The Delhi High Court has directed the Insurance Regulatory and Development Authority of India (Irdai) to convene an urgent meeting of insurance companies in Delhi this week to address the problem of 'duress and coercion' used by them to force a contracting party to abandon legitimate rights under law. The order was passed in the judgment, Worldfa Exports Ltd vs United India Insurance.
The conduct of the companies, violating the provisions of the Contract Act and consumer laws, was severely condemned by the court. The firm in this case had taken a fire insurance policy and there was a fire in its premises. It claimed Rs 12 crore, but the surveyor assessed the loss at Rs six crore. The insurer tendered Rs 5.62 crore and asked the firm to send an undated discharge voucher in 'full and final settlement' of the claim. The company which was in distress due to the long delay in settling the claim signed the voucher.
The high court pointed out that no law permitted an insurance company to withhold the payment of the admitted amount unless a 'full and final settlement' voucher is given to the insurer. The Supreme Court had termed the practice "unfair, irregular and illegal." The National Consumer Commission has also condemned the coercive practice, the high court said. At the high court's instance, Irdai had earlier issued a circular asking the insurers to abandon the 'bad faith' practice. Since more cases of coercion are coming up everywhere, the court asked IRDA to call the meeting and report to it later this week.
Excise relief for automobile industry
The Supreme Court last week dismissed a large number of appeals moved by the Commissioner of Central Excise and held that pre-delivery inspection charges and after-sales service charges would not be included in the assessable value of motor vehicles for purposes of excise duty.
The excise tribunals had taken contrary views on this issue and, therefore, the question was referred to the appellate tribunal. It held in favour of the revenue authorities maintaining that the definition of 'transaction value' would cover the two charges. In those cases, the manufacturers also came before the Supreme Court. In the common judgment, CCE vs TVS Motors Ltd, the apex court overruled the appellate tribunal view.
Cold rolling process makes new product
The Supreme Court last week dismissed the appeal of Gujarat Industries Ltd against the ruling of the Custom Excise & Service Tax Appellate Tribunal that the process of cold-rolling on hot-rolled stainless steel pattas undertaken by the firm on job work basis attracted levy as it involved manufacture. It rejected the contention of the firm that no new commercially identifiable commodity came into existence by the process.
Compensation must come to land owners
If compensation is not paid to land owners for a long time the acquisition will lapse, the Supreme Court declared in its judgment in Rattan Singh vs Union of India case. In this case, the acquisition was notified in 1959 and the award was given in 1968. However, the land owners did not get the compensation.
The government's stand was that the amount was lying with the collector and no one claimed it. Rejecting this contention, the Supreme Court stated that "compensation was neither paid to them nor deposited in the appropriate court. The retention of it by the Land Acquisition Collector till such time as they applied for it would not amount to compensation being paid to them."
The court also noted that under the new land acquisition law of 2013, five years is the limit to complete the take-over.
High courts differ on DRT jurisdiction
The Bombay High Court last week differed from the Delhi high court view in the matter of jurisdiction of the Debt Recovery Tribunal when a dispute under the Securitisation Act is involved. In this case, GSL India Ltd vs Asset Reconstruction (India) Ltd, the debt recovery tribunal and the appellate tribunal in Mumbai had rejected the application of GSL India, maintaining the company had no jurisdiction in the matter as the property under proceedings under the Securitisation Act was situated in Gujarat.
Their view was that the tribunal in that state will have jurisdiction. The Bombay High Court reversed that position and ruled that the Mumbai tribunal could deal with the matter. Its interpretation of the provisions of the Debt Recovery Act, the Recovery of Debts due to Banks and the Securitisation Act differed from that of a full bench decision of the Delhi High Court, which is applicable in Delhi jurisdiction.
Compensation for trademark violation
In a trade mark case, the Delhi High Court has ruled if the financial loss suffered by the alleged victim of the infringement finds that he/she had suffered more than earlier estimated, the litigant can amend the petition and ask for a higher compensation. In this case, Eicher Motor Ltd vs Saurabh Katar, the manufacturer of Royal Enfield, Bullet and other vehicles with registered trademarks had moved the court seeking compensation amounting to Rs 21 lakh.
Eicher alleged that a rival firm was found selling through websites its various products like mudguard, number plates, stickers, grip covers, ignition switch plates and mud flaps using the same or deceptively similar names and designs registered by it. Further investigation showed that the real damage was much higher and, therefore, it sought to amend the demand raising it to Rs 1 crore. The high court permitted it observing that normally such the prayer should be granted unless it changed the nature of the suit or some prejudice is caused to the opposite party. The high court does not look into the bona fides of the request; it is for the trial court to go into the merits of the case.
Printing error costs company dear
If the symbol Rs/Rs is missing on the package of a product for sale, it could invite penalty under the Legal Metrology (Enforcement) Rules, 2011. The offence is compoundable, but the rules are valid, the Delhi High Court stated last week in its judgment, M/s IMS Mercantiles Ltd vs Union of India.
In this case, the premises of the firm were inspected by a team of Legal Metrology officials and they found that one of the packets containing rechargeable LED flash lights did not bear the word 'Rs'. The MRP shown on the package merely showed 'MRP 299.00'. The firm was asked to pay Rs 25,000 for the lapse. It challenged the action in the high court and also argued that the rules were against the Legal Metrology Act. The high court dismissed the writ petition.
