[No.189]

Supreme Court

• State of U.P. and Ors. Vs. R.C. Misra

The respondent-government officer was placed under suspension and a departmental enquiry was initiated against him while he was still in service. Thereafter, the respondent-officer attained age of superannuation and retired from service. After respondent’s retirement from service, enquiry officer submitted report that all charges against respondent stood proved, whereupon appellant- State Government issued an order directing recovery of amount from pension and gratuity of respondent. Respondent then filed claim petition before U.P. Public Service Tribunal challenging aforesaid order of Government. Tribunal allowed claim petition and set aside aforesaid order of State Government. Appellant State then filed writ petition challenging order of Tribunal but same was dismissed. Hence, the present appeal. Whether disciplinary proceedings initiated against respondent prior to his retirement could have continued after his retirement without specific order for its continuance from competent authority. Held, a combined reading of proviso and explanation to Regulation 351 A would show that there is no fetter or limitation of any kind for instituting departmental proceedings against an officer if he has not attained age of superannuation and has not retired from service. If an officer is either placed under suspension or charges are issued to him prior to his attaining age of superannuation, departmental proceedings so instituted can validly continue even after he has attained age of superannuation and has retired and limitations imposed by Sub-clause (i) or Sub-clause (ii) of Clause (a) of proviso to Regulation 351A will not apply. It is only where an officer is not placed under suspension or charges are not issued to him while he is in service and departmental proceedings are instituted against him under Regulation 351A after he has attained age of superannuation and has retired from service and is not under re-employment that limitations imposed by Sub-clauses (i) and (ii) of proviso (a) shall come into play. In present case, respondent had been placed under suspension and charges were also served upon him while he was in service. In such circumstances, proviso (a) did not come into play at all and there was no requirement of obtaining sanction of Governor. Enquiry which had been instituted prior to retirement of respondent and was completed after his retirement could not, therefore, be held to be illegal on ground of want of sanction of Governor. View to contrary taken by Tribunal and by High Court is, therefore, clearly erroneous in law and cannot be sustained. Therefore, Regulation 351A cannot be interpreted in a manner that a departmental proceeding validly instituted while officer is in service would require sanction of the Governor for its continuance subsequent to his retirement as limitation imposed by Sub-clause (i) of Clause (a) of proviso is only on institution of proceedings and not continuance thereof. Appeal is allowed.

• Palitana Sugar Mills Pvt. Ltd. and Anr Vs. Smt. Vilasiniben Ramachandran and Ors

The Supreme Court issued directions to respondents vide a detailed judgement in a suit brought by petitioners. However, as there was no compliance of Court directives by respondents, petitioners sent several reminders to respondents and requested them to comply with Court Orders. Inspite of same, respondents did not comply with Court Orders. Hence, present petition. Whether it is open to any authority to ignore binding judgement of Court on ground that full facts had not been placed before the Court. Held, it is well settled that judgments of this Court are binding on all authorities under Article 142 of Constitution and it is not open to any authority to ignore a binding judgment of Court on ground that full facts had not been placed before Court and/or judgment of Court in earlier proceedings had only collaterally or incidentally decided issues raised in show-cause notices. Such an attempt is to belittle issues and orders of Court. Therefore the Contempt Petition was allowed.

High Courts

Madras

• Pushpanjali Silk Private Ltd. Vs. The Commissioner of Customs (Seaport-Imports), Chennai

The petitioner-company imported raw silk from Uzbekistan at declared value of USD 13.40/kg and sought clearance of same. Respondent-Revenue refused clearance of same on ground that genuineness of origin of country of import is doubted as similar goods imported from China were cleared at USD 28/kg and therefore same is under investigation. Petitioner was therefore, allowed provisional clearance of goods on provisional assessment basis applying higher rate of USD 28/kg and upon furnishing of bank guarantee. Hence, present petition. Whether conditions for provisional clearance given by respondents are arbitrary and stand no reason. Held, it is always open to respondents to verify genuineness of details of imports, particularly, certificate of origin of country. But when invoice is clear, which shows that value of goods is USD 13.40/kg and when similar consignments have been cleared at USD 14.50/kg, mere assumption that goods are identical to one imported from China at value of USD 28/kg, cannot by itself be a reason to fix same rate for provisional clearance of goods of petitioner and demand for 120 per cent bank guarantee for differential duty is unrealistic. Section 18 of Customs Act provides that when proper officer deems it necessary to subject any imported goods or export goods to any chemical or other test for purpose of assessment of duty thereon, proper officer may direct that duty leviable on such goods may, pending production of such documents or furnishing of such information or completion of such test or enquiry, be assessed provisionally if importer furnishes such security as property officer deems fit for payment of difference between duty finally assessed and duty provisionally assessed. Therefore, having regard to statutory provision and in view of fact that similar nature goods have been cleared by respondents themselves, conditions for provisional clearance given by proceedings of respondents are arbitrary and stand no reason.

