The Supreme Court has set aside the judgment of the Madhya Pradesh High Court and upheld the rule that imposed two per cent levy as stamp duty on transactions of immovable property through power of attorney. According to the state amendment to the Stamp Act, the power of attorney given without consideration to a stranger will attract the two per cent levy on the market value of the property, though there is no such levy on near relatives executing such document. This rule in Schedule 1A was struck down by the high court on the ground that the classification between near relatives and strangers was arbitrary. Reversing it, the Supreme Court stated in the case, state of MP vs Rakesh Kohli, that the rule was reasonable and intended to curb the tendency of transferring immovable property through “inappropriate documentation”, which hid the real intention.
‘Sorry state of affairs’ in SC
The Supreme Court has criticised the way lawyers conduct cases in certain matters. It remarked in the case, M & B Footwear Ltd vs R K Sales, that “this case reveals a very sorry state of affairs as to how the highest court of the land is being treated by advocates.” Lawyers in the case failed to appear repeatedly in the last two years. After the court passed an interim order staying the criminal trial, none appeared to pursue it. As this was going on for quite some time, the court vacated the stay on the criminal trial and dismissed the appeal against the order of the Bombay high court.
BIFR to draft practice directions
The Delhi High Court last week asked BIFR to formulate practice directions within three months to prevent misuse of the Sick Industries Act by certain companies making references repeatedly with intend to defeat the claims of the creditors. The direction was passed in the judgment, Alcatel-Lucent India vs Usha India. Alcatel complained that the other company was making repeated references to BIFR and appeals to AAIFR over the past decade to get the protection of Section 22 of Act. If a reference is made, recovery proceedings are suspended. The high court pointed out that proceedings can go on with the consent of the BIFR and it can pass a “general order” giving such consent. Where the references were rejected previously, the BIFR can refuse to extend the benefit of the law. “The present case appears to be one where prima facie the provisions of Section 22 were taken undue advantage of. Therefore, at least in those cases where the reference was rejected in previous years on merits by the BIFR, guidelines can be issued to ensure that fresh references in subsequent years should not be mechanically entertained,” the judgment said.
Firm told not to use trade name
The Delhi High Court last week allowed the application of Danish company A.P. Moller-Maersk A/S seeking an injunction against Maersk Mining and Exploration Ltd claiming the service mark ‘Maersk’. The foreign company, which is in shipping service, argued that it has registered the mark in 130 countries and was doing business in India since 1989. The Indian company is allegedly using Maersk as a service mark in relation to its mining and exploration services. It was contended that this was violation of Section 29(4) of the Trade Marks Act. The Indian company defended the use of the name Maersk stating that it was adopted from the name Maehndra and Rasika, which were claimed to be the names of the brother and sister of the promoter. The high court rejected the claim pointing out that a similar claim was rejected in the Rolex case in 2009 where it was claimed that Rolex was adopted from the name Alex and rolled gold.
Curb on power to fix gas price
The Delhi High Court last week declared that the Petroleum and Natural Gas Regulatory Board is not empowered to fix or regulate the maximum retail price at which gas is to be sold by entities such as Indraprastha Gas Ltd to their consumers. It further held that the board is also not empowered to fix any component of network tariff or compression charge for an entity having its own distribution network. Accordingly, the high court quashed the board’s order dated of April 9 to the extent so fixing the maximum retail price. The judgment stated that Petroleum and Natural Gas Regulatory Board Act did not confer any power on the board to fix/regulate price of gas as was claimed by the board. Analysing the provisions of the Act, the court stated that while prescribing function of monitoring prices they limited it to “taking corrective measures to prevent restrictive trade practices by the entities. Thus, only if the board finds that the marketers of gas in a particular area have formed a cartel or are indulging in any other restrictive trade practices, is the board empowered to monitor prices.”