Supreme Court dismisses L&T appeal

LEGAL DIGEST

The Supreme Court last week dismissed the appeal of Larsen & Toubro Ltd challenging the judgment of the Madras high court denying it benefits under the International Price Reimbursement Scheme.

L&T has a workshop at Kandla Free Trade Zone (FTZ) in Gujarat. It built two steel bridges there for Malaysia for Rs 24 crore. Units in FTZ are given several financial benefits, but "deemed exports" is not one of them.

L&T bought steel from SAIL and TISCO at domestic prices in preference to its right to import steel at a much competitive international price. The company, after building the bridges, claimed reimbursement of price difference in accordance with the price reimbursement scheme.

The government rejected L&T's claim. Therefore, it moved the high court, which rejected the petition.

The Supreme Court upheld the high court view, asserting that the price reimbursement scheme did not cover contracts for "deemed exports".

The company was entitled to import raw materials from the domestic tariff area to the FTZ at international price. Every such import would be deemed export and exempted from the benefit, the court said.

Bangalore builder gets a reprieve

The Supreme Court last week overruled the Karnataka high court which had ordered the demolition of a multi-storeyed building in Bangalore for violating the town planning regulations (R & M Trust vs Koramangala Residents).

The residents in the neighbourhood objected to the building alleging that the licence was granted to the builder illegally. The high court allowed their petition and ordered its demolition.

On appeal, the Supreme Court found that the permission granted by the municipal corporation did not violate the laws.

Can MRTP award compensation?

The Supreme Court has decided to examine the power of the Monopolies and Restrictive Trade Practices (MRTP) Commission to award compensation for death or injury due to negligence of the railways (Union of India vs C L Hora).

The government argued that the commission has no power to award compensation for negligence under Section 12-B of the MRTP Act.

Meanwhile, it has asked the Railways to deposit Rs 18 lakh as compensation for the death of a girl who fell through the vestibule of Goa Express. The award was given last year by the commission.

Civil courts' pecuniary jurisdiction upheld

A five-judge Constitution bench of the Supreme Court has unanimously upheld the validity of three laws which take away the pecuniary jurisdiction of some high courts and vests them in civil courts.

The laws are: The Bombay City Civil Court (Enhancement of Pecuniary Jurisdiction) Act 1986, the Maharashtra High Court (Hearing of Writ Petitions) Act 1986 and the Madhya Pradesh High Court (Letters Patent Appeals) Act 1981.

Some of the petitions challenging the laws were public interest litigation, and some others by companies (Jamshed Guzdar vs State of Maharashtra).