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In This Issue

[No.131]                                                                            August 20, 2005

Supreme Court

•  Rani Kusum v Kanchan Devi and Ors.

MANU/SC/0489/2005

In this case, the Supreme Court settled the controversy regarding the mandatory character of the Order VIII Rule 1 of Code Of Civil Procedure,1908 as amended by the 1999 Amendment Act which provides for a period of 30 days for filing written statement which can be further extended by 60 days.

It was observed that the purpose of such amendment is to reduce the delay in the disposal of civil cases. Moreover, no person has a vested right in any course of procedure. A procedural law should not ordinarily be construed as mandatory, it is always subservient to and in aid of justice. Though the provision has been enacted in a negative language implying mandatory character yet it is not without exceptions .

It was further observed that the courts, whenever called upon to interpret the nature of the provision, may keep in view the entire context in which the provision came to be enacted. The court observed that  Order VIII Rule10 which provides that in case a person fails to file the written statement within the time frame as provide by Rule 1 or Rule 9, the court shall either pronounce the judgment against him or pass such other order as it thinks fit. In construing these two provisions i.e. Rule 1 and Rule 10, the Court applied the doctrine of Harmonious Construction and held that the courts have power to allow filing of written statement even after the period of 90 days as provided in O VIII R1. Therefore the proviso to Order VIII Rule 1 providing for the limit of 90 days is only directory and not mandatory.

§         M/s Premier Engineers v M/s Taj Rubber Industries and Anr.

MANU/SC/0486/2005

The present case analyses the question whether causation of ‘actual loss or injury’ is essential for invoking the provisions of Section 36A of the MRTP Act.

It was observed by the Hon’ble Supreme Court of India that a bare perusal of the provision would show that an unfair trade practice would mean a trade practice which, for the purpose of promoting the sale or use of any goods or services , results in any loss or injury to the consumers of such goods or services. Causation of loss or injury is a sine qua non for invoking the principles of Section 36 A of MRTP Act. Hence the appeal in the present case was allowed as the respondent in his application had stated nothing about loss or injury suffered except stating that he was supplied with a defective machinery after considerable delay ,

§         Samya Sett v Shambu Sarkar and Anr.

MANU/SC/0487/2005

In this case, a learned single judge of the High Court made certain remarks against the appellant (who was also a judicial officer) while dealing with an order passed by the latter.

It was observed that it is necessary that judicial decorum be maintained at all times and even where criticism is justified, it must be in the language of utmost restraint. A judge entrusted with the task of administering justice should be bold and feel fearless while acting judicially. The fact that any order passed by the subordinate judicial officer is open to judicial review should not be a deterrent to formation of an honest opinion so long it is within the four corners of law. This availability of fearlessness is essential for the maintenance of judicial independence. Hence, it was held that the order passed by the appellant judge might or might not be correct, but the remarks made, strictures passed and directions issued by the learned single judge of High Court against the appellant were improper, uncalled for ,unwarranted and unjustified and were ordered to be deleted.

High Courts and Tribunals

Orissa

§         Pramodini Rath Vs. State of Orissa

By this Letters Patent Appeal, the Appellant had called in question the order passed by the Learned Single judge holding that there was no infirmity in the order passed by the Collector of Nayagarh, wherein the Collector directed to conduct a fresh interview of the candidates for appointment as Anganwadi Worker for Govindpur Centre. The Collector passed this order on his finding that the selection process had been tainted with malafide intention.

In the present appeal, the appellant averred that the finding of malafide was not supported by any material available and was baseless. The High Court setting aside the impugned order observed that there must be specific pleadings regarding malafide.

Mere use of words like malafide, corruption, corrupt practice is not enough, the full particulars of such allegations must be set out.

Kerala

§         Manuel Vs. State of Kerala

This petition was filed under Section 482 Cr.P.C. for the cancellation of anticipatory bail granted to the third respondent. The main question for consideration in this petition was whether the anticipatory bail can be cancelled by resort to Section 482 Cr.P.C. when there is a specific provision for the same purpose under Section 439(2) Cr.P.C.

The Court dismissing the petition observed that if the court allowed this petition it will indirectly amount to review by this court of it’s own order which is prohibited under Section 362 Cr.P.C., and such power cannot be exercised under the cloak of Section 482 Cr.P.C.

