[No.225]

Supreme Court

• Deputy Commissioner of Income Tax, Ahmedabad v.Core Health Care Ltd.

Assessee claimed deduction towards expenses aggregating which included interest on borrowings. During assessment year under consideration Assessee had installed new machinery. The Assessing Officer disallowed the deductions. On appeal CIT (A) confirmed the addition of interest amount on borrowings to the income of the Assessee. However, Tribunal and thereafter High Court held that the Assessing Officer was not justified in making disallowance in respect of borrowings utilized for purchase of machinery. Hence, the present appeal. Whether interest paid in respect of borrowings on capital assets not put to use in the concerned financial year can be permitted as allowable deduction under Section 36(1)(iii) of Income Tax Act. Held, Section 36(1)(iii) is attracted when the Assessee borrows the capital for the purpose of his business. It does not matter whether the capital is borrowed in order to acquire a Revenue asset or a capital asset, because Section requires is that the Assessee must borrow the capital for the purpose of his business. In the present case, even though the machinery has not been actually used in the business at the time when the assessment was made, the same has to be treated as a business asset as it was purchased only for business purposes. In the circumstances, the interest paid on the amount borrowed for purpose of such machinery is certainly a deductible amount. Assessing Officer is not justified in making disallowance in respect of borrowings utilized for the purchase of machines. Therefore, question answered in favour of the assessee and against the Department.

• Basic Education Board, U.P. v. Upendra Rai and Ors.

Respondent held a Diploma in Education (D.Ed) from DIET Jabalpur, MP. A Circular dated 11.8.1997 was issued by the U.P. Government which rescinded the recognition of D.Ed. Respondent got appointment as an Assistant Master in a Junior Basic School after the issuance of the concerned Circular. Appellant challenged said appointment contending that the Respondent got appointment after the issuance of the rescinded Circular and therefore, the Circular applies to the Respondent as well. Further, Appellant contended that the matter was a policy decision of the UP government and that the Court cannot interfere with the policy decisions unless it is in violation of some statutory or constitutional provision. However, Division Bench held that Respondent had the requisite qualification for the post of Assistant Master. Hence, present appeal. Held, as the Respondent admittedly got appointment after the issuance of Circular dated 11.8.1997, the Circular applies to him as well. Further, as this was a policy decision of the U.P. Government, and the Court cannot interfere with policy decisions of the Government unless it is in violation of some statutory or constitutional provision, the Respondent is not entitled to be appointed as Assistant Master of a Junior Basic School in U.P. Grant of equivalence and /or revocation of equivalence is an administrative decision which is in the sole discretion of the concerned authority, and the Court has nothing to do with such matters. A person who does not have the qualification mentioned in Rule 8 cannot validly be appointed as an Assistant Master or Assistant Mistress in a Junior Basic School. Therefore, Division Bench wrongly held that the Respondent had the requisite qualification for being appointed as an Assistant Master in a Junior Basic School. Impugned order is set aside.

High Courts

Karnataka

• The Academy of General Education, Manipal, rep. by the Registrar Sri K.K. Pai and Anr. v. Smt. B. Malini Mallya, Udupi Taluk and District

Deceased, a noted Kannada literary figure, got his will registered and bequeathed copyrights of his literary works to plaintiff. Plaintiff-respondent filed suit alleging that Defendant-Appellant tried to copy a distinctive dance form developed by deceased which had been bequeathed to plaintiff and had thus infringed plaintiff's copyright over said dance form. Trial Court decreed suit in favour of plaintiff. Defendant however challenged same on ground that plaintiff was bequeathed with copyright of deceased's literary works and not dramatic works. Hence, present appeal. Whether plaintiff is entitled to copyright in dramatic works of deceased? Held, bequest of copyright in literary works and books will have to be treated as the bequest covering dramatic works also, since dramatic works is also a form of literature. Hence, necessity of mentioning copyright separately in respect of dramatic works does not arise. The Plaintiff, therefore, is entitled to copyright even in respect of dramatic works.

Bombay

• Shri Madhav Bhalchandra Joshi, Vasind v. Vidya Vikas Mandal, Thane, Saraswati Vidyalaya, Thane, Learned Presiding Officer, School Tribunal, New Mumbai and State of Maharashtra

Petitioner, a teacher with Respondent-Society School, filed two suits for recovery of damages against Respondents. While said suits were pending before the Civil Court, the petitioner was suspended. A departmental enquiry was then held into charges against the petitioner and thereafter, petitioner was dismissed from service without even obtaining the sanction of the Education Officer. Petitioner filed appeal against said order of Respondent before School Tribunal. Tribunal dismissed the appeal holding that the petitioner had already filed civil suits with the same cause of action and therefore, cannot obtain relief for the same cause of action before another forum. Hence, present petition. Held, civil suits filed by the petitioner, as was mentioned in the appeal memo itself, were much before the date of chargesheet or date of suspension. There was no connection between the issues pending before the Civil Court in both the Civil Suits and the grievance raised before the School Tribunal. Therefore, the School Tribunal passed a mechanical order without even adverting to the appeal memo and thus committed a manifest error in holding that the Petitioner could not seek relief for the same cause of action before two different forums. Petition allowed.