• The Society of St. Joseph’s College rep. by its Procurator Jesuit Residence, Tiruchy Vs. Union of India rep. by Chief Post Master General Anna Salai, Chennai

The petitioner, a minority-educational institution, let out a property to respondent-post office for a monthly rent. Petitioner sought revision of rent but same was not complied with by respondents. On contrary, respondents started proceedings under provisions of Land Acquisition Act to acquire property in question. Writ petition and appeal challenging same was dismissed. Thereafter, petitioner filed a writ petition before Supreme Court to enforce its fundamental right as a Minority educational institution. Supreme Court, disposed of writ petition holding that provisions of Central Act I/1894 may not be invoked in respect of educational institutions run and administered by Minority and enabled Union of India to safeguard its position only if any special enactment or amendment to Central Act is made to cover such situation. It further held that pending and uncompleted acquisitions would stand lapsed on and after 31st May, 2002. I.A. filed by Union of India for extension of upper limit of 31st May, 2002, was dismissed. Thereafter, proceedings in respect of petitioner’s property stood lapsed after expiry of said date as no amendment was made in Land Acquisition Act, 1894 as directed by Supreme Court. Hence, present petition. Whether, as on date, there is any enforceable constitutional or statutory right available to petitioner. Held, a person praying for a mandamus must show that he has a legal right to compel opponent to do or refrain from doing something. A legal public duty or statutory duty sought to be enforced must have a duty of public nature or a right created by provision of Constitution or of a statute or some rule of common law. Therefore, this remedy unless it is shown to be a right enforceable under Constitution or statute or common law, there cannot be a writ of mandamus to compel any person to do or refrain from doing something. In instant case, in absence of any such enforceable right as on date as legislation is yet to be amended, petitioner has no legal right to enforce it by compelling Union of India to handover possession.

Bombay

• Solapur Nagari Audyogik Sahakari Bank Niyamit, Solapur Vs. Solapur District Industrial Co-op. Bank Ltd. Solapur (In liquidation) and Anr.

The Petitioners are secured creditors of Respondent No. 1 due in respect of amounts invested by the petitioners with Respondent No. 1 for which fixed deposit receipts were executed. As Respondent No. 1 failed to repay the said amounts, petitioners filed suits before the Co-operative Court for recovery of amount. Thereafter, disputes were settled in compromise pursis. However, as Respondent No. 1 failed to make payment in terms of compromise, petitioners filed execution proceedings in civil court. During pendency of execution proceedings, Commissioner of Co-operation and Registrar of Co-operative Societies, declared Respondent No. 1 be wound up and appointed a liquidator. Petitioners therefore, sought permission from Registrar of Co-operative Societies to implead Liquidator as a party in the above proceedings and same was granted. However, Liquidator filed applications against same and Civil Judge allowed applications by Liquidator and disposed of the execution proceedings. Hence, the present petition. Whether civil court is entitled to dispose of execution proceedings when permission to make Liquidator a party to execution proceedings is granted by Registrar. Held, it is the Registrar who is authorized to grant leave under Section 107 of Act. Neither Civil nor Revenue Courts are concerned with question of leave under Section 107. Nor are they authorized to grant leave contemplated in Section 107. Therefore, leave granted by Registrar cannot be revoked or ignored by Civil or Revenue Courts.