Tamil Nadu

§         Plydham Vs. The Registrar, Tamil Nadu Taxation Special Tribunal and Others

The first appeal against the assessment order passed against the petitioner having been rejected, he preferred a revision before the Tamil Nadu Special Taxation Tribunal which relying on the first proviso to Section 38-A of the Tamil Nadu General Sales Tax Act, dismissed the revision on the ground that there was no limitation prescribed by the statute therefore the revision was not maintainable. The High Court while disposing of the matter quashed the order of the Tribunal observing that if no period of limitation is prescribed the first proviso of Section 38-A does not come into operation and the revision could be filed at any time.

Andhra Pradesh

§         M. Babu Rao v. Deputy Registrar (FB)

The question which arose in this case was whether the authorities under the Andhra Pradesh Co-Operative Societies Act, 1964 have got jurisdiction to entertain claims of the co-operative banks for recovery of debts due to them or could it be adjudicated exclusively by the Tribunals constituted under the provisions of Recovery of Debts Due to Banks and Financial Institutions Act, 1993 and the jurisdiction of the authorities under the 1964 Act is eclipsed and overborne by the provisions of the 1993 Act.

It was held that since the respondent banks were co-operative banks within the text and structure of the Banking Regulation Act 1949, as they pursued the business of banking as defined in section 5 (b) and hence not covered by the exception of Section 7(1), and they used the word “bank” as part of their respective name in connection with their respective banking business, must be held to be “bank” within the expression in Section 2(d) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. Since providing an institutional mechanism for resolution of disputes relating to banking business are matters eminently and exclusively within the spectrum of the legislative field “banking” in Entry 45 of list I of the Seventh Schedule of the Constitution, their claims were to be adjudicated exclusively by the Debt Recovery Tribunals under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 subject to pecuniary limits.

Karnataka

§         Institute of Hotel Management, Catering Technology and Applied Nutrition (Karnataka) Society, Bangalore and Others v. Hemalatha V. Reddy

The question which arose in this case was whether an order abolishing a post which results in termination of service of person can be set aside by courts in exercise of power of judicial review where such person has not been given an opportunity of being heard and whether such person is entitled to be accommodated in alternative employment notwithstanding the abolition of post held by such employee.

It was held that the power to create or abolish a post is a matter of policy and is invested in every employer whether State or private and it is not open to the court to go behind the wisdom of the decision and substitute its own opinion for that of the authority. The only requirement is that the decision to abolish the post should be taken in good faith and not used as a cloak or pretence to terminate services of a person holding that post. Termination of service in consequence of such abolition is not dismissal or removal therefore opportunity to show cause does not arise. Rehabilitation of such employee is a matter of discretion and cannot be converted into duty or obligation by judicial intervention.

Himachal Pradesh

§         Himachal Road Transport Corporation v. Ramku and others

The question, which arose in this case, was whether the Corporation would be liable in a case where a person fell from the bus when its door opened suddenly due to jerk while moving at high speed and receives fatal injuries. The defence said that the deceased jumped from the moving bus without waiting for the bus to stop but there was no evidence on record to suggest that the conductor made any attempt to prevent the deceased from doing that

It was held that it was the duty of the conductor to insure that no one makes an attempt to open the door while the bus was in motion and since there was no evidence to suggest that he tried to stop the deceased, going by the doctrine of res ipsa loquitur the driver of the Corporation was rash and negligent and responsible for the accident.

CESTAT (Mumbai)

§         Express Tours & Travels Pvt. Ltd. v. Commissioner of Central Excise, Vadodara

The question, which arose in this case, was whether a hirer of a cab is covered by Rent-a-Cab Scheme framed under Motor Vehicle Act 1988 and hence liable to pay Service tax.

It was held that while interpreting a taxing statute the words should be given the same meaning as is understood by the persons in that trade. In spite of the title, the Scheme speaks of hire charges in Clause 9, which lays down the duties and responsibilities of hirers of motor cabs, indicating thereby that Motor Vehicle Act does not make any distinction between rent and hire. The Rent-a-Cab Scheme would have consistently used the word ‘Rent’ ‘Rental Charges’ etc instead of ‘hire’ ‘hire charges’ if there is such a big difference between the two expressions. The Government intention is to tax the providing of a service, which involves, hiring/renting of a cab formally for a longer duration; hence hirers of motor cabs are not excluded from the Service Tax.

