Only first notice on bounced cheque valid

The Supreme Court has ruled in the case of Tameshwar Vaishanav vs Ramvishal Gupta that if the payee or the holder of the cheque does not file a complaint of dishonour within the prescribed time, he cannot issue a second notice and then file a complaint again. Notice with respect to a cheque can be issued only once. The deadline or limitation starts from the date of the first notice. Later notices do not matter, the judgement stated while interpreting Sections 138 and 142 of the Negotiable Instruments Act. According to the Act, the notice of dishonour of a cheque due to insufficiency in the account should be sent to the drawer of the cheque within 30 days of the dishonour. If the drawer of the cheque does not pay within 15 days thereafter, the holder of the cheque may file a criminal complaint. 

Dispute over arbitrator

The Supreme Court has remitted the arbitration dispute between NBCC Ltd and JG Engineering Ltd to the Calcutta high court. The high court had allowed the petition of the private company and terminated the mandate of one arbitrator and appointed a new one in his place. The dispute was over the contract to build the terminal buildings at Bhubaneshwar which was delayed. There was a term in the contract that the time within which the arbitration should be concluded could be extended by mutual consent. After years of delay and change of arbitrators, the litigation moved to the high court. It refused to accept the award of the arbitrator as it was beyond the stipulated time. It appointed a new arbitrator. This action was challenged in the Supreme Court. It asked the high court to reconsider the case after considering the qualifications required by the arbitrator.

Sales Tax holiday for PSU

The Supreme Court has dismissed the appeal of the Bihar government which had denied certain sales tax benefits to a public sector company, Kalyanpur Cements Ltd. It became sick and it sought financial assistance from several institutions for rehabilitation. However, their offers were subject to a condition, namely, that the restructuring package would be made available only on the company obtaining a sales tax exemption for five years from the state government in terms of its then industrial policy. Subsequently, the company had a problem with sales tax exemption. The company moved the Patna high court which accepted its demand for the benefits. Upholding the high court view, the Supreme Court remarked that “the government cannot be permitted to rely on its own lapses in implementing its policy to defeat the just and valid claim of the company.” 

Computation of capital gains on PCDs

The Supreme Court last week allowed the appeal, Navin Jindal vs Assistant Commissioner of Income Tax, deciding the issue whether the loss on renunciation of right to subscribe to partly convertible debentures (PCDs) is short-term capital loss or long-term capital loss in the light of Section 48(2) of the Income Tax Act. A number of assessees in a similar situation argued that it was short-term capital loss, while the revenue authorities maintained that it was long-term capital loss. The Supreme Court ruled that the nature of the loss in the concerned transactions should be considered as short-term loss.

Real estate firm gets right to name

The Delhi high court last week dismissed the petition of a US company seeking injunction against a Gurgaon real estate company which have similar names in the case, Century 21 Real Estate LLC vs Century 21 Main Realty Pvt. Ltd. The high court remarked there was no balance of convenience in favour of the US firm to grant injunction. It was not a case where the US firm was going to suffer any irreparable loss or injury. It has no business in India and it has no office in India. Except making an application for registration of trademark and keeping trademark registered so as to block the trademark, it had done no work in India. “Blocking of trademark and blocking of trade name are not looked upon kindly by the courts. It has become a practice to block important domain names, important trade names so that others cannot use it despite the fact that the person himself may not use it,” the high court said.

Blocking of the name ‘Century 21’ in India would give no advantage to the US firm especially as the Indian firm’s operation was confined only to Gurgaon, in Haryana.