Legislative and Regulatory Update

You now have the option of customizing your manupatra round-up. This means that you get updates on the areas of interest that you select. You may change your preferences at any time you wish to. If you do not customize your round up you will continue to get the updates on all areas

 

To customize your round-up now click here.

_____________________________________________________________________

India Centric Online Legal & Business Database

Bringing forth new efficiency and unparalleled results to research efforts.

In This Issue

[No.168]

August 30, 2006
Supreme Court
High Courts
IRDA
PIB
RBI
International Cases & News

To keep you informed about the latest Legislative and Regulatory information manupatra.com publishes this e-roundup highlighting the recent changes brought about by the Notifications/Acts/Bills /Ordinances etc.

About manupatra.com

http://www.manupatra.com/ provides comprehensive and easy to use legal and related information over the Internet. Our database covers Central Laws, Judgments of Supreme Court and High Court (full text of the judgments from 1950 onwards ), Orders of Tribunals, Bills, Notifications, Circulars and more

Key features of manupatra are

Content is derived from reliable primary and secondary sources
Database is updated on a daily basis
Electronic Ready Reckoner to view the judgments under a particular section of an Act / Subject
Powerful search engine with user friendly interfaces
Search in any one court/year or multiple courts/year
Hyper-linking of documents

Updated modules on WTO, Anti Dumping, Arbitration, Investment Destinations Abroad, Capital Markets, Taxation, Environment, Cyber & IT Laws, IPR, Corporate Laws, Industrial Policies, Foreign Trade, Forex & Banking and more

 

 

For subscription to manupatra.com or for more details please log onto http://www.manupatra.com/ or call us at 0120 2531811 or send an email to : contact@manupatra.com

If at any stage you wish to stop receiving the e-roundup please click here to unsubscribe.

 

 

Supreme Court

  • Rajiv Ranjan Singh 'Lalan' and Anr Vs. Union of India (UOI) and Ors.

The petitioners, former Members of Parliament, filed the present petition in the form of Public Interest Litigations against respondents No. 4 and 5, former Chief Ministers of State of Bihar, for amassing wealth disproportionate to known sources of income and for interfering with judicial processes with a view to get court rulings in their favour. Petitioners alleged that respondent Nos. 4 and 5 were involved in large-scale defalcation of public funds and falsification of accounts involving hundreds of crores of rupees in the Department of Animal Husbandry in the State of Bihar. Several cases were registered against the said respondents and the same were handed over to CBI for investigation with the direction that the progress of investigation has to be monitored by the High Court of Patna as per a Supreme Court directive. It is alleged that with the change of government in the Centre, efforts to delay and interfere with judicial process were initiated. Public prosecutors handling the cases were replaced with others. An ITAT member handling the income tax cases against the said respondents was sent on deputation and was replaced with another person who gave rulings in the income tax cases in favour of the respondents. Also, the ITAT did not prefer any appeal inspite of rulings against the department. The respondents refuted the allegations raised by petitioners and contended that the petitions contained vague and indefinite allegations. The allegations were made with political motive to satisfy personal grudge and that this is an abuse of process of Court. Respondents contended that the PIL should not to be used for private or political motives or for other consideration. Case pending before the Special Judge case was registered under Sections 13(2) and 13(1) of Prevention of Corruption Act and has nothing to do with the 'fodder scam' case. Held, allegations made by the petitioners were vague and indefinite. The petitioners have alleged series of irregularities, but they are not supported by basic facts having solid foundation. Therefore, the writ petitions have no merit and are liable to be dismissed.

  • Director General, Directorate General of Doordarshan and Ors Vs. Anand Patwardhan and Anr.

The respondent, a filmmaker, submitted his documentary film titled "Father, son and Holy War" to be telecast on the National Network. The same was rejected by the appellant, Doordarshan, on the ground that Part-II of the documentary film was issued “A” certificate by the Censor Board and that Doordarshan follows a policy of telecasting only “U” certificate films. The Bombay High Court ruled in favour of the respondent and hence the present appeal. The appellant contended that the decision not to telecast is based on valid and germane considerations and that no film maker can claim that he has a vested right that the film made by him has to be telecast on Doordarshan. Futher, it was against the policy of Doordarshan to telecast “A” certificate films. It was also contended that the film in question deals with sensitive issues and is likely to give rise to communal violence and riots and that Doordarshan has viewers from remote regions who are illiterate and who could be affected due to the screening of the film. The respondents submitted that refusal to telecast the film is a clear violation of the respondent’s fundamental right under Article 19(1)a of the Constitution. It was also submitted that Doordarshan has a policy of telecasting award winning films and documentaries and hence the action of not screening the film is contrary to the policy and is unfair, unjust and arbitrary. Held, decision of Doordarshan of not screening the film is highly irrational and is in blatant violation of right guaranteed under Article 19(1)a of Constitution. Appeal dismissed.

