[No.203]

Supreme Court

• District Red Cross Society V. Babita Arora and Ors.

Respondent nurse working in appellant's hospital was transferred to De-Addiction Centre due to closure of Appellant's maternity hospital which was not acceptable to respondent and so she was terminated. Respondent then filed claim petition before Industrial Tribunal that the appellant management had not followed due procedure in Sections 25F to 25H of the Industrial Disputes Act during termination as no retrenchment compensation was paid to her at the time of termination and so prayed for reinstatement of services with full back wages. Tribunal held that the appellant Society was running a Drug De-Addiction-cum-Rehabilitation Centre, a Family Planning Centre and a Viklang Kendra and thus it cannot be said that the establishment of the appellant had been closed. It was further held that the respondent had completed more than 240 days of service in the year preceding the date of termination of her service and, therefore, she was entitled to reinstatement compensation which had not been given by the management and thus termination of her service was in violation of Section 25F of the Act. On these findings, the Tribunal held that the termination of service of the respondent was illegal and contrary to law and accordingly gave an award directing her reinstatement with continuity of service and full back wages from the date of demand notice. Appellant challenged the awards of the Tribunal by filing writ petitions in the High Court. The High Court also dismissed the writ petitions endorsing the view held by the Tribunal. Hence, present appeal. Held, the position in law is well settled that if the entire establishment of the employer is not closed down but only a unit or undertaking is closed down which has no functional integrity with other units or undertaking, the provisions of Section 25FFF of the Act will get attracted and the workmen are only entitled to compensation as provided in Section 25FFF of the Act which has to be calculated in accordance with Section 25F of the Act. The Tribunal and also the High Court clearly erred in holding that as other units of the appellant Red Cross Society like Drug De-Addiction-cum-Rehabilitation Centre, Family Planning Centre and Viklang Kendra were functioning, the termination of services of the respondent would amount to retrenchment. The Maternity Hospital was functioning as a distinct entity. It was not receiving any grant from the Government and was being run entirely on charitable basis from donations received from public. Due to financial stringency, the Maternity Hospital had to be closed down. The other three units, viz., Drug De-Addiction- cum- rehabilitation Centre, Family Planning Centre and Viklang Kendra are receiving grants from government and are functioning as separate entities and the mere fact that they have not been closed down, cannot lead to the inference that the termination of services of the respondent was by way of retrenchment which was illegal on account of non-compliance of the provisions of Section 25F of the Act. Appeal is allowed

• Food Corporation of India and Ors Vs Ramesh Kumar

Respondent employee working with Appellant-Corporation applied for voluntary retirement which he later revoked. However, despite respondent employee's application for withdrawal of voluntary retirement, appellant accepted respondent's application for voluntary retirement. Same was challenged by respondent before High Court. High Court allowed respondent employee's request for withdrawal of voluntary retirement. Hence, present appeal. When the applicant has made the application for withdrawal before it could be accepted, can the Food Corporation of India still enforce the offer of voluntary retirement upon the incumbent? Held, as per the decision in State Bank of Patiala v. Romesh Chandra Kanoji, the position stands settled that in case of a V.R.S. Scheme of State Bank of India where 15 days' time limit for revocation has been laid down in case the incumbent withdraws his offer within 15 days then the offer given by the incumbent cannot be treated against him and it will be deemed that he has revoked his offer. In case of other banks there is a condition that once the offer has been given it shall not be permitted to be revoked but in view of the above decision the incumbent can still withdraw the offer if it has not been accepted by the Management. Now adverting to the present scheme of the Food Corporation, para 8 clearly stipulates that the incumbent has no right to revoke the same and the Management will decide the same within three months. That means the Management still has three months' time to consider and decide whether to act upon the offer given by the incumbent or not. But if the incumbent revokes his offer before the Corporation accepts it then in that case, the revocation of the offer is complete and the Corporation cannot act upon that offer. In the present Clause there is one more additional factor which is that the Management has to take a decision within three months. Therefore, once the revocation is made by the incumbent before three months then in that case the Corporation cannot act upon the offer of voluntary retirement unless it is accepted prior to its withdrawal. The revocation therefore, made by the incumbent of his offer of retirement cannot be acted upon as he has revoked it before the Corporation could act upon it. Hence, the view taken by the High Court is correct. Appeal is dismissed.

