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Legislative and Regulatory Update
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[No.183] |
January
30, 2007 |
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Supreme
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Respondent Corporation, a government undertaking, by three separate indentures of lease, leased out three industrial sheds to appellant company for a period of 99 years. As per clause contained in lease deed, after failure of appellant company to start production within six months from the date of lease, prescribed authority sent a notice to appellant company. Thereafter, lease deed was terminated and possession was taken over by respondent-corporation. Possession was thereafter, restored to appellant upon representation made by appellant and on appellant furnishing an undertaking to commence manufacturing activity and tendering rent. Even after that, as appellant- company did not commence any manufacturing activity two notices were issued by prescribed authority to hand over possession of industrial sheds. Appellant-company then filed two writ petitions before Calcutta High Court which were disposed of by a learned Single Judge with a direction to Chairman of Corporation to give oral hearing to appellant. Chairman of Corporation after affording an opportunity of hearing to appellant passed a detailed order holding that appellant was liable to be evicted from the demised premises. Appellant then filed a writ petition before Calcutta High Court challenging aforesaid order. Writ petition was dismissed by a learned Single Judge and said order was affirmed in appeal by Division Bench. Hence, present appeal. Held, preamble of Act says that it is an Act to provide for regulation of certain incidents of tenancy in relation to Government premises in West Bengal Preamble does not say that Act is meant for regulation of residential tenancies alone. Definition of "Government premises" in Section 2(a) is very wide. It means any premises, which is owned by State Government or by a Government undertaking except official residence of any person authorized to occupy any premises in consideration of office which he holds under State Government or a Government undertaking. Therefore, all kinds of premises whether commercial, industrial or residential, if owned by State Government or by a Government undertaking would be covered by definition. Appeal is dismissed
Uttar Pradesh Public Service Commission conducted examination to U.P. Judicial Service Civil Judge posts. Examination papers were evaluated by examiners and marks assigned by examiners were subjected to statistical scaling and results were declared based on such scaled marks. Petitioners, unsuccessful candidates, were aggrieved. They challenged statistical scaling system adopted by Commission to evaluate examination papers as illegal as it is contrary to Uttar Pradesh Judicial Service Rules, 2001. They also contended that conversion of their raw marks into scaled marks is illegal as it was done by Commission by applying an arbitrary, irrational and inappropriate scaling formula. Hence, present petitions. Held, when the object of selection process is to try to select the best, and even one mark may make difference between selection or non-selection, system of scaling which has the effect of either reducing or increasing marks in an arbitrary manner will lead to unjust results. This is in addition to main disadvantage that scaling does not remedy ill-effects of examiner variability arising out of strictness or liberality in valuation.
Appellant company, paying taxes in Japan along with consortium members, entered into an agreement with Petronet LNG Ltd for setting up a facility in Gujarat. As per terms of contract each member of consortium was to receive separate payments and price was payable for offshore supply and offshore services in US dollars, whereas that of, onshore supply as also onshore services and construction and erection partly in US dollars and partly in Indian rupees. As liability of appellant company to pay income tax in India was doubtful, an application was filed by same before Authority for Advance Rulings (Income Tax) on whether appellant company was liable to tax in India under Income Tax Act and India Japan Tax treaty on amount appellant received from Petronet LNG for offshore supply of equipments. Authority opined that appellant was liable to pay direct tax even under Double Taxation Avoidance Agreement entered into between the Governments of India and Japan as appellant company has a business connection in India and also a permanent establishment and that contract under question envisages a composite consideration for performance of various obligations out of which some operations are performed through or by business connection in India. Hence, present appeal. Held, for a non-resident to be taxed on income for services, such a service needs to be rendered within India, and has to be a part of a business or profession carried on by such person in India. Petitioners in present case have provided services to persons resident in India, and though same have been used here, it has not been rendered in India.
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High Courts |
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Gujarat
Plaintiff-respondent was provided with electricity connection by defendant company from industrial feeder, at rates applicable to rural feeder for farming purpose, since last 20 years, as there was no rural feeder available at that time. Plaintiff allegedly used said connection only for agricultural purpose as he did not have any industry. However, defendant-company now wanted to transfer feeder by supplying electricity from rural feeder instead of industrial feeder due to availability of rural feeder now. Same was resisted by plaintiff who filed suit for declaration and injunction restraining defendant-company from transferring supply of electricity from industrial feeder to rural feeder. Trial court granted interim injunction holding that as plaintiff is getting connection through industrial feeder since long, defendant-company cannot now transfer his electricity connection from industrial feeder to rural feeder. Hence, present appeal by defendant-company. Held, learned Judge has failed to consider case from its proper angel. Since it is not in dispute that now rural feeder is available, which is meant for agriculturists only, insistence on part of plaintiff to get electricity from industrial feeder only is not proper. From rural feeder, plaintiff can get electricity at a cheaper rate for a particular number of hours. Simply because plaintiff was given benefit of getting electricity through industrial feeder for intervening period when rural feeder was not available, it does not give any right in favour of plaintiff to get electricity from same feeder by paying charges for rural feeder, especially when it was only a stop-gap arrangement till rural feeder is made available. Appeal is allowed.
