The Supreme Court last week widened the scope for insurance companies for resisting claims in road accident cases, especially on the amount of compensation. The Motor Vehicles Act enumerates the limited grounds on which the insurance companies can defend claims against it in the motor accident claims tribunals. These are listed in Section 149(2) of the Act, like plying vehicle without permit or violating the conditions of the permit. This had narrowed the scope for insurance companies to present their arguments before the delivery of the order by the tribunal. In the present judgment in a batch of appeals, United India Insurance Company vs Shila Datta, the court clarified that “whatever be the reason for insurer being made a party, once it is a party, it can raise all contentions that are available to the owner or driver to resist the claim.” Thus it can raise more grounds than are listed in Section 149 of the Act.
SC quashes selection of ‘ biased’ person in gas pipeline project
The appointment of a “competent authority” under the Petroleum and Minerals, Pipelines (Acquisition of Right of User in Land) Act must inspire confidence in the public, the Supreme Court observed while setting aside the selection of V I Gohil in the case, Trilok Pandya vs Union of India. He was nominated by the Gujarat government and it was approved by the central government as the competent authority for deciding compensation and other disputes relating to laying of gas pipelines from Gujarat to Rajasthan and Madhya Pradesh. His orders were challenged by some land owners arguing that he was an employee of a private company, Reliance Gas Transportation India Ltd, and therefore his decisions were biased. Their petitions were rejected by the Gujarat high court. However, when they appealed to the Supreme Court, it reversed the high court decision and directed the central government to appoint an “unbiased person” for the post. The judgment said that “if instead of public servants, a person is appointed whose pay, allowances and other incidentals are not paid out of the public exchequer but directly paid by a private employer, persons interested in the land will have reasonable grounds for assuming that such a person who is dependent on a private corporation for his salary, allowance, accommodation and transport allowances will have a bias in favour of the private corporation.”
Customs must normally accept invoice price
The transaction value shown in the invoice should normally be accepted by the customs authorities unless there is strong ground to reject it, the Supreme Court stated last week in a large batch of cases, led by Commissioner of Customs vs M/s Aggarwal Industries Ltd. The revenue authorities had appealed against the ruling of the customs appellate tribunal in all these cases. In the leading case, the firm imported sunflower seed oil from Singapore. There was a short delay in the shipment of the goods, during which period the oil price shot up in the international market. The revenue authorities therefore rejected the contracted price and issued show cause notice to the importer. The tribunal set aside the show cause notice. The authorities moved the Supreme Court, which dismissed their appeals stating that they had erred in rejecting the invoice price.
Severe indictment of PSUs in Dabhol revival tender
The Delhi high court last week quashed a clause in the tender for building the LNG block for the revival of Dabhol Power Plant and asked the members of the board of directors of Ratnagiri Gas and Power Ltd, the Gas Authority of India Ltd and Engineers India Ltd “to take a decision in accordance with fairness, equity and justice keeping the interest of the state in mind.” The judgment was passed in a writ petition moved by RDS Project Ltd, which almost got the contract in the first bid, but lost it after the public sector joint venture between NTPC and GAIL changed the terms of the tender. The amended clause is “bad in law”, the court said. It passed severe remarks against the PSUs, which is in charge of the revival of the defunct Dabhol project at the instance of the Maharashtra government. The long judgment started with the observation that “this writ petition would bear testimony to the adage that truth is a conundrum wrapped in mystery surrounded by a multitude of lies.” It noted that RDS Projects had incurred more than Rs 33 lakh in lawyers’ fees and asked the government companies to share part of the legal cost.
Insurer denies storm to reject claim
The National Consumer Commission last week dismissed the appeal of Bajaj Allianz General Insurance Ltd against the order of the Jharkhand state commission asking it to pay compensation to Atibir Industries Co. The company had filed a claim for the losses suffered in its production unit in Giridh due to a storm. The insurer denied there was a storm at all, and blamed the structural deficiency of the plant for its collapse. The state commission ruled that Bajaj had failed to prove any structural deficiency and there was indeed a storm. After examining expert evidence, the national commission upheld the state commission’s order.
