[No.201]

Supreme Court

• National Insurance Co. Ltd. V. Smt. Sobina Iakai and Ors.

Appellant insurance company issued an insurance policy to respondent but same got expired. The insured bus then met with an accident killing two persons. The accident took place at 9.15 a.m. on 20.7.1994 and policy then was renewed on 20.7.1994 at 2.00 p.m. A claims petition was filed in the Motor Accident Claims Tribunal which was allowed by the Tribunal ignoring the specific terms of the insurance policy and averment of appellant company that insurance was not in existence at the time the bus met with the accident. On appeal, High Court held that the appellant insurance company is liable to pay compensation for the reason that the Cashier and the Development Officer have not been produced by the appellant company. Hence, present appeal. Held, The insurance policy and the motor renewal endorsement were on record. Both these documents were produced and proved by the appellant company. Therefore, the Tribunal and High Court have seriously erred in ignoring these basic and vital documents and deciding the case against the appellant company on the ground of non-production of the Cashier and Development Officer. In Kalaivani and Ors. v. K. Sivashankar and Ors. JT 2001 (10) SC 396 the Court observed that it is the obligation of the Court to look into the contract of insurance to discern whether any particular time has been specified for commencement or expiry of the policy. In order to curb the widespread mischief of getting insurance policies after the accidents, it is absolutely imperative to clearly hold that the effectiveness of the insurance policy would start from the time and date specifically incorporated in the policy and not from an earlier point of time. Appeal is allowed.

• B. Arvind Kumar V. Government of India and Ors.

Plaintiff-appellant alleged that land in question was leased in perpetuity by Defendant-respondent Military authorities to his predecessor and predecessor constructed buildings on suit land. As the predecessor in question came to be insolvent, father of appellant brought suit land in sale by auction and came to be in possession and enjoyment of suit land, which later came to be vested in plaintiff-appellant. Thereafter, appellant was dispossessed of suit land by force by respondent Military in 1975. Plaintiff-appellant then filed a civil suit against same after sending a notice to respondents in 1984. Suit was resisted by defendant –respondent Military on ground that predecessor of appellant was only a lessee and therefore, plaintiff even if he was the successor-in-interest could under no circumstances claim absolute ownership. Said suit came to be allowed in part. On appeal against same before High Court by respondent, High Court allowed appeal holding that lease in question was not a lease in perpetuity and that lease certificate in favour of plaintiff's father was not followed by a registered instrument transferring the lessee's interest in favour of plaintiff's father. Therefore, no title was conveyed to plaintiff's father, in regard to the suit land. Hence, present appeal. Whether High Court was right in holding that the sale certificate did not convey any right, title or interest to plaintiff's father for want of a registered deed of transfer? Held, when a property is sold by public auction in pursuance of an order of the court and the bid is accepted and the sale is confirmed by the court in favour of the purchaser, the sale becomes absolute and the title vests in the purchaser. A sale certificate is issued to the purchaser only when the sale becomes absolute. The sale certificate is merely the evidence of such title. It is well settled that when an auction purchaser derives title on confirmation of sale in his favour, and a sale certificate is issued evidencing such sale and title, no further deed of transfer from the court is contemplated or required. In this case, the sale certificate itself was registered, though such a sale certificate issued by a court or an officer authorized by the court, does not require registration. Section 17(2)(xii) of the Registration Act, 1908 specifically provides that a certificate of sale granted to any purchaser of any property sold by a public auction by a civil or revenue officer does not fall under the category of non testamentary documents which require registration under Sub-section (b) and (c) of Section 17(1) of the said Act. Therefore, High Court committed a serious error in holding that the sale certificate did not convey any right, title or interest to plaintiff's father for want of a registered deed of transfer.

