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In This Issue [No.181] January 10, 2007 Supreme Court High Courts IRDA PIB RBI International Cases & News Site Links Roundup Archives Free Trial Contact us 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.   www.manulawjobs.com   A niche for Legal, Tax & Finance Jobs crafted away from the clutter of IT & BPO jobs… Supreme Court Jagdish Mandal Vs. State of Orissa and Ors The Second respondent Department invited tenders for construction works and tender submitted by fifth respondent being lowest was accepted. Accordingly fifth respondent furnished required Earnest Money Deposit (EMD) by pledging a postal Term Deposit. Thereafter, upon receipt of a complaint that fifth respondent had deposited only partial amount as EMD and not the stipulated full amount and had defrauded department by altering figure in passbook, a letter was written requesting confirmation about authencity of said term deposit (TD), wherein concerned postal authorities wrote back stating that said TD Account not be taken into account for any official requirement. Thereafter, EMD submitted by fifth respondent was declared to be invalid and next lowest tender i.e. that of appellant was accepted. Same was challenged by fifth respondent through a writ petition before High Court and an investigation into allegation of defrauding was conducted, wherein it was revealed that T.D. Account and passbook held by fifth respondent was genuine. High Court therefore, allowed writ petition and held that offer made by fifth respondent was arbitrarily rejected by department for no fault of his. It then proceeded to quash agreement entered into department and appellant. Hence, present appeal by appellant. Held, if decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. Power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or the contractor with a grievance could always seek damages in a civil court. The appeal was allowed. Doiwala Sehkari Shram Samvida Samiti Ltd. Vs. State of Uttaranchal and Ors. Appellants, engaged in mining business, applied for grant of lease for mining of minor mineral under Rule 9-A of the U.P. Minor Minerals (Concession) Rules, 1963 for a period of ten years. While matter was still pending, the State of U.P. passed order granting lease to U.P. Forest Corporation for ten years. The appellant challenged the order for grant of lease before the High Court of Allahabad by filing a writ petition. The High Court vide order directed the District Magistrate to consider the application of the appellant. Thereafter, erstwhile State of U.P. was bifurcated and the area under question fell under the newly formed State of Uttaranchal which exercising power under Section 87 of U.P. Reorganisation Act, 2000 extended the U.P. Minor Minerals (Concession) Rules 1963 with certain modification/amendment to form Uttaranchal Minor Mineral (Concession) Rules, 2001 (Adaptation & Modification) Order, 2001 to the newly formed State of Uttaranchal and a new policy creating complete and general ban of mining of minor mineral by private persons was introduced by the State executive. Same was challenged by appellant though a writ petition wherein High Court dismissed writ petition and upheld the policy of state government creating monopoly in respect of mining of minor minerals on ground that same is in public interest. Hence, present appeals. Held, rights of appellants get crystalised on date of commencement of litigation and, therefore, appellant is entitled to relief of continuing lease till expiry of lease for ten years. Appellant, in our opinion, must be allowed to operate mine for full period of lease subject to adjustment for period for which he has already operated and subject to payment of lease amount and other dues etc. Appeal allowed to aforesaid extent. High Courts Gujarat Rs Nanavati Vs. State Bank of India and Others Petitioner was appointed as full time medical officer and alleged that his services were governed by conditions contained in Determination of the Terms and Conditions of Service Order, 1979. The case of petitioner is that he being a full-time employee of respondent, State Bank of India, he is entitled to get all benefits like housing loan, motor vehicle loan as well as other benefits regarding scholarship to children, staff consumer loan, festival loan etc, as are provided to other permanent employees of respondent bank. Respondent bank challenged same on ground that duties, responsibilities and nature of service of medical officers are different from that of General Officers and that appointment and service conditions of medical officers are governed by Uniform Terms and Conditions of Service, therefore, petitioner is not entitled to any of said benefits. Hence, present petition. Held, petitioner who has been appointed to work as a medical officer in the bank is entitled to get benefits only as per UTCS, which