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| Arbitrator's award restored |
| BS Reporter / New Delhi Oct 26, 2009, 00:56 IST |
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The Supreme Court last week set aside the judgement of the Rajasthan high court and restored the award of the arbitrator in the case, Indian Hume Pipe Co Ltd vs State of Rajasthan. The company was granted contract for laying pipeline in the Kota division. Following disputes between the company and the state government, the matter was referred to three arbitrators. They allowed the claim of the company along with interest from the pre-reference period, during the arbitration and ‘future interest’ from the date of the award till the date of payment. On appeal by the state government, the high court set aside the award of interest at the above three stages. The company appealed to the Supreme Court. It ruled that the arbitrator has the power to award interest at all the three stages.
Appointment quashed
The SC last week quashed the order of the Bombay high court appointing Justice M N Chandurkar as the third arbitrator in the dispute between SBP & Co and Patel Engineering Ltd. The latter company was awarded a contract for execution of works relating to the Koyna hydroelectric project. The company sub-contracted part of the work to SBP. When disputes arose between the two companies, SBP invoked the arbitration clause and appointed a retired chief engineer as arbitrator on its behalf. Patel appointed its arbitrator. But he declined to arbitrate. So Patel nominated a substitute. It was opposed by SBP. When the matter was taken to the Bombay high court, it appointed the judge as the third arbitrator under Section 11 of the Arbitration and Conciliation Act. SBP appealed to the Supreme Court. It ruled that according to the agreement, a substitute arbitrator cannot be appointed.
Toys or skill games
The classification of toys has become a question of intense debate in the Supreme Court in two cases involving large toy-makers, Funskool India and Pleasantime Products. Mere toys like Barbie dolls, miniature planes or trains do not invite excise duty. Those which demand intelligent inputs like building blocks, chess board or sudoku are levied duty. However, with the toy market expanding fast and in variety, the distinction between them is difficult to make as there are several new products which fall between the two categories. The revenue department has claimed duty on several items arguing they are not mere toys but games of skill and intelligence. But the toymakers argue that they are only toys of entertainment. The court observed that the size of the toy, where it is sold (toy shop or sports shop) and how it is understood by a common customer and similar pointers should be taken into account for deciding the issue. It also indicated it might issue guidelines on this. The hearing will conclude next week.
Approval to JSW Energy
The Delhi high court has directed the Expert Appraisal Committee set up by the Ministry of Environment and Forests to re-examine within three months the approval already granted to JSW Energy Ltd to set up a coal-based thermal power plant in Jaigarh, Ratnagiri district of Maharahstra, famous for Alphonso mangoes. The order was passed in a petition challenging the environment clearance granted by the ministry to the power company. The Bombay high court is also seized of the environmental impact of the power plant in a public interest petition moved by certain organisations in the district. In the judgment, Balachandra Nalwade vs Union of India, the Delhi high court ordered that till specific approval is granted by the Expert Appraisal Committee, the thermal plant will not be made operational and integrated with the power grid. However, the power company, which says that the plant is almost ready to start, will be entitled to undertake tests and operational trials. The order passed by the committee will be apealable before National Environment Appellate Authority.
Withdrawal of duty exemption
The Bombay high court has struck down two notifications of Maharashtra government which withdrew exemption of payment of electricity duty for captive generation of power by non conventional or conventional sources except to the industries in the cooperative sector. The high court passed the order on petitions of Ravalgaon Sugar Farms Ltd, Saswad Mali Sugar Factory Ltd and New Phaltan Sugar Works Ltd. They had argued they were discriminated against because they were registered companies and not cooperatives. The high court stated that the exercise of power by the government violated Section 5-A of the Bombay Electricity Act and “smacked of arbitrariness”. Captive use of the power generated by a generating station, in respect of all the industries must be treated on a par while granting exemption in payment of lectricity duty, the high court said.
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