Cheque case, right to appeal, corruption PILs: Here are key court orders

SC steps in to speed up cheque cases

The Supreme Court has called for reports from all high courts in the country regarding the implementation of its directions on trials under the Negotiable Instruments Act. A detailed judgment was passed last year in the case, Meters and Instruments Ltd vs Kanchan Mehta, with orders to speed up procedure in trial of persons accused of issuing cheques without sufficient fund in the bank. The Supreme Court passed a follow-up order last week in the case, Gulshan Dhall vs Atbit Singh. In this case, the court wan­ted to know the progress made by the high courts in following its directions.

The judgment of last year dealt with, among other things, compounding offence if the payee accepts the cheque amount with compensation, cost and interest, exempting the accused from appearing in person before the magistrate, and punishment. Relaxing the rules, the court had stated that “where the cheque amount with interest and cost as assessed by the court is paid by a specif­i­ed date, the court is entitled to close the proceed­ings.” The Supreme Court also introduced modern technology when it said it would be open to the high courts to lay down the cate­gory of cases where proceedings could be conducted online.

Right to appeal cannot be curbed

An appeal before the Competition Appellate Tribunal cannot be dismissed just because a party could not fulfil the condition for getting a stay, the Supreme Court stated in the judgment, Himmatlal vs Competition Commission. In this case, a transport firm was found indulging in anti-competitive practice and penalised. It went on appeal. The appellate tribunal granted a stay on condition that the fi­rm deposited 10 per cent of the penalty. The firm could not pay the amount due to financial difficulties. Upon this, the tribu­nal dismissed the appeal itself. Allowing the appeal, the court stated that any person has a right to one appeal and the Competition Act did not say that the main appeal could be dismissed if the pre-deposit to get stay was not complied with.

Politicians can move corruption PILs

The Supreme Court has reiterated that there was nothing wrong in politicians moving public interest petitions seeking judicial action in an economic scam. In this case, E Sivakumar vs Union of India, opposition legislators in Tamil Nadu moved petitions seeking a CBI investiga­tion into alleged manufacture and sale in black of gutka and pan masala in the country stretching tentacles to foreign countries too. The Madras High Court ordered a CBI investigation, taking it out of the state vigilance commission because the food safety officer was an accused and several bigwigs in the administration and the police were suspects. Sivakumar alleged, among other things, political vendetta behind the petitions. Rejecting this contention, the court remarked that political opponents played an important role both inside and outside the House and are the watchdogs of the government in power. They are the mouthpiece to ventila­te the grievance of the public at large if genuinely projected and throws reasonable apprehension of violation of the law.

Arbitrator declared ineligible

The Delhi High Court has removed an arbitrator in the dispute between Ashiana Infrahomes Ltd and Adani Power Ltd because he was ineligible according to the amended Arbitration and Conciliation Act. When disputes arose between the companies over the implementation of an earthing station in Kurukshetra, Haryana, an arbitrator was named according to the agreement. But Ashiana objected to the choice because he was the corporate group president of the opposite company and therefore, disqualified from acting as arbitrator under the new provision. Adani argued that he was not disqualified as the contract was signed before the amendment to the Act. The court rejected the argument and pointed out that the disqualification is applicable to him after the amendment. According to Section 12(5) and the Seventh Schedule added to the law, no one can be an arbitrator if he is in the management of the company involved and has a controlling influence in it. The court emphasised that the amendment was made in view of reasonable apprehension of the complaining parties that arbitrators employed by one party to the dispute could not act independently and impartially.

Central PF notification inapplicable

The Calcutta High Court has ruled that the Kolkata Municipal Corporation is exempt from the Employees’ Provident Fund Act and the notification issued under it by the Union Labour Ministry. Until the 2011 notification, the corporation was exempt from the law. However, after the notification, the provident fund authorities initiated proceedings against the corporation for determination of amounts due towards the provident fund. They had also initiated such proceedings in respect of employees engaged through private agencies in different departments. The corporation argued it has its own general provident fund regulations. The provident fund authorities insisted that the corporation was included in the notification. But the High Court was not impressed by their argument, criticising it for harping on “perfunctory and irrelevant” issues. Citing some examples, the court remarked: “Such loose sentences betray lack of specific answer to the main subject and is never expected from a statutory body.”

Consumer law covers executive’s car

According to the Consumer Protection Act, a company which buys goods for 'commercial purpose' is not a consumer and cannot move a consumer forum. But if a company buys goods or vehicle for the personal use of its directors or staff, it is not the commercial purpose and a consumer forum can be approached for an appropriate remedy. However, this question arises very often in consumer courts. In the latest case, Shree Krishna Motors vs BMW India Ltd, a partnership firm bought a car for use of its directors. When a consumer issue arose between the firm and the manufacturer, the firm moved the Chhattisgarh consumer commission, which rejected the complaint maintaining that the car was bought for the commercial purpose. On appeal, the National Consumer Commission reversed the ruling as the firm argued that the vehicle was bought for use by the partners.

The judgment recalled its earlier full bench decision in Crompton Greaves Ltd vs Diamler Chrysler India, in which it was asserted that if a car or any other goods are obtained or any services hired by a company for the personal use of its directors or employees, such a transaction is not for commercial purpose. It does not matter whether the goods or services are used solely for the personal purposes of the directors or employees or they are used primarily for the use of the directors or employees of the company and incidentally for the purposes of the company.

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