The Supreme Court has ruled that consumption of electricity in excess of the contracted load would amount to ‘unauthorised use’ under the Electricity Act 2003. Though it is not theft, penal provisions in Section 126 of the Act will apply to such cases, the court stated in the judgment, Executive Engineer vs Sri Seetaram Rice Mill. The inspectors found that the small scale unit was overdrawing power and issued notice to it. The punishment is twice the tariff for the whole period when the unauthorised use had taken place. The mill moved the Orissa high court arguing that overdrawing of power is not ‘unauthorised use’. The high court agreed with it. However, on appeal, the Supreme Court set aside the high court order. Apart from the overdrawal being breach of contract, it is “prejudicial to the public at large as it is likely to throw out of gear the entire supply system.”
Arbitrator cannot fix rate higher than in the contract
Once the rate for a works contract is fixed for a particular project, the contractor cannot demand additional amount merely because he had to spend more for carrying out the work, the Supreme Court stated while dismissing the appeal of the contractor in the case, M/s Satyanarayana vs Union of India. The contractor wanted arbitration in the dispute as the government did not pass its bill. The government contended that the work was unduly delayed. The arbitrator awarded Rs 95 lakh to the contractor. The dispute was taken to the Andhra Pradesh high court which set aside the award. The contractor’s appeal to the Supreme Court was dismissed stating that the arbitrator went beyond his authority and wrongly awarded a rate higher than that fixed by the contract.
Cut-off date in Kar Vivad scheme upheld
The Supreme Court last week upheld the cut-off date of March 31, 1998 set by the Finance Act for claiming the benefit of Kar Vivad Samadhana Scheme 1998. The Gujarat high court had quashed the provision in the Finance Act stating that the cut-off date was arbitrary and excluded certain persons from claiming the benefit merely on the basis of the date of notice of arrears. The Supreme Court set aside the high court judgment in a large batch of appeals by the government in the case, Union of India vs Swiss Pharma Ltd. In a taxation statute, the government can pick and choose people to be taxed for reasons of “functional expediency.” A power to classify being extremely broad and based on diverse considerations of executive pragmatism, the “judiciary cannot rush in where even the legislature warily treads,” the judgment said.
Dutch beer firm blocks use of trade mark in India
The Delhi high court last week passed a permanent injunction against Mohan Goldwater Breweries Ltd restraining it from selling, distributing or marketing beer under the trademark Castle and/or Old Castle. The order was passed on a petition moved by South African Breweries (SAB) of the Netherlands and its joint venture partner in India. According to SAB, the trademark Castle is well-known in India and is well-recognised worldwide on account of its extensive availability in various countries and duty free shops at various airports. It has also been sponsoring South Africa cricket team for the past ten years and therefore the name is familiar to Indian cricket fans. It has been selling beer in India since 1974 and it has obtained the registration of the trade mark. The court stated that the Indian company appeared to have applied for registration of the trade mark only to block the entry of the foreign brand to the Indian market. SAB has registered the name and has been the first user of the brand. The use of the name by the Indian company will affect the reputation of SAB and confuse the customer, the high court said.
Disney characters’ misuse stopped
The Delhi high court has passed a permanent injunction in favour of Disney Enterprises Inc against some firms which used its favourite characters for selling fast moving products like school bags. The US corporation moved the high court seeking to restrain the use of the marks like Mickey Mouse, Minnie Mouse, Donald Duck and Goofy. It claimed that it was the tenth greatest brand in the world with a brand value of £28,447 million. It alleged that the Indian manufacturers were passing off their goods as those of Disney’s or implying that their goods were connected with or approved by it in some manner. Accepting the complaint, the high court passed the injunction order and imposed damages on the defaulters.
Telecom firm gets compensation for fire mishap
The National Consumer Commission last week dismissed the appeal of United India Insurance Company against the order of the Gujarat state consumer commission asking it to pay compensation to Milap Telecom, a private telephone exchange. There was a fire in the unit, destroying its equipment. When the claim was made, the insurer repudiated it on several grounds, one of them being that Milap Telecom had obtained only a fire policy and had not taken “Electronic Equipment Policy for the Break Down” which could have covered the loss on account of alleged short circuit. The commission rejected the argument and pointed out from the proposal form that furniture, plant machinery and accessories and the whole stock-in-trade were insured.
