Supersession of elected committees

The Supreme Court has issued seven "general directions" to be followed when a state government supersedes elected managing committees of cooperative banks and other financial bodies. This has become necessary, stated the court, "in view of the mushrooming cases in various courts challenging orders of supersession of elected committees." The order was passed while dismissing the appeal of the Madhya Pradesh government against the high court judgment in the case of supersession of the board of directors of District Cooperative Bank Ltd, Panna. The joint registrar of cooperative societies superseded the board after issuing a show cause notice containing 19 charges. The directors challenged the supersession as it was done without consulting Reserve Bank of India. The court directed reinstatement of the board of directors for the full term. Among the general directions are supersession should be ordered only in rare circumstances, the committees should not be penalised for short-comings and illegalities committed by the earlier body, it should be given sufficient time to rectify defects, the registrar should consult controlling banks before taking action, he should not act under political pressure, if he does not act bona fide he shall be subjected to disciplinary proceedings and pay cost of legal proceedings and finally "public money should not be spent by the government for unnecessary litigation involving various factions in a coop."

When tender goes into spam

The Delhi High Court last week dismissed the petition of Swiss company, Opus Group AB challenging the rejection of its bid by the Ministry of Road Transport and Highways. The firm is a worldwide vehicle inspection industry group with focus on vehicle testing and diagnostics. It made the technical bid last year in response to the ministry's tender and deposited earnest money. It also provided the email and contact addresses. However, the ministry sought certain clarifications which did not reach the company as the spelling was wrong and the computer moved the message to spam. Though the information was sent later, it was beyond the deadline and therefore the bid was rejected. The company argued the message was sent to the wrong address and it could not be blamed. The ministry denied the charges and stated that it could not be blamed for technical faults at their end. The high court stated that it was the duty of the bidder to check the communications regularly as instructed in the bid document and if the message has gone into spam folder, it was not the faulty of the ministry. It was the company which should have corrected the technical flaw after checking the spam file. The court will interfere in tenders only if there is mala fide or arbitrariness.

VAT penalty only prospective

The Bombay High Court last week upheld the constitutional validity of the 2009 amending Act to the Maharashtra Value Added Tax, 2009, but clarified that the imposition of a penalty under Section 93(2) will take effect only prospectively as it would be harsh to make it operate from 2005. The retrospective operation of the law was challenged by several companies like Jindal Poly Films Ltd and Bajaj Auto Ltd. The government had provided for an incentive package to encourage industries to disperse outside Mumbai-Pune-Thane belt. Later the package was modified twice to accelerate the dispersal. The companies argued, among other things, that the state legislature by amending the provision sought to collect a tax after they had taken the benefit of the exemption and passed on the benefit, which is unreasonable. It also amounted to imposition of new levy.

Challenge to TM rejected

The Bombay High Court has rejected the plea of Macleods Pharmaceuticals Ltd for an injunction against Intas Pharmaceuticals for violation of trademark of a medicine and "passing off". Macleods produces Anti-Thyrox, a medicine brand used to treat thyroid deficiency, and Intas manufacturers Lethyrox, for the same symptoms. Macleods alleged that the opposite party violated its trade mark and therefore it should be stopped from marketing the product to avoid confusion among the consumers. The high court rejected the request stating that the marks are distinct and different. Moreover, Macleods has not established the ingredients of passing off action. The adoption of the name by the opposite party appeared to be honest, independent and bona fide. The rival packets placed before the court also did not make out any case for confusion. There are no instances of any complaints being made suggesting any confusion having been caused. Since the medicines are the same, there cannot be any disastrous consequences. The court then expedited the hearing of the main suit.

Patent denied for hair tonic

The Intellectual Property Appellate Board last week dismissed the petition of Hindustan Unilever Ltd challenging the denial of patent for water-in-oil microemulsions for hair treatment by the Controller of Patents and Designs. According to the company, consumers who oiled their hair pre-wash and post-wash get an unattractive appearance. This invention prevented such condition. However, the controller rejected the claim of "invention". The board upheld the view of the controller.