From arbitration to cheque bounce cases, here are list of key court orders

A weekly selection of key court orders

 

Arbitration placed in fast lane
 
When the Commercial Courts Act is invoked as against the Arbitration and Conciliation Act in a dispute between companies, it is the latter which will prevail as it is a special law. The object of both laws is an expeditious settlement of disputes. Therefore, in the interest of speedy decision, an appeal, which is not maintainable under the Arbitration Act, cannot be taken to a commercial court set up in the high courts. This observation was made by the  Supreme Court last week while dismissing the appeal case, Kandla Export Corporation vs Oci