Madras

• D'zine Garage Pvt. Ltd., Chennai, v. D'zine Café FZE, Chennai and Dubai, UAE

Respondent-plaintiff filed for ad-interim injunction claiming trademark infringement by Applicant-Defendant in respect of plaintiff's registered trade mark "D'Zine" used with regard to online communications and multimedia presentations. Applicant-defendant challenged same contending that the trademarks in question are not similar. Further, that "D'zine" being a generic, plaintiff is not entitled to exclusive right over same. Trial Court however, granted interim injunction in favour of plaintiff. Hence, present application by defendant for rejection of plaint. Held, Supreme Court Heinz Italia v. Dabur India Ltd held that to grant ad-interim injunction principle of similarity cannot be strictly applied. However, phonetic similarity cannot be ignored; prior user must be proved and dishonest intention must be there. In the case on hand, there is phonetic similarity. Prior user is established and there is no specific denial of the charge that the Defendant is taking advantage of the Plaintiff's mark. Therefore, ad-interim injunction is granted. Application is rejected.

Ministry of Home Affairs

• Central Government Directions Regarding Exercise of Powers Under Section 7 and 8 of the Unlawful Activities (Prevention) Act, 1967 in Relation to Specified Unlawful Association

Notification No. SO483(E) Dated 12.03.2008:-The Central Government by virtue of powers conferred by sub-section (1) of Section 3 of the Unlawful Activities (Prevention) Act, 1967 (37 of 1967), had declared the "Students Islamic Movement of India (SIMI)" as an unlawful association vide notification number S.O.276(E), dated the 7th February, 2008. Vide the present circular, the Central Government in exercise of the powers conferred by Section 42 of the said Unlawful Activities (Prevention) Act, 1967, directs that all the powers which are exercisable by it under Sections 7 and 8 of the said Act shall be exercised also by the State Governments and the Union Territory Administrations in relation to the aforesaid unlawful association.

RBI

• RBI Releases Second Draft of Guidelines on Recovery Agents for Public Comments

Press Release No. 2007-2008/1235 Dated 25.03.2008: The Reserve Bank of India released the second draft of the Guidelines on Recovery Agents for public comments. The revised guidelines include provision of recording of calls made by recovery agents to customers and vice versa, placing of updated list of recovery agents on bank's website, periodical verification of antecedents of employees of recovery agents which may include verification through police, additional conditions for repossession of assets. The revised guidelines have also provided for continuation of recovery proceedings if the borrower continuously makes frivolous/vexatious complaints and utilisation of credit counsellors' services if the case of a particular borrower deserves sympathetic consideration.

IRDA

• File and Use Guidelines for General Insurance Products and Relaxation of Price Controls

Circular No. 66/IRDA/F&U/Mar-08 Dated 26.03.2008: The Authority vide the "File & Use Guidelines Circular No. 021/IRDA/F&U/SEP-06 dated 28 th September 2006" had stipulated that insurers shall not vary the coverage, terms and conditions, wordings, warranties, clauses and endorsements in respect of covers that are currently under tariff till 31 st March 2008 . Insurers may file their proposals for changes in cover, terms, wordings, etc for such products from a date to be notified by the Authority, but to be given effect to after 31 March 2008. Vide the present circular the Authority notifies that it has decided that pending examination of common market wordings proposed by General Insurance Council, Insurers shall continue to use the coverage, terms & conditions, wordings, warranties, clauses and endorsements of the erstwhile tariff classes of insurance covers until further orders.

• Declares Specified Industry to be a Public Utility Service for the Purpose of Industrial Disputes Act, 1947

Notification No. SO482(E) Dated 12.03.2008: The Central Government in pursuance of the provisions of the Industrial Disputes Act, 1947 had declared by Notification S.O.2751 dated 17-09-2007 that the service in Hindustan Aeronautics Limited to be a public utility service for the purpose of the said Act, for a period of six months from 24th September, 2007. Vide the present circular, as the Central Government is of the opinion that public interest requires the extension of the said period by a further period of six months, it declares the said industry to be a Public Utility Service for the purposes of the said Act, for a period of six months from the 24th March, 2008.

Cases

• Rodwell Arlie Anthony Poole, v. Michael b. Mukasey, Attorney General of the United States

Petitioner, a permanent resident of US was ordered to be removed from the country by the Immigration Judge for being convicted of crime of aggravated felony. Petitioner challenged same stating that even though he was a permanent resident, he had derived citizenship through his mother who had become a citizen of the country and therefore, he could not be removed from the country. However, the Board of Immigration Appeals dismissed his claim. Hence, present appeal. Held, petitioner's mother was naturalized nine months after petitioner's eighteenth birthday and he appears to fail to satisfy the timing requirement of subsection 1432(a)(4) of 8 U.S.C. §. However, there might be some basis for relieving petitioner of the requirement that his mother was naturalized prior to his eighteenth birthday. She applied for citizenship when he was 16. The record provides no indication why the Government took two years to process her application. A more expeditious processing, if completed within two years, would have provided Petitioner with derivative citizenship. An inexplicable delay on the part of the INS in processing a parent's citizenship application should not defeat a child's claim for derivative citizenship. Therefore, matter remanded back to lower court.

