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| Biotech firm's dispute sent to Singapore arbitration centre |
| BS Reporter / New Delhi Feb 16, 2009, 00:05 IST |
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The Supreme Court last week sent the dispute between Nandan Biomatrix Ltd and D1 Oils Ltd for arbitration at the Singapore International Arbitration Centre. Nandan Biomatrix is engaged in the business of seed cloning and production, nursery development and plantation management. It entered into three agreements with D1 Oils and entered into a joint venture.
There was a termination agreement also, which became the bone of contention when Nandan alleged breach of obligations under the supply agreement. While Nandan wanted arbitration, the other company denied that there was any international arbitration clause. The Supreme Court stated that there was indeed an arbitration agreement and since there was a claim for compensation, it should be decided by arbitration along with other issues.
Electrical transmission bidder’s appeal dismissed
The Supreme Court last week dismissed the appeal of Electrical Manufacturing Co Ltd against the judgment of the Delhi High Court which had ruled that its bid for a power project was rightly rejected by Power Grid Corporation of India Ltd. The corporation, working under the Ministry of Power, invited tenders for setting up electrical transmission lines.
Electrical Manufacturing Co Ltd was the lowest bidder. However, its bid was rejected on the ground that it lacked the requisite technical experience specified in the contract. It challenged the decision as arbitrary as its bid was the lowest and it was in the electric transmission business since 1951. The high court found that it did not meet the requirement of “satisfactorily completing 100 km”.
It had completed several projects, but they were either short of 100 km or were not satisfactorily completed. Therefore, the high court decided against its it. Its appeal was also dismissed by the Supreme Court.
Gujarat HC asked to determine sales tax question
The Supreme Court last week asked the Gujarat High Court to determine whether the fuels consumed, namely, natural gas, furnace oil, light diesel oil, naphtha etc, by industrial units to generate electricity which is then used in the manufacture of end products, namely, caustic soda, industrial chemicals etc, can be considered to be ‘raw material’ or processing material’ or ‘consumable source’ for the purposes of the Gujarat Sales Tax Act.
The direction came in an appeal by the state government against the judgment of the high court which granted sales tax benefits to hundreds of industries like AMI Pigments (P) Ltd. There are some doubts about the applicability of a Supreme Court judgment in the case of Andhra Pradesh sales tax law to the Gujarat law. Therefore, the apex court asked the Gujarat High Court to decide the above core question to clear the doubts. Meanwhile, there would be status quo on pending assessments.
Lottery tickets not goods; so not liable for sales tax: SC
The Supreme Court has dismissed two appeals by the Kerala government demanding sales tax on lottery tickets. The tickets are not goods for the purpose of sales tax, according to the latest judgment. The court held that a lottery ticket had no value by itself. It is a mere piece of paper.
Its value lies in the fact that it represents a chance or a right to a conditional benefit of winning a prize of a greater value than the consideration paid. Earlier rulings like that of the Constitution bench in Sunrise Associates vs Govt of Delhi was followed to reject the government’s contention. The claim of the purchaser of a lottery ticket is excluded from the definition of ‘goods’ under the Sale of Goods Act and the sales tax laws of the states, the judgment emphasised.
High court criticised for reducing insurance amount
The Supreme Court has criticised the Karnataka High Court for reducing, without giving reason, the amount of insurance granted by the trial court to a firm which suffered total loss in a fire. The judgment said: “There is not a single reason in the judgment of the high court for reducing the quantum of damages awarded by the trial court.” Moreover, the case was dragging on for more than 25 years.
Maland Traders, which had insured its assets with New India Assurance Co Ltd, did not get any response when it sought the insured amount. It moved the civil judge, who awarded Rs 3.3 lakh. However, the high court reduced it to Rs 48,000 without giving reasons for the drastic reduction after a quarter of a century. The Supreme Court asked the insurer to pay according to the trial court order.
Ansals get relief on development charge
Ansal Properties & Industries Ltd, which developed townships in Gurgaon, got substantial relief from the Supreme Court when it held that the demand of the Haryana government for Rs 61,000 per gross acre was “illegal, unjustified and unreasonable”. The director of town and country planning of the state had threatened to cancel the licence to the company if it did not pay the amount at the above rate towards external development charges, but actually on account of construction of internal community buildings.
There was a further stipulation that no such charge would be realised from the plot holders. The company challenged the demand in the Punjab and Haryana High Court, but it dismissed its writ petition. On appeal, the Supreme Court allowed the appeal and let the government adjust the refund towards the dues of the company.
Power regulator alone can alter tariff
The Supreme Court has reiterated that the Uttar Pradesh Electricity Regulatory Commission alone had the power to modify or alter the tariff. For any change, the commission must be approached, the court stated in the judgment, Badri Kedar Paper Ltd vs UP Electricity Regulatory Commission.
There was confusion among the state industries regarding certain circulars issued by the UP Power Corporation Ltd and their subsequent withdrawal. Some ten writ petitions were filed in the Allahabad High Court, which were dismissed. However, the Supreme Court allowed the appeal of the company and asserted that under the UP Electricity Reforms Act 1999, the corporation could not modify the tariff; it was the function of the commission.
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