High Courts

Bombay

• 'Goenkarancho Ekvot V. Union of India

Petitioner society claimed to be working for and on behalf of people of the State of Goa. They filed suit against respondents who are owners of Trade Mark “Goa 1000 Gutka” claiming that respondents cannot use the word “Goa” in their trademark as the word 'Goa' is derived from the Mundari word 'GoanBab', meaning “inclined ear of paddy” and is an expression of prestige for the residents of Goa. Therefore, respondents cannot use the said word in relation to Gutka and other harmful products and that said act of respondents violate the provisions of the Emblems And Names (Prevention of Improper Use) Act, 1950. A petition filed against same by petitioners was dismissed by the High Court of Delhi. Hence, present petition. Whether present writ petition is maintainable in present form? Held, this does not appear to be a public interest litigation satisfying the ingredients laid down by the Supreme Court in its various judgments. In the petition, there is no reference that the respondents concerned had taken any steps of making representation to any Competent Authority prior to filing of this Writ Petition. It is a settled rule of law that before seeking a mandamus, the petitioner should approach, for appropriate relief, the authorities concerned, upon whom an obligation to discharge their duty lies, before invoking the extraordinary jurisdiction of the Court under Article 226 of the Constitution of India. In the entire petition, there is no reference made by the petitioner that they have made an application to the Registrar of Trade Marks having jurisdiction or the Appropriate Government under the provisions of any statute. Therefore, writ petition dismissed.

• Shaikh Zahid Mukhtar, Bhiwandi, Thane v. The Commissioner of Police, Thane, The Dy. Commissioner of Police, Bhiwandi City and The State of Maharashtra

Petitioner, a member of the muslim community filed present petition to declare the Maharashtra Animal Preservation Act, 1976 as unconstitutional. The petitioner alleged that the said Act was violative of petitioner’s right to practice his religion as it prohibited the slaughter of cows in the State of Maharastra and as a practicing Muslim it was his religious obligation to slaughter cow, sheep, camel etc as per availability during the festival of Bakri-Id. Hence, present petition. Held, Advocate for the petitioner was unable to show any verse in the Quran which makes it mandatory for a Muslim to sacrifice a cow. No material was placed to say that this is a mandatory practice. In the State of Maharashtra, unlike the State of Gujarat, there is no total ban on the slaughter of adult male cows (bulls and bullocks). The ban is restricted to “cows” which are defined under Section 3(b) of Impugned Act. In the State of Gujarat not only is there a complete prohibition on the slaughter of cows but unlike the State of Maharashtra there is a complete prohibition on the slaughter of bulls and bullocks. Thus in the State of Maharashtra, the restrictions are less stringent and the complete ban covers females in the category of cows in all ages as well as male calves. Even the more stringent provisions in the laws prevalent in the State of Gujarat have been upheld by the Constitution bench of the Apex Court. Therefore, there is no substance in present petition.

Prakash Vishnupant Tile and Vishwamber Vishnupant Tile, since deceased through LRs. Vijendra Madhukar Tile Petitioners v. Ramchandra Ganesh Pathak, since deceased through his L Rs.

Appellants-plaintiffs landlords filed for eviction on ground of default in payment of rent with permitted increases, bona fide requirements and change of user and breach of the terms of tenancy agreement. The Trial Court on assessment of the evidence decreed the eviction on the ground of default in payment of rent and permitted increases. However, on appeal, the Lower Appellate Court held that there was no reference to agreement of monthly payment of rent or permitted increases by defendant tenant and so set aside decree passed by the Trial Court. Hence, present petition. Held, in the case of Raju Shetty a three-Judge Bench of the Apex Court held, that the payment of education cess under the Maharashtra Education (Cess) Act, 1962 is the liability of the landlord to pay annually but the landlord has a right to recover the amount so paid from his tenant in addition to the standard rent and the said amount will fall within the ambit of “permissible increases” within the meaning of Section 5(7) of the Bombay Rent Act. It further held, that failure to make payment of these permitted increases would fall within the ambit of Section 12(3)(a) of the said Act. Having regards to the evidence as available on record led by both the parties, the landlord was successful in proving that he was entitled for a decree under Section 12(3)(a) of the Bombay Rent Act and the reasoning set out by the Lower Appellate Court in setting aside the said decree is unsustainable. In the Advocate’s notice at Exh. 66 it was clearly stipulated that there was an agreement for payment of rent on monthly basis at the rate of Rs. 65 per month and in addition the tenant was liable to pay the education cess and the employment guarantee cess. The same was reiterated in the plaint by the Plaintiffs. It is, therefore, obvious that the Lower Appellate Court fell in manifest error on reading the evidence and in fact recorded a finding contrary to the evidence on record. It also fell in grave error in interpreting the provisions of Section 12(3)(a) of the Rent Act. Petition is allowed.