High Courts

Madras

• Sun TV Limited Vs. Tata Sky Limited and The Telecom Disputes Appellate Tribunal, represented by its Registrar

First respondent-Tata filed suit before second respondent Tribunal on ground that petitioner-Sun TV refused access of its channels on a non-discriminatory basis to first respondent as laid down in the applicable regulation of TRAI. While the matter was pending before the Tribunal, first respondent moved Delhi High Court for writ of mandamus to direct tribunal to grant interim orders. Thereafter, a meeting for amicable settlement took place but same failed. Tribunal then granted interim orders in favour of first respondent. Hence, present petition. First respondent however, challenged territorial jurisdiction of Madras High Court to entertain writ petition holding that Tribunal which passed interim orders was based in Delhi. Whether Madras High Court has jurisdiction to entertain writ petition? Held, it has been held by the Supreme Court in its catena of judgments, that even if a fraction of a cause of action has arisen within the territorial jurisdiction of a court, that is sufficient for the court concerned to entertain a petition which cannot be dismissed on the ground that the court does not have territorial jurisdiction to deal with the said petition. In the instant case, admittedly, the petitioner is having its registered office in Chennai and carrying on its business in Chennai. Therefore, petition dismissed.

• Board of Trustees of Chennai Port Trust rep. by its Chairman Vs. Ircon International - Sree Bhavani Builders (Joint Venture) and Others

Petitioner, a public sector undertaking awarded a building contract to first respondent joint venture wherein government has 22% stake and private party has 78% stake. A dispute arose between parties and dispute was referred by first respondent before Arbitral Tribunal. While matter was pending before Tribunal, petitioner filed a memo before Arbitral Tribunal stating that since both parties are public sector undertakings a clearance from Cabinet Committee was required before dispute is raised before Tribunal and that Arbitral Tribunal cannot pass orders in said matter before getting clearance of Cabinet Committee as Arbitral Tribunal is also a tribunal and is a substitute to regular court of law. Hence, present petition. Whether clearance of Cabinet Committee is required before raising dispute before Tribunal in present case? Held, Honourable Supreme Court in Oil & Natural Gas Commission v. Collector of Central Excise directed the Government of India to set up a committee to monitor disputes between public sector undertakings to ensure that no litigation comes to Court or to a tribunal without the matter having been first examined by the committee. However, in this case, the first respondent is a joint venture, consisting of a partnership firm and a public sector undertaking having stakes of 78% and 22% respectively. Hence, the contract between the petitioner and the first respondent cannot be construed just between two public sector undertakings. Petition dismissed.

Gujarat

• The State Of Gujarat V M/S.Sindh Ayurvedic Pharmacy

Assessee-Ayurvedic Pharmacy engaged in manufacture of Gulkand for medicinal purposes claimed that the Gulkand manufactured by it was a medicinal preparation and therefore, exigible to tax at the rate of 4% under Entry 26(1) of Schedule II-A to Gujarat Sales Tax Act. However, Sales Tax Authority took the view that Gulkand manufactured by the assessee should be treated as foodstuff and so would fall within Entry No.6 of Schedule III to the Act and therefore, not exigible to tax at the rate of 4%. On appeal, Tribunal came to the conclusion that the Gulkand manufactured and sold by the assessee was an ayurvedic medicinal preparation, which is administered in the treatment of diseases stated in Ayurvedic Pharmacopoeia and, therefore, the Gulkand is covered by Entry 26(1) of Part-A of Schedule II to the Act and not either under Entry 6 of Schedule III or Entry 13 of Schedule III to the Act. Hence, present revision by Revenue. Whether Tribunal is justified in holding that the Gulkand manufactured and sold by the assessee is covered by entry 26(1) of Schedule-II-Part-A of the Gujarat Sales Tax Act, 1969 and not either under entry 6 of Schedule-III or under entry 13 of Schedule-III of the Act? Held, medicine would mean, which is admisnistered either internally or externally in the treatment of disease or relief of sickness. The word medicine appearing in Part A of Schedule II to the Act will have to be interpreted not in technical sense, but as understood in common parlance, i.e. in the popular sense of it being a remedial agent. The evidence produced by the assessee makes it very clear that it is administered in the treatment of the diseases. Further, in Ayurvedic Pharmacopoeia published by the Government also, it is treated as medicinal preparation. Therefore, there is no good reason for not treating the Gulkand manufactured by the assessee as medicine because it is shown that the article has capacity and capability of curing or remedying diseases and is administered in the treatment of several diseases. Therefore, question of law is answered in affirmative, i.e. in favour of the assessee and against the Revenue.

