From coal price escalation to special leave, here're the key court orders

Pre-deposit must in all cheque cases 
The Supreme Court ruled last week that the amended provision in the Negotiable Instruments Act tightening curbs on those accused of issuing bounced cheques shall be applicable with retrospective effect. This Section 148 states that in an appeal by the drawer of the cheque against his conviction, the appeal court may order him to deposit at least 20 per cent of the fine or compensation awarded by the trial court. The question raised in the case, Surinder Singh vs Virender Gandhi, was whether this rule applied retrospectively. The accused was convicted by a trial court for issuing a cheque without sufficient balance. When he appealed, the court asked him to deposit 25 per cent of the amount before taking up the case. The Punjab and Haryana High Court dismissed his appeal. He argued before the Supreme Court that the amendment carried out last September was not applicable to him as the case was initiated before that time. Dismissing the appeal, the court stated that the law was amended because of the delay tactics adopted by unscrupulous drawers of dishonoured cheques. They thought filing of appeals and obtaining stay on proceedings would help them. In such cases, the payee would suffer. The court further stated that provisions of the Criminal Procedure Code could not be invoked in such cases.

Price escalation in coal supply upheld
The Supreme Court last week upheld the claim of a coal supply firm for price escalation caused by delay in getting forest and environment clearance by the state electricity manufacturing firm.  In this case, Parsa Kente Collieries Ltd vs Rajasthan Rajya Vidyut Upadan Nigam, disputes between the two parties were referred to arbitration. The arbitrator allowed the claim of the coal supply firm for escalation and price adjustment according to the coal mining and delivery agreement.  The state electricity corporation appealed to the Rajasthan High Court which disallowed the claim. The private firm moved the Supreme Court. While upholding the high court ruling on other issues, the Supreme Court quashed the order with regard to the escalation price.

SLP dismissal needs no reason
Special leave petitions (SLP) that are now clogging the Supreme Court are in fact appeals in disguise against the orders of high courts or tribunals. Normally, the courts below must provide a certificate to the losing party to appeal to the Supreme Court. But Article 136 provides a short cut to move the Supreme Court. Though it is meant to be invoked in special cases, SLPs take up most of the time of judges these days and they are liberal in admitting them and turning them into regular appeals. When they dismiss an SLP, it does not mean that the high court judgment under challenge has been upheld. This was clarified in a recent judgment of the Supreme Court in the case, State of Orissa vs Dhirendra Sundar. This was an appeal of some employees of the state demanding promotion on the basis of a high court judgment. They argued that the government SLP against that judgment was dismissed and therefore, that judgment should be followed in their favour. The Supreme Court said no; dismissal of the SLP did not mean all that the high court stated in its judgment was correct and approved. The Supreme Court explained: "Dismissal of an SLP at the threshold simply implies that the case before this court was not considered worthy of examination for a reason, which may be other than the merits of the case. Such dismissal at the threshold without giving any detailed reasons does not constitute any declaration of law or a binding precedent."

No casual re-opening of tax assessment
The Delhi High Court has stressed that re-opening of an income tax assessment after four years must be based on “tangible material” and the assessing officer’s allegation that the assessee had failed to disclose his income fully and truly must be backed by sound reasons. The court stated so in its judgment in the case, Best Cybercity Ltd vs ITO, while quashing the notice to the firm as well as the rejection of its objections to the re-opening of the assessment. The judgment reiterated that there must be adequate material that leads an officer to form “reasons to believe” that income chargeable to tax for the assessment year had escaped assessment. His reasons must not be based on a mere change of opinion.  Sections 147/148 of the Income Tax Act cannot be invoked “to overcome an oversight, inadvertent error or mistake in the original assessment order.” The court further emphasised that the reasons for re-opening the assessment must contain all these elements.

Architect can’t stop razing of his work
An architect of a building or structure cannot object to the demolition of his work or claim damages if the owner of the land decides to bring it down, the Delhi High Court ruled last week in its judgment in the case, Raj Rewal vs Union of India. The architect, in this case, had claimed that his work consisting of the Hall of Nations and the Nehru Pavilion at Delhi’s Pragti Maidan had artistic merit and were protected under Section 57 of the Copyright Act. He wanted the court to prevent the demolition of these structures by the India Trade Promotion Organisation. The court dismissed his suit stating that the land owner’s right cannot be denied in such matters. The requirements of urban planning outweighed the moral rights of an architect. Surveying laws in other countries, the court added that none of them prohibited demolition of a structure constructed in accordance with the architectural drawings or plans.

Ice cream feast for the deprived
Unilever and Deluxe Ice Cream Factory have arrived at a settlement in a trademark case in the Bombay High Court by which the latter will donate Rs 5 lakh to an NGO which looks after sick and injured animals on the streets. The dispute was over the names of ice cream products, Choco Feast and Cornetto, claimed by Unilever. It had alleged that the rival firm was passing off its ice cream products with similar sounding names like Conatto and Conetto. The court passed a permanent injunction against the use of such names in any manner.  It further ordered the destruction of all wrappers and packets bearing the imitative names. Additionally, the finished products like ice creams and frozen desserts shall be distributed in orphanages, old age homes and like organizations.


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