The Supreme Court, on Friday, brought to an end a 23-year-old dispute related to the 1992 securities scam and Standard Chartered Bank, whose appeal against the special court order was allowed. The bank will now be richer by more than Rs 50 crore. Nine financial companies have to pay the amount to StanChart along with 6 per cent interest from 1996. In this case, Stanchart vs Andhra Bank Financial Services, several top banks like ANZ Grindlays and Canara were involved in circuitous transfers of NTPC bonds.
SC picks holes in new land law
Even before the new land acquisition law comes out of the tumult of political and social justice issues, the Supreme Court has discovered a few legal faultlines in the proposed Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. So there is still time to hear the call of the court in its recent judgment in the case, Soorajmull vs state of Bihar. The case involved a 1981 land acquisition, which was repeatedly notified under the infamous "urgency" provision but allowed to lapse. The court ruled that the state had denied the land owner "just and fair compensation for the land from which he was dispossessed well over three decades ago." So the acquisition was struck down under the new law. On the 2013 law, the court observed that there seemed to an "unexplained inconsistency between Section 24(1)(a), which allows an acquisition to stand despite a failure to pass an award while only requiring the compensation to be determined and Section 24(2), which deems the acquisition to have lapsed for a failure to pay compensation or take physical possession of the land where an award has been passed over five years prior to the commencement of the 2013 Act." There is yet another poser from the court: "Which provision in the 2013 Act governs a situation where the state has not progressed beyond making a declaration of acquisition; where possession of the land has not been assumed by the state; where neither part nor whole of the compensation has been paid or tendered!"
Vaseline Heel Guard is a medicament
The Supreme Court last week dismissed the appeal of the commissioner of central excise and declared that 'Vaseline Intensive Care Heel Guard' manufactured by Hindustan Lever Ltd is a medicament with curing properties and not merely a skin care preparation. Therefore the duty on the product will be 15 per cent, which I less than the tariff for cosmetics. The revenue authorities contended that the product should be included in the cosmetics and perfumery entry attracting 40 per cent levy. The company marketed it as a solution for cracked heels and claimed that the solution was especially developed by the scientists at Vaseline Research. The court stated that when certain products have shades or qualities of both cosmetics and prophylactic, namely, skin care as well as cure of skin diseases the onus is on the department to show that it is not a medicament. For this, it will have to demonstrate that the curative value is only subsidiary in nature. The authorities have not discharged this responsibility. Moreover, though a product is sold without a prescription of a medical practitioner, it does not lead to the immediate conclusion that all products that are sold over the counter are cosmetics. There are several products that are sold OTC and are yet medicaments.
Palm oil importers' appeals dismissed
Supreme Court has dismissed the appeals of importers of palm oil challenging the 2007 notifications of the central government prohibiting the import of the oil through all the ports of Kerala. The notifications were issued invoking the Foreign Trade (Development and Regulation) Act. Kerala is the largest producer of coconut oil and the import of cheaper palm oil, a competitive product, will affect 350,000 farmers in the state. The notifications were issued as a matter of policy of the government and the court would be reluctant to exercise its power of judicial review in such matters. The judgment in Parisons Agrotech Ltd vs Union of India concluded: "There is sufficient public good sought to be achieved by banning the imports of crude palm oil through ports in Kerala."
Re-auction should be justified
The government has discretion to cancel an auction sale due to valid reason like cartelisation or failing to fetch adequate price above the reserve price, but the reason should be transparent to the bidders. This rule was reiterated last week by Supreme Court in its judgment, Punjab State Leather Development Corporation vs M/s Bandeep Singh. Supreme Court incidentally took a decade to deliver its judgment dismissing the appeal of the state government and the corporation. The highest bidder had deposited the earnest money and 25 per cent of the bid amount and auction was confirmed. But for some reason, the corporation cancelled the sale and ordered re-auction. The bid money was also not returned, leading to a complaint before the high court. It found in favour of the bidder. The corporation appealed to Supreme Court, which upheld the high court judgment. The apex court said, "every decision of an administrative or executive nature must be a composite and self-sustaining one, in that it should contain all the reasons which prevailed on the official taking the decision to arrive at his conclusion. It is beyond cavil that no authority can be permitted to travel beyond the stand adopted and expressed by it in the impugned action."
Challenge to welfare fund dismissed
Supreme Court last week dismissed the appeals of works contractors of Madhya Pradesh challenging the levy of one per cent of the cost of construction for the welfare of unorganised labourers. The levy was demanded according to the Building and Other Construction Workers' Welfare Act which came into force in 1998. The levy was constitutionally challenged earlier in the Delhi High Court which dismissed it. That judgment was upheld by Supreme Court. This time, contractors approached Supreme Court arguing that though the law was passed in 1996, the state government constituted the board for the welfare of the labourers only in 2003. The government had not taken steps to implement the provisions and register the names. Therefore, they should not be asked to pay for the period before 2003. The court dismissed their appeals, titled A Prabhakar Rao & Co vs State of MP. It stated that the government was bound to collect the charges as soon as the central law came into force. Collection of the levy cannot wait for the formalities and "the service to the workers is not required to be a condition precedent for the levy of the cess. The rendering of welfare services can be undertaken only after the cess is collected and credited to the welfare fund."
