The Supreme Court last week severely criticised the Orissa High Court for directing the Orissa State Financial Corporation (OSFC) and Industrial Promotion and Investment Corporation of Odisha Ltd to offer afresh the benefit of “One-Time Settlement Scheme” to M/s Hotel Torrento Limited, a defaulter of loan. It had earlier been offered the scheme but did not avail of it. The high court had also ordered dispossession of Micro Hotel Ltd, the auction purchaser, which had bought the mortgaged property under the procedure followed by the State Financial Corporation Act. The Supreme Court listed 13 factors which the high court overlooked while deciding the case. Moreover, the order was also against that of another bench of the same court. “We express our strong disapproval of the manner in which the division bench of the high court virtually sat in judgment over the judgment of another co-ordinate bench,” the Supreme Court judgment observed.
Labour issue for larger bench
The Supreme Court has referred to a larger bench an important question in labour law as two benches of the court had given different interpretations on the power of the labour court. In this case, Ram Shiroman Mishra vs Vishwanath Pandey, the labour court had ordered reinstatement of an employee with full back wages. However, the employer moved an application stating that he was not aware of the proceedings. The labour court rejected it observing that the application was filed after publication of the award and after issuance of the recovery certificate under the provisions of the Industrial Disputes Act. Therefore the labour cannot recall the order. The employer moved the Delhi High Court against the order, but it was dismissed. About the power of the labour court to recall its own order after 30 days of delivery, there are two streams of judgments which are contrary to each other. Therefore, the Supreme Court referred the question to a larger bench.
Arbitral award set aside
The Delhi High Court has set aside the majority award of the arbitration tribunal allowing the claims and counter claims of E I Du Pont de Nemours and Indian Acrylic Ltd in their dispute over a know-how and engineering information agreement. Du Pont as licensor had agreed in a $5 million deal to provide the Indian company a non-exclusive licence to use Du Pont’s confidential information and know-how as specified in the agreement to use polymer in the manufacture of a certain product. Later Du Pont allegedly closed its acrylic fibre production business and therefore it was unable to fulfil its obligations, starting disputes between the two followed by arbitration in Paris. The majority award allowed the claim of Du Pont and it was challenged by Indian Acrylic on the ground of delay. The high court accepted the contention and observed that “the majority award committed a patent illegality” on this issue. It added that the Limitation Act is part of the public policy inasmuch as it prohibits the entertaining of monetary claims that are time-barred. While rejecting claims and counter-claims, the court stated that “an award contrary to the express provisions of the Act would be in conflict with the public policy of India.”
Stop anti-competitive practice
The Competition Commission of India has acted on a complaint filed by Vedant Bio Sciences against the Chemists and Druggists Association of Baroda and imposed penalty on the latter for adopting anti-competitive practices. The commission directed the association to file an undertaking that practices with respect to fixing of trade margins of pharma products, non-appointment of stockists or wholesalers from amongst non-members of the association, requirement of No Objection Certificate from the association for appointment of stockists or wholesalers and limit on number of stockists of pharmaceutical companies have been done away within 90 days.
Sugar mills not to pay market fee
The Supreme Court last week dismissed an appeal moved by the Madhya Pradesh government and ruled that sugar mills are not liable to pay market fee on the purchase of sugarcane from cane growers and their cooperative societies. The mills had filed writ petitions for quashing the notices issued by the market committees requiring them to take licence under the Market Act of the state and to pay market fee on the purchase of sugarcane, by asserting that the provisions of the Market Act are not applicable to the transactions which are exclusively governed by the Madhya Pradesh Sugarcane (Regulation of Supply and Purchase) Act and the Sugarcane (Control) Order issued by the Central Government under the Essential Commodities Act. The state government and the market committees had argued that the Market Act would prevail over the Control Order in transactions involving the purchase of sugarcane by the factories operating in the market areas. This was rejected by the high court as well as the Supreme Court in the case, Krishi Uptadan Mandi Samiti vs Shiv Shakti Khansari Udyog.
