The Supreme Court has ruled in a large batch of appeals that in cases of bounced cheques, the complaint could be filed in the place where the cheques were dishonoured, and not where it was issued. This principle which was laid down by the court last year has now been affirmed in the Negotiable Instruments (Amendment) Ordinance of this year. The rule has come into effect with retrospective effect from June this year.
In the leading case in this batch of appeals, Bridgestone India Ltd vs Inderpal Singh, the cheque was drawn on Union Bank of India in Chandigarh. It was presented at IDBI in Indore. The cheque was returned with note 'exceeds arrangement'. The company filed a complaint before the magistrate in Indore.
The drawer moved the Madhya Pradesh High Court for quashing the complaint, arguing that the cheque was issued in Chandigarh and therefore the complaint should have been filed there. The high court allowed his petition and quashed the complaint stating that it should have been filed in Chandigarh.
The company moved the Supreme Court which held that the high court was wrong. According to the new rules, the complaint could be filed where the cheque is delivered for collection. Judgments of other high courts, which took the view similar to that of the Madhya Pradesh were also set aside, thus confirming the rule for all future litigation.
Uttarakhand market rules held illegal
The Supreme Court last week struck down certain provisions of the Uttarakhand Agricultural Produce Marketing (Development and Regulation) Act on the appeal of Gujarat Ambuja Exports Ltd, stating that the state government had no power to levy market fee and development cess on agricultural produce which were being brought into the market not for sale, but for the purpose of manufacture or further processing. Only the central government could levy charges on these activities under the Constitution, the court said.
Food vouchers cannot be taxed
Food vouchers given by employers to their workers are not 'goods' which attract local tax, and the company which facilitates this service is not liable to pay any levy, the Supreme Court ruled last week in its judgment, Sodexo SVC India Ltd vs State of Maharashtra. It set aside the decision of the Bombay High Court which held that they were goods. In this case, the company's business was providing pre-printed meal vouchers named 'Sodexo Meal Vouchers'. It entered into contracts with large employers for issuing the vouchers.
The company has made arrangements with various restaurants, departmental stores, shops, etc, where the employees can obtain food and other items on presentation of the vouchers. The issue was whether the vouchers could be treated as goods for legal purposes. The high court answered yes. But the Supreme Court said no; it was only a service.
The judgment pointed out that the company had been conducting its business after getting authorisation from the Reserve Bank of India which was mandatory under the Payment and Settlement Systems Act. The authorisation covers issue of meal vouchers and gift vouchers in the form of 'paper-based vouchers' and 'smartcard' or 'smart meal card' and they are treated as a service. "No doubt, vouchers bear a particular value and for such value, goods are provided to the employees.
However, these goods are not provided by Sodexo, but by the affiliates (eateries, etc). The company is only a facilitator and a medium between them and customers (employers) and is providing service," the judgment said.
Property tax on IOC warehouses
The Supreme Court ruled last week that Indian Oil Corporation must pay property tax to the Chinnachowk Grama Panchayat for keeping its warehouse within the area, storing petrol, diesel, LPG and other items meant for distribution. The government corporation argued that it was not a house where people frequented.
But, the court rejected the argument in the case, IOL vs Andhra Pradesh Industrial Infrastructure Corporation. The court stated that "it may not be necessary that such a place is capable of frequent visits by the human beings or fit for human occupation." The definition of house in the Andhra Pradesh Panchayat Raj Act covers storage depots and similar buildings. "It is this fictional definition of 'house' which is to be kept in mind for the purpose of levy of tax," the judgment said.
Shorter time to reply to consumer pleas
In an order that would speed up trial in consumer forums, the Supreme Court last week declared that the reply to a complaint should be filed within 45 days. The court stated that this rule should be followed to keep up the spirit of the Consumer Protection Act which is a faster method of adjudication of consumer issues.
The judgment was passed in view of doubts expressed over two of its own judgments which had apparently held different views. The attorney general had sought a clarification on this point. The court did so in a batch of cases, led by New India Assurance vs Hilli Multipurpose Cold Storage Ltd.
HDFC bank to pay for debit card negligence
Many persons are unaware of life insurance which comes free with their credit/debit cards but the banks that issue them have a responsibility to fulfil their duty towards its customers. If they fail to get the promised amount from the insurance company, the banks will be guilty of deficiency in service.
The National Consumer Commission held so in its judgment last week, HDFC Bank vs Pooja Kapoor. The bank had issued a gold card to Pankaj Kapoor and wife Pooja with the benefit of insurance for Rs 5 lakh in case of accidental death. The bank's arrangement was with New India Assurance. Pankaj died in an accident, but the widow did not claim the insurance benefit for a long time, though the condition in the policy prescribed a 30-day limit.
She was not aware of the benefit when the bank account was closed due to the death. The bank did not tell her either. Later, she learned about the insurance and she approached the bank. It referred the claim to the insurer, which rejected it on the ground of delay. She moved the Sonepat consumer forum.
It ordered the bank to pay full amount plus litigation expenses for causing harassment and mental agony. The state commission dismissed the bank's appeal stating that when the bank came to know of the death, it was bound to refer the claim to the insurer. The second appeal of the bank to the national commission was also dismissed, though the amount was reduced.