SEBI

Mutual Fund

• SEBI Bimonthly Compliance Test Reports (CTRs)

Circular No. SEBI/IMD/CIR No. 6/98057/07 Dated 05.07.2007: SEBI in order to synchronize the frequency of submission of compliance certificate by the Asset Management Company (AMC) to the trustees and CTR by the AMC to SEBI, had vide circular no. SEBI/IMD/CIR No.11/36222/2005 dated March 16, 2005 stipulated filing of CTR once in every two months. With an objective of effective and relevant disclosure to the regulator, it has been decided that instead of filing complete CTR with SEBI, the AMCs shall only do exceptional reporting on a bimonthly basis. While the format and contents of CTR would continue, the AMCs would be required to report to SEBI only the exceptions in the CTR i.e. the AMCs shall report for only those points in the CTR where it has not complied with the same. The details sought in the annexures of the CTR shall be furnished to SEBI in case of non-compliance only along with the exception report. This exception report shall also be placed before the board of trustees.

Press Information Bureau

• Approval to introduction of a Bill purposing to Amend the Payment of Gratuity Act, 1972

PIB Dated 26.07.2007: The Union Cabinet today gave its approval for introduction of a Bill in the coming Session of the Parliament for amendment of section 2(e) of the Payment of Gratuity Act, 1972 to insert the following definition of "employee". Accordingly, " Employee" means any person (other than an apprentice) who is employed for wages, whether the terms of such employment are expressed or implied, in any kind of work, manual or otherwise, in or in connection with the work of a factory, mine, oilfield, plantation, port, railway company, shop or other establishment, to which this Act applies, but does not include any such person who holds a post under the Central Government or a State Government and is governed by any other Act or by any rules providing for payment of gratuity.' This will result in coverage of teachers in the educational institutions under the Payment of Gratuity Act, 1972.

RBI

Press Release

• Appointment of UCBs as agents / Sub- agents under Money Transfer Service Schemes

Circular No. UBD (PCB) Cir No. 8/16.12.000/2007-08 Dated 17.07.2007: RBI had issued circular UBD.POT/14/09.132.00/02-03 dated September 16, 2002 prohibiting UCBs (Urban Co-operative Banks) to act as agents/sub-agents under Money Transfer Service Schemes. However, the matter has been revisited and it has been decided that UCBs holding AD category I or II category licence may act as agents/sub-agents under Money Transfer Service Schemes which are in conformity with the guidelines issued by our Foreign Exchange Department, subject to conditions that bank's adherence to AML/KYC standards should be satisfactory; The principal should maintain foreign currency deposits (USD) with the designated bank in favour of the agent which, at present, is equivalent to 3 days' average payout or USD 50, 000 , whichever is higher; Where the UCB is acting as a sub-agent, the agent should also maintain with the designated bank, security deposits equivalent to 3 days' average payout or Rs 20.00 lakh, whichever is higher, in favour of the UCB sub-agents concerned; the UCBs should ensure that the payouts not reimbursed do not, at any point of time, exceed the security deposits placed by the overseas principal /agent, as the case may be and No UCB should appoint any other UCB/entity as its sub-agent.

Insurance Regulatory and Development Authority (IRDA)

• Guidelines for Closure of Liaison Office established in India by Insurance Companies registered outside India

Circular No. IRDA/ 024/ Closure-FLO/ 2007-08 Dated 17.07.2007: The Government of India have entrusted the regulatory work pertaining to Liaison offices of Insurance companies w.e.f. 06 th December, 2005 to IRDA. In continuation thereof, the IRDA, now issues the following guidelines for closure of Liaison Office established in India by insurance companies registered outside India. Accordingly, requests for closure of Liaison Office shall be submitted to Insurance Regulatory and Development Authority in form IRDA-FIC-2 attached as Annexure “1”. The application for closure of Liaison Offices shall be submitted along with certified copy of the IRDA’s permission for establishing the branch / liaison office in India. A Chartered Accountant’s certificate shall also be submitted indicating the manner in which the remittable amount has been arrived at and supported by a statement of assets and liabilities of the applicant, and indicating the manner of disposal of assets; confirming that all liabilities in India including arrears of gratuity and other benefits to employees etc. of the office have been either fully met or adequately provided for confirming that no proceeds accruing from sources outside India has remained un-repatriated to India and No-objection/ Tax Clearance Certificate from Income Tax authority for the remittance; or an undertaking from the applicant and a certificate from the Chartered Accountant regarding undertaking to be obtained from a person making remittance of foreign exchange as advised by RBI from time to time (AP (Dir Series) Circular No.56 of 26 th November, 2002 of RBI may be referred to), and confirmation from the parent entity that no legal proceedings in any court in India are pending against the Liaison Office and there is no legal impediment to the closure/ remittance. Also approval for closure and remittance of proceeds is granted provided the Liaison Office has submitted the Annual Activity Certificate for all the years for which it was in operation in India. The certificate is submitted by the Chartered Accountant of the Liaison Office, stating that the Liaison Office has complied with the terms and conditions stipulated by IRDA at the time of granting approval.

