[No.193]

Supreme Court

• K. Thulaseedharan Vs. The Kerala State Public Service Commission, Trivandrum and Ors.

Appellants were included in a ranked list published by PSC for appointment with Public Works and Irrigation Departments. The validity of said ranked list was one year. If no new list was prepared, its validity was to be extended to three years. Accordingly, as no new list was prepared said list was operative till 31.3.2004. Government of Kerala then issued notification to PSC to extend validity of appointment lists upto the end of Year 2004 in view of a previous ban issued by it with regard to appointments in State Service. Pursuant to said request Kerala Public Service Commission extended rank lists that were current and were to expire thereafter till 30.12.2004. However, appellant’s rank list was not kept alive on the basis that the list had already expired before issuance of notification. Therefore, appellants approached High Court through a writ petition and learned single judge dismissed writ petition. Appellant thereupon filed an appeal before Division Bench of High Court. Division Bench after taking note of the fact that the concerned list had expired before the Government Notification extending the validity of the various lists was issued held that the expired list could not be kept alive or revived in exercise of power under the 5th proviso to Rule 13 of the Rules. Therefore, affirming the decision of the learned single judge, the appeal was dismissed by the Division Bench. Hence, present appeal. Held, 5th proviso to Rule 13 of the Rules relied upon clearly gives an indication that the power available thereunder could be exercised only in the case of a ranked list which is still subsisting or the life of which is still continuing. The words "the Commission shall have the power to keep alive the Ranked Lists which are normally due to expire during the said period" clearly show that it is a question of keeping alive until a future date, of a live list, the term of which is to expire shortly. The power under the 5th proviso to Rule 13 of the Rules cannot be made use of to revalidate a time expired ranked list. Therefore, there is no justification in interfering with the decision of the High Court since by 3.4.2004 when the notification extending the validity of the lists was issued, the validity of the list in question had expired and the same could not be revived in alleged exercise of power under the 5th proviso to Rule 13 of the Rules. Appeal is dismissed.

• Bikash Bhushan Ghosh and Ors. Vs. Novartis India Limited and Anr.

Appellants, workmen of Respondent-company, were transferred by order of transfer. Appellants did not join services of respondent company at transferred places and alleged that said orders of transfer were violative of Memorandum of Undertaking and were issued with an ill-motive of victimizing them for their trade union activities. Despite repeated requests by appellants, purported orders of transfer were not revoked and they therefore sought intervention of Labour Commissioner. Allegedly, a conciliation proceeding was initiated but during pendency of same services of workmen were terminated by Respondent Company. Contending that said orders of termination were unauthorized, arbitrary and illegal, workmen raised an industrial dispute. Tribunal held that orders of termination passed against appellants were illegal and workmen were directed to be re-instated in service with back wages. Aggrieved by said order, Respondent filed a writ petition before High Court but same was dismissed. On an intra-court appeal filed by respondents, a Division Bench of High Court without going into merit of matter held that State of West Bengal, being not appropriate Government in respect of dispute raised by appellants, had no jurisdiction to make reference and on that premise allowed said appeal and consequently set aside Award made by Tribunal as also judgment and order of learned Single Judge. Hence, present appeal. Held, with reference to objections relating to territorial jurisdiction, Section 21 of the Civil Procedure Code enacts that no objection to the place of suing should be allowed by an Appellate or Revisional Court, unless there was a consequent failure of justice. It is the same principle that has been adopted in Section 11 of the Suits Valuation Act with reference to pecuniary jurisdiction. The policy underlying Sections 21 and 99, C.P.C. and Section 11 of the Suits Valuation Act is the same, namely, that when a case had been tried by a Court on the merits and judgment rendered, it should not be liable to be reversed purely on technical grounds, unless it had resulted in failure of justice, and the policy of the legislature has been to treat objections to jurisdiction both territorial and pecuniary as technical and not open to consideration by an appellate Court, unless there has been a prejudice on the merits. Therefore, order of High Court is set aside and matter is remitted back to High Court

