The Supreme Court has dismissed a batch of appeals by the tea industry in Assam seeking sales tax concession under an incentive scheme declared in the state industrial policy of 1986 meant to increase economic growth. In the leading appeal, Dugar Tea Industries vs State of Assam, the firm argued it was declared eligible for the benefit in 1988 and it could not be withdrawn. The court this saying tea as raw material was not eligible for the concession under the policy and anyway there was no "manufacture" as the companies were only blending and packing tea. They were also not given certificates of authorisation by the authorities concerned, a requirement for claiming the benefit.
Bid for mosquito repellent nets
When registration of a product by a statutory authority is an essential condition for bidding, its absence is a valid ground for rejecting the bid. Mere decision by the registration committee to provisionally approve registration does not amount to registration, the Supreme Court has held in its judgment, M/s Shobikaa Impex vs Central Medical Services Society. The company manufactures mosquito bed net called Duranet, which comes under the category of "long lasting insecticide net", and it was issued a license, which was renewed. The Central Insecticide Board issued a provisional registration for Duranet. On that basis it bid for the supply of 10 million nets to the Medical Services Society under the National Vector-Borne Disease Control Project. Meanwhile, there was an amendment to the eligibility conditions, making the production of registration certificate essential. The company moved the Delhi High Court arguing that the board had taken a decision to grant it registration, so it was eligible. But the court insisted that the registration should have been filed along with the tender documents. So its petition was rejected. On appeal, the Supreme Court upheld the high court decision. It observed: "The tender was floated for a purchase which is needed for the nation. The Medical Services Society was taking immense precaution. In such a circumstance, needless to emphasise, public interest is involved. It cannot succumb to private interest. The society's action cannot be regarded as unreasonable or arbitrary."
Damages for incomplete work
The Supreme Court has set aside the judgment of the Orissa High Court, which had quashed the demand of penalty by Mahanadi Coalfields from Dhansar Engineering for not completing the contract of surface mining. Though the work was assigned to the firm as it quoted the lowest rate, it later suffered financial hardship and could not complete the obligations. Mahanadi, therefore, allotted the job to another firm, which demanded a higher rate. Mahanadi then sought compensation from the original firm. The contractor moved the high court saying Mahanadi's action was not bonafide and there was no explanation for the penalty. On appeal, the Supreme Court said the firm could not walk out of the contract midway pleading that the rate was low, without asking for extension of time to complete the work. Regarding the extent of penalty, it was allowed to approach Mahanadi for appropriate decision.
CBI not meant for probe into bad loans
The Karnataka High Court has dismissed a petition by Deutsche Bank AG seeking a probe by the Central Bureau Investigation into a Rs 30-crore loan it could not recover. The matter had been investigated by the state police twice and the magistrate is seized of the case. However, the bank was dissatisfied with the probe and wanted the CBI to take over. Rejecting the request, the judgment said: "Merely because the bank feels the investigation is not satisfactory it cannot be entrusted to CBI, when the allegation is not of the nature where there is a scam which has national or international ramifications nor is it a circumstance where several customers are affected. If such transfer is ordered merely because the bank feels dissatisfied and to allay their apprehension, it will set a bad precedent where all banks will expect that their failed commercial transactions will have to be investigated by CBI the moment they allege fraud and investigation is sought."
SBI guilty of debiting service charge
The National Consumer Commission has held State Bank of India guilty of illegally debiting service charge of Rs 11.60 lakh from the account of Premier Bar, though the company had rejected the terms of the loan offered by the bank. The company had sought credit facilities but when it read the terms, it withdrew. Nevertheless, the bank withdrew the amount claiming it to be service charge. It maintained that charges have to be paid even if the loan was not sanctioned or disbursed. Rejecting the argument, the commission upheld the district forum order asking the bank to repay the amount with 12 per cent interest from 2008 plus compensation and costs.