are applicable to all doctors. Therefore, it is not relevant whether petitioner was appointed on part time basis or full time basis. Petitioner and such medical officers are entitled to benefits given to them as per terms and conditions evolved by bank by exercising its statutory powers for framing such terms and conditions, therefore, it cannot be said that any discriminatory treatment is given to petitioner. Even assuming that somebody else has been given benefit wrongly, it would not confer any right in favour of petitioner to get such benefits. Therefore, when bank has framed a rational policy for medical officers, who are required to perform fixed hours duty, by giving them certain benefits and not extending few benefits, it cannot be said that bank has acted in an arbitrary manner. Petition dismissed. Sultan Ibrahim Mansuri Vs. State of Gujarat Petitioner was engaged as a daily wager and thereafter, appointed as a work charge employee and retired on attainment of age of superannuation. Thereafter, petitioner applied for pensionary benefits but same was refused by respondent on ground that petitioner had put in less than 10 years' service as a work charge employee and therefore, was not entitled to same. Petitioner challenged same on ground that he is entitled to pensionary benefits if his service period as a daily wager was also taken into account, which respondent had not done, while computing service period for determination of pensionary benefits. Hence, present petition. Held, in resolution dated 17-10-1988, it has been envisaged that those workmen who, as on 1-10-1988 or thereafter completes ten years of continuous service to be counted in accordance with provisions of S.25B of ID Act shall be deemed to be permanent. Under resolution dated 17th October, 1988 his entire continuous service from date of entry until he retires including his services rendered prior to date of his regularisation is taken into consideration for purpose of computing pension or making pension available to such retired employee. In view of this, it is clear beyond any manner of doubt that services of petitioner as a daily rated employee, is required to be taken into consideration until, he retired for purposes of computing pensionary benefits. Petition is allowed. Taraben Mansukhlal Pala Vs. LIC of India  The husband of appellant opted for life insurance policy and same was issued in his favour under concluded contract. Thereafter, husband of appellant died within a period of four months and 12 days from date of issuance of said policy and appellant lodged her claim. Respondent-Corporation rejected said claim stating that proposal form submitted by deceased husband of appellant contained mis-statements of facts, material facts were suppressed and facts which had material bearing on the contract were also suppressed. Being aggrieved by same, appellant filed a Regular Civil Suit. Trial Court decreed suit in favour of appellant and an appeal was filed against same before First Appellate Court by Respondent Corporation wherein appeal was allowed. First Appellate Court held that there was no suppression of material fact but as period of two years had not passed from date of concluded contract, provisions of Section 45 would not apply and contract/claim could be repudiated. Hence, present appeal. Held, a cause which can persuade Corporation to cancel or repudiate policy should not only be a cause which is material, but at least, should have some connection between disease and death. In present case, Respondent Corporation has miserably failed in showing connection between ailment which was suppressed and cause of death. Appeal allowed. Insurance Regulatory and Development Authority Clarification regarding tariff rate in respect of Fire, Engineering and Motor own damage insurance Press Release Dated 05.01.2007: There is an erroneous impression that though the Fire, Engineering and Motor Own Damage stand detariffed, the insurers are constrained to charge only 20% less than the erstwhile tariff rate in respect of Fire and engineering and 10% less than the rate obtaining for Motor Own Damage. This impression is presumably based on the two circulars issued by the IRDA dated 29 th November, 2006 and 15 th December, 2006. However, it is to be noted that these circulars were issued before the insurers filed their revised rates under the "File and Use" procedure under which the Insurers are expected to file their new rates with IRDA giving justification for adopting those rates. The Insurers indicated that pending approval of rates by IRDA, they have to issue renewal notices to their clients and desired to know what premium should be indicated in those renewal notices. The IRDA indicated that they could reduce rates upto 20% in the case of Fire and Engineering and 10% in the case of motor and if they wanted to adopt any rate lower than these ceilings they have to file