The recurring legal issue over the control of minerals between state governments and the Centre surfaced again when the Kerala government claimed rights over atomic minerals on the southern coast and the Supreme Court dismissed its appeal by majority with one judge dissenting.
In this case, State of Kerala vs Kerala Rare Earths & Minerals Ltd, the state government granted licences to the firm but within 10 days stayed its own order for re-examining the environmental impact on the crowded area and the priority of public sector firms vis-a-vis private miners. Rare Earth challenged the state government's action in the high court. It held that the state government was wrong. The government appealed to the Supreme Court, claiming right over the minerals.
While dismissing the appeal, the court pointed out that the approval of the Centre was also required under the Mines and Minerals Development Regulation Act and it had approved of licences in this case. The judgment further pointed out that under the state mineral policy, it was bound to list the minerals, which it controlled and the boundaries of areas where they can be exploited. This has not been done. The court gave leeway to the state government on this point and if it takes necessary steps, it would have better claim for granting licences according to its discretion.
Accepting rent does not extend lease
Mere acceptance of rent and other payments by the lessor from a lessee does not mean the lease has been renewed automatically, the Supreme Court ruled last week in a case harking back to 1975. The Delhi High Court had held that acceptance of rent by the Delhi Development Authority (DDA) pursuant to a demand made by it amounted to a renewal of lease.
The tenant had also obtained perpetual injunction against the DDA on that ground. But, the Supreme Court rejected the high court's view in its judgment, DDA vs Anant Raj Agencies Ltd. The original lease was made in 1952 to one Virmani. He had made alterations in the premises and the DDA had issued a showcause notice to him and the lease was not renewed. He later transferred the property to a firm, which obtained relief against the DDA all the way up to the high court. The DDA argued in appeal that Virmani, having no right or title in the property, could not have transferred it to the firm.
The DDA also contended that deposit of rent by him and its acceptance by the DDA office was administrative in nature and was not acceptance of any right. These arguments were accepted and the orders of the courts below were held wrong and "miscarriage of justice". The original lessee was in unauthorised occupation for 30 years and the new one for 17 years. The court allowed the DDA to take possession immediately and claim damages from the original lessee or his heirs and the new occupant according to the market rent.
CMD to stand trial for bad cheques
The Supreme Court last week allowed criminal proceedings to go on against the chairman and managing director of a shipyard firm and signatories of three cheques worth Rs 200 crore, which bounced. The Bombay High Court had quashed the proceedings against the executive director and a whole-time director.
In the appeal case, Standard Chartered Bank vs State of Maharashtra, the apex court set aside the high court order and let the proceedings go on against these two also, who were in charge of the day-to-day affairs of the company. The judgment asserted that under Section 141 of the Negotiable Instruments Act, the company and directors, who were in charge of the affairs of the company, were liable for cheque bounce. The directors had 'vicarious liability' for the lapse.
VAT claim against ABB dismissed
The Supreme Court has dismissed the appeal of the Commissioner of Delhi VAT against the judgment of the Delhi High Court, which had granted tax exemption to ABB Ltd in its transactions with Delhi Metro Railway Corporation Ltd. The high court had reversed the order of the VAT Tribunal and concluded that the inter-state movement of goods was in pursuance of the contract for the supply of goods used in the execution of the works contract between ABB, a company engaged in engineering and power distributions system.
The high court had also ruled that the sales should be deemed to have taken place in the course of imports of the goods or inter-state trade and that such import/movement of goods was integrally connected with the contract for their supply to Metro. On the basis of such findings, the high court had held that the transactions constituting inter-state trade and those constituting sale or purchase in the course of import were covered by the exemptions granted in the Central Sales Tax Act.
Eveready denied tax incentives
The appeal of Eveready Industries India claiming exemptions in entry tax and sales tax from the Karnataka government was dismissed by the Supreme Court last week. The judgment noted that the firm, which was given incentives to set up new units in underdeveloped regions investing at least Rs 111 crore, did not fulfil the conditions attached to the notifications. The benefits were given for six years for bringing in raw materials and machinery.
The battery manufacturer did not meet the investment requirements during the assessment periods. The Supreme Court stated that exemption notifications required strict interpretation. In order to get benefit of any exemption, the assessee has to satisfy that it fulfils all the conditions contained in the notification. "Once the conditions are satisfied and the assessee gets covered by the notification, for the purpose of giving benefit the notification has to be construed liberally," the judgment clarified.
Eyes and ears decide trademark row
Phonetic similarity alone is not enough to grant an injunction against a trademark of a rival, the Bombay High Court ruled last week while rejecting the prayer of a Sharjah firm in the judgment, International Foodstuffs Llc vs Parle Products. The Gulf company used 'London Dairy' for its ice-cream and it opposed Parle using 'Londonderry' for its boiled sweet.
The court compared the trademarks and found that 'London Dairy' had distinct design resembling London Bridge, while Parle pack showed a "winsome milkmaid in flowing dress." The price of the foreign company's ice-cream was Rs 80 while Parle sweet cost 50 paise, something often returned as "change at toll gates". Moreover, "when it comes to questions of similarity, the test is one of perception. Like beauty, it lies in the eye of the beholder; in trademark cases, that of the judge."
