THE Supreme Court has severely criticised the Allahabad High Court for introducing ‘novel’ methods to resolve disputes between a power company and consumers. It upheld the claim of the Uttar Pradesh Power Corporation of dues from Amausi Textile Mills Ltd. The high court had appointed one of its retired judges to settle the dispute between the parties over electricity bills. He filed a report in favour of the company. On appeal by the power company, the Supreme Court criticised the high court for “summarily brushing aside” the objections of the power company and blindly accepting the retired judge’s decision. The Supreme Court pointed out that the textile mill had moved the consumer forum and the Electricity Ombudsman and failed in both places. Then the mill moved the high court five times. Ultimately it succeeded when the retired judge supported it. The Supreme Court remarked that the mill had abused the process of law at all levels and the high court had ignored its conduct. The judgment said: “It is extremely difficult, if not impossible, to fathom any reasons why the high court appointed the judge. It evolved a novel method for granting relief to the company. We disapprove of the mechanism adopted by the high court by relying upon the report of the retired judge.”
SC upholds United Insurance liability to Kantika Color Lab
The Supreme Court has upheld the liability of United Insurance Company to pay compensation for loss of goods in transit to Kantika Colour Lab but reduced the damages to the actual loss suffered by the latter. The National Consumer Commission had awarded the full Rs 53 lakh insured. It was reduced to Rs 27 lakh. Kantika imported printer and film processors from Japan and they were transported by Super Road Lines from Mumbai port to Hardwar. The goods were damaged on the way and the degree of loss was disputed. Kantika moved the consumer commission which awarded full insured amount. But on appeal, the Supreme Court reduced it to the actual loss estimated by it. It said that it was not the outer limit set in the policy which should be followed by the actual loss. The transporter was also made liable for compensating Kantika.
Jail if compensation not paid for bounced cheque
If a person convicted for issuing a cheque without balance in his bank account is ordered to pay compensation to the payee, he can be sentenced to imprisonment under Section 357(3) of the Criminal Procedure Code, the Supreme Court has held in the case, K A Abbas vs Sabu Joseph. In this case, the court asked the drawer to pay Rs 5 lakh as compensation for issuing a cheque which bounced. The drawee did not pay. So he was sentenced to two months more for the default. The Kerala high court reduced it to imprisonment till the rising of the court. Both parties appealed to the Supreme Court, the payee arguing that the sentence was minimal. The court ruled that sentence of imprisonment can be imposed in such cases.
Award of the sole arbitrator enforceable in India: Delhi HC
The Delhi high court last week declared that the award of the sole arbitrator appointed by the International Court of Arbitration in the dispute between Fittydent International GmBH and Brawn Laboratories was enforceable in India. The award was in favour of the foreign firm, which had a licence agreement with the Indian firm for manufacture and sale of denture products. Fittydent terminated the contract alleging that the Indian firm failed to start production. The latter stated that it had not received the government approval and therefore it was not at fault. The dispute was decided by the international arbitrator in favour of Fittydent. The award was challenged in the high court, which was rejected and the Indian firm was asked to pay the awarded amount within 12 weeks.
No waiver of pre-deposit condition for sick units
The Delhi high court has dismissed the appeal of Swadeshi Cement Ltd against the order of the Debt Recovery Appellate Tribunal asking it to deposit 25 per cent of the dues before moving the court. The creditor, Asset Care Enterprises, had invoked the power under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act against the cement firm. The latter moved the tribunal, which asked it to deposit 25 per cent of the dues before hearing it. It pleaded that it was a ‘BIFR company’ and therefore the pre-deposit condition should be relaxed. The high court rejected this request and declared that sick companies are not entitled to such benefit under the Act.
SC upholds Bengal government’s change in tender policy
The Supreme Court has upheld the West Bengal government’s change in the policy of inviting tenders for high security number plates for motor vehicles as it was “in larger public interest without compromising on safety, security, quality or sustainable capacity.” Earlier, the conditions for award of tender included foreign experience and specified turnover of the contracting firm. Then there were only two competitors. The government later changed the conditions and floated new tenders. The lowest bid then plunged to Rs 469 from Rs 1,200. Shimnit Utsch India (P) Ltd, which quoted Rs 1,200 challenged the change in conditions in the Calcutta high court and later in the Supreme Court. It dismissed the appeal, Shimnit Utsch vs West Bengal Transport Infrastructure Development Corporation Ltd. A similar appeal against the Orissa government’s decision to change tender conditions was also dismissed in the case, Tonnjes Eastern Security Technologies (P) Ltd.