• Jonathan Segal. V. Geisha Nyc llc

Plaintiff, owner of premium restaurant "Japonais", filed infringement suit against defendant who was co-founder of plaintiff's restaurant as well as owner of another restaurant named "Geisha" which used a similar concept and trademark as that of "Japonais". District Court dismissed said suit holding that the operating agreement between the co-founders expressly authorizes "any two Founders to expand the restaurant concept and to do so using the intellectual property of the parent restaurant" and therefore, there is no infringement. Hence, present appeal. Held, where the trademark holder has authorized another to use its mark, there can be no likelihood of confusion and no violation of the Lanham Act if the alleged infringer uses the mark as authorized. Because the operating agreement between the co-founders authorized the use of intellectual property of parent restaurant, plaintiff's Lanham Act claim fails as a matter of law. Judgement of lower court affirmed.

News

• Belarus Courts Sentence Protesters After Anti-Lukashenko Rally

Belarusian district courts sentenced at least 55 demonstrators for participating in a banned "Freedom Day" rally in Minsk to protest against Belarus President. "Freedom Day" first began as a celebration of Belarus' 1918 declaration of independence but has in recent years become a protest against the President's authoritarian policies. Some protesters, including journalists, were sentenced to three to 15 days in jail while others were fined as much as $500. Officials at the Belarus Interior Ministry said that a total of 70 people face charges of public disorder. The UN General Assembly Third Committee and the International Helsinki Federation for Human Rights have denounced Belarus for human rights abuses. The US and the European Union have imposed sanctions on Belarus pending the release of all political prisoners.

• Bush Administration Asks Federal Appeals Court to Rehear Mercury Emissions Case

The Bush administration has filed an appeal of a ruling by a panel of the US Court of Appeals for the DC Circuit invalidating new less-stringent mercury emissions rules issued by the US Environmental Protection Agency. In February, the panel ruled that the "cap-and-trade" policy, to be implemented in 2010 by the EPA to regulate electrical power plant mercury emissions, is effectively invalid. The policy would permit power plants whose mercury emissions exceed the regulatory cap to buy "credits" from other power plants whose emissions fall below the cap. The ruling also struck down the EPA's decision to remove coal- and oil-fueled power plants from the list of utilities subject to the strictest emissions controls. The Bush administration has asked for an en banc review by the full US Court of Appeals for the DC Circuit. The original lawsuit was brought by a coalition of 16 states that argued that the mercury pollution rules would endanger children living near power plants that buy credits to pollute over the EPA limit. The EPA argued that its Clean Air Mercury Rule would result in a more than 70 percent reduction in mercury emissions from utilities.

• Egypt Court Sentences Newspaper Editor for President Mubarak health 'rumors'

A court in Egypt sentenced the former editor of weekly newspaper al-Dustour to six months in prison after convicting him on charges of spreading "rumors" about the health of Egyptian President Hosny Mubarak in an August newspaper report. In June 2006, the former editor was sentenced to one year in prison for publishing a report critical of Mubarak, but an appeals court reduced the sentence. Under Egyptian law, citizens may file lawsuits against individuals who make statements that harm society, and the accused can face criminal punishment if found guilty.

• Canada Supreme Court hears Khadr Appeal on Government Documents Access

Lawyers for Guantanamo detainee Omar Khadr argued before the Supreme Court of Canada that the Canadian government should be compelled to turn over confidential documents that they say led to Khadr's charges and are therefore necessary for a fair trial. Khadr is seeking documents that Canada allegedly provided to US authorities, along with videotapes of Khadr's 2003 interrogations at Guantanamo Bay and uncensored transcripts. In May 2007, the Canadian Federal Court of Appeal overruled a lower court decision barring Khadr's access to documents compiled by Canadian officials following interviews with Khadr. In October 2007, the Supreme Court agreed to hear the appeal by Canadian Justice Department lawyers opposing the access.

• Nebraska Legislature Rejects Death Penalty Ban

A Nebraska bill that would have banned the death penalty, replacing it with a sentence of life in prison without parole, failed in the Nebraska Legislature, receiving only 20 of the 25 necessary votes to move forward. Last month, the Nebraska Supreme Court ruled that execution by electric chair, the only method authorized in the state, was "cruel and unusual" punishment and therefore prohibited by the Nebraska constitution. Nebraska Governor Dave Heineman voiced support for the death penalty, saying that the legislature should decide on a new means of execution that can pass constitutional muster.