Ministry of Labour and Employment

Notification No. SO1085(E) Dated 03.07.2007: The Central Government, after consultation with the Central Advisory Contract Labour Board and having regard to the conditions of work and benefits provided for the con- tract labour and other relevant factors enumerated in Sub-section (2) of the said Section, prohibits the employment of contract labour in the specified godowns and depots of Food Corporation of India specified in the Schedule and in the works of loading, unloading, stacking, destacking, restacking, standardization, weightment, sweeping and cleaning.

Cases

• Untied States Court of Appeals for the Ninth Circuit

Perfect 10, Inc. V. Visa International Service 

Plaintiff-appellants publishes the magazine “PERFECT10” and operates the subscription website www.perfect10.com., both of which “feature tasteful copyrighted images of the world’s most beautiful natural models.” Plaintiffs alleged that numerous websites based in several countries have stolen its proprietary images, altered them, and illegally offered them for sale online. However, instead of suing the direct infringers in this case, plaintiffs sued Defendants which are financial institutions that process certain credit card payments to the allegedly infringing websites. Plaintiffs alleged that it sent Defendants repeated notices specifically identifying infringing websites and informing Defendants that some of their consumers use their payment cards to purchase infringing images. However, Defendants took no action in response to the notices after receiving them. So, plaintiffs sued defendants alleging secondary liability under federal copyright and trademark law and liability under California statutory and common law. It sued because Defendants continue to process credit card payments to websites that infringe plaintiff intellectual property rights after being notified by plaintiff of infringement by those websites. The district court dismissed all causes of action under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. Hence, present appeal. Held, plaintiff alleged that Defendants aided and abetted the websites’ violations of plaintiff’s rights of publicity, acquired by assignment from its models, in violation of Cal. Civil Code § 3344 and the common law right of publicity. This aiding and abetting claim fails for the same reasons as the aiding and abetting claims under unfair competition and false advertising. Even if such liability is possible under California law, a proposition for which plaintiff has provided no clear authority. Defendants lack sufficient control or personal involvement in the infringing activities to be so liable. Therefore, judgement of lower court is affirmed.

• Zomba enterprises, inc.; zomba songs, inc., v. Panorama records, inc.,

Defendants, purveyor of karaoke discs, entered the business of recording and selling karaoke discs without considering whether doing so they infringed the intellectual property rights of others. They had not acquired copyright or licenses to the use of songs in the CDs sold by them. Plaintiffs, music publishing corporations, are in the business of exploiting musical compositions for commercial gain” and toward this purpose, plaintiffs held and administered the copyrights to a variety of musical compositions, including songs performed by pop music performers. Defendants, started selling CDs with songs for which copyright were held by plaintiffs. Plaintiff therefore, filed suit against defendant. District court held in favour of plaintiffs and directed defendants to pay compensation to plaintiffs. Defendants challenged same on ground that infringement was not wilful and therefore trial court could not award compensation. Hence, present appeal. Held, defendants exhibited a reckless disregard for plaintiff’s rights, and therefore, defendant’s reliance on its fair-use defense was objectively unreasonable. The defendants continued to sell karaoke packages containing copies of each of the relevant compositions after the district court entered its consent order forbidding defendants from doing so. Therefore, district court’s conclusion that defendant’s infringements were willful and accordingly granted statutory damages is justified.

