M J Antony: No part-timers in FEMA tribunal: SC

The Supreme Court has ruled that members cannot be appointed part-time to the Appellate Tribunal for Foreign Exchange, nor can the chairman be selected from them. It struck down the rule introduced to enable the government to appoint part-time members in the tribunal. The court pointed out that the Foreign Exchange Management Act did not approve of part-time members and therefore Rule 5 providing for such appointment was illegal. Even if a candidate met the eligibility criteria, he could not be appointed. The government justified the appointment contending that members of the Indian Legal Services could be appointed as a stop gap arrangement and even the chairman could be selected form the part-time members. The writ petitions challenging the appointments were earlier allowed by the Delhi high court. The appeal of the government, Union of India vs S Srinivasan, was dismissed. However, the Supreme Court judgment clarified that the orders already passed by the tribunal consisting of disqualified members shall be valid.

Misconduct of bank’s lawyer
A lawyer who does not file recovery suits entrusted by a bank as a client is liable for disciplinary action, the Supreme Court has ruled in the case, N V Ramakrishna vs Syndicate Bank. In this case, the bank had handed over 75 cases for recovery. There was no response from him for a long time. So another lawyer was engaged to find out the fate of some of the cases. It was found that those cases were not filed in the court. Therefore, the bank moved the Bar Council of Andhra Pradesh and later the Bar Council of India. Its disciplinary committee found that the lawyer had committed professional misconduct. It suspended his practice for one year and imposed a fine to be given to the advocates’ welfare fund. On appeal, the Supreme Court rejected his petition, but reduced the suspension period by half.

Arbitration award set aside
The Delhi high court has set aside the award of the arbitrator in the dispute between Indian Railway Construction Co (IRCON) and Royal Forgings Ltd. The latter company was to supply rail parts according to a schedule with specific markings on the product. The delivery was to be made at Ishurdi, Bangladesh, by meeting the entire cost of transportation, insurance and tax liabilities except custom duty. However, disputes arose over the non-delivery of the parts on time and without the markings. The arbitrator gave an award in favour of Royal Forgings, leading to the appeal.

US Gem Society denied trade mark
The Intellectual Property Appellate Board has rejected the appeal of Las Vegas-based American Gem Society Laboratories LLC against the order of the Deputy Registrar of Trade Marks rejecting its applications for registering two trade marks relating to grading of precious stones. The two trade marks are “Setting the highest standard for diamond grading” and “American Gem Society Laboratories”. Both referred to gemological services. The firm argued that it was the registered proprietor of the marks in US, Canada, Japan, UAE and other countries. In India, the applications were made in 2005. The authorities rejected the applications on the ground that the mark was not capable of distinguishing the goods or services of one person from another. They are highly descriptive to their services and directly refer to the character or quality of the services. The board upheld this view. It also stated that it was well-settled that trade marks law is territorial in nature and registration in any number of countries, including the US, will have no bearing on their registration according to laws of this country.

Postal authorities’ demand quashed
Postal authorities who accept bulk mail cannot make the sender-company liable for mistakes discovered later, the Supreme Court stated in the case, CESC Ltd vs Chief Post Master General. It is for the postal authorities to check the postal articles and postage. CESC, which supplies electricity in Kolkata, sends more than 26 lakh bills to its customers every month. These franked consumption bills are handed over to the postal authorities. There was dispute over whether the postage for each bill was Rs 1 applicable to ‘book post’ or Rs 3 for ‘letter mails’. The company sent bulk mail by franking it at book post rate. The authorities did not accept the rate and demanded Rs 2 crore at the letter mail rate. The company moved the high court, which asked it to pay the amount. On appeal, the Supreme Court quashed the high court order, stating that once the postal authorities accept the bulk mail and they are delivered to the addressees, they cannot turn around and make the sender liable for their mistakes.