SC overturns its own order

LEGAL DIGEST

A seven-judge Constitution Bench of the Supreme Court has overruled its own decision on the role of the Chief Justice in arbitration and conciliation.

According to Section 11 of the Arbitration and Conciliation Act, when the parties to a dispute cannot reach an agreement following the procedure, the issue may be referred to the chief justice to take necessary measures.

The earlier view, held by another Constitution Bench in the case, Konkan Railway Corporation Ltd vs Rani Construction Ltd (2000), was that the chief justice was exercising his administrative power while doing so. This decision has now been overruled. It is judicial power, according to the new judgment.

Tisco gains over Kalinga

The Supreme Court last week allowed Tisco to proceed with its Rs 15,400-crore thermal power project in Orissa, but, declared that the company would be doing so at its own risk as the appeal of the rival company, Kalinga Power Corporation Ltd, would be heard by the court after six weeks.

The court passed the order in Kalinga's appeal against a Orissa High Court order, which had practically rejected its objection to the state government cancelling land allotted to it and giving it to Tisco.

Kalinga argued that the state government cancelled the allotment without notice. When there was plenty of land available, the government chose to take land allotted to Kalinga and give it to Tisco, the company said.

The State Industrial Development Corporation submitted that Kalinga was not accepting the lease terms and did not pay the instalments. The project was delayed for nearly ten years and therefore, the land was given to Tisco.

Pharma firm's plea on dues

The Supreme Court last week rejected the appeal of Assam Small Scale Industrial Development Corporation Ltd and ruled that it was liable to pay dues to JD Pharmaceuticals for medicines supplied to the corporation. The corporation had bought medicines manufactured by the company. However, it did not pay the full amount.

Therefore the pharma firm filed a suit for the recovery of dues. A trial court decreed the suit.

The corporation appealed to the Supreme Court arguing that different departments of the state, other government corporations and undertakings were the real buyers and beneficiaries of the supplier and therefore they were liable to pay and not the corporation. The state must answer for the default. This argument was rejected by the Supreme Court.

Ruling on excise benefits

The Supreme Court overruled the Customs, Excise and Gold Appellate Tribunal and allowed the appeal of Compack Pvt Ltd in its claim for excise benefits for cardboard containers manufactured by it.

The firm had opted for benefits according to a 1982 notification under Section AA of Chapter V of the rules. It did not avail of Modvat credit for the base paper board.

It filed Modvat declaration with regard to other products like plastic coated paper. This was not accepted by revenue authorities. The firm's petition was dismissed by the tribunal.