders in favour of him. In order to end the long litigation, the Supreme Court allowed the appeal of the sick company, Automobile Products India Ltd, hoping that “good sense” would prevail on the employee and he would vacate the flat instead of running the risk of being sent to jail.
Essar Steel petition against GAIL dismissed
The Delhi high court last week dismissed the writ petition of Essar Steel Ltd against the Gas Authority of India Ltd (GAIL) for not allowing it to participate in electronic reverse auction process. Essar argued that the denial was under the wrong impression that it had not filed the requisite form with the Registrar of Companies along with the certified copy pertaining to the amalgamation of Hazira Pipe Mills Ltd. It claimed that the Gujarat High Court as well as the Bombay High Court had sanctioned the amalgamation scheme before the auction date. However, the high court dismissed its petition stating that on the last date of submitting bids, there was no sanctioned scheme in place and therefore the amalgamation scheme could not be treated as having taking place.
