From insurance claim to Lupin diabetes drug, here are the key court orders

Govt land can be sold without regulations

The Supreme Court last week ruled that a public corporation has vast powers to deal with land in its possession for promoting industries, including regularisation of encroachments. There is no need for formal regulations. The court reiterated that auction is not the only way to dispose of public properties; the government can devise other methods that do not violate the equality provisions in the Constitution. The court stated so in its judgment regarding the Odisha Industrial Infrastructure Development Corporation Ltd vs Pitabasa Mishra case. In this case, the corporation had to deal with a number of encroachers on plots allotted for industrial use in Rourkela. When a plot in the commercial estate was regularised in favour of an encroacher, six others moved the Orissa High Court, alleging that it was in violation of the existing policy and regulations. They pointed out that there was no public auction. The High Court accepted these arguments and set aside the regularisation of land, leading to the appeal. Setting aside the High Court judgment, the Supreme Court stated that regulations are not essential in regularising encroachments and public auction should not be insisted as the only way to dispose of government land.

SC untangles knot in arbitration

The divergence of opinions among several High Courts over the mode of execution of arbitration award was resolved by the Supreme Court in the case, Sundaram Finance Ltd vs Abdul Samad. The issue was as to whether an award is required to be filed first in the court having jurisdiction over the arbitration proceedings for execution and then to obtain a transfer of the decree or it can be straightway filed and executed in the court where the assets are located. The Supreme Court ruled that execution application can be filed “anywhere in the country where such decree can be executed and there is no requirement for obtaining a transfer of the decree from the court which would have jurisdiction over the arbitral proceedings". In this case, a person borrowed money from the Tamil Nadu firm and failed to repay it. The arbitration award was moved before Morena court in Madhya Pradesh. The court there ruled the application should be filed in Tamil Nadu and then transferred to Morena. The Supreme Court cut short the procedure in this judgment. It clarified that the contrary view taken by the High Courts of Madhya Pradesh and Himachal Pradesh was not good in law. The High Courts of Delhi, Kerala, Rajasthan, Allahabad, Punjab & Haryana reflected the correct legal position.

Tardy insurer cannot reject claim  

If an insurance company rejects a proposal and payment of premium after an excessive delay, it would be implied that the firm had accepted it and the policy is active. “We are of the opinion that the rejection of the policy must be made in a reasonable time so as to be fair and in consonance with the good faith standards,” the Supreme Court stated in its judgment, D Srinivas vs SBI Life Insurance  Co. In this case, a bank issued a housing loan for a family along with SBI life insurance. One member died and it was intimated to the bank. The insurer denied the claim arguing that the deceased had not presented himself for medical examination. The bank returned the premium after more than one year five months. The Supreme Court remarked that “the insurer is only trying to get out of the bargain, which they had willfully accepted. There is a clear presumption of the acceptance of the proposal in favour of the proposer,” said the judgment, setting aside the decision of the National Consumer Commission.

Cheaper gas preferred for power 

The Supreme Court has upheld the definition of fuel by the Andhra Pradesh Electricity Regulation Commission and set aside the ruling of the tribunal in the judgment, Transmission Corporation of AP Ltd vs GMR Vemagiri Power Generation Ltd. The issue was whether the word fuel used in the Power Purchase Agreement meant natural gas only or includes regasified liquefied natural gas (RNLG). The commission ruled that the term fuel meant only natural gas in its natural form and did not include RNLG.  Only because the physical composition of the two gases is similar, it does not automatically entitle the power generation company to generate power with RLNG, which is more expensive and not domestically available, as ultimately the consumer will have to pay more.   

Cable operators abused dominant position

By cancelling a contract with a broadcaster without providing reasons, multi-system operators have abused their dominant position in Punjab and Chandigarh, the Supreme Court ruled in the judgment, Competition Commission of India vs Fast Way Transmissions Ltd.  Fast Way was a group of operators which had a contract with broadcaster Day and Night News. However, the contract was cancelled, leading to a complaint by the broadcaster. The  Director-General of the CCI conducted an inquiry and confirmed the allegation of abuse of dominant position. The operators had 85 per cent market share. The CCI passed an order according to the finding. However, the appellate tribunal held since the broadcaster was not in competition with the operators, there was no abuse of dominant position. Allowing the CCI appeal, the Supreme Court stated that the latter issue was not relevant and declared that the CCI was right.

Injunction against Lupin diabetes drug

The Delhi High Court last week passed a permanent injunction against pharmaceutical firm Lupin Ltd on an application by Sun Pharma Laboratories Ltd. Sun alleged that the rival was infringing its trademark by introducing a medicine for the treatment of non-insulin diabetic patients. While Sun's product was named TRIVOLIB, Lupin introduced TRI-VOBIT. The High Court rejected the claim of Lupin that it had only added a prefix to its product. “When we compare the two words, it is manifest that TRI-VOBIT is structurally and phonetically similar to the trademark of Sun,” the court explained. Merely because Lupin was using Vobit earlier cannot be a ground to plead that the words have to be split and then compared as is sought to be done. Moreover, it is manifest from the certificate of registration issued by the Trade Marks Registry that the trademark TRIVOLIB is registered in the name of Sun Pharmaceutical Laboratory Ltd.