From mortgaged property to power supply, here are the key court orders

SC bid to revamp consumer courts

While the shortage of judges in high courts and the Supreme Court is well known, the plight of the consumer forums is less recognised. The National Consumer Commission has complained that the filing of cases has gone up 300 per cent and there is no space in its Delhi office to keep the fresh cases, and files are lying in the corridors. The Supreme Court has been hearing such complaints from all states in a common case, State of Uttar Pradesh vs Consumer Bar Association. The court had asked the Centre two years ago to solve the problem of infrastructure and other issues by drafting model rules. The government presented a “final draft model rules” last month. Following this, the court has asked the central and state governments to implement the model rules and report to it in August. The exercise would include filling up of 153 posts, creating additional benches and space and reviewing the emoluments of the presidents and members of the consumer courts.

Disputed title for mortgaged property

The Supreme Court has set aside a judgment of the Bombay High Court and asked it to reconsider its decision to refer a dispute over title to a mortgaged property to a civil court. The Debt Recovery Tribunal (DRT) had already decided the title to the mortgaged property. But one of the claimants in possession of it moved the High Court, claiming the right to it. The High Court allowed him to approach the “proper forum”. State Bank of India, which moved the DRT for recovery of loan, appealed against the High Court order arguing that filing of a civil suit with respect to a secured asset was barred by the Securitisation (Sarfaesi) Act. Allowing the appeal (SBI vs Allwyn Alloys Ltd), the Supreme Court asked the High Court to re-assess the merits of the claims.

Power supply terms cannot be changed

The Allahabad High Court has ruled that the UP Power Corporation has no authority to change the terms of distribution of power and that jurisdiction belonged to the four distribution companies in the state. The court thus struck down a letter of the government corporation withdrawing the promise of uninterrupted supply to industrial units that fulfilled certain conditions. They had moved the court arguing the 2012 state industrial policy granted them uninterrupted power supply to develop infrastructure. Allowing their appeals in the judgment, Tirupati Cylinders vs UP Power Corporation, the court stated the corporation has ceased to be a transmission company after the creation of discoms. “We hope the chairman and directors will understand the legal status of the corporation and different discoms and would act strictly within their limits instead of encroaching upon each other’s powers and authority,” the judgment emphasised.

Award on Sri Lanka rail project upheld

A division bench of the Delhi High Court has dismissed the appeal of Ircon International Ltd against the arbitration award in its dispute with Patil Rail Infrastructure Ltd, stating that it would not re-interpret the clauses in the contract. Ircon had awarded the work of manufacture and supply of concrete sleepers for the restoration of various railway lines in the Northern Province of Sri Lanka to Patil. Ircon alleged Patil was liable for the sleepers supplied by it. The sleepers were later found to have developed cracks. When disputes arose over when the cracks appeared, the issues were referred to arbitration and expert teams of IIT Chennai and Sri Lankan railways found that the defects arose after the supply of the sleepers. Ircon moved a single judge bench of the High Court which dismissed its challenge to the award. The division bench dismissed the appeal stating that the onus was on Ircon to prove its allegations and it was not for the court to sit over an award like an appellate authority and re-interpret the terms of the contract.

Brands cross geographical borders

The opening up of the Indian economy and increased travel of Indians abroad have changed the dynamics of reputation and goodwill of brand names. “For a mark/brand to have a reputation or goodwill in India, setting up a shop in India or sale in India is no longer a necessity,” the Delhi High Court said. “The introduction of web-based sales which enables Indians to shop for whatever brands/goods available wheresoever has further increased the familiarity in India with the marks and brands essentially sold/marketed outside,” the High Court stated while passing an injunction in the case, H&M Hennes & Mauritz AB vs HM Megabrands Ltd. The Swedish company, which designs and sells worldwide fashionable clothing and ancillary products, sued the Indian company alleging trademark violations. It argued that H&M is a top brand in several countries and the Indian company used the same initials HM and imitative design with the addition of ‘Megabrand’. The latter argued that the initials HM stood for its founder Hashim Merchant and it did not contain "&" between the letters. It further argued the additional word Megabrand distinguished the products. The court did not accept its argument, stating that ‘megabrand’ is a descriptive word and the two letters which were prominent would be confused in the FMCG market.

Fairness in sexual harassment trial

A division bench of the Delhi High Court has quashed all proceedings and report of the Internal Complaints Committee of Air France that looked into sexual harassment at workplace. The court stated one member of the committee was not qualified to be in it, according to the provisions of the Sexual Harassment of Women at Workplace Act. Allowing the appeal of a commercial assistant who complained against a French national posted in Delhi as managing director, the court asked the airline to constitute a new committee and start hearing her complaint afresh. Earlier, a single judge had rejected her complaint. She argued the committee was supposed to have an independent external member like a representative of an NGO. But a person associated with the Employers’ Association was nominated by the airline. Her other objections included the choice of a neutral venue (not the airline office), right to have her mother attend the proceedings, cross-examination of and by the accused. The court noticed a number of violations of the rules, including her dismissal from service. The judges observed: “The world is rocked by horrific tales of all forms of sexual harassment of female co-workers at varied workplaces. Decision-makers, courts and employers are to be ever vigilant in ensuring that effective policies are swiftly and impartially enforced to see that no one is subjected to unwelcome and unacceptable behaviour.”

Outbrain