High Courts

Chennai

• Balakumar and Ors. Vs. Inspector of Police, Arcot Town Police Station

Appellant-accused assaulted deceased as result of which deceased succumbed to death in hospital. Thereafter, appellants A1 to A5 were charged and convicted under Sections 147 and 302 read with 149 IPC and A6 under Section 201 IPC. A6, 6th appellant, was subsequently arrayed as accused after the evidence was closed, but the Trial Court without conducting de novo trial, impleaded 6th Appellant and procedure as contemplated under Section 319 Cr.PC was not followed. Chief examination of all prosecution witnesses were over without conducting fresh chief examination and 6th Appellant was permitted only to cross examine prosecution witnesses and thus opportunity of seeing demeanor of prosecution witnesses at the time of adducing chief examination was denied for 6th Appellant. Hence, present appeal. Whether judgement of Trial Court is valid in view of fact that A6 was not afforded a proper opportunity to cross-examine prosecution witnesses and procedure contemplated under Section 319 Cr.P.C. was not followed? Held, it is seen from records that 6th Appellant was arrayed as A6, only after prosecution evidence was closed. Therefore, it would not be a reasonable opportunity to 6th Appellant as he was permitted only to cross examine prosecution witnesses without providing opportunity to see demeanor of witnesses as chief examination is also equally important in a trial. Therefore, as far as 6th Appellant is concerned, prosecution witnesses have to be examined afresh and opportunity should be given for 6th Appellant to cross examine witnesses. As Court below has delivered a common judgment, so far as A1 to A5 and A6, Court could have split up case of A1 to A5 and delivered judgment separately. As far as 6th Appellant, A6 is concerned, it could have conducted trial afresh, in order to provide reasonable opportunity to 6th Appellant to cross examine prosecution witnesses. Learned Government Advocate has not disputed legal aspect that case has to be remitted back to Trial Court, to split up case and dispose them, according to law, in view of Section 319(4)(a) of Code of Criminal Procedure. Therefore, it is reasonable to set aside common judgment and remit back same to Trial Court.

• Raji Vs. State by Inspector of Police, Maduranthakam Police Station, Kancheepuram District

Appellant-husband along with his father was charged with the offence of ill-treating, demanding dowry and then murdering his wife. Trial Court acquitted father of appellant but convicted appellant under Section 304B and 498A IPC. Appellant challenged judgement of trial court on ground that the post mortem Doctor has not given a positive opinion regarding the cause of death and that apart from the evidence of P.W. 1 and P.W. 2, parents of deceased-wife, there is no positive material to come to a conclusion that the death of the deceased is due to homicidal violence. Hence, present appeal. Whether trial court had correctly appreciated the evidence adduced by prosecution and convicted appellant? Held, in so far as actual offence of homicide of deceased is concerned, witnesses examined are P.W. 4 and P.W. 5 and they have been treated as hostile. Medical evidence of P.W. 7 to P.W. 9 do not support case of prosecution version that death has been caused due to homicidal violence. The hyoid bone is intact and no superficial injury is found on the neck of the deceased. On a perusal of the Observation Mahazar and report of RDO, one can safely reach a conclusion that the deceased had committed suicide. To support such conclusion statement of Appellant given to RDO during the course of his enquiry can be taken into consideration. Appellant in that statement has narrated the quarrel between him and his wife prior to the occurrence and the deceased, thereafter had committed suicide by hanging. In such circumstances, conclusion reached by Trial Court is erroneous and offence alleged by prosecution is not made out. Therefore, conviction and sentence passed against appellant is set aside and appellant is acquitted of all charges.

Gujarat

• Gujarat Ship Breakers' Association Vs. State Of Gujarat and Anr.

