Relief for Century co-op bank investors

LEGAL DIGEST

The Supreme Court has devised a scheme under which investors in Century Consultants and City Co-operative Bank can hope to get back their money under the supervision of a company judge of the Allahabad High Court.

Apart from various shady financial transactions, Century started "Byaz Badla" scheme in terms of which the money received from investors would be deposited with the BSE. However, the investors suffered huge losses.

The company was wound up. The promoters were released on bail on the promise that they would return the money to the investors. However, after the promised time, they sought extension of bail though the money was not returned.

Their bail plea was therefore rejected. So they appealed to the Supreme Court. Exercising its extraordinary powers under Article 142 of the Constitution, the judges framed a 20-point plan to help the investors.

Amounts recovered by the CBI as well as that lying with the NSE and the BSE, subject to determination by SEBI, will be made available to the company judge for disbursement.

Order on excisable value of goods

The Supreme Court has ruled in the judgment Commissioner of Central Excise vs Kripa Chemicals Pvt Ltd that excise duty paid on raw material, if "modvatted", is not to be included in determining the cost of production of excisable products.

Further, it held that the value of the raw material, the value of the job work done and the manufacturing profit and the expenses for the processing have to be taken into consideration for determination of the excisable value of the goods

Arbitrator's award set aside

The Supreme Court has set aside the award of the arbitrator who had decided a dispute between Dharma Prathishthanam and Madhok Construction Ltd. The construction company appointed a sole arbitrator and gave notice to the other party who did not respond.

The award was given in favour of the construction company. It went to the Delhi high court for making the award a rule of the court according to the Arbitration Act 1940.

Then the Pratishthanam objected to the award. The single judge as well as the division bench of the high court dismissed their plea. So it moved the Supreme Court and succeeded. The apex court ruled that the whole procedure was unknown to law and the ex parte proceedings were void.

"One party cannot usurp the jurisdiction of the court and proceed to act unilaterally. A unilateral appointment and a unilateral reference, both will be illegal."

SC order in bounced cheque case

A power of attorney holder in a bounced cheque case cannot pursue the case of a deceased party unless the concerned court permits him to do so. This was stated by the Supreme Court in the judgment Jimmy Jahangir vs Bolly Cariappa. The person who had complained about the cheque had died during the trial and her two children were in the US.

They issued a general power of attorney to two persons in India to pursue the case. The accused challenged this before the magistrate and the Karnataka high court. Both courts allowed the power of attorney holders to pursue the case on behalf of the children of the deceased. But on appeal, the Supreme Court ruled that the magistrate and the high court were wrong.

According to the Criminal Procedure Code, a person can move his complaint on his own, or an advocate can pursue the case with power of attorney from him. The third alternative is to get permission from the court for the power of attorney holders. Since this was not done in this case, the high court order was set aside.