Late plea of coercion not acceptable
In another judgment involving the appointment of an arbitrator, the Supreme Court emphasised that a mere plea of fraud, coercion or undue influence by one party is not enough to get an arbitrator appointed unless the allegations are backed by satisfactory evidence on record. In this case, United India Insurance vs Antique Art Exports Ltd, the company had purchased a policy covering fire and special perils. There was an accident in the factory and two claims were made. The insurer paid both and the exporter sent a reply accepting the computation made by the insurer and attaching a final discharge voucher. However, after 11 weeks, the exporter alleged that the vouchers were given under duress. It moved the Delhi High Court, requesting it to appoint an arbitrator. The high court appointed one on the ground that since there were allegations of duress, the issue should be settled in arbitration. The insurer appealed to the Supreme Court. It set aside the high court order observing that it committed a manifest error by passing the order mechanically and pointing out the delay in raising the complaint after sending the discharge voucher.
Denial of compensation upheld
The claim of an infrastructure company that sought compensation from its insurer alleging damage to road because of excessive rainfall was rejected as meteorological data showed that there was little rain on those days. In Mahavir Road & Infrastructure Ltd vs Iffco Tokio General Insurance Co, the infrastructure company had undertaken the resurfacing, metalling and asphalting of roads in Nashik. It took out an insurance policy covering 'material damage' but excluding ‘normal wear and tear’. The company claimed compensation from the insurer for damage to the roads due to "abnormal rainfall and water logging". The claim was rejected on the ground that the damage had been caused by defective workmanship and there was no rain on the days mentioned by the builder. The dispute led to a complaint before the National
Consumer Commission. The commission rejected the claim relying on the survey report which stated that there was only surface damage and there was no washout due to rain. On appeal, the Supreme Court again rejected the claim, asserting that the evidence showed that the claim was baseless.
Power to attach property under PMLA
In a 100-page judgment, the Delhi High Court last week laid down 17 rules for confiscating tainted property under the Prevention of Money-Laundering Act (PMLA). There might be sovereign claims by the state as against genuine claims by third parties. The court ruled that the enforcement officer has the authority to attach not only a property acquired illegally but also any other asset of equivalent value of the money-launderer. If the tainted property is not enough or is not traceable or reachable, the officer can attach any asset of the accused person as “deemed tainted property”. The five appeals were filed by the Directorate of Enforcement against the orders of the appellate tribunals and involved claimants like Axis Bank, SBI and PNB.
CCI can prosecute firms for disobedience
Failure to pay penalty under the orders of the Competition Commission of India would lead to criminal prosecution, the Delhi High Court has emphasised in two cases. The commission had issued notices to Rajasthan Cylinders and the Federation of Film Distributors of Kerala on the allegations of anti-competitive practices by them. They did not respond to the notices for a long time. The commission, therefore, imposed heavy penalty on them, based on the number of days they failed to comply with the notices. It added up to Rs 5 lakh in the case of the LPG cylinder manufacturers and Rs 35 lakh against the film distributors. They challenged the prosecution by the metropolitan magistrate before the high court, arguing that the commission cannot punish them for not replying to the notices and also impose a penalty. That would amount to penalising them twice for the same offence, known as ‘double jeopardy’ in constitutional law. The court rejected this argument and dismissed their petitions.
Penalty for passing off others’ goods
The commercial division of the Delhi High Court last week imposed costs and penalty totalling Rs 13 lakh on a Delhi firm for passing off products of a well-known brand in luxury goods. In this case, Louis Vuitton Malletier vs Iqbal Singh, the French company alleged that its products were being imitated by a Delhi firm, violating trademark and copyright laws and causing loss of reputation and revenue. The latter denied the charge stating that it was in “innocent use” of the name Louis Vuitton for nearly a decade. They were in parallel business and their products were superior to that of the foreign firm. The court concluded that the Delhi firm was guilty of ‘passing off’ and ordered a permanent injunction against it barring it from using deceptive trademarks and logos.