Petitioner-Association, a Non Trading Corporation, were granted permission by Central Government for bulk supply of LPG and an order was issued to Indian Oil Corporation to provide petitioners with of 1000 Metric Tonnes every quarter on ground that petitioners would set up a LPG bottling plant as soon as possible in conformity with statutory safety requirements and after procurement of necessary licenses. Accordingly, petitioners established a bottling plant, purchased cylinders, started refilling cylinders and supplied same on no profit no loss basis to its members. Thereafter, an inspection of petitioner’s premises was carried out and it was found that petitioners did not possess requisite license and were not maintaining records as required under 1981 Control Order. Therefore, District Collector passed an order confiscating gas cylinders of petitioner-Association. Collector held that petitioners fell within definition of term “dealer” and as they have not obtained a license, they had committed breach of 1981 Control Order and an association of persons or a Non Trading Corporation would also be deemed to be a “seller” and as petitioners have not obtained necessary requisite license, goods could be confiscated. Being aggrieved by said order of confiscation, petitioners preferred an appeal to State Government, which came to be dismissed. Hence, present petition. Whether petitioner-Association fell within the definition of “dealer” of 1981 Control Order? Held, a Non Trading Corporation, which is registered under provisions of law can sue or be sued in its own name, it is a legal entity and has juridical capacity to sue and to be sued. Once a Non Trading Corporation owns an article and is involved in sale and purchase of articles, then, such Non Trading Corporation would become a dealer, because, it purchases property in its own name and thereafter distributes it to its members. Present is not a case where petitioners say that after receiving consignment they are directly supplying goods to their members, their case is that they are working on no profit no loss basis, however, fact remains that they have established a bottling plant, they are refilling bottles and are supplying filled gas cylinders. The moment they say that they are undertaking some expenses for refilling and supplying gas cylinders to their members, then, they become dealers also. They cannot be allowed to say that because goods are purchased for consumption by members and as Corporation is supplying goods to members, there is no transaction of sale. It is not disputed nor it is case of petitioners that after purchasing goods from Indian Oil Corporation, they are selling same to their members, they are receiving price or cost of articles from their own members. Qua members, petitioners become a seller and such member becomes purchaser, on second occasion, petitioners would become a dealer. The definition further says that persons so included in definition if are engaged in business of purchase, sale or storage for sale of any essential article, whether or not in conjunction with any other business and includes its representative, agent or as case may be, commission agent. Their case is that they are a Non Trading Corporation. Even if they are representative of members or agent or commission agent, then again, definition would cover them within sweep of “dealer”. Therefore, petition is dismissed.

Press Information Bureau

• Finance Bill, 2007 passed by Lok Sabha including the amendments introduced in the Bill

PIB Dated 03.05.2007: The Lok Sabha passed the Finance Bill 2007, including the amendments introduced by the Government on 3rd May, 2007. The major relief proposed by the Finance Minister while moving Government amendments are

Direct Taxes: The business of developing or operating and maintaining or developing, operating and maintaining any infrastructure facility has been included in the positive list of businesses and industries under the proposed amendment in clause (23FB) of section 10. The valuation of perquisite in the nature of rent free or concessional rent accommodation owned and provided by the non-Governmental employer to his employee is proposed to be reduced to 7.5% of salary (for cities having population of 10 lakhs and below), 10% of salary (for cities having population of more than 10 lakhs, but not more than 25 lakhs) and 15% of salary (for cities having population of more than 25 lakhs). The amount paid or recovered from employee for the rent of the accommodation will thus get reduced from this valuation. The Income-tax Act is proposed to be amended to provide for tax-neutral amalgamation or demerger of co-operative banks. Hence, the amalgamated or resulting co-operative bank will be able to set-off and carry forward the unabsorbed loss or accumulated depreciation of the amalgamating or demerged cooperative bank. Investment in rural bonds of NABARD, as notified by the Central Government, is proposed to be included in the list of permissible investment under section 80C. New section 80-IE is proposed to be inserted for providing fiscal incentives as contained in North Easter Industrial and Investment Promotion Policy, 2007, to units located in North-Eastern States and State of Sikkim.

