Courts should not interfere with power tariff fixation: SC

ORDINARILY the high courts or the Supreme Court should not interfere with the determination of electricity tariff as it is the job of an expert body like the Central Electricity Regulatory Commission set up under the relevant Act of 1998, the Supreme Court stated last week. The court was deciding a batch of disputes between the Uttar Pradesh Power Corporation and the government-owned electricity producer, NTPC Ltd over fixation of tariff. “Determination of tariff involves highly technical procedure requiring not only working knowledge of law but also of engineering, finance, commerce and management,” the judgment said and recommended that an expert appellate body was the best forum to adjudicate on such disputes.

Mortgaged land cannot be released on court order
The Supreme Court last week set aside the judgment of the Allahabad high court ordering the Uttar Pradesh Financial Corporation to release the mortgaged land to Sri Bharat Paper Udyog and hand over possession of the property to the firm which had taken a loan from the corporation. The firm had defaulted in the repayment of the loan, leading to accumulation of interest. It applied for a one-time settlement with a repayment schedule. The firm argued that according to the correspondence between it and the corporation, the latter would release the land on the payment of the first instalment to enable it to pay subsequent instalments by selling or leasing out the land in question. The corporation denied there was any such clause in the settlement. The court agreed with the corporation and stated that the terms of the settlement were binding on the firm. The conditions put forward in the application or negotiations would not alter or control the terms of the settlement.

NTC as tenant cannot claim government privilege
The Supreme Court has ruled that National Textile Corporation (NTC) cannot take the position of the ‘agent’ of the government while occupying a lease premises. The government and the corporation are separate legal entities and are not synonymous as claimed by the corporation. The court stated so while dismissing the appeal of NTC against the judgment of the Bombay high court in the case, NTC vs Naresh Kumar. The mill, originally described as Poddar Mills in Mumbai, was taken over in 1983 and nationalised in 1995. The land belonged to a trust. The trustees wanted to evict the mill, which was now part of NTC. The corporation resisted the termination of lease claiming that the land now vested in the government and therefore the government was the tenant. Rejecting the claim, the Supreme Court stated that the government is not the controlling authority of NTC, but the latter is covered by ordinary tenancy laws.

Employers need not pay higher provident fund contribution
The Supreme Court has dismissed the appeals of the employees’ unions of Marathwada Gramin Bank and Marathwada Regional Rural Bank demanding higher contribution of provident fund (PF) to them. The banks were earlier paying the rate according to the PF Act. Later, they set up a trust of their own and contributed an amount in excess of the legal obligation. Later the banks made losses and therefore they reverted to the statutory scheme. The employees wanted the earlier rate to continue despite the banks opting for the statutory scheme. The dispute was taken to the tribunal which held in favour of the employees. However, on appeal, the high court set aside the tribunal’s order. The Supreme Court upheld the high court view and state that the banks could not be compelled to pay a contribution higher than that was set under law.

Margarine should be considered as edible oil: Supreme Court
Margarine used as raw material by bakeries and confectionaries is ‘edible oil’ for purposes of sales tax and therefore would attract a lower rate of duty, the Supreme Court held in the case, Aluva Sugar Agency vs State of Kerala. While the firm argued that it was using edible oil and only 4 per cent was payable, the revenue authorities demanded 8 per cent contending that margarine was a not edible as it was a lubricant and animal fat. The tribunal agreed with the firm, but the high court took the opposite view. The Supreme Court restored the view of the tribunal, allowing the appeal. It explained: “Normally anything which is used for preparation of a food article is edible because ultimately it is being consumed by human beings. Though one may not consume margarine directly or may not use for normal cooking, the fact is that margarine is used for preparing bakery items which are consumed by human beings and, therefore, margarine is also edible. Having around 80 per cent fat, and being in the nature of oil, it should be considered as edible oil.”