Telecom Regulatory Authority of India (TRAI)

§         TRAI Provides its Recommendations on Issues Relating to ISP Licence with Virtual Private Network (VPN)

Press Release No.67/2005 Dated 16.08.2005: The Telecom Regulatory Authority of India vide its press release dated 16.08.2005 provided its recommendations to the Government on Issues Relating to entry fee and annual licence fee for ISP Licence with Virtual Private Network (VPN). The recommendations are as follows:

One time Entry Fee

For Layer-2 VPN service    Rs 30 lakhs

For Layer-3 VPN service     Nil

Annual Licence Fee

For Layer-2 and Layer-3 VPN services    Nil

PIB

§         Reduction in Prices Due To VAT

Dated 16.08.2005: Shri S.S. Palanimanickam, Minister of State for Finance has informed that the overall rate of inflation, reflected through the Point-to-Point Movement in the Wholesale Price Index, itself has declined from 5.70% for the week ending 02 April 2005 to 4.07% for the week ending 23 July 2005. The prices of drugs and medicines have come down in most of the States due to reduction in the tax rate from 8% under Sales Tax regime to 4% under VAT .The States are also advised to set up special VAT Cells, inter alia, to monitor this aspect and so far, no such proposal has been received from any State in the context of VAT and the Central Government has no proposal to introduce a Central legislation in this regard.

RBI

Miscellaneous Series

§         Facilitating Opening of Bank Accounts for Flood Affected Persons

Circular No RPCD.RF.AML.BC 30/07.40.00/2005-06 Dated 16.08.2005: Vide the above circular, banks are advised to observe minimum formalities for enabling persons affected by unprecedented floods in Maharashtra to open a bank account quickly. The accounts may be opened with –

a) introduction from another account holder or

b) documents of identity such as Voter's Identity Card or a driving license, identity card issued by an office, company, school, college, etc. along with a document indicating the address such as Electricity Bill, Ration Card etc. or

c) introduction by two neighbours who have the documents as indicated in para (b ) above or

d) in the absence of the above any other evidence to the satisfaction of the bank.

These guidelines would be applicable to other states also in similar situations.

DCM

§         Indian Banknotes with Additional/New Security Features

Circular No. DCM (Plg.) No.G 7/10.01.00/2005-06 Dated 10.08.2005: Reserve Bank of India (RBI), has vide this circular, decided to issue the banknotes of Rs.50 and Rs.100 denominations with additional/new security features in August, 2005. This will be followed by issuance of Rs.500 and Rs.1000 denomination banknotes in September 2005. Rs.10 and Rs.20 denomination banknotes with additional/new security features are targeted for issue in 2006.

Ministry of Commerce & Industry

DGFT

§         Import of Food Items and Alcoholic Beverages by Golf Course Resorts under Served From India Scheme

Policy Circular No.20RE-2005)/2004-2009 Dated 17.08.2005: The Directorate General of Foreign Trade, has clarified that Golf Course Resorts having residencies with catering facilities are eligible to utilize Duty Credit Entitlement Scrip issued under Served From India Scheme to import food items and alcoholic beverages. However, such imports would be subject to excise and tourism laws, as applicable.

Ministry of Finance

CBEC-Excise

§         Exemption granted to Cement and Steel Used in Construction of Houses for Tsunami Victims from Excise Duty

Notification No. 32/2005 Dated 17.08.2005: Vide the above notification, the Central Government has exempted cement falling under Chapter 25, and steel falling under Chapters 72 or 73 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) used in construction of houses, in tsunami affected districts of States of Tamil Nadu, Andhra Pradesh, Kerala and Union Territories of Pondicherry and Andaman and Nicobar Islands, from the whole of the duty of excise leviable thereon under the said Acts. The exemption would be available only if the said goods are used in construction of houses, including temporary shelters (hereinafter referred to as such houses) by Non Government Organization or Voluntary Agency or Private-Public Enterprise or Rehabilitation Organization or Trust or any agency, approved by the concerned State or Union Territory Government (hereinafter referred to as approved construction agencies), for constructing such houses in the said areas, for rehabilitation work. The exemption will be given effect in the manner as prescribed in the notification.

SEBI

SEBI Mutual Fund

§         Unique Client Code (UCC) for Mutual Fund Schemes/Plans

Circular No. SEBI/IMD/CIR No.2/46603/05 Dated 10.08.2005:Vide the above circular, it has been decided to allow mutual funds to share the UCC of their schemes/plans with their unit holders. This would facilitate the unit holders to claim the tax benefit associated with payment of STT.These guidelines are issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992, read with the provisions of regulation 77 of SEBI (Mutual Funds) Regulations, 1996.