Indirect Taxes: Excise duty: Excise duty on texturised vegetable proteins has been reduced from 8% to Nil. Similarly, excise duty on ready to eat packaged food has been reduced from 8% to Nil. Water Purification Equipment based on ultra-filtration technology using polysulphone membranes have been fully exempted from excise duty.

Customs Duty: Cut and polished diamonds have been fully exempted from customs duty. Customs duty on nickel and articles of nickel has been reduced from 5% to 2%. Full exemption from customs and excise/CV duty has been extended to aircrafts and their parts, imported/procured for providing 'Non-scheduled Air transport (passenger) services and Non-scheduled Air transport (charter) services, subject to specified conditions.

RBI

DBOD

• Complaints about excessive interest charged by banks

Circular No. DBOD No. Dir.BC.93/ 13.03.00/2006-07 Dated 07.05.2007: The Reserve Bank vide the above circular notifies that the Reserve Bank and Banking Ombudsmans' offices have been receiving several complaints regarding levying of excessive interest and charges on certain loans and advances. Accordingly, a reference is invited to Reserve Bank's Master Circular DBOD. Dir.BC.5/ 13.03.00/ 2006-07 dated July 1, 2006 advising banks to have an objective and transparent policy approved by their Boards for the purpose of fixing interest rates on loans and advances. In the case of short-term advances granted to small and marginal farmers, Reserve Bank has also advised banks to ensure that interest applied does not exceed principal amount. Further, though interest rates have been deregulated, rates of interest beyond a certain level may be seen to be usurious and can neither be sustainable nor be conforming to normal banking practice. Boards of banks are, therefore, advised to lay out appropriate internal principles and procedures so that usurious interest, including processing and other charges, are not levied by them on loans and advances. In laying down such principles and procedures in respect of small value loans, particularly, personal loans and such other loans of similar nature, banks may take into account, certain broad guidelines like: An appropriate prior-approval process should be prescribed for sanctioning such loans, which should take into account, among others, the cash flows of the prospective borrower; Interest rates charged by banks should incorporate risk premium as considered reasonable and justified having regard to the internal rating of the borrower. The total cost to the borrower, including interest and all other charges levied on a loan, should be justifiable having regard to the total cost incurred by the bank in extending the loan and an appropriate ceiling may be fixed on the interest, including processing and other charges that could be levied on such loans, which may be suitably publicised.

• RBI direction for not allowing listed defaulted companies to deal with the money transaction in their accounts in pursuance of the Patna High Court advise

Circular No. DBOD. No. Dir. BC. 91 /13.26.00/2006-07 Dated 30.04.2007: The Hon'ble Patna High Court vide its order dated April 10, 2007 has directed the Reserve Bank of India to direct all the banks that the companies which have been declared as 'defaulted companies' be not allowed to deal with the money transaction in their accounts. Therefore vide present circular, RBI advises all the banks to ensure that no money transaction of the companies, declared as 'defaulted companies' by the Hon'ble Patna High Court be allowed in bank or their respective branch offices.

• Reduction in Risk Weight on residential housing loans

Circular No. DBOD.BP.BC. 92 /21.01.002/ 2006-07 Dated 03.05.2007: As per terms of circular No.DBOD.BP.BC.61/21.01.002/2004-05 dated December 23, 2004, risk weights on housing loans extended by banks to individuals against mortgage of housing properties and investments in Mortgage backed Securities (MBS) of Housing Finance Companies (HFCs), recognised and supervised by NHB were increased to 75% for capital adequacy purposes. Accordingly, banks have been advised from time to time to tighten their credit administration in this area in particular and RBI in terms of present circular advises that it has been decided to reduce the risk weight in respect of housing loans up to Rs. 20 lakh to individuals against the mortgage of residential housing properties from 75% to 50%. Similarly, the risk weight for banks’ investment in mortgage backed securities, which are backed by housing loans which would now qualify for 50% risk weight, and are issued by the housing finance companies regulated by the National Housing Bank is also reduced from 75% to 50%.

