Double trouble for sand mafia

A weekly selection of key court orders

The Supreme Court last week settled differences in decisions of high courts and ruled that removing sand, gravel and other minerals from river and other places without permission could be criminally charged on two accounts: firstly, under the Mines and Minerals Development & Regulation Act, for violation of the conditions of mining lease; and secondly as theft of property of the state. There was one set of judgments which held that action under one law precluded prosecution under the other. Conflicting views have been taken by the high courts of Delhi, Gujarat, Kerala, Calcutta, Madras and Jharkhand. Since illegal mining is a nation-wide phenomenon the Supreme Court decided to put an end to the differing views in this batch of appeals from several states. The offences under the two laws are different and therefore prosecution can be launched according to the procedure laid down in each case, the Supreme Court stated in the case, Kalubhai Dulabhai vs State of Gujarat.

Arbitrator's power to award interest
When a contract for work states that no interest shall be payable on earnest money/security deposit or any money due to the contractor, an arbitration tribunal cannot award interest. However, it can order payment of interest from the date of the award. Thus the Supreme Court accepted the plea of Bharat Heavy Electricals Ltd last week in its dispute with Tata Projects Ltd. Bhel had given a Rs 7 crore work contract to the Tata firm. When disputes arose, it was referred to a three-member arbitration tribunal. It awarded Rs 70 lakh on various and Rs 25 lakh on account of interest. Bhel challenged the award of interest against it, among other things. The Calcutta High Court confirmed the award of interest. The Supreme Court set aside the high court order and ruled that in view of the terms of the agreement, Bhel will be liable to pay interest only from the date of award till payment.

Price of comparable imported goods

The Supreme Court has stated that customs authorities cannot assess value of imported goods at a rate higher than that declared by the importer without disclosing the basis of such assessment. The Customs Valuation Rules enable the authorities to determine the value of the imported goods on the basis of identical imported goods of comparable transaction. In this case, Giri Enterprises vs Commissioner of Customs, the importer bought Cyanuric Chloride from China declaring the price at $500 per metric ton. The Gujarat authorities assessed the price at $ 1860 pmt for comparable goods at the relevant time. It was based on a print-out at Mumbai customs house. The print-out was not disclosed to the importer. The latter challenged it before the Customs Tribunal but the tribunal upheld the demand. On appeal, the Supreme Court set aside the ruling and said that "the mere existence of an alleged computer print-out is not proof of the existence of comparable imports." The firm must be given an opportunity to establish that its transactions are not comparable, the court said.

Court not to review arbitration award
The Supreme Court has reiterated that the scope of interference by it in an arbitration award is very limited. "Where there is an error apparent on the face of the record or the arbitrator has not followed the statutory legal position, then only it would be justified in interfering with the award published by the arbitrator," the court stated in the judgment, Navodaya Mass Entertainment Ltd vs J M Combines. Confirming the order of the Madras high court, the apex court added that "once the arbitrator has applied his mind to the matter before him, the court cannot reappraise the matter as if it were an appeal and even if two views are possible, the view taken by the arbitrator would prevail."

Odisha appeal on contract labour dismissed
The Odisha government notification of 2000 for abolition of contract labour in respect of workers engaged in the DAP Plant in Paradeep Phosphate Ltd must be implemented, the Supreme Court stated while dismissing the appeal of the company against the order of the high court. The trade union had argued that the concerned workers were working uninterruptedly for 15 years. They were engaged by contractors who changed from to time, but the workers continued their work despite the changes. Though the company contested the claim questioning the power of the state government to issue the notification, the high court directed it to implement the government orders and regularise the workers. The Supreme Court upheld that order.

Building workers entitled to PF
The Delhi High Court has dismissed the writ petition of the Builders Association seeking to restrain the central government from enforcing the Provident Fund Act on casual construction workers. They also wanted the court to prevent the authorities from levying payment for site workers engaged by sub-contractors of the members of the association, consisting of top builders in the country. The high court allowed the authorities to initiate steps against the builders under the provisions of the law. It was alleged by the builders that Rs 26,000 crore is lying with the fund authorities without being distributed and the system was not working. The high court said that was no good reason not to contribute to the fund. It also asked the authorities to devise a scheme to ensure casual workers get their dues.

Korean ship allowed to sail
The Bombay High Court has ruled that a ship cannot be arrested while a claim for compensation is pending. In this case, Hanjin Shipping Co vs Port of Mumbai, there were two explosions on the South Korean vessel carrying hazardous substances while in Mumbai. The port trust demanded around Rs 2 crore as reimbursement for repairs and compensation. It did not allow the ship to sail until the amount was paid. The shipping company moved the high court. It allowed the ship to sail on furnishing a bank guarantee.