Defendant Nos 1 to 3 executed an agreement to sell in favour of plaintiffs and earnest money was paid by plaintiffs to said defendants. As per the terms, sale deed was to be executed within a period of six months wherein Defendants Nos 1 to 3 was supposed to get title clearance as well as clearance from ULC Authority. Thereafter, after expiry of six months Defendants sent a letter of attornment informing plaintiffs that the property in question is sold to Defendant No. 4. Plaintiffs then filed a suit for specific performance of agreement to sell. Defendant challenged same on ground that plaintiffs were not ready and willing to perform their part of contract and thereafter upon expiry of period property was sold to defendant No. 4. Trial court dismissed suit filed by plaintiffs on ground that plaintiffs have failed to prove that Defendants No. 1 to 3 had committed breach of suit agreement and that plaintiffs were also not ready and willing to purchase the suit property and that sale deed executed by defendants No. 1 to 3 in favour of Defendant No. 4 is not illegal or fraudulent document. Hence, present appeal by plaintiffs. Held, considering evidence on record, it is clear that plaintiffs were not in a position to perform their part of contract within stipulated period and they have failed to show their willingness to perform their part of contract and in meanwhile, Defendant No. 4 has purchased suit property by way of registered sale deed and, at last moment, the plaintiffs had rushed to Court by filing suit. Considering said aspect of matter, it cannot be said that Trial Court has exercised its discretion in arbitrary manner by refusing decree for specific performance. Appeal is dismissed.
Accused persons were apprehended during a raid conducted by Armed Forces, BSF and police to check infiltration of men and ammunition from Pakistan to India across the Kutch Border of India during Kargil War. Accused were found to be in possession of weapons and explosives and therefore, were apprehended. Trial Court found accused to be guilty of offences under Indian Penal Code, Arms Act, Explosive Substances Act, Indian Passport Rules and Foreigners Act and sentenced them to death. Hence, present criminal appeals. Held, Law on this point is very clear that if there is a delay in F.I.R. and delay has been satisfactorily explained by prosecution, then it will never become fatal to case of prosecution. Here in this case, Court below has rightly dealt with that there is no deliberate delay on part of prosecution and whatever delay occasioned has been absolutely necessary in given special circumstances and it was in interest of nation. In these circumstances, we do not find any substance in contention raised by learned Counsel for accused that prosecution case fails on ground of non-filing of F.I.R. within stipulated period.
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Insurance
Regulatory and Development Authority |
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Circular No. : 043/IRDA/De-Tariff/Jan-07 Dated 23.01.2007: Vide the above circular, Insurance Regulatory and Development Authority notifies that revised rates of premium has been prescribed by it for motor third party liability insurance effective from 1st January 2007. The same is in supercession of Authority’s Circular Ref: 034/IRDA/De-Tariff/Dec- 06, dated 4th December 2006.
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RBI |
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Press Release
Press Release No. : 2006-2007/951 Dated 12.01.2007: Bank of Baroda has been given authorization to undertake Primary Dealer business in government securities market by Reserve Bank with effect from January 16, 2007. Meanwhile, authorization given to BOB Capital Markets Limited as Primary Dealer has been withdrawn. The Reserve Bank of India had announced in its Annual Policy Statement 2005-06 that the permitted structure of Primary Dealership business would be expanded to include banks, which fulfill certain minimum eligibility criteria. Accordingly, the Reserve Bank of India had issued guidelines on February 27, 2006 addressed to all Scheduled Commercial Banks (excluding RRBs) on eligibility criteria for banks to undertake Primary Dealer business.
Press Release No. : 2006-2007/926 Dated 09.01.2007: The Reserve Bank of India has notified that no further purchases of equity shares of Zee News Limited, should be made on behalf of Foreign Institutional Investors (FIIs)/Non Resident Indians (NRIs) and Persons of Indian Origin (PIOs) under Portfolio Investment Scheme (PIS) through stock exchanges in India without obtaining the prior permission of the Reserve Bank. The same has been notified on January 9, 2007 and is in view of the fact that Zee News Limited has reached the overall limit of 26 per cent of its paid up equity capital.