Ministry of Power

§         Central Electricity Regulatory Commission (Preparation of Annual Report)(Amendment) Rules, 2005

Notification No. GSR528E) Dated 11.08.2005: The Central Government, vide this notification, has brought forward the, Central Electricity Regulatory Commission (Preparation of Annual Report) (Amendment) Rules, 2005 amending Central Electricity Regulatory Commission (Preparation of Annual Reports) Rules, 2004.These rules shall come into force on the date of their publication in the Official Gazette. The amendments were made in Rule –1 of the Central Electricity Regulatory Commission (Preparation of Annual Reports) Rules, 2004

§         Intimation of Accidents (Form and Time of Service of Notice)(Amendment) Rules, 2005

Notification No. GSR529E) Dated 11.08.2005 : The Central Government, vide this notification, has made the Intimation of Accidents (Form and Time of Service of Notice) (Amendment) Rules, 2005, further to amend the Intimation of Accidents (Form and Time of Service of Notice) Rules, 2004. The amendments were made in Rule –1 of the Central Electricity Regulatory Commission (Preparation of Annual Reports) Rules, 2004. . These rules shall come into force on the date of their publication in the Official Gazette

Ministry of Health and Family Welfare

§         Draft of Drugs and Cosmetics (_______) Amendment Rules, 2005

Notification No. GSR 521(E) Dated 02.08.2005 : The Central Government after consulting Drugs Technical Advisory Board has proposed to make amendments in the Drugs and Cosmetics Rules, 1945, to bring fore the Drugs and Cosmetics (Amendment) Rules, 2005. The amendments relate to Schedule M 1.These rules shall come into force after one year of their final publication in the Official Gazette.

International Legal Cases and News

Cases

Civil

§         IBM Personal Pension Plan v. City of San Francisco

The California Appellate Districts Court in the above case held that in a suit to recover property taxes, the plaintiff could not seek the refund of the taxes paid because it did not pay the tax as per the provisions laid down under Revenue and Taxation Code section 5140.

Patent

§         Warner-Lambert Co. v. Schwarz Pharma, Inc.

The United States Court of Appeals for the Federal Circuit in the above patent dispute case involving pharmaceuticals for treatment of hypertension held that the district court erred in granting summary judgment in favor of plaintiff on the issues of enablement and infringement when there are genuine issues concerning material facts.

Criminal

§         Jefferson v. Budge

The US 9th Circuit Court of Appeals in the above case held that it is an error on the part of a trial court to dismiss a mixed habeas petition without giving the plaintiff the choice of either returning to state court to exhaust his claims, or amending or resubmitting the habeas petition to present only exhausted claims to the district court.

§         US v. Gonzalez-Coronado

The US 10th Circuit of Appeals in the above case affirmed the Defendant's sentence for unlawfully entering the United States by the trial court on the ground that the trial court’s erroneous treatment of the US Sentencing Guidelines as mandatory had no significant effect on the sentence.

§         US v. McCutchen

In the present criminal case, the US 10th Circuit of Appeals affirmed the Defendant's sentence for knowingly possessing child pornography material. The trial court in the said case had ruled that the defendant's prior state conviction fell within the scope of 18 U.S.C. section 2252(b)(2) and thereby imposed a ten-year sentence.

§         Guile v. US

In the above wrongful death action case, on appeal the US 5th Circuit Court of Appeals affirmed dismissal of plaintiff's claims under the Federal Tort Claims Act by the trial court on the ground that the plaintiff was not able to establish by expert testimony that negligence was the cause of his wife's death.

Tort Law

§         Tran v. Toyota Motor Corp.

In the above product liability action case, a jury verdict in favor of defendant-automobile manufacturer was reversed by the US 11th Circuit Court of Appeals on appeal on the ground that the jury instructions on strict liability design defect misstated the law laid down.

News

§         London will continue to have ‘shoot to kill policy’ though with minor changes

Following the review of the ‘shoot to kill’ policy, which was under taken after the killing of innocent Brazilian, who was wrongly suspected to be a suicide terrorist, London metropolitan Police has decided to not modify its policy of using the deadly force against the suspected terrorists. The police have however agreed to make one or two minor changes though the operation remains essentially the same.

§         Pricewaterhouse coopers pays $42 Million for settlement in over billing suit

Without admitting any wrongdoing Pricewaterhouse Coopers LLP has agreed to pay $41.9 million with the aim to resolve a California federal court suit, which accuses it of over billing the government for travel expenses. The suit filed by U.S. District Court for the Central District of California alleged that PWC though aware did not inform the United States that it had received rebates on its travel expenses from credit card and travel companies, airlines, hotels, and rental car agencies.

§         US court treats atheism as a religion

A federal court of appeal has ruled that Atheism is a religion and Wisconsin prison officials violated an inmate's rights, as they didn’t allow him to start a group, which was religious in nature even though it expressly rejects a belief in a supreme being. The court said that the inmate's First Amendment rights were violated because the prison refused to allow him to create a study group for atheists.

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