  • Santosh Kumar Vs. State of M.P.

The appellant was accused of raping a prosecutrix. The sessions judge convicted the appellant under Section 376(2)(g) IPC and imposed a sentence of of 10 years RI and a fine of Rs. 500/- and in default to undergo six months RI. The appellant filed an appeal against the judgement of the Sessions Judge in the Madhya Pradesh High Court which was dismissed and hence the present appeal. The appellant submitted that the medical evidence does not disclose that the prosecutrix has been subjected to rape as there no injuries on her private parts and therefore the entire prosecution case becomes doubtful. Held, the prosecution has established its case against the appellant beyond a shadow of doubt. The learned Sessions Judge and the High Court have rightly convicted the appellant under Section 376(2)(g) IPC and there is absolutely no ground to warrant interference by Court. Appeal dismissed.

High Courts

Delhi

  • Biswaroop Roy Choudhary Vs. Karan Johar

The Plaintiff filed an application under Order XXXIX Rules 1 and 2 read with Section 151 of the Code of Civil Procedure seeking an interim injunction restraining the defendants from using the trademark of title ‘Kabhi Alvida Naa Kehna’(KANK). The Plaintiff asserts that he had applied for registration of the trademark/title KANK on 17.5.2005 under the Trade Marks Act in Class 41. But the defendants stated that on 13.1.2005 they had approached the Secretary, Association of Motion Pictures and TV Programme Producers for the title registration of KANK-Feature Film and TV. And the third party who had already registered this title had transferred this title to the defendants.

The Court after careful consideration held that since neither of the parties has authored or conceived the catchy phrase or title ‘Kabhi Alvida Naa Kehna’, it was stated that where words or phrases in common parlance are sought to be used with exclusivity, the Court should take care to determine which of the parties has ended its journey or traversed appreciably longer way in the use of such words as a trademark or as a title. The fact that the defendant has completed the production of the film, and is ready to release  for commercial exploitation, was a factor, which would always deter the Court from granting injunctory relief against defendant. And it was further observed that since the defendant has completed the film and as it was ready for release, the balance of convenience has shifted in favour of defendant. The application was dismissed viewing the proceedings to be malafide.

  • Sandeep Kumar Vs. Commissioner of Police and Ors.

The petitioner applied for the post of Head Constable (Ministerial) in Delhi Police and in the attestation form the petitioner furnished information about his involvement in a criminal case and his consequent acquittal upon a compromise. Thereafter, the respondents cancelled the candidature of the petitioner on the ground that there was concealment of material information in the application form. In the present petition the petitioner assails this cancellation of candidature by the respondents.

The non-disclosure in the application form about the case in which petitioner had been acquitted , was an inadvertent error and not willful concealment. The matter had been compromised and the petitioner stood acquitted. Petitioner on the first available opportunity, made a bona fide disclosure about the incident while filling in the Attestation Form. This was prior to his selection and without receipt of any show cause notice from the respondents. The respondents failed to take into account the plausible explanation and extenuating circumstances of the disclosure by the petitioner prior to the selection, in accordance with the approach and practice followed by them in several cases, wherein, explanation had been accepted and non-disclosure was  condoned or faced with minor penalties. The respondents have departed from their practice and approach, while dealing with the petitioner's case for no justifiable reasons. Hence the appeal was allowed.

Patna

  • Dayanand Sinha and Ors. Vs. The State of Bihar and Ors.

The case of the petitioners was that even though they were engaged in service for more than twenty years, they were not regularized while their juniors were retained in service, thereby violating the principles of last come first go. The government has given clear mandate as to regularization of the petitioners. But instead of considering their cases for regularisation in the light of the Government decision, the authorities concerned disengaged them, in utter violation of the said Government resolution.

The High Court observed that eventhough it was well settled that the State can take a policy decision for such regularisation and it is really unfortunate that the implementing authorities do not appreciate compliance of such policy decision and take such frivolous plea to defend their inaction in the matter of implementation of the policy decision. Hence, the orders of disengagement/retrenchment of the petitioners from service were held to be violative of Articles 14 and 16 and also Article 311 of the Constitution of India and the basic principles of natural justice.

