When partners of a firm issue cheques which are dishonoured, it is presumed that they were responsible for issuing them unless they prove that they were not in charge of the daily affairs of the firm. They have to discharge the burden during the trial under the Negotiable Instruments Act, the Supreme Court stated in the case, Rallis India Ltd vs Poduru Vidya. In this case, the company filed criminal complaints against three partners. They denied responsibility arguing that they had resigned before the date of the cheques. The Andhra Pradesh accepted their plea and quashed the criminal cases against them. Rallis appealed to the Supreme Court. It set aside the high court judgement and stated that the partners’ denial of responsibility and their status at the time of the issuance of cheques must be tested during the trial. The complaint against them could not be quashed by the high court using its discretionary power.
Bombay HC division bench dismisses Cadila Pharmaceuticals’ appeal
A division bench of the Bombay high court last week dismissed the appeal of Cadila Pharmaceuticals against the judgement of a single judge bench restraining Cadila from manufacturing, marketing or exporting medicinal preparations under the trade mark "Hb TONE"/ "HB TONE" or any other mark deceptively similar to the trademarks of another company, Medley Pharmaceuticals, namely "ARBITONE", "RB TONE" or "HB RON". The complaint was that Cadila was “passing off” the products with similar names.
Glass bottles fixed capital investment: SC
Glass bottles used by a soft drink company are “fixed capital investment” and are exempted from trade tax, the Supreme Court ruled in the case, Commissioner of Trade Tax, Uttar Pradesh vs Varun Beverages Ltd. However, crates used to carry the bottles are not fixed capital investment, the court added. The argument of the soft drink company was that it was entitled to exemption for all fixed capital investment including land, building, apparatus, components and equipment which are necessary for the establishment and running of the factory. The Allahabad high court agreed with the contention, stating that for the manufacture of soft drinks, bottles and crates are essential equipment, especially in a captive industry where the liquid is prepared and collected by way of a continuous process in bottles and thereafter kept in crates. But the revenue authorities appealed to the Supreme Court. It held that bottles were exempted, but not the crates.
Supreme Court sets aside Allahabad Court judgement on tax exemption
The Supreme Court last week set aside the judgement of the Allahabad high court which had granted exemption from trade tax to a firm which was engaged in the manufacture and sale of various scientific and biological equipment used by scientists for research purposes. In the case, Commissioner of Trade Tax vs Kartos International, the revenue authorities demanded 10 per cent tax, but the company challenged it invoking a 2000 notification arguing that it was entitled to the benefit under the Central Sales Tax and also because it was engaged in inter-state sales made to various government institutions. The Supreme Court ruled that the company was not entitled to the benefit as the notification covered maps, educational charts, mechanical drawings and biology equipment used in schools and colleges. Goods used by research institutions are not eligible for the tax benefits, the court ruled.
Telephone conversation recording valid evidence: Supreme Court
A compact disc containing recording of telephone conversation could be valid evidence according to Section 3 of the Evidence Act and Section 2(t) of the Information Technology Act, the Supreme Court has stated in the case, K K Velusamy vs N Palanisamy. One of the parties in a suit over sale of property produced a CD in the court as evidence. The opposite party objected to its validity as evidence, arguing that the recordings were created with the help of mimicry specialists. In this context, the Supreme Court stated that electronically recorded conversation is admissible in evidence, if the conversation is relevant to the matter in issue and the voice is identified and the accuracy of the recorded conversation is proved by eliminating the possibility of erasure, addition or manipulation. A CD recording of a relevant conversation is comparable to a photograph of a relevant incident.
Lok Adalat cannot pass an order to pay the insurance money: Supreme Court
The Supreme Court has stated that a Lok Adalat cannot pass an order to pay the insurance money when there was no compromise between the parties, in the case, Life Insurance Corporation vs Suresh Kumar. Lok Adalat cannot take over the function of the regular courts. In this case, the Lok Adalat tried to arrive at a compromise between the parties, but failed. Then it passed an order to LIC to pay Rs 1 lakh to the claimant. LIC appealed to the high court, which dismissed it. However, the Supreme Court allowed LIC’s appeal and stated that the Lok Adalat and the high court committed serious error.
