The Supreme Court has set aside the judgment of the Delhi High Court in the tripartite dispute over the trade mark ‘Field Marshal’ and asked the Intellectual Property Appellate Board to examine the issues once again. The disputed trade mark was claimed by Thukral Mechanical Works, which makes centrifugal pumps and other products, Jain Industries which manufactures flour mills and pumps and PM Diesels (P) Ltd, which produces diesel engines.
The dispute has been going on for two decades. After deciding the legal questions, especially the consequence of not using a trade mark for over five years under Section 46(1)(b) of the Trade and Merchandise Marks Act, the Supreme Court asked the board to decide the questions of fact in the applications for the trade mark.
Winding up of companies for not paying interest The Supreme Court has held that interest payable on sum due would be a ‘debt’ and a winding up petition can be filed against the defaulting company. With this pronouncement in the case, Vijay Industries vs NATL Technologies Ltd, the Supreme Court has settled difference of views expressed by various high courts on this question. In this case, Vijay Industries, a small scale unit, supplied castor oil to the opposite party.
Part payment was paid, but on the balance there were delays and disputes. Therefore, a winding up petition was filed against NATL Technologies. The company judge of the Andhra Pradesh High Court found that there was prima facie case for winding up. But a division bench did not agree. In the appeal, the Supreme Court stated that since NATL had agreed to compensate oil supplier, the same must be by way of interest payable on the principal amount. Section 433 of the Companies Act (winding up of companies unable to repay debt) does not state that the debt must be a definite sum. Failure to pay agreed interest or the statutory interest would come within the purview of the word ‘debt’, the judgment explained, setting aside the high court decision.
Cheque bounce case only if payment is to discharge liability A drawer of the cheque would be guilty of issuing it without sufficient funds in the bank only if he had to discharge a financial liability or debt, not otherwise. In this case, Kumar Exports vs Sharma Carpets, the former issued two cheques as advance payment for buying carpets. However, the goods were not produced or delivered. When the cheques bounced, the carpet firm prosecuted the export firm. The magistrate dismissed the complaint. However, the Punjab and Haryana High Court convicted the exporter and asked the magistrate to decide the sentence.
On appeal, the Supreme Court stated that when the sale of carpets had not taken place, “there was no existing debt or liability in discharge of which the export firm was expected to issue cheques to the carpet firm.” Therefore, Section 138 of the Negotiable Instruments Act had no application. The Supreme Court also criticised the high court for adopting an unknown procedure in which it convicted the exporter and directed the magistrate to decide the punishment.
Karnataka decision on CST set aside The Supreme Court has set aside the judgment of the Karnataka high court and granted central sales tax relief to A & G Projects & Technologies Ltd. The company was awarded three independent by the Karnataka Power Transmissions Corporation Ltd. The company in turn entered into four contracts with manufacturers and suppliers in Tamil Nadu. The Karnataka government imposed sales tax on goods coming from outside the state. The company claimed exemption under Section 3(a) of the Central Sales Tax Act (inter-state movement of goods), which was rejected by the state authorities. The high court held that the state could impose tax. On appeal by the company, the Supreme Court ruled that it was Tamil Nadu, not Karnataka, which could collect tax.
Kerala told to refund excess sales tax to bullion trader The Supreme Court has ordered the Kerala government to refund the excess sales tax paid by a bullion dealer, M/s Saraswati Abharansala, who bought gold worth Rs 42 crore from Corporation Bank. The bank paid the tax on behalf of the purchaser. Later, the state government reduced the tax from one per cent to 0.05 per cent with retrospective effect. However, the state government refused to refund the excess tax paid to the bank. It maintained that once the tax was paid it was not bound to refund the amount. The bank appealed to the Supreme Court, which directed the government to refund the excess amount directly to the dealer, instead of the bank, with 10 per cent interest.