Madras

  • B. Selvaraj Vs. The Chief Educational Officer

The petitioner, a Secondary Grade Teacher, attained the age of superannuation and submitted representations before the third respondent along with a medical certificate to extend his service. The third respondent, school, rejected his representation and hence the present writ petition filed by the petitioner. The petitioner contended that he is entitled to get re-employment as per government orders and therefore refusal to grant extension of service was illegal. The respondent on the other hand contended that the petitioner is not entitled to get re-employment or extension of service as his character and conduct are not satisfactory. It was alleged by the respondent school that it received various complaints against the petitioner that the petitioner was misusing his position; that he illegally collected money from students and that his attitude towards other teachers were not satisfactory. It was therefore held that in view of the established fact that the petitioner’s character and conduct are not satisfactory, petitioner is not entitled to get re-employment. Therefore, impugned order of third respondent relieving petitioner from service is legally sustainable and valid. Hence, the writ petition was dismissed.

  • S. Srinivasalu Vs. The Food Corporation of India, rep. by its Zonal Manager (South) and The Food Corporation of India, rep. by its Deputy General Manager (Personnel)

The petitioner, a member of the Scheduled Tribes Community, joined the services of the Ministry of Food and Agriculture under Government of India. He was later transferred to the Food Corporation of India. The second respondent issued an order of cancellation of appointment of the petitioner when the petitioner reached the age of superannuation and was about to retire. The said order was passed on the ground that the petitioner did not produce the community certificate as per the terms of his order of appointment, even after repeated requests. The said order is challenged in the present writ petition. The petitioner contended that he had produced the community certificate at the time of his initial appointment with the Ministry of Food and Agriculture. He also contended that he was asked to produce the same without giving him reasonable time to furnish the same. He further submitted that he was permanently employed with the respondent corporation without any precondition and therefore, the second respondent cannot cancel his order of appointment. The impugned order is nullified as it affects the his civil rights. The petitioner also stated that no enquiry as contemplated under Article 311 of Constitution and Section 12A of Food Corporation Act was conducted into the matter. On behalf of the respondents, it was submitted that the petitioner was given several opportunities to produce the community certificate which he willfully failed. It was also submitted that dismissal from service can be effected without due process of law under Article 311 of Constitution if appointment order was obtained by production of false community certificate, as appointment order itself is a nullity. It was held that request of the respondents to produce a community certificate just six days prior to the date of retirement of the petitioner is unauthorized since it is not proved that the petitioner has not produced the community certificate before. Impugned order was therefore set aside.

Karnataka

  • Sri B.C. Sathyanarayana S/o B.K. Chamaraju Vs. Smt. B.N. Jagannatha Rao S/o B. Narasinga Rao

A Suit was filed by petitioner landlady seeking possession of petition shop premises for her bonafide use and occupation, for commencement of business. The petition premises were let out to the tenants on a monthly rent for conducting business. The petitioner contended that her husband retired from service and her son completed his BBM and they intended to start a departmental store in the premises in question. After removing the existing partition walls between the shops, petitioners intended to make it as a single compact unit for the purpose of starting the departmental store. She also submitted that the family resided in the first floor of the said building and so it was convenient for them to look after the business. The trial court however ruled in favour of the tenants and hence the present petition was filed by the petitioner. The respondent tenants contended that the requirement of petitioner landlady was unreasonable and was motivated by oblique motive and monetary consideration. The eviction petition was filed as the tenants were unable to comply with the unreasonable demand of the petitioner to pay enhanced rate of rent and also a goodwill amount and ten months rent in advance. It was further submitted that the petitioner has neither the experience nor the necessary finance to commence a departmental store. The tenants contended that they are family men and that their families are dependent on them and the business run by them in the petition premises are their source of income. It was therefore held that the trial court took a pedantic approach in ignoring the requirement of the petitioner/landlady. Explanation to Section 27(2)(r) of Rent Control Act and law laid by Supreme Court makes it clear that statutory presumption on requirement has to be presumed and that financial capacity or experience regarding nature of business is not a necessary requisite for allowing the petition. Finding of the trial court is therefore erroneous and not in the true spirit of amended Act.  The finding of the trial court was therefore set aside.