RBI

DBOD

• Grant of Loans for acquisition of Kisan Vikas Patras (KVPs)

Circular No.DBOD.No.Dir.BC.69/13.03.00/2006-2007 Dated 14.03.2007: Reserve Bank of India vide the above circular notifies that RBI has come across certain instances where banks had sanctioned loans to individuals who are mostly High Networth Individuals-HNIs for acquisition of Kisan Vikas Patras (KVPs). The HNIs were first required to bring in 10% of the total face value of the proposed investment in the KVPs as margin and the remaining 90% of the investment was treated as loan and funded by the bank for acquisition of the KVPs. Once the KVPs were acquired in the borrower's name, the same were pledged thereafter to the bank. Accordingly, RBI notifies that the sanction of loans as described above is not in conformity with the objectives of small savings schemes as the basic objective of small savings schemes is to provide a secure avenue of savings for small savers and promote savings, as well as to inculcate the habit of thrift among the people. Thus grant of loans for acquiring/investing in KVPs does not promote fresh savings but rather, channelises the existing savings in the form of bank deposits to small savings instruments and thereby defeats the very purpose of such schemes. Banks are therefore to ensure that no loans are sanctioned for acquisition of/investing in Small Savings Instruments including Kisan Vikas Patras.

UBD

• Loans and advances to directors, relatives and firms/concerns in which they are interested-UCBs

Circular No.UBD.PCB.Cir.No.32/13.05.000/06-07 Dated 12.03.2007: The RBI vide circular UBD.PCB.CIR.50/13.05.00/2002-03 and circular UBD.BPD.Cir.No. 54/13.05.00/02-03 dated April 29, 2003 and June 24, 2003 had prohibited Urban Coo-operative Banks (UCBs) from extending any loans and advances (both secured and unsecured) to the directors, their relatives and the firms/concerns/companies in which they are interested. However, vide Circular No.UBD.PCB.CIR.No.14/13.05.000/05-06 Dated 06.10.2005 RBI excluded regular employee-related loans to staff directors on the Board of UCBs, normal loans as applicable to members to the directors on the Boards of salary earners’ co-operative banks and normal employee-related loans to Managing Directors of Multi-State co-operative banks from the purview of such prohibition. Now, vide the present circular, RBI notifies that as a further measure of relaxation, it has been decided to permit directors of UCBs and their relatives to avail loans against Fixed Deposits and Life Insurance Policies standing in their own name.

SEBI

Press Release

• SEBI signs Memorandum of Understanding with Emirates Securities and Commodities Authority

Press Release No. PR No.111/2007 Dated 26.03.2007: Securities and Exchange Board of India (SEBI) has signed a bilateral Memorandum of Understanding (MoU) with the Emirates Securities and Commodities Authority (ESCA). The MoU was signed in New Delhi on 26.03.07 by Mr. M. Damodaran, Chairman, SEBI and Mr. Abdullah S. Al Turaifi, Chief Executive Officer of ESCA. The MoU is aimed to promote co-operation between the two jurisdictions towards fostering a common understanding of the regulatory issues and co-operation, particularly in matters relating to cross-border trading and supervision of investment products.

Secondary Market Divisin

• Amendments to the Listing Agreement for Debentures

Circular No. SEBI/CFD/DIL/LA/1/2007/20/03 Dated 20.03.2007: SEBI vide Circular No. SEBI/CFD/DIL/CIR-39/2004/11/01 dated November 1, 2004 had introduced a Model Listing Agreement to be entered into by companies desirous of listing their debentures. The circular was applicable for listing of all debentures irrespective of the mode of issuance i.e. whether issued on private placement basis or through public/rights issue. Vide present circular, SEBI notifies that it has been decided to rationalize the provisions of continuous disclosures made by issuers who have listed their debt securities and not their equity shares and to introduce submission of unaudited financial results with a limited review. It has also been decided to modify clauses 3.3 and 2.14 (1) of the extant Model Listing Agreement for debentures wherein Clause 3.3 applicable for debentures issued on private placement basis shall be amended to provide for submission of unaudited half-yearly results subject to a limited review, the results of which shall be submitted to the exchange within one month from the end of the half-year and a copy of the limited review report shall be submitted within two months from the end of the half yearly period. Further, Clause 2.14.A.(1) applicable for debentures issued on public/ rights issue basis shall be amended to provide for submission of unaudited quarterly results subject to a limited review, the results of which shall be submitted to the exchange within one month from the end of the quarter and a copy of the limited review report shall be submitted within two months from the end of the quarter. Accordingly, the limited review shall be done by the statutory auditors of the company and report of the limited review shall be prepared on the lines of the format now being included in the Model Listing Agreement. Further, SEBI also notifies that the revised Clauses of the Listing Agreement for Debentures shall come into force for all filings made to stock exchanges on or after April 1, 2007.

