The Supreme Court has ruled that an arbitral tribunal has no power to direct payment of compound interest or interest on interest on the award amount from the date of the award to the date of payment. It declared in the appeal case, State of Haryana vs SL Arora & Co, that the Punjab Haryana high court was wrong in taking a contrary view. The Supreme Court itself had misconstrued the law last year in its judgment in UP Cooperative Federation Ltd vs Three Circles. The present judgment therefore laid down the correct law. In this case, the work on the construction contract was delayed, leading to disputes. They were referred to a sole arbitrator, who gave an award in favour of the contractor. However, the firm wrongly calculated the claim in the first instance. Later, it presented the full claim with interest on interest, which was approved by the arbitration tribunal, and later upheld by the high court. The state government appealed to the Supreme Court and it allowed the appeal.
Termination of dealership must be fair
The Supreme Court has dismissed the appeal of Hindustan Petroleum Corporation which had terminated its dealership agreement with Super Highway Services, a retail dealer. The action was taken after a check on the private company’s stock of high speed diesel for its quality. The dealer moved the Patna high court, which set aside the termination.
The appeal of the public sector undertaking was dismissed by the Supreme Court stating that the dealer did not get proper notice of the quality test. “Cancellation of dealership agreement of a party is a serious business and cannot be taken lightly,” the judgement said. “The concerned authority has to act fairly and in complete adherence to the rules and guidelines framed for the purpose. No person should be condemned unheard.”
Every director not liable in cheque dishonour case
The Supreme Court reiterated that every director connected with a company could not be held liable in a case of cheque which was dishonoured for want of sufficient funds in the bank. Only those who were in charge of and responsible for the conduct of the business of the company at the time of the offence under Section 138 of the Negotiable Instruments Act will be liable for criminal action, the court said in the case, National Small Industries Corporation vs Harmeet Singh. A mere bald statement that a particular director among many was responsible for the conduct of the business would not be sufficient to clamp vicarious liability on him.
Income tax commissioner appeals against Idea
The Delhi high court has allowed the appeal of the Commissioner of Income Tax against Idea Cellular Limited (ICL) in an income tax case involving the question of the nature of the transaction it had with its distributors with regard to SIM. The assessing officer concluded that the transaction between ICL and distributors were that of principal and agent and distributors were selling a prepaid SIM Card/recharge coupon on behalf of the ICL. Consequently, the amount of discount offered to prepaid distributor was in the nature of commission and liable to tax deduction at source under Section 194H of the Income-tax Act. He accordingly treated the assessee as defaulter. However, the tribunal reversed the finding, holding that the transaction was between principal and principal. According to it, what was paid to the distributors was not commission or brokerage and was not subject to deduction of tax at source. The Delhi high court set aside the latter view and upheld the opinion of the revenue authorities.
US firm says Indo Nippon’s ‘Whip Topping’ infringes copyright
The Delhi high court has dismissed the suit filed by US firm, Rich Products Corporation, seeking a permanent injunction against Indo Nippon Food Ltd for using the word ‘Whip Topping’ as trademark for its products. The US firm, which uses the mark, Rich’s Whip Topping, claims that it invented the vegetable based whipped cream from soya bean in the 1940s’ and is selling it in many part of the world, including India. It argued that Indo Nippon adopted the word Whip Topping for its food products, which is not only infringement of its patent but also ‘passing off’, by confusing the mind of the consumers. The high court rejected these contentions and stated that while it could not be denied that the US firm had a proprietary right in the trade mark Rich’s Whip Topping, its right did not extent to a part of the trade mark, that is, Whip Topping. “Rights in the entire or whole does not necessarily translate into a right in a “part” of the trade mark – as in this case,” the high court said.
Appeal against trademark claim order over ‘Swaraj’
A division bench of the Delhi high court has dismissed the appeal against the order of a single judge bench, upholding the trademark claim of Punjab Tractor Ltd with respect to ‘Swaraj’. Prakash Agricultural Industries sought registration of the same trade mark for its diesel oil engines (not for land vehicles), hand water pumps and parts for sale in the States of Uttar Pradesh, Madhya Pradesh, Rajasthan, Bihar and Haryana. Punjab Tractor opposed it as it made agricultural vehicles under the name Swaraj. Though the trade mark authorities allowed the new entrant to use the trade mark, the high court rejected the claim. On appeal, the division bench said that the adoption of the same name was likely to confuse the consumer as the source of supply of the products was the same, the function was the same, and the channel for buying and selling were the same.