Insurance Regulatory and Development Authority

  • Special dispensation to Insurers under Section 64 UM (2) of the Insurance Act, 1938 in view of flash floods in Surat, Gujarat

Order No IRDA/SURV/016/Aug-06 Dated 23.08.2006: The Insurance Regulatory and Development Authority vide the above notification notifies that in exercise of the powers under Section 64 UM (2) of the Insurance Act, 1938, the Authority raises the limit of losses required to be surveyed by a licensed surveyor and loss assessor for settlement of claims, from Rs.20,000/- to Rs.50,000/- for the recent flash floods in Surat, Gujarat for a period of two months from the date of this order, as a special case. It is also notified that the insurers may utilize the services of in-house surveyors for assessing losses upto Rs.50,000/-. This special dispensation is given to insurers to ensure expeditious disposal of claims and for mitigating hardships to policyholders affected by the flash floods.

Press Information Bureau

  • Amendment to the State Bank of India Act, 1955

PIB dated 24.08.2006: The Union Cabinet gave its approval to amend the existing provisions of the State Bank of India Act, 1955. The amendment is aimed to enable the State Bank of India to access the capital market for raising funds and for smooth functioning and better control so that it can discharge its functions more efficiently. Pursuant to this, The State Bank of India (Amendment) Bill will be introduced in the Parliament with such modifications. It is hoped that The SBI (Amendment) Bill will enable State Bank of India to attract a large number of small individual investors.

RBI

DBOD

  • Internet Banking – Internet based platforms for dealing in Foreign Exchange

Circular No DBOD No.Comp.BC.1658/07.23.29/2006-07 dated 22.08.2006: The Reserve Bank of India vide the above circular notifies that banks are permitted to offer Internet based foreign exchange services, for permitted underlying transactions, in addition to the local currency products already allowed to be offered on Internet based platforms. This is subject to certain conditions like Banks will remain responsible for secrecy, confidentiality and integrity of data; the data relating to Indian operations will be kept segregated; the data will be made available to RBI inspection / audit as and when called for; the services offered through Internet, for banks' customers on an Internet based platform for dealing in foreign exchange, should allow only reporting and initiation of foreign exchange related transactions, with the actual trade transactions being permitted only after verification of physical documents and that Banks should comply with FEMA regulations in respect of instructions involving cross-border transactions.

  • Section 42 (1) of Reserve Bank of India Act, 1934 - Penalties on Default in Maintenance of Cash Reserve Ratio (CRR)

Circular No DBOD.No. Ret. BC.26/12.01.001/2006-07 Dated 10.08.2006: The Reserve Bank of India vide an earlier circular had advised banks that it will not be paying any interest on the CRR balances maintained by Scheduled Commercial Bank's with effect from the fortnight beginning June 24, 2006. Vide the present circular, it is notified that with effect from the fortnight beginning June 24, 2006 penal interest will be charged in cases of default in maintenance of CRR by Scheduled Commercial Banks like in cases of default in maintenance of CRR requirement on a daily basis, which is presently 70% of the total Cash Reserve Ratio requirement, penal interest will be recovered for that day at the rate of three per cent per annum above the bank rate on the amount by which the amount actually maintained falls short of the prescribed minimum on that day and if the shortfall continues on the next succeeding day/s, penal interest will be recovered at a rate of five per cent per annum above the bank rate. Also in cases of default in maintenance of CRR on average basis during a fortnight, penal interest will be recovered as envisaged in sub-section (3) of Section 42 of Reserve Bank of India Act, 1934.

International Legal Cases and News

Cases

Civil

  • Elizabeth M., et al., on behalf of themselves and on behalf of others similarly situated Vs. Nancy Montenez, et al

The plaintiff-appellees in the present case are former female patients at Nebraska’s three residential mental health facilities namely the Lincoln Regional Center (LRC), the Norfolk Regional Center (NRC), and the Hastings Regional Center. The plaintiffs seek declaratory and injunctive relief against the Director of the Nebraska Department of Health and Human Services and the Chief Executive Officers and the Clinical Directors of the three facilities, all sued in their official capacities. The plaintiff-appelles allege that the defendant-appellants violated the plaintiffs’ federal constitutional and statutory rights by failing to protect them from sexual and physical assaults by male patients and staff, and by failing to adequately treat their mental illnesses and developmental disabilities. The District Court ruled in favour of the plaintiff-appelles and hence the present review interlocutory appeal under Rule 23(f) of the Federal Rules of Civil Procedure preferred by the Defendant-appellants. Held, plaintiffs failed to satisfy the requirements of Article III and Rule 23, and the district court abused its discretion in presuming that these requirements were satisfied. Order of district court therefore vacated.