Cases

• Brilliance Audio, Inc. Vs. Haights Cross Communications, Inc.

Defendants-appellees are in direct competition with plaintiffs. Plaintiff alleges that defendant is repackaging and relabeling plaintiff’s retail editions as library editions. According to plaintiff, defendant then markets the repackaged products as plaintiff’s library editions and distributes them for commercial advantage by rental, lease, and lending. Plaintiffs have never authorized Defendants s to engage in this activity. Plaintiff also claims that defendant uses the plaintiff’s mark on the repackaged products, which constitutes trademark infringement and results in the misrepresentation that Defendants has a relationship with plaintiffs and that its activities are authorized. Plaintiffs brought a claim in federal district court alleging copyright infringement under 17 U.S.C. § 109 and trademark infringement under 15 U.S.C. § 1114, unfair competition under 15 U.S.C. § 1125(a) and dilution under 15 U.S.C. § 1125(c). District Court dismissed same. Hence, present appeal. Held, the complaint claims that defendant is repackaging and relabeling plaintiff’s retail editions as library editions and that the notice of repackaging is inadequate because it creates the misrepresentation that “defendants have a long-standing relationship with Plaintiff and that the activities of Defendants are authorized and sponsored by Plaintiff.” The complaint also alleges that the inadequate packaging is likely to result in consumer confusion that will dilute the value of the trademark. In regards to whether the product is genuine, plaintiff alleges that the library edition is different from the retail edition. Plaintiff claims that it packages and markets the two editions differently and that by repackaging retail editions as library editions, Defendant is altering the product in a manner likely to cause consumer confusion. Plaintiff claims that this confusion will diminish the value of its trademark. Although the complaint does not specifically use the word “material” in describing the product difference and leaves some ambiguity in allegations as to whether the product is in fact different or only the packaging and marketing, we cannot conclude that plaintiff has alleged insufficient facts to permit granting relief. Thus, the district court erred in dismissing the trademark claims under Rule 12(b)(6).

• Roger Miller Music, Inc. Vs. Sony/ATV Publ'g, LLC

Plaintiff-appellant is the wife of a famous country-music singer and songwriter who was deceased. The deceased music-singer had executed publishing agreements with the precedessor of Defendant-Company. The agreement conveyed original copyrights in deceased singer’s songs to predecessor-company. Further, as per the agreement, for renewal of copyrights, parties shall enter into agreements separately. The rights ultimately came to be vested with Defendant-Company who came to own the predecessor-company. Plaintiff-appellant, wife of deceased music singer, filed suit alleging copyright infringement by Defendant-Company on ground that Defendant Company is beneficial owner of original copyrights only and is not vested with renewal copyrights in deceased singer’s songs as deceased singer had not assigned renewal copyrights to defendants before commencement of renewal period. The Tennessee District Court however, ruled in favour of Defendant-Company. Hence, present appeal. Held, an author of a copyrighted work can assign the right to the renewal of copyright before the renewal period commences. Further, under Tennessee Law, a court’s task when interpreting a contract is to ascertain the intention of the parties based upon the usual, natural, and ordinary meaning of the contractual language. Language in the agreement is sufficient to convey the renewal-copyright interests because the language evinces a clear intent by singer to transfer to predecessor-company, and later to Defendant-Company, the renewal copyrights. Therefore, Defendant-Company owns renewal copyrights of songs in question. Ruling of lower court is affirmed.

• Pfizer, Inc. Vs. Apotex, Inc.