the rates and await their consideration by the Authority. Thus, reduction of 20% and 10% was only indicative for the limited purpose of sending renewal notices for the month of January, 2007. Accordingly, IRDA notifies that the rates filed by the Insurers were reviewed by the IRDA and the approved rates communicated to the Insurers on 30 th December, 2006. Hence the revised rates along with discount factors are now available to the Insurers and they are free to apply those rates for new business as well as for renewals in the month of January 2007. The interim dispensation of 20% and 10% stands withdrawn with the approval of the rates filed by the Insurers under the "File and Use" system. Press Information Bureau The Central Educational Institutions (Reservation in Admission) Bill, 2006 gets President's assent PIB dated 04.01.2007: The Central Educational Institutions (Reservation in Admission) Bill, 2006, which provides for the reservation in admission of the students belonging to the Scheduled Castes, the Scheduled Tribes and the Other Backward Classes of citizens, to certain Central Educational Institutions established, maintained or aided by the Central Government has received the assent of the President. The Act paves the way to start implementing the policy of reservations from the academic session of 2007. However, the provision of the Act will not apply to (i) a Central Educational Institution established in the tribal areas referred to in the Sixth Schedule to the Constitution; (ii) the institutions of excellence, research institutions, institutions of national and strategic importance specified in the Schedule to this Act; and (iii) the Minority Educational Institutions referred to in clause (1) of article 30 of the Constitution Vayalar Ravi Announces Partiy with Nationals for OCIS in Domestic Air Fares PIB dated 07.01.2007: The Union Minister for Overseas Indian Affairs, Shri Vayalar Ravi said that 'Overseas Citizenship of India' (OCI) cardholders will be given parity with resident Indian nationals in domestic air fares. The OCI Scheme introduced by the Prime Minister last year had met with overwhelming response and so far ninety thousand such cards were already issued. The three new benefits announced by the Minister include Parity with NRIs in Inter-country adoption, parity with Resident Indians in Domestic Airfares and, parity with Indian Nationals in entry fees for National Parks and Wild Life Sanctuaries. RBI DBOD Valuation of Properties - Empanelment of Valuers Circular No DBOD.BP.BC No.50/21.04.018/2006-07 Dated 04.01.2007: Different banks follow different policies for valuation of properties and appointment of valuers for the purpose. The issue of correct and realistic valuation of fixed assets owned by banks and that accepted by them as collateral for a sizable portion of their advances portfolio assumes significance in view of its implications for correct measurement of capital adequacy position of banks. RBI therefore, notifies that there is a need for putting in place a system/procedure for realistic valuation of fixed assets and also for empanelment of valuers for the purpose. Accordingly, banks are requested to be guided by the following aspects while formulating a policy on valuation of properties and appointment of valuers: Banks should have a Board approved policy in place for valuation of properties including collaterals accepted for their exposures; the valuation should be done by professionally qualified independent valuers i.e. the valuer should not have a direct or indirect interest and the banks should obtain minimum two Independent Valuation Reports for properties valued at Rs.50 crore or above. International Legal Cases and News Cases Vives Vs. Fajardo Appellants brought an action in the United States District Court for the District of Puerto Rico against the Secretary of Education three employees of the Puerto Rico Department of Education (Department The complaint alleged retaliation in violation of the Rehabilitation Act. See 29 U.S.C. § 794a; 45 C.F.R. § 80.7(e). Specifically, appellants claim that said emplouyees told the Puerto Rico Department of Family (DOF) that Vives and Trinidad were negligent parents in retaliation for filing a complaint with a federal agency asserting disability discrimination on the part of Puerto Rico Department of Education against their son who was suffering from autism. District court granted summary judgment for the defendants on the ground that there was no evidence that the report to DOF was motivated by retaliatory animus. United States Court of Appeal for first circuit affirmed the decision of District Court and held that there is no evidence of retaliatory motive. Farzana K. Vs. Indiana Department of Education, et al., Plaintiff appellant had an autistic teenager son. She sought judicial relief as she alleged that public schools are not providing appropriate education program to suit her autistic son’s needs. District Court dismissed her complaint for want of jurisdiction to the extent that parent and child seek relief from the school system. On appeal, appellate court vacated and remanded matter despite the fact that appeal was filed with an expired docket number that required amendment to show that a new suit was being initiated on ground that plaintiff’s complaint was timely. Propat Int'l Corp. Vs. Rpost, Inc The present patent infringement case deals with the question whether a party has a sufficient ownership interest in a patent to be entitled to sue for infringement. The plaintiff's patent infringement action involved an apparatus and method for document authentication. District Court held that plaintiff's rights created by a May 2002 agreement did not accord it rights in the patent sufficient to give it standing to sue, even though the patent owner was named as a co-plaintiff, as patent owner lacked important indicia of a true ownership interest in the patent, such as right to transfer its interest as agreement forbids assigning of interests. Decision of District Court was affirmed on appeal by appellate court. News Navy lawyer to be court-martialed for leaking names of Guantanamo detainees A staff attorney with US Navy Judge Advocate General's Corps who was accused in August 2006 of leaking detainee names while stationed at Guantanamo Bay was ordered to face court-martial on charges of leaking secret national defense information to a person outside the government. The complaint against accused does not specify what information was included in the leak, but prior allegations indicate that names and information related to Guantanamo detainees were printed and transmitted to an outside person. The accused’s Article 32 hearing was postponed in October and his case was cited in the Congressional debate over new US military commissions that followed the Supreme Court's June ruling in Hamdan v. Rumsfeld as a cautionary tale suggesting that classified information might not even be safe in the hands of cleared military defense counsel who could turn out to be "ideological attorneys." Arguments heard by Supreme Court in garbage hauling case The US Supreme Court heard oral arguments in United Haulers Association v. Oneida-Herkimer Solid Waste Management Authority, a case concerning whether a local ordinance would violate the Commerce Clause [US Constitution Article I, Section 8, Clause 3 ] by requiring New York trash haulers to deliver all solid wastes to a publicly owned local facility. Lawyers for the trash companies argued that using out-of-state transfer facilities would cost significantly less than the using the county's mandated facilities. Defense lawyers for the government-owned waste management authority countered that the non-discriminatory government operation of the transfer facilities does not benefit a private company and that the ordinance should thus be allowed to stand; the petitioners point out that the county is in fact profiting from the mandate. The US Second Circuit Court of Appeals had ruled in favor of the county. Sept. 11 conspirator sentenced to 15 years by German Court Moroccan-born Mounir al-Motassadeq, who was found guilty of assisting the Sept. 11 attacks on the US, was sentenced to 15 years in prison by Germany's Federal Constitutional Court. According to the court, accused aided the hijackers by funneling money and helping them maintain appearances of being university students. In 2005, a German lower court determined that there was not enough evidence showing accused actually knew of the 9/11 plot, but an appeals court overturned the acquittal, finding him guilty of assisting the 9/11 attackers. Accused had admitted to attending an Al Qaida training camp in Afghanistan and being friends with some of the Sept. 11 hijackers, but claims he had no knowledge of their plans to carry out the attacks. The court maintained accused’s guilt with his sole knowledge that the accomplices had plans to hijack planes, even if he had no information as to details of the attacks. Prison Abuse Lawsuit of released Detroit terror suspect to proceed A federal judge has ruled that a former terrorist suspect can sue a county in Detroit for alleged abuse while he was in jail. The accused, a Moroccan national, was convicted in 2003 of document fraud and conspiracy to aid terrorists after he and three others were accused of establishing a terrorist "sleeper cell" in Detroit. The convictions were later overturned after the US Department of Justice agreed that federal prosecutors were not forthcoming with evidence. Accused has alleged that he was unnecessarily strip searched, denied exercise, and isolated for 23 hours a day during his three years in the Wayne County, Michigan jail. US District Judge rejected the county's bid to dismiss said lawsuit. 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