Insurance companies will have to pay out more to road accident victims as the Supreme Court has added new criteria in computing compensation for death and injury. "We have to revisit the practice of awarding compensation under the conventional heads," the court stated in a recent order in the case of Rajesh vs Rajbir Singh. The court stated in countries such as the US, the UK and Australia, 'loss of consortium' is a major component of the compensation. "We are of the view that it would be just and reasonable that the courts award at least Rs one lakh for loss of consortium," the judgment said. Loss of consortium, it said, means loss of spouse's affection, companionship, care and sexual relations.
The court stated that at least Rs 25,000 should be awarded on this count. In the case of self-employed or persons with fixed wages, in case the deceased victim is below 40 years, there must be an addition of 50 per cent to the actual income while computing future prospects. The actual income should be income after paying tax if any. Victims between 40 and 50 years should get 30 per cent more. For those between 50 and 60 years, the addition should be 15 per cent.
Stock exchange loses suit
The Supreme Court has dismissed the appeal of Coimbatore Stock Exchange Ltd against the Madras High Court judgment in its dispute with the Tamil Nadu Electricity Regulation Commission over determination of tariff. The stock exchange, the railways and others had argued that the burden of subsidy given to some classes of consumers could not have been transferred to them and it was for the state government to compensate the board.
Rejecting the contention, the court stated that the state commission has, keeping in view factors like geographical location of the consumers, the quantum of energy consumed by them, the time at which the energy is supplied to them, the nature of supply, etc, fixed different tariffs for different classes of consumers. Therefore, the high court was right in taking the view that the commission was entitled to fix different tariff for different consumers. Fixation of lower tariff for certain classes of consumers did not amount to discrimination, the judgment emphasised.
Highest bidder has no vested right
The Supreme Court has set aside the judgment of the Allahabad high court and ruled that a bidder has no vested right to get a property in auction merely because his bid amount is the highest and he had deposited 20 per cent of the highest bid amount along with earnest money.
Allowing the appeal of UP Avas Evam, the court stated that in the absence of acceptance of the bid offered by a bidder to the competent authority, there is no concluded contract. So long as an order regarding final acceptance of the bid had not been passed, the highest bidder acquires no vested right to have the auction concluded in his favour and the auction proceedings could always be cancelled. The government can validly retain its power to accept or reject the highest bid in the interest of public revenue.
Court can override contract
Though parties to an agreement on referring disputes to an arbitration tribunal must follow the terms of the contract, in exceptional cases, the court can appoint its own panel. In case of differences, the chief justice is empowered to consider the rival contentions based upon peculiar facts read with the agreed clauses, the Bombay high court stated in the case, Afcon Infrastructure Ltd vs Konkan Railway.
"There is no total bar or prohibition to overlook the agreed clauses. The basic requirement is to note the intention of the parties to settle their dispute within the agreed time." In this case, the construction company wanted a retired SC judge to be the president of the three-member tribunal. The railway resisted it and insisted that all members should be technical experts. The court stated that the presence of a technical member is important. But it was equally important to have a judicial member. It, therefore, appointed a retired judge as the presiding officer.
'Puffing up' in ads permissible
Courts will not look at advertising material with a "magnifying glass" to see whether it affected rival products. "The promotion of a robust market for trade and commerce requires that the courts grant some latitude to the advertisers in designing and crafting their pitch to the consumers and the tendency to scrutinise such advertisements with a magnifying glass must be eschewed unless of course the claims made are found to be totally unsubstantiated and to have no basis in reason or logic," the Delhi High Court stated in the case, Marico Ltd vs Adani Wilmar.
Marico sought permanent injunction restraining the other from broadcasting or publishing ads of its cooking oil under the brand name Fortune, because it was alleged to be disparaging the goodwill and reputation of its similar product Saffola. It was alleged that there was unfavourable comparison of the products with regard to their cholesterol lowering ability. Though "puffing up" is allowed in ads, disparaging rival products should not be allowed. The court did not grant injunction stating that a tradesman is entitled to declare his goods to be best in the world, even though the declaration is untrue.