Plaintiff – pharmaceutical company filed suit against Defendant- pharmaceutical company alleging that pursuant to 21 U.S.C. § 355(j)(5)(B)(iii), defendant’s filing with the United States Food and Drug Administration (“FDA”) of its Abbreviated New Drug Application seeking approval to commercially sell amlodipine besylate tablets before the expiration of the term of U.S. Patent “303 patent” belonging to plaintiff is an infringement of its patent. Allegedly, the drug sought to be approved by defendant is a generic version of plaintiff’s drug amlodipine besylate, which is commercially sold in tablet form in the United States under the trademark Norvasc for treating hypertension and chronic stable and vasospastic angina. Defendant denied infringement and claimed that the ‘303 patent ’of plaintiff is invalid for anticipation and obviousness, and that the ’303 patent is unenforceable due to plaintiff’s alleged inequitable conduct before the United States Patent and Trademark Office as plaintiff allegedly made several misrepresentations before USPTO during prosecution of application leading to 303 patent including misrepresenting the solubility and stability of amlodipine besylate and misrepresenting the number of tablets tested for processability. It alleged that main ingredient or salt used in “303” patent was known earlier and used in other patents and “303 patent was an improvised version of the same and a skilled chemist would have had reasonable success with inventing it. District court ruled in favour of plaintiff and held that Defendant failed to show intent to deceive by clear and convincing evidence. Hence, present appeal. Held, as a patent is presumed to be valid, the patent challenger bears the burden of proving the factual elements of invalidity by clear and convincing evidence. The trial court has the responsibility to determine whether the challenger has met its burden by clear and convincing evidence by considering the totality of the evidence, including any rebuttal evidence presented by the patentee. Considering all of the evidence, the district court clearly erred in finding that Defendant failed to produce clear and convincing evidence that one skilled in the art chemist would have had a reasonable expectation of success with the besylate salt of amlodipine. Judgement of lower court is reversed.

News

• Supreme Court Hears Arguments In Securities Antitrust Case

The US Supreme Court heard arguments in the case of Credit Suisse Securities v. Billing, a case in which investors filed a class action lawsuit against underwriters and institutional investors for their alleged manipulation of initial public offerings. The question presented was whether the plaintiffs' class can maintain their action under federal and state antitrust laws, or whether the federal Securities Act of 1933 and Securities Exchange Act of 1934 provide the sole means of redress for plaintiffs. The Supreme Court has also to decide whether the US Court of Appeals for the Second Circuit erred in holding that the investment banking entities did not receive implied immunity from antitrust claims.

• Trial of US engineer accused of leaking secrets to China opens

The US District Court for the Central District of California began jury selection in the trial of Chi Mak, a Chinese-American engineer charged with conspiring to smuggle sensitive naval intelligence data to China. The US government indicted accused for both acting as, and failing to register as, an agent of a foreign government in violation of 18 USC § 951. Accused allegedly stole computer disks from his employer, defense contractor Power Paragon, copied sensitive information and attempted to send it to the Chinese government through an intermediary before his arrest at Los Angeles.

• Death penalty repeal bill fails in New Hampshire House

The New Hampshire House of Representatives voted to reject proposed legislation which would have effectively ended the death penalty in the state. Had it passed, the proposed law would have set the maximum penalty for capital crimes at life in prison without parole. The debate was emotionally charged by the recent shooting of a police officer for which his assailant now faces execution. Opponents of the bill said overturning capital punishment so soon after the death of a police officer would be an insult to the state's police officers. The New Hampshire legislature attempted to repeal the state's death penalty in 2000 and again in 2001, but the first attempt was vetoed and the second try failed to pass the legislature.

• Rumsfeld torture lawsuit dismissed by Federal Judge

The US District Court for the District of Columbia dismissed a lawsuit against former US Secretary of Defense Donald Rumsfeld for authorizing torture and abuse of detainees by US personnel in Iraq and Afghanistan. The suit asserted that Rumsfeld bears direct responsibility for detainee abuse and that his actions violated the US Constitution, federal statutes and international law. The Judge based the dismissal on the immunity of government officials from lawsuits and the premise that US constitutional rights do not apply overseas. The suit was brought by the American Civil Liberties Union (ACLU) and Human Rights First, which had previously sued Rumsfeld and other military officials in 2005 on behalf of eight former detainees.