The Supreme Court has dismissed the appeal of HDFC Securities seeking to quash criminal complaints against the company, its relationship manager, managing director, business head and the Mumbai regional head for fraudulently trading in the account of a client for one year causing huge loss to her. Earlier, the Bombay High Court had allowed police investigation ordered by the magistrate into the complaints stating that it could not quash the first information report even before the report has been made. The Supreme Court took the same stand and asserted that the inherent power of courts cannot be allowed to stop investigation when serious allegations involving fraud, cheating and conspiracy are involved.
Arbitration despite moving suit
The Supreme Court last week set aside the judgment of the Calcutta High Court that has declined to get the dispute between two companies to arbitration. In this case, Greaves Cotton vs United Machinery and Appliances, there was an agreement to supply diesel engines for diesel gensets. Disputes arose between them and United Machinery moved a suit in the high court. Greaves sought time to file its written statement. Later it invoked the arbitration clause in the contract. The high court ruled that since the company had sought time in the suit, it participated in the suit and it could not invoke arbitration clause later. Overruling it, the Supreme Court stated that by merely seeking time to file statement would not mean that it had waived its right to seek arbitration.
‘Urgent’ land acquisition quashed
Invocation of urgency clause in the Land Acquisition Act to take over land on the ground that it is necessary to prevent unauthorised construction is invalid, the Supreme Court stated in its judgment, Sahara India Commercial Corporation Ltd vs State of UP. In this case, the Ghaziabad Development Authority wanted to acquire land urgently for development of the city. The land owners challenged the acquisition arguing that the acquisition had lapsed as no award was passed for two years. The court ruled that its jurisdiction to interfere in the subjective decision of the authorities is limited. But in this case, the sole ground for urgent acquisition was to prevent unauthorised construction. This ground is not valid.
SC against excessive compensation
Award of compensation should be fair, reasonable and proportionate to the loss suffered by the person complaining; it should also not be excessive, the Supreme Court stated in the case, HUDA versus Shakuntla Devi. The Haryana Housing Development Authority allotted residential plot to Devi in 1987 but possession was not handed over to her for a long time. She moved the consumer forum alleging that the delay had caused cost escalation for constructing the house. The forum awarded her Rs 15 lakh as compensation. The Haryana state commission upheld it. HUDA therefore appealed to the Supreme Court. It set aside the commission’s order describing it as excessive. It said that the award of interest would have been sufficient. The court remarked that though she had suffered loss due to escalation of cost of construction between 1989 and 2000 she had also benefited from the increase in the cost of the plot, especially when she had delayed construction for six years to claim higher compensation.
Compensation for speed post delay
The National Consumer Commission has ruled that if a letter sent by the speed post is not delivered within the prescribed time, the postal department would be liable to pay compensation assuming that it was due to wilful default. The onus to prove otherwise is on the department. In this case, Dept of Post versus Gajanand, an application for competitive exam for civil judge’s post was sent from Jaipur to Bhopal. It reached the addressee two days after the last date for receiving applications. Thus the application was rejected. Therefore, the applicant sued the department for deficiency in service leading to loss and mental distress, invoking the Consumer Protection Act. The department submitted that there was no intention to delay the delivery and under Section 6 of the Post Office Act it was not liable unless it is proved that the delay was intentional. However, it could not produce the relevant records. The commission stated that since the records could not be produced, the department was making a “deliberate attempt to hide the real reason for the wrong-doing of its employee(s). Such conduct leads to an irresistible conclusion that there was wilful default which is not being disclosed.”
One wrong does not justify another
The Supreme Court last week stated that a wrong decision by the authorities would not justify continuation of the same wrong in other cases. The court was dealing with daily wagers who were made permanent after a long time by the MP government. They got regularisation benefit and pay scale. But they demanded annual increment also. They argued that the government had given increments in several other cases. The court ruled that they did not deserve increments, and if some others got it was by wrong application of law. Dismissing the case, Ram Naresh vs Aswini, the judgment said that “the right to equality in the Constitution is not in negative terms”.