Cases

• Rudolph International, Inc. Vs. Realys, Inc.

Plaintiffs and defendants are involved in the manufacture and marketing of abrasive nail files and related products. Plaintiff tested and developed a line of nail files that could withstand the disinfection process in response to a California regulation that required nail technicians to disinfect all instruments used on multiple customers. Plaintiff thereafter used the term “disinfectable” in product packaging and advertising. Plaintiff also applied to the Patent and Trademark Office (“PTO”) to register “disinfectable” as a trademark, but its application was rejected. Defendants then started using the term “disinfectable” on its nail files. Asserting trademark rights in the term “disinfectable,” plaintiff sent defendant a letter asking defendant to stop using said term on its product but defendant continued to use the term. Therefore, plaintiff filed a suit against defendant for trademark infringement and related claims. District court ruled in favour of defendant holding that the term “disinfectable” has a clear and readily understandable meaning and therefore “disinfectable” is a generic term when used in the nail file industry and cannot be the subject of trademark protection. Hence, present appeal. Held, Generic terms cannot be protected trademarks. The district court correctly found that the term “disinfectable” has a history of established use as a generic adjective within the nail care industry as well as in other fields such as medicine and dentistry. Where, an allegedly valid trademark has not been registered with the PTO, the plaintiff bears the burden of persuasion that the mark is not generic. The district court correctly held that plaintiff failed to introduce sufficient evidence to meet its burden of persuasion that “disinfectable” is not a generic mark. Therefore, judgement of district court is affirmed.

• Perfect 10, Inc. Vs. CCBILL LLC and Netpass Systems Inc

The plaintiff is the publisher of the eponymous adult entertainment magazine and the owner of the website, perfect10.com. Perfect10.com is a subscription site where consumers pay a membership fee in order to gain access to content on the website. Plaintiff’s website, Perfect 10, has created images of models for display in its website and magazine. Plaintiff website also holds registered U.S. copyrights for these images and owns several related, registered trademark and service marks. Defendants provide webhosting and related Internet connectivity services to the owners of various websites. Apparently, plaintiff filed suit alleging that defendants violated copyright, trademark, and state unfair competition, false advertising and right of publicity laws by providing services to websites that posted images stolen from plaintiff’s magazine and website. Plaintiff argued that defendants implemented their repeat infringer policy in an unreasonable manner because defendants received notices of infringement from plaintiff and yet the infringement identified in these notices continued. District Court held that defendants qualified for certain statutory safe harbors from copyright infringement liability under the Digital Millennium Copyright Act (“DMCA”) under 17 U.S.C. § 512, and that plaintiff did not provide notice that it substantially complied with the requirements of § 512(c)(3), and thus did not raise a genuine issue of material fact as to whether defendants reasonably implemented their repeat infringer policy. Hence, present appeal. Held, Compliance is not “substantial” if the notice provided complies with only some of the requirements of § 512(c)(3)(A). Section 512(c)(3)(B)(ii) explains that a service provider will not be deemed to have notice of infringement when “the notification that is provided to the service provider’s designated agent fails to comply substantially with all the provisions so long as the service provider responds to the inadequate notice and explains the requirements for substantial compliance. The statute thus signals that substantial compliance means substantial compliance with all of § 512(c)(3)’s clauses, not just some of them. Plaintiff’s communications do not substantially comply with the requirements of § 512(c)(3). Each communication contains more than mere technical errors; often one or more of the required elements are entirely absent. In order to substantially comply with § 512(c)(3)’s requirements, a notification must do more than identify infringing files. Therefore since plaintiff did not provide effective notice, knowledge of infringement may not be imputed to defendants based on plaintiff’s communications. Plaintiff’s attempted notice does not raise a genuine issue of material fact that defendants failed to reasonably implement a repeat infringer policy within the meaning of § 512(i)(1)(A).