Criminal

  • United States Of America Vs. Joseph Van Sach

The accused was convicted of being a felon and in possession of firearm in violation of 18 U.S.C. § 922(g) after a jury trial. The District Judge held that the case warranted the applicability of the Armed Career Criminal Act, (ACCA) 18 U.S.C. § 924(e), and that the accused’s Advisory Sentencing Guideline was in the range of 210 to 262 months. The accused was therefore sentenced to 210 months in prison. Upon appeal, the accused claimed that he was denied due process and a fair trial when the district judge ordered him to wear leg shackles at the jury trial. In addition, it was argued that he was denied the right to confrontation because the government declined to call a paid confidential informant as a witness, yet relied on her acts and statements to convict him. The accused also challenged the jury instructions. He argued that 18 U.S.C. § 922(g) is unconstitutional and also challenged the application of the Armed Career Criminal Act and the reasonableness of his 210 month sentence. Held, convictions for aggravated battery against police officers involved a serious potential risk of physical injury to others, and were felony offenses under 18 U.S.C. § 924(e)(2)(B). Therefore, the district court rightly rejected the accused’s Sixth Amendment claim and did not err in sentencing him under ACCA.

Service

  • James D. Wallace, Vs. City of San Diego; City of San Diego Police Department

The plaintiff –appellant in the present case was employed as a police officer with the defendant- appelle Department. During his tenure of service, some issues relating to misconduct arose and the plaintiff-appellant resigned from service. The plaintiff-appellant stated that his resignation in fact constituted a constructive discharge. The District Court ruled in favour of the defendant –appelle allowing motion for judgment as a matter of law and conditionally granting a new trial. The jury had earlier ruled in favour of the plaintiff-appellant stating that the defendant-appelle retaliated against the plaintiff in violation of the Uniformed Services Employment and Reemployment Rights Act (USERRA), 38 U.S.C. §§ 4301 et seq., and awarded him $256,800 in damages. The present appeal is directed against the judgement of the district court. Held, Jury’s finding that the City constructively discharged plaintiff and took other retaliatory actions against him in violation of USERRA was supported by substantial evidence and was not contrary to the great weight of evidence. District Court’s Judgement reversed.

News

  • Death penalty for Bulgarian nurses in Libyan AIDS Trial

The prosecutor in the Libyan retrial of five Bulgarian nurses and one Palestinian doctor, accused of infecting over 400 patients, primarily children, with the HIV virus, called for the death penalty of all the six accused in the case. The six health workers were first convicted in May 2004 and sentenced to death for deliberately infecting the children, but the Libyan Supreme Court overturned the convictions in December 2005 and ordered a retrial. Bulgaria and its allies, including the US and the European Union, contend that the nurses are innocent and maintain that their confessions were coerced through torture. The defendants, detained since 1999, previously argued that the children were infected with the virus before treatment.

  • Florida’s Third Party Registration Law unconstitutional

A US District Judge of the Southern District of Florida held Florida's Third-Party Registration Law as unconstitutional. The said law imposed steep fines on organizations and volunteers who failed to submit voter applications within specified time periods. The judge ruled that the law is unconstitutional as it discriminates in favour of political parties by excluding them from the definition of 'third party voter registration organization. Several labor unions had criticized the law stating that it blocked voter registration drives because of a high financial risk. The law imposed a $250 fine on organizations and volunteers that failed to submit voter applications within ten days of application, $500 on organizations and volunteers that failed to submit applications by the registration deadline, and $5,000 on organizations and volunteers that failed to submit the application altogether. Florida state officials said they would appeal the decision to the Court of Appeals for the Eleventh Circuit.

  • Nine years imprisonment for money laundering awarded to former Ukraine PM

A US federal judge in San Francisco sentenced former Ukrainian Prime Minister Pavlo Lazarenko to nine years imprisonment on corruption-related charges. US prosecutors indicted the former PM for money laundering, wire fraud, extortion and other crimes after he claimed asylum in the US in 1999 in the wake of several alleged assassination attempts against him. The charges were laid in connection with various Ukrainian business schemes he was involved in during the 1990s in which at least $114 million taken from Ukrainian sources was illegally passed through US banks. The former Ukrainian leader has been under house arrest in the US since his conviction.

  • Debate over Australian Control Order on terror suspects

A debate arose  in Australia surrounding Australian government’s first control order under new anti-terror laws limiting the activities of an uncharged terror suspect. An Australian Court issued the order against a terror suspect called “Jihad Jack”. As per the control order an uncharged terror suspect is required to stay within the city, report to police three times a week, remain at home between midnight and 5 AM each day, and only use an approved provider to connect to telephones and the Internet. Critics called the order unwarranted and suggested that the order was a political ploy to support government policy.