News

• Australia lifts travel ban for Dr. Haneef after prosecutors drop terror charge

Australian Immigration and Citizenship Minister Kevin Andrews told reporters that the Australian government has given Dr. Mohammad Haneef permission to leave Australia, reversing a previous decision to place the former terror suspect under home detention. Haneef's transfer to home detention followed the Australian chief prosecutor's decision Friday to drop the terror charge Haneef faced in connection with June's attempted UK car bomb attacks. Haneef, who has not been implicated by UK authorities in the attacks, departed for Bangalore, India shortly after Andrews' announcement. Haneef's lawyer, Peter Russo said that Australian immigration authorities have made the lifting of restrictions on Haneef's travel conditional upon Haneef not speaking to the media or allowing himself to be photographed. Russo said that Haneef will continue his appeal against the revocation of his work visa at the Federal Court of Australia.

• Anti-terror bill goes to Bush for signature

The US Congress sent an anti-terror bill to President George Bush for signature. The bill, based on recommendations by the 9/11 commission would transfer funds to states and cities found to be at high risk for terrorist attacks. It also includes a provision to screen all air and sea cargo coming into the US within five years. The bill passed the Senate by 85-8 and the House by 371-40. Bush has said he will sign the legislation. Critics have argued that the technology does not exist to efficiently monitor cargo without interrupting trade; as a compromise, the bill allows the Homeland Security secretary to extend the five-year deadline in two-year increments if necessary. The White House has also expressed displeasure with a requirement that intelligence community budgets be made public.

• Taiwan moving forward with UN membership referendum

Taiwanese Foreign Minister James Huang said that a national referendum on Taiwan's membership in the United Nations would proceed despite opposition from China. The United Nations Office of Legal Affairs rejected Taiwan's fifteenth bid for member state status, reiterating the One-China Policy and recognizing the People's Republic of China as the legitimate government of China. Chinese Foreign Ministry spokesperson Liu Jianchao has characterized Taiwan's latest effort to join the UN as a "separatist act of the 'Taiwan Independence' secessionist forces,", pointing to the UN Charter's requirement that only sovereign states can apply for UN member status. The referendum is largely symbolic, and its backers must secure one million signatures to put the issue on the ballot. Taiwan, which officially refers to itself as the Republic of China, was kicked out of the UN in 1971 by General Assembly Resolution 2758 and replaced by the PRC as the representative of China.

• Sudan to appeal $8M judgment in USS Cole bombing case

The government of Sudan said that it will appeal a US court verdict ordering it to pay $7.96 million in compensation to the families of 17 US Navy personnel killed in the 2000 al Qaeda attack on the USS Cole. Sudanese Justice Minister Mohammed Ali al-Mardi denied that Sudan bore any responsibility for the bombing and said that, as a sovereign state, it could not be tried in a US court. The families had sought $105 million for pain and suffering, but the federal Death on the High Seas Act limits compensation to only economic damages.

• Former Qwest CEO sentenced to six years for insider trading

An US District Judge sentenced former Qwest Communications CEO Joseph Nacchio to six years in prison and ordered him to pay the maximum $19 million fine and forfeit of $52 million in assets obtained through insider trading. Nacchio, who was convicted of 19 counts of insider trading in April, had faced a maximum sentence of up to 10 years in prison and a $1 million fine for each count. Nacchio, who will also be required to serve two years of probation, illegally sold 1.33 million Qwest shares valued at $52 million between April 26 and May 29, 2001 before news of Qwest's accounting scandal broke. In December 2005, prosecutors indicted Nacchio on 42 counts of insider trading. Nacchio and other former Qwest executives are still facing a class action lawsuit and other civil charges brought on by the Security and Exchange Commission.

• EU accuses Intel of antitrust violations

The European Commission (EC) confirmed that its Directorate General for Competition has sent a Statement of Objections (SO) to semiconductor manufacturing giant Intel, notifying the company that the EC believes it has abused its dominant position in the x86 architecture processor market to exclude its biggest rival Advanced Micro Devices (AMD) from the market. The SO, alleges that Intel violated the Treaty of Rome's antitrust prohibitions by providing "substantial rebates" to various Original Equipment Manufacturers (OEMs) if the OEMs purchased the majority of their processors from Intel. Intel Senior Vice President and General Counsel Bruce Sewell responded to the allegations Friday, saying that "Intel's conduct has been lawful, pro-competitive, and beneficial to consumers" and that Intel will respond directly to the EC's concerns. The EC has given the company ten weeks to respond, and may impose fines against Intel if it does not satisfactorily address the EC's concerns.