News

• Clemency denied by German President for former Baader-Meinhof terrorist

German President, Horst Koehler, refused to grant a plea for clemency in respect of an imprisoned former terrorist, who was a member of the Red Army Faction, commonly known as the Baader-Meinhof gang, a radical leftist group that killed 34 people before disbanding in 1998. Accused was convicted of involvement in numerous murders, including those of Chief West German Federal prosecutor Siegfried Buback and the Head of Dresdner Bank, Juergen Ponto.

• DOJ not opposing House immunity for Goodling testimony on firings

The US Department of Justice (DOJ) will not try to block Congress's decision to grant immunity to former DOJ official Monica Goodling to testify about the firing of eight US Attorneys. In a letter to House Judiciary Committee Chairman John Conyers, Inspector General Glenn Fine and counsel to the Office of Professional Responsibility H. Marshall Jarrett said that while they prefer that Goodling would not receive immunity, they will not object to the panel's decision. Both the Inspector General and the Office of Professional Responsibility are investigating whether Goodling, who is the former special counsel to US Attorney General Alberto Gonzales, violated federal law by considering the political affiliations of US Attorneys in making firing decisions. Goodling told the committee in March that she would not speak to the committee about her role in the firings and stated through her lawyer that she would seek protection under her Fifth Amendment right against self-incrimination if the committee issued her a subpoena. She resigned from her position at the Justice Department last month. The House Judiciary Committee voted to give Goodling immunity in exchange for her testimony in late April.

• Indonesia prosecutors appeal Newmont Mining pollution acquittal

Indonesian prosecutors registered their appeal against the acquittal of American Richard Ness, the regional chief executive of Denver-based Newmont Mining Corporation and Newmont's local subsidiary on criminal pollution charges. An Indonesian court acquitted Ness and Newmont last month and after registering the appeal, prosecutors now have an additional two weeks to specify the grounds for appeal. Ness and Newmont were accused of dumping arsenic and mercury into the waters of Indonesia's Buyat Bay. Prosecutors had requested a three-year prison term for Ness and $110,000 fine against Newmont.

• Pakistan High Court halts disciplinary inquiry into suspended Chief Justice

The Pakistan Supreme Court suspended an investigation into misconduct charges against former Chief Justice of Pakistan Iftikhar Chaudhry. Pakistan's Supreme Judicial Council (SJC) has been conducting an inquiry into Chaudhry's alleged misconduct, but Chaudhry appealed to the Supreme Court, arguing that the SJC lacked competence to try the case. The former CJ’s lawyer told that the court decided that the case should instead be heard by the full Supreme Court. The high court will begin considering Chaudhry's suspension. The former CJ was technically made "non-functional" by a March 9 order of Pakistan President Pervez Musharraf. No specifics were provided at the time of his suspension but documents subsequently disclosed suggest he was officially removed on suspicion of misusing his influence to get his son jobs and promotions. Lawyers and opposition leaders critical of the move say, however, that the suspension was an assault on the independence of the country's judiciary and an indirect bid by Musharraf to continue his eight-year rule in an election year.

• Ecuador launches truth commission to investigate past rights abuses

The government of Ecuador has set up a truth commission [declaration and articles, in Spanish] to investigate rights abuses committed in the country beginning in the early 1980s, a period that includes the 1984-88 presidency of right wing politician León Febres Cordero. The four-member commission, announced by current leftist President comprises of a lawyer, two human rights activists, and a member who lost two sons who were apparently "disappeared" during the regime of Febres Cordero. The commission follows in the wake of others recently established in Guatemala, Peru and Chile to address wrongs and abuses committed during recent "dirty wars" and harsh regimes.