Telecom Regulatory Authority of India (TRAI)

• TRAI Releases Consultation Paper on Headend-In-the-Sky (HITS) to Promote Digital Transmission

Press Release No. : 66/2007 Dated 24.07.2007: TRAI has released a consultation paper on Headend-In-The-Sky (HITS). HITS is a satellite based delivery platform for delivering multi channel television signals to cable operators across the country. It is capable of delivering TV signals in digital form with addressability feature. The Ministry of Information and Broadcasting, Government of India had requested TRAI to formulate and recommend the policy guidelines for HITS operation. Accordingly, the consultation paper on HITS has views from various stakeholders on various policy issues such as scope of HITS operation; spectrum band for its operation; FDI Limit; Entry fee, annual fee and spectrum fee; Uplinking restrictions and Cross holding restrictions.

RBI 

DBOD

• Discounting / Rediscounting of Bills by banks

Notification No: DBOD.BP.BC.NO.26/21.02.070/2007-08 Dated 03.08.2007: RBI vide Master Circular RBI/2006-2007/43. DBOD.No.Dir.BC.9/13.03.00/ 2007-08 dated July 2, 2007 on Loans and Advances - Statutory and Other Restrictions had notified that banks should purchase / discount / negotiate bills under Letter of Credit (LC) only in respect of genuine commercial and trade transactions of their borrower constituents who have been sanctioned regular credit facilities by the banks. Banks should not, therefore, extend fund-based credit facilities (including bills financing) to a non-constituent borrower or a non-constituent member of a consortium / multiple banking arrangement. Further, the practice of drawing bills of exchange claused 'without recourse' and issuing letters of credit bearing the legend 'without recourse' should be discouraged because such notations deprive the negotiating bank of the right of recourse it has against the drawer under the Negotiable Instruments Act. Banks should not, therefore, open LCs and purchase / discount / negotiate bills bearing the 'without recourse' clause. However, RBI vide the present circular clarifies that in cases where negotiation of bills drawn under LC is restricted to a particular bank, and the beneficiary of the LC is not a constituent of that bank, the bank concerned may negotiate such an LC, subject to the condition that the proceeds will be remitted to the regular banker of the beneficiary. However, the prohibition regarding negotiation of unrestricted LCs of non-constituents will continue to be in force. The banks may also negotiate bills drawn under LCs, on 'with recourse' or 'without recourse' basis, as per their discretion and based on their perception about the credit worthiness of the LC issuing bank. However, the restriction on purchase/discount of other bills (the bills drawn otherwise than under LC) on 'without recourse' basis will continue to be in force.

DBS

• Remuneration Payable to the Statutory Central and Branch Auditors of Public Sector Banks from the year 2006-07

Circular No. DBS.ARS.BC. No. 3/ 08.92.001/ 2007-08 Dated 25.07.2007: RBI vide circular DBS.ARS.No.BC.08/08.92.001/2006-07 dated June 06, 2007 had issued guidelines on remuneration payable to statutory central and branch auditors of public sector banks for the year 2006-07. Vide the present circular, RBI clarifies that as regards fees in respect of tax audit the SCAs may be assigned the Tax Audit work at the banks' Head Office level; in order to maintain transparency and a fair distribution of work arrangement amongst the SCAs, tax audit work may be allotted by the banks to one of the existing SCAs by rotation and in consultation with the SCAs/ ACB and that the fee for tax audit payable to SCAs may continue to be paid at 20% of basic audit fee. The system will be effective from the current year i.e. 2007-08. As regards the year 2006-07, the fee payable for tax audit at HO/Controlling Office and branches may be paid at the existing rate of 20% and 15% of basic audit fee to SCAs and branch auditors respectively.

Ministry of Corporate Affairs

• Appoints Registrar of Companies, Tamil Nadu as Registrar for Registration of Companies Under the Companies Act, 1956

Notification No: SO1291(E) Dated 30.07.2007: Vide the present notification, it is notified that the Central Government in exercise of the powers conferred by Sub-section (2) of Section 609 of the Companies Act, 1956 (1 of 1956), appoints the Registrar of Companies, Tamil Nadu as the Registrar for registration of companies under the said Act in the Union Territory of Andaman and Nicobar Islands with effect from 20th August, 2007.

Ministry of Human Resource Development

• Appointed Dated For Enforcement of the Tripura University Act, 2006

Notification No : SO1054(E) Dated 29.06.2007: The Central Government in exercise of the powers conferred by sub-section (2) of Section 1 of the Tripura University Act, 2006 (9 of 2007) has notified the 2nd day of July, 2007 as the date on which the provisions of the said Act shall come into force.

Ministry of Social Justice and Empowerment

• Exemption to Specified Categories of Posts Under Section 33 of the Person with Disabilities (Equal Opportunities Protection of Rights and full Participation) Act, 1995

Notification No : SO1110(E) Dated 22.06.2007: Vide the present circular the Central Government notifies that in exercise of the powers conferred by proviso to Section 33 of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 19%), Central Government, having regard to the type of work carried on exempt the posts Section Engineer, Station Controller, Train Operator, Assistant Station Controller, Jr. Station Controller, Maintainers/Skilled Artisans, Sr. System Analysts/System Analysts and any other technical post in Delhi Metro Rail Corporation (DMRC) which involves requirement of public safety from the provisions of the said Section.

Cases

• Benitec Australia , LTD., v. Nucleonics, INC.,

Plaintiff company sued defendant for infringing U.S. Patent "'099 patent", which relates to RNA-based disease therapy. Both parties are biotechnology companies that are engaged in gene silencing, which involves silencing the expression of disease-causing genes. Thereafter, defendant filed a request with the U.S. Patent and Trademark Office ("PTO") for reexamination of the '099 patent alleging that the inventor named in the '099 patent may have misappropriated the idea for the invention from others, or at least should have named others as co-inventors on the patent application. Thereafter, defendant sought leave of court to amend its answer and add declaratory relief counterclaims of invalidity and unenforceability based upon alleged inventorship fraud. Then, plaintiff moved to dismiss its complaint that it had no viable infringement claim against defendant. Trial court dismissed defendant's declaratory judgment and counter claims against plaintiff on ground of lack of subject matter jurisdiction. Hence, present appeal. Held, a party seeking to base jurisdiction on the Declaratory Judgment Act bears the burden of proving that the facts alleged, "under all the circumstances, show that there is a substantial controversy, between the parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment". In this case defendant appellant has not made a showing of "sufficient immediacy and reality" to support declaratory judgment jurisdiction. The district court's judgment of dismissal for lack of jurisdiction is therefore, affirmed.

• In Re Omega Sa (OMEGA AG) (OMEGA LTD.)

Plaintiff, a watch company appeals the decision of the Trademark Trial and Appeal Board (TTAB) of the United States Patent and Trademark Office (PTO), sustaining the Trademark Attorney's refusal to register plaintiff's trademark AQUA TERRA in Class 14 for "jewelry, precious stones; watches, watch straps, watch bracelets and parts thereof; unless plaintiff amended its trademark application to limit the phrase "chronographs" to "chronographs for use as watches." The Trademark Attorney refused plaintiff's application for registration of AQUA TERRA in Class 14, on the ground that the term "chronographs" can refer not only to watches in Class 14, but also to time recording instruments in Class 9 such as timepieces. Plaintiff however, contended that the term "chronograph" is internationally understood in the watch industry although plaintiff does not dispute that "chronograph" can also designate time recording instruments. However, plaintiff argues that the PTO should not now require this additional qualification to the United States registration because the parent Swiss registration is based on International Class 14, which includes "chronographs [watches]," "chronometers," and "chronometrical instruments." Further, plaintiff points out that the United States has adopted the International Classification and it applies to all applications filed on or after September 1, 1973, and their resulting registrations, for all statutory purposes. PTO challenged same on ground that the requirement of a more precise description of goods for a United States registration is not governed by the international classification, nor by the existence of any foreign registration or other domestic registration for similar goods. Hence, present appeal. Held, the scope of the term "chronographs" is ambiguous for registration purposes, for it includes both watches and time recording devices. Plaintiff states that the only chronographs with which it uses the mark are "watches." The PTO has discretion to determine whether and how a trademark registration should include a more particularized statement of the goods for which the mark is be used; in the circumstances here the PTO did not abuse its discretion in determining that the term "chronographs" in the registration should be restricted to those "for use as watches." No basis for challenging this requirement has been shown. Therefore, judgment of TTAB affirmed.

News

• Pakistan Court Allows Prosecutors to Reopen Corruption Case Against Exiled former-PM

A Pakistani court ruled that government prosecutors may reopen their investigation into alleged corruption committed by exiled former Prime Minister Nawaz Sharif, dealing a blow to Sharif's bid to return to Pakistan. Sharif, exiled for 10 years to Saudi Arabia in exchange for the government dropping its investigation in 2000, petitioned the Supreme Court of Pakistan for the right to return earlier this year. Legal observers say the government's bid to reopen the case against Sharif, who was overthrown by Pakistani President Pervez Musharraf in a 1999 military coup, is a preemptive measure in case the Supreme Court issues a ruling favorable to Sharif. If Sharif returns to Pakistan while the corruption case is pending, he could face detention.

Earlier, the Supreme Court of Pakistan ordered the government to produce complete voter registration records, a move that may hinder Musharraf's bid to extend his eight-year rule by another five years. Government lawyers had sought 140 days to produce the records, which would have extended beyond the November elections, but the Court ordered them due within 30 days of the ruling.

• FTC Appeals Ruling Allowing Whole Foods to Proceed With Acquisition

The US Federal Trade Commission (FTC) filed an appeal with the Court of Appeals for the DC Circuit Friday contesting a DC District Court decision allowing organic food company Whole Foods Market to buy rival grocer Wild Oats Markets. The District Judge refused to issue an injunction blocking the acquisition saying that it did not violate US antitrust laws. The FTC argues that the merger will limit competition in the organic food market, thereby hurting consumers. Whole Foods, however, maintains that it must still compete with traditional food markets that are beginning to offer more organic varieties. Whole Foods has agreed to not complete the acquisition prior to August 20 but may continue with the buyout afterwards if no injunction is granted.

• Netherlands Reaches Agreement With UN to host Hariri Tribunal

The government of the Netherlands reached an agreement with the United Nations to host the ad hoc tribunal that will investigate and try suspects involved in the 2005 assassination of former Lebanese Prime Minister Rafik Hariri. In July, UN Secretary-General Ban Ki-moon formally asked the Netherlands to host the tribunal saying that The Hague had valuable experience in hosting international tribunals as it is the site of the International Court of Justice, the International Criminal Court, and the International Criminal Tribunal for the former Yugoslavia. The UN International Independent Investigation Commission (IIIC) is set to turn its investigation over to the tribunal after the IIIC's mandate expires in December. The tribunal, which was unilaterally established by the UN Security Council in May, will be known as the Special Tribunal for Lebanon. It will also investigate and possibly try suspects in 17 other attempted and successful political assassinations in Lebanon.

• Interpol Issues Warrant for Daughter of Saddam Hussein

Interpol issued an arrest warrant for Raghad Saddam Hussein, daughter of the former Iraqi dictator, on charges of terrorism. Interpol circulated the warrant to member countries, accusing Raghad of supporting insurgencies in Iraq. Last year, Iraq placed Raghad and her mother, Saddam Hussein's first wife Sajida, on its most-wanted list, accusing the two of using secretly-looted money to fund Baathist insurgents.

• FISA Court to Consider Making Wiretapping Rulings Public

A judge on the secret Foreign Intelligence Surveillance Act (FISA) court said in an order that the court would consider what she called an "unprecedented" ACLU motion to release to the public hitherto-classified rulings on the extent of the US government's wiretapping authority. Judge Colleen Kollar-Kotelly directed the government to file a response to the motion by August 31. The Foreign Intelligence Surveillance Court does not hold public hearings and has traditionally confined itself to releasing annual summaries of the number of wiretaps it has approved. Its only public rulings were released in 1981 and 2002, the latter dealing with interpretation of the USA Patriot Act.