THE Supreme Court has ruled that disputes over payment for work done can be referred to arbitration even after receipt of payment without raising objections. In the judgment Durga Charan Rautry vs State of Orissa, the court stated that “despite receipt of payment on the preparation of the final bill, it was still open to him to raise his unsatisfied claims before an arbitrator, under the contract agreement.” In this case, the contractor undertook a project but there were several disputes over additional payments. The matter was referred to an arbitrator. His award was contested by the state government. The Orissa high court accepted the argument of the state that after the receipt of payment, there could be no arbitration. The contractor moved the Supreme Court, which allowed his appeal. It stated that the government participated in the arbitration and therefore the award has become final. The state was precluded from asserting that the claims raised could not be adjudicated upon by way of arbitration. “Once the disputes were referred for arbitration and the rival parties submitted to the arbitration proceedings without any objection, it is no longer open to either of them to contend that arbitral proceedings were not maintainable,” the judgment said.
Ex-director of company cannot be prosecuted in cheque bouncing case
The Supreme Court last week set aside the judgment of the Delhi high court in a cheque bouncing case and ruled that an ex-director of a company cannot be prosecuted under the Negotiable Instruments Act. The Apparel Export Promotion Council had filed a case against Lalpareil Exports Ltd for issuing a cheque which was dishonoured by the bank. Three directors were also included as accused persons. However, Anita Malhotra, one of the accused persons, moved the high court seeking quashing of her prosecution as she had resigned from the company much before the cheque was issued. The high court rejected her prayer and asked to stand trial. She moved the Supreme Court, which quashed the high court order.
Land acquisition for govt corporation oppressive: Supreme Court
The Supreme Court has once again called for a fresh land acquisition law as the present legislation does not adequately protect the interest of the land owners/persons interested in the land. Dismissing the appeal of Ramji Patel against the ruling of the Madras high court upholding the state acquisition of land for Cholan Roadways Corportion, the court remarked: “The Act does not provide for rehabilitation of persons displaced from their land although by such compulsory acquisition, their livelihood gets affected. For years, the acquired land remains unused and unutilised. To say the least, the Act has become outdated and needs to be replaced at the earliest by fair, reasonable and rational enactment in tune with the constitutional provisions, particularly, Article 300A of the Constitution. We expect the law making process for a comprehensive enactment with regard to acquisition of land being completed without any unnecessary delay.”
High court cannot fill post of dead arbitrator
The Delhi high court has declined to appoint an arbitrator to substitute one who died during the pendency of the proceedings, as it was an international commercial dispute. In such cases, only the Supreme Court Chief Justice can appoint an arbitrator under Section 11 of the Arbitration and Conciliation Act, the judgment in the case, Hrd Corporation vs GAIL (India) Ltd, clarified. In this case, the US Corporation and the Indian firm, both dealing in petrochemicals and gas, had disputes regarding price fixation and other matters. Both sides nominated their arbitrators and a president was also appointed according to the agreement. However, one of the arbitrators died. Therefore, another dispute arose: whether the late arbitrator should be substituted and the proceedings should be continued with a new member or the whole tribunal should be reconstituted. The US firm approached the Delhi high court for substitution. However, the high court stated that Section 11 of the Act clearly conferred power on the Chief Justice of India or his designate in international commercial arbitration and the high court has no power under law.
Permanent injunction against Microsoft pirates
The Delhi high court has passed permanent injunction against Nitya Infotech of Mumbai and ordered compensation for infringing the copyrights and other intellectual property rights of Microsoft Corporation by carrying on the business of unauthorized hard disk loading of the US company’s software programmes on to the branded computers sold by them to their customers. The high court passed a similar order against a Bangalore firm, M/s G-Net Technologies, on a petition by Microsoft.
Inclusion of valuer in panel at banks’ discretion
The Madras high court has ruled that a public sector bank can drop the name of a valuer if it is dissatisfied with his performance. Indian Bank and other government banks had informed the valuer, who was facing CBI inquiry, that he could not be continued in their panel of valuers. V Subramanian, the valuer, moved the high court to set aside the banks’ decision, reinstate him and pay compensation for loss suffered. The banks submitted that the inclusion of valuers in their panels was after considering various norms regarding qualification, experience, membership in the Institution of Valuers and the needs of the banks. The high court agreed with them and stated: “The inclusion or exclusion of any name in the panel is a discretionary act of the banks. Only when discretion had been exercised improperly, this court can go into the issue in the matter of purely contractual in nature.”