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SEBI |
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Seconday Market Division
Circular No : MIRSD/DPS III//Cir-01/07 Dated 22.01.2007: SEBI has been mandated under the SEBI Act, 1992 to protect the interests of investors in the Indian securities market through several investor protection measures and regulatory reforms. SEBI has been receiving representations from various investors requesting for a direct and quicker forum for enabling them to register their complaints expeditiously with the intermediaries/listed companies/stock exchanges as in several cases pursuant to registering a complaint, the investors do not have any mode for a follow-up or monitoring the processing of their complaints. Accordingly, SEBI has proposed designation of an exclusive e-mail ID of the Grievance Redressal Division / Compliance Officer wherein the investors would be able to register their complaints and also take necessary follow-up actions as necessary. Such a process would not only expedite the redressel of the complaints of the investors but also enable several investors across the country to register their complaints through a single, centralized, exclusive e-mail ID that is designated for the purpose. Accordingly, all registered Merchant Bankers, registered Registrars to an Issue/ Share Transfer Agents, registered Debenture Trustees, registered Bankers to Issue and registered Underwriters are advised to designate an e-mail ID of the Grievance Redressal Division/Compliance Officer exclusively for the purpose of registering complaints by investors. The above entities are also advised to display the email ID and other relevant details prominently on their websites and in the various materials/pamphlets/advertisement campaigns initiated by them for creating investor awareness.
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| International Legal
Cases and News |
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Cases
The present lawsuit was filed by a California Prison inmate who was sentenced to death challenging California’s death sentence by lethal injection protocol as it violated his constitutional rights. Federal Judge held that procedure in question was unconstitutionally cruel and therefore suspended it indefinitely until the process is reviewed by the state. Judge held that he does not necessarily oppose lethal injection, but opposed state’s method of implementing the procedure.
In the present case, the defendant lawyer was convicted on charges relating to an elaborate scheme of diverting money to his law firm's account and he filed an application for professional liability insurance. Same was challenged by plaintiff insurance company. Federal Judge ruled against the defendant and held that a professional liability insurer may rescind coverage for a lawyer sentenced to prison for his participation in a corporate fraud scheme and can seek reimbursement of all legal fees it paid on behalf of the defendant.
In the present motor accident case, plaintiffs’ son was apparently killed when he lost control of his vehicle, SUV, while passing the vehicle in a no passing zone on a curve. The SUV rolled and came to rest on its roof. Plaintiffs alleged that their son died because the roof of the vehicle manufactured by defendant-company was too weak to withstand a rollover and sued the defendant company. Hence, present case. Judge upheld the plaintiff’s challenge and order defendant Ford Motor Company to pay $15 million as damages.
News
A federal judge held that overcrowded Philadelphia jails violate inmates' constitutional rights and therefore require court monitoring. The ruling from US District Judge came in response to a lawsuit filed last year by University of Pennsylvania law professor on behalf of 11 inmates. Philadelphia city jails are not the only prisons in the United States that have faced judicial criticism lately. In December 2006, a US District Judge gave the state of California six months to remedy overcrowding in the state's prison system, which is 70 percent overcapacity. Judge warned that if acceptable remedies were not reached in six months, a judicial panel could order California to release prisoners before their sentences are completed. Also in December, a federal judge in Michigan ruled that the Michigan Department of Corrections was in contempt of court for failing to conform with medical care requirements for prisoners mandated by that court in a prior ruling.
The Committee to Protect Journalists, an international press freedom group, lashed out at the new media rules imposed in Bangladesh in the wake of the government's declaration of a state of emergency. The Emergency Powers Rules of 2007 restrict reporting of political activities in the country and provide for up to five years in prison for offenders. They allow news programming deemed "provocative or harmful" to be blocked and broadcast equipment and printing presses to be seized. Bangladesh President declared a state of emergency January 11 and later indefinitely postponed elections scheduled for January 22 after the collapse of a caretaker government in the face of violent protests over election procedures.
A federal judge in Nebraska ruled that the state cannot enforce a 25-year old ban on corporate farming while it appeals a US Eighth Circuit Court of Appeal decision ruling the ban as unconstitutional. The Nebraska Attorney General had appealed the ruling to the US Supreme Court earlier this month.
A Jordanian Appeals Court upheld a military court's death sentence for a would-be Iraqi suicide bomber who attempted to detonate a suicide bomb as part of a series of 2005 deadly hotel bombings in Amman. The accused was convicted in December along with six others who were tried in absentia of conspiracy to carry out a terrorist act causing death and destruction and illegal possession of weapons and explosives. The attack in which the accused took part killed 60 people at a wedding party. The death sentence can now only be overturned by Jordan's King Abdullah. Jordan executes some 10 convicts per year for serious crimes.
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