Qualifications required to bid for an inter-city rail project and a metro rail one are different as there are qualitative differences in the construction, the Supreme Court has ruled while setting aside the judgment of the Bombay High Court in the appeal, Afcons Infrastructure Ltd vs Nagpur Metro Rail Corporation. A joint venture between Guangdong Yuantian Engineering Company of China and Tata Projects Ltd bid for the project claiming that the Chinese firm had executed the Pearl River Delta inter-city high-speed railway project in that country. However, the metro corporation rejected the bid as building an inter-city railway for trains, which are faster, with less frequency, was different from intra-city metro. An inter-city high speed railway project did not meet the requirements of metro civil construction work. The JV moved the high court against that decision. It found that the difference was "illusory" and the decision was arbitrary. Afcons, one of the bidders, appealed to the Supreme Court. It reiterated that courts should not interfere in such commercial matters unless the decision was perverse or mala fide. The Supreme Court faulted the high court for not making other bidders parties. The high court should have heard what they had to say in this matter against rivals, it said.
Director to stand trial for bounced cheque
The Supreme Court last week asked the director of a firm to stand trial in the case of a bounced cheque. In the case, Sampelly Rao vs Indian Renewable Energy Development Agency, the government firm extended a loan against which the director of the borrower firm gave 18 post-dated cheques. When they bounced, a case under the Negotiable Instruments Act was filed against him. He asked the Andhra Pradesh High Court to quash the complaint, as the cheques were given as 'security' and not in discharge of the liability. The argument was rejected. Upholding the high court ruling, the Supreme Court stated that though the cheques were given as 'security' for the loan, they would be covered by the Act. "Once the loan was disbursed and instalments have fallen due on the date of the cheque as per the agreement, dishonour of such cheques would fall under Section 138 of the Act. The cheques undoubtedly represent the outstanding liability," the judgment said.
Norms flouted in computing loss
The computation of compensation in a road accident death by the Gauhati High Court was "shocking" and against all principles laid down in earlier decisions, the Supreme Court observed in its judgment in the case Sandhya Rani vs National Insurance. The accident claims tribunal awarded Rs 32.52 lakh for the death of a young engineer in a jeep-bus collision. Insurers of both vehicles were asked to share the liability. One insurance company appealed to the high court which reduced the award to Rs 20.40 lakh "in complete and utter forgetfulness of the principles of computing compensation," the Supreme Court stated. The high court judge called the widow's plea of loss of consortium as a "gross perversity because of its fanciful subjectivity, and irrationality". The Supreme Court enhanced the award to Rs 27.50 lakh, adding loss of consortium, loss of guidance to two children, aged parents and other heads. Oriental Insurance and National were directed to pay the amount to the family within a month with nine per cent interest from the date of the claim.
Exporters' bank guarantee unpaid
The Supreme Court has dismissed the appeal of the central government against a Bombay High Court judgment in favour of IndusInd Bank on the issue of invocation of bank guarantees. In this case, Union of India vs IndusInd Bank, the textile commissioner allowed export of staple cotton to a Singapore firm on presentation of bank guarantees. As the exporters failed to submit supporting documents, the textile commissioner invoked the bank guarantees. The bank declined to pay, arguing it could not be invoked after the time set in the agreement. The government contended that the bank's stand was invalid after a 1997 amendment to Section 28 of the Contract Act. The court rejected the argument stating that the amendment came into force one year after the agreement.
SC sees disturbing trend in copyright suit
The Supreme Court last week regretted that a copyright suit in the Delhi High Court had not made any progress for 10 years, as the main party has been seeking adjournments and not filing evidence. In this suit, moved by the International Confederation of Societies of Authors and Composers, the legal issue is the right of the original lyricists and composers of music after it is recorded by a recording company and played by event management firms. The high court had passed an interim order in 2006, after which there has been no progress. This is a "disturbing trend" in copyright suits, the apex court said. It asked the high court to dispose of the case within a year.
Promoters shall be above suspicion
Security clearance to a service-providing firm at an airport can be denied if a promoter is an undesirable character found in the "contact men list", the Delhi High Court has ruled. There might not be anything against the corporate entity itself, but if a promoter holds 10 per cent shares and has been in adverse notice since 1997 for involvement in "corrupt practices and acting as broker in deals between private parties and the civil aviation ministry and influencing the decision-making process," security clearance can be denied under the Aircraft (Security) Rules, the high court stated while dismissing the appeal case, Add Lounge Services Ltd vs Union of India. Additionally, the court noted that a majority of the shares of the company are held by a foreign-based entity. Recalling 9/11, the judgment observed: "Security clearance is not confined to the corporate entity but has to necessarily extend to the natural persons conducting the affairs of the corporate entity and who would have access to the restricted area…It cannot be lost sight of that under the guise of security clearance to a corporate entity it is the human beings at the helm of affairs who gain access to the secured area of the airport…A person who can for money influence decisions to be taken, not in national interest but in private interest, cannot be trusted with access to the restricted areas."
