In a boost for small scale industries (SSI), the Supreme Court (SC) last week upheld the power of the Industry Facilitation Council to award disputed amounts with interest to SSIs when the amounts are due from the buying company. The council is set up under the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act 1993. The law was meant to help small scale units to recover dues from buyers promptly as otherwise their working capital would suffer. In this case, Steel Authority of India bought supplies from SSI Modern Industries but there was a dispute over the amounts due.
The SSI moved the council where SAIL failed to appear at all. So the council passed an award in favour of the SSI. SAIL then moved the Orissa high court which quashed the order of the council. The SSI appealed to the SC which set aside the high court judgment. The SC, moreover, indicted SAIL for not using the opportunity to argue before the council and not using the appellate machinery under the Act and straightaway going to the high court.
Jharkhand wins right to revise rent on mining land
The SC last week upheld the resolution of the Jharkhand government revising the surface rent on the area of mining leases at par with the land under commercial use. The high court had struck down the resolution on the petition by more than 50 mining licencees, stating that the power to make the decision was with the Centre and not the state. The state appealed to the SC arguing it has the powers to pass executive orders. The court allowed the appeal, remarking that the high court had passed a “confusing” and “patently erroneous” judgment, under the impression that the resolution passed by the government was issued by the legislature.
Official cannot withdraw offer of voluntary retirement
The SC has ruled that a development officer of a nationalised general insurance company cannot withdraw his offer of voluntary retirement application even if the management had not accepted it within the time prescribed for the scheme. In this case, some development officers of New India Assurance Company opted for the voluntary retirement package of 2003 in operation for 60 days. There was no response from the company during the period. Then they withdrew their offer. This was not accepted by the company which relieved them.
They contested this in the Madhya Pradesh high court. It ruled in favour of them, maintaining that their offer was not accepted by the management and since offer and acceptance are vital ingredients of a contract, their termination was illegal. The company moved the SC. It held, the employment was governed by statutory rules and not by the law of contract. Under Section 17A of the Nationalisation of General Insurance Business Act, the Conditions of Service Scheme 2003 was passed and the voluntary retirement scheme was under that law, and not under the Contract Act. The SC thus set aside the high court judgment.
Insurance against bank staff fraud
After 33 years of discovering a series of embezzlements in Amravati District Central Coop Bank Ltd, its appeal to the SC for insurance amount from United India Fire & General Insurance Co Ltd failed in the SC last week. The bank had taken an insurance policy against dishonest or criminal acts of its officers. However, one employee used forgery to pilfer the accounts of several persons periodically. The bank sought insurance on the amount filched, but the insurer insisted that each instance should be considered separately in which event, the liability would come to Rs 29,000 only. It pointed out to the “excess clause” in the policy. According to it, the bank had to bear the losses in small amounts, but beyond them, the insurer will take 25 per cent. The insurance company considered each case of forgery separately to reduce its liability. Though the arbitrator delivered an award in favour of the bank, the Bombay high court and the SC accepted the view of the insurance company and dismissed the appeal.
Dispute over ‘Ayur’
The Delhi high court has passed an injunction in favour of Three-N-Products Ltd against Holistic Health Care Ltd in the dispute over the trade mark ‘Ayur’. The first firm contended that it has the right to the registered trade mark, while the latter had entered the same business with the mark ‘Ayurcare’. Both were in the health services and wellness programmes, like running spa, dance classes, abstract body art, Su-Jok, spiritual and holistic healing.
The high court stated that the first firm made prior use of the mark Ayur and therefore it was entitled to enforce its rights as a registered proprietor of the mark. It has at least prima facie established that its mark is well known and acquired wide reputation not only in India but also in various countries across the globe. “In the circumstances, Holistic Health Care company’s use of the mark is not only detrimental to the distinctive character and repute of the registered trade mark of Three-N, but also has been used by Holistic to take unfair advantage.”
