Business standard legal diges 15-10-2012

LEGAL DIGEST

>Arbitration plea notpiecemeal: SC The Supreme Court last week ruled that an arbitration petition cannot be dealt with piecemeal by a high court, and it should be considered in its entirety. In this case, Hindustan Copper Ltd vs Monarch Gold Mining Ltd, one judge of the Calcutta high court ruled that disputes have arisen for arbitration. He then referred the issues to the Chief Justice for appointment of an arbitrator. The chief justice then designated another judge to nominate the arbitrator. The high court had followed this method adopted in an earlier case. This procedure was challenged by Hindustan Copper in the Supreme Court. It held that the procedure followed by the high court was “legally impermissible”. The function of the chief justice or his designate is judicial and they should deal with it in its entirety by one of them and “not by both making it a two-tier procedure”. The high court precedent which was followed by it in this case was overruled on this legal issue. >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Agri-markets gettaxrelief The Supreme Court has held that contributions made to the market committee fund by members of the agricultural produce marketing committees in Uttar Pradesh are not taxable as they are for charitable purposes under the Income Tax Act. The marketing committees which advance credit facilities to farmers as also for development works in the area have to defray the expenses out of the fund. These are statutory duties for the welfare of the members. Therefore, these activities come within the definition of charitable purposes within the meaning of Section 11(1)(a) of the Income Tax Act, the Supreme Court held while dismissing a large batch of appeals moved by the Commissioner of Income Tax. >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> What’s in a name? A wrong title of the ministry created complications for the central government in pursuing its review petition. In this case, Union of India vs Sandur Manganese & Iron Ores Ltd, the notice was sent to the “Ministry of Coal and Mines”, which does not exist. The court registry meant Ministry of Coal, but due to the mistake it was not served on the right party. The Attorney General pointed out that the government did not receive notice. Agreeing with him, the court said that “pronouncing a judgment which adversely affect the interest of the party who was not given a chance to represent his case is unacceptable.” >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Acquittal no relief forSBI manager Even if a criminal court acquits a bank employee accused of serious fraud, the disciplinary proceedings against him can be conducted and action can be taken against him on the same set of facts, the Supreme Court held in the case, Avinash Bhosale vs Union of India. A senior manager of State Bank of India was accused of fraudulent transactions to the tune of Rs 12 crore. The criminal court acquitted him for want of evidence. But that cannot be a ground for rejecting the finding of the disciplinary authority of the bank. The conduct of the criminal trial was in the hands of the prosecuting agency. Having registered the First Information Report, the bank had little or no role to play, apart from rendering assistance to the prosecuting agencies. >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> SCappoints judge as arbitrator The Supreme Court has appointed Justice Arvind Savant, former Chief Justice of the Kerala High Court, as arbitrator in the dispute between Fugro Survey Ltd and Ramunia International Services Ltd. The two firms had entered into a survey contract whereby Fugro agreed to perform various surveys. After completion of the main part of the work, when it demanded payment, there was no response. Though an arbitrator was proposed by Fugro, there was no acceptance. Therefore, an arbitration petition was moved first in the Bombay high court and later in the Supreme Court. The court noted that Ramunia had not appeared before it. Despite that, it appointed the arbitrator. >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> United Breweries writdismissed A division bench of the Bombay high court has dismissed a petition of United Breweries Ltd challenging the higher levy charged by the Maharashtra Industrial Development Corporation on liquor industries for consumption of water for commercial use. The corporation had appointed National Environment Engineering Institute (NEERI) to study the use of water by liquor industries. The report stated that these industries did not part with their data and therefore it was handicapped. However, it found that 65 per cent of the water supplied was for commercial purpose. The corporation then raised the levy by five times. This was challenged by United Breweries, which had not paid the rate since 2001. The company also opposed the appointment of NEERI as without authority. It argued that the employees of the corporation should have done the task. The high court rejected the contention and said that it was an independent expert body and the corporation was right in appointing it and accepting its recommendations. If the company wants to appeal to the Supreme Court, it has to pay 50 per cent of the demand within two weeks. MJ ANTONY