If an order to wind up a company is recalled and the company is revived, it is entitled to get back from the official liquidator its entire assets. Tenants who occupied the premises during the proceedings shall go out. The company court can evict them, the Supreme Court stated in its judgment in A Talukdar & Co vs Official Liquidator. In this case, the company was directed to be wound up at the instance of a creditor. The Calcutta High Court appointed a liquidator. During the proceedings, five firms occupied the premises claiming to be tenants. Later, the company in debt repaid the dues. But, the occupants did not move out and some of them set conditions for vacating. The high court accepted the claims of three occupants. The company appealed to the Supreme Court. Setting aside the high court judgment, the Supreme Court ruled that the company court was in charge of the assets during the winding-up proceedings and it had not authorised these firms to occupy the premises. So, they had no right to stay.
Budget proposals no ground for tax relief
The proposals put forth by the finance minister while presenting the Budget reflects the government's view for raising revenue and his speech only highlights the more important proposals of the Budget. An argument for tariff benefits cannot be based on the proposals, unless these are enacted. Even assuming that the amount of tax is excessive, in matters of taxation, the court permits greater latitude to the discretion of the legislature and it is not amenable to judicial review, the Supreme Court stated in its judgment in Amin Merchant vs Central Board of Revenue. In this case, a firm imported eight consignments of alcoholic compounds. It complained that goods were charged high, classifying these under a wrong tariff head. Apart from invoking Budget proposals, it also alleged discrimination and mala fides against the authorities. The court dismissed all arguments.
Conditions for renewing mining lease legal
Grant or renewal of lease in respect of a mining area is a fresh grant and the state government has the power to impose conditions at the time of renewal, the Supreme Court declared in its judgment in State of Gujarat vs Nirmalaben. There was a 20-year lease in 1964 for bauxite excavation in Jamnagar and Junagad districts. Later, the government reserved all such areas for the public sector. In 1978, it was de-reserved and leases were offered for steel-based small-scale industries for captive consumption. The central government also permitted the change of policy. When the leaseholder sought to sell bauxite for export, the government objected to it, stating that bauxite was not used for captive consumption and royalty was not paid. The lessee moved the high court, and got a favourable order. The government appealed to the Supreme Court, arguing that lessees were exporting huge quantities of the ore without informing it or paying royalty. The leaseholder argued that the state has no power under the Mines and Minerals (Development & Regulation) Act to frame policy. Allowing the state appeal, the Supreme Court stated that while renewing lease, the government was empowered to impose conditions.
Death not end of corruption trial
The Supreme Court last week declared that the death of a public servant involved in a corruption scam does not end the proceedings against other accused firms or persons. In this case, HCL Infosystem Ltd vs Central Bureau of Investigation (CBI), there was a series of murders, suicides and mysterious deaths following the unearthing of a Rs 9,000-crore swindle in the National Rural Health Mission in Uttar Pradesh. The company as well as state medical authorities were charged under the Prevention of Corruption Act and the Indian Penal Code. The Allahabad High Court ordered a CBI inquiry and special judges were appointed to try all cases related to the scam. The company appealed to the Supreme Court arguing that as the public servant involved in the charges died, the case must be closed. It also contended that the special judges appointed for trying corruption cases could not take up penal code cases. The Supreme Court rejected both arguments.
STC challenge to award dismissed
The Delhi High Court last week dismissed the petition of State Trading Corporation (STC) seeking to set aside the arbitration award in favour of German firm Helm Dungemittel Gmbh. The dispute was over payment for purchase of bulk urea following a global tender, in which the German firm offered the lowest price. STC claimed that communications after signing of the contract showed that the German firm had accepted a reduced price. By majority of 2:1, the arbitral tribunal held that the German firm was entitled to receive the contracted price, whereas STC claimed that the company had accepted a reduced price. It also argued that the award was against public policy of India. The high court discussed the merits of the claims, though it stated that the court was not obliged to do so if the reasoning of the award was a plausible one. The court restricts its interference in arbitration decisions as the parties in a contract commit themselves to accept the award as final and binding. It will intervene only on very limited grounds, the judgment said.
Liquor firms lose tax case
The Delhi High Court has dismissed petitions from the Confederation of Indian Alcohol Beverages Companies and the International Spirits & Wines Association challenging the levy of service tax on firms that manufacture liquor for human consumption on job work basis. They argued that Parliament lacked legislative competence to enact the relevant amendments in the Finance Act since the activity of manufacture of liquor for consumption, whether for oneself or for another person, lay exclusively within the domain of the state legislature. The high court ruled that Parliament has such power under List 1, Entry 97 of the Constitution.
Civil dispute in criminal garb
The Bombay High Court has quashed criminal prosecution of Zeeco in the US, Europe, their Indian affiliate and their top executives, saying the charges involved were mainly of a civil nature. The companies design, manufacture and supply industrial equipment. A criminal complaint was filed by a sales representative in Mumbai alleging conspiracy and cheating. The companies and the executives moved the high court. The judgment in the case, Nigel Palfreeman vs State Of Maharashtra, said the complaint on did not disclose any of the penal code offences and it would be abuse of process to continue with criminal prosecution.
