M J Antony: Supreme Court rejects refund claim

LEGAL DIGEST

The Supreme Court last week dismissed a review petition moved by Priya Blue Industries Ltd, seeking refund of Customs duty paid under protest. The company had imported a ship for breaking.

It filed a bill of entry and duty was assessed. After paying the duty under protest, it filed a claim for refund on the ground that it was wrongly levied. The claim was rejected by all authorities.

CEGAT also maintained that since no appeal had been filed against the assessment order, the refund claim was not maintainable.

The Supreme Court said: "Once an order of assessment is passed, the duty would be payable as per that order. Unless that order of assessment has been reviewed or modified in appeal, that order stands. So long as the order of assessment stands, the duty would be payable as per that order of assessment."

Validity of mining lease upheld

The Supreme Court has upheld the granting of a mining lease to Medley Minerals India Ltd for decorative stones in the Bolangir district of Orissa, overruling the high court judgment and objections by a rival company.

Initially, the lease was in the name of an individual. Later, he formed a company in which he became the director. The rival company argued that the application made by the individual for renewal of the lease could not benefit the newly-formed company.

The Supreme Court said the state government was justified in treating the company's application as continuation of the application for renewal of lease made by the individual lessee.

SC rejects plea in debt recovery case

The Supreme Court has held that under the banking laws, a debtor is not entitled to be heard before the valuation of his assets and the fixing of the reserve price for their sale by the creditor.

He is entitled to a notice only for drawing up of the proclamation of sale. The creditor is not required to consider an alternative valuation at the instance of the debtor.

The court was hearing an appeal in the Samir Shah vs Union of India case, in which the bank proclaimed the sale of two properties as the debtor failed to honour the settlement and pay the dues.

The debtor challenged Regulation 60 of the Debt Recovery of Tribunals, Maharashtra & Goa on the ground that it was contrary to the Recovery of Debts Due to Banks and Financial Institutions Act and the Rules in the second schedule to the Income Tax Act. The court rejected the challenge.

High court overruled in accident case

The Supreme Court last week allowed the appeal of the National Insurance Company and set aside the ruling of the Andhra Pradesh High Court, which had asked the company to indemnify the award of the Motor Vehicle Accident Tribunal.

Two persons died and one was injured in an accident involving an autorickshaw without a valid permit to ply. The company argued that since the vehicle had no permit, it was not liable to pay compensation. The tribunal held that it was not liable to pay, but the insured owner had to pay the damages.

On appeal, the high court ruled that the insurance company was liable to indemnify the award. The Supreme Court overruled the high court saying the company is not liable. The apex court said in view of the beneficial object of the Motor Vehicles Act, the company should pay the amount first, and then recover it from the owner of the vehicle.