Udayani's plea dismissed

LEGAL DIGEST

The Supreme Court last week dismissed the appeal in the Udayani Ship Breakers Ltd vs Commissioner of Customs case, ruling that the company was not entitled to abatement of Customs duty for a ship imported from Belgium.

Originally, Priya Blue Industries Ltd imported the ship for breaking, paying Rs 24 crore. The ship, while beached on the Gujarat coast, drifted from the allotted plot and grounded at a plot owned by Udayani. The ship was then sold to Udyani. It declared the price at Rs 12 crore.

The authorities rejected this figure as abnormally low. On appeal, the Customs tribunal upheld this view. The Supreme Court dismissed Udayani's further appeal, observing that "adoption of two different values for the same goods for charging duty of Customs is not only unprecedented but also patently illegal."

Madras High Court order upheld

The Supreme Court last week dismissed appeals of Sterling Holiday Resorts (India) Ltd and Dove Investment Pvt Ltd against Gujarat Industrial Investment Corporation Ltd and upheld the judgment of the Madras High Court against them. Facts in both cases were similar.

In the case of Sterling Holiday Resorts, the company took a loan from Gujarat Corporation. By way of security, four persons pledged 2,592,800 shares in favour of the corporation.

Since there had been delay in the repayment of the loan, the corporation asked Sterling to transfer the pledged share certificates to it. A winding up petition under the Companies Act was also filed by the corporation. The company registered only a small number of shares, but failed to do so for the remaining alleging delay on the part of the corporation.

The corporation opposed it, arguing that the shares were freely transferable and the conduct of Sterling was mala fide. The Company Law Board directed Sterling to register the remaining shares within a month. Its appeal was dismissed by the high court as well as the Supreme Court.

'Financier can impound vehicle'

The Supreme Court held on Friday that if hire purchase agreements permitted a financier to take possession of financed vehicles, there was no legal bar on the financier taking such possession.

It noted in the case, Managing Director, Orix Auto Finance India Ltd vs Jagmander Singh, that these are matters of contract, and some high courts had wrongly entertained writ petitions of hirers and stopped the re-possession.

The Supreme Court further said there could be no "public interest litigation" in such contractual matters. The high courts were told to follow this principle in future.

Duncan's appeal rejected

The Supreme Court on Friday dismissed the appeal of Duncan Industries Ltd challenging the retrospective modification of the "retention price scheme" granted by the central government to fertiliser manufacturers.

Earlier, the Allahabad High Court had dismissed the company's writ petition. Nagarjuna Fertilisers and Chemicals had also challenged a similar order of the Andhra Pradesh High Court earlier. It had been dismissed. The Supreme Court upheld the view of the high courts and dismissed the challenge to the central government's revision of the scheme in 2001, leading to recovery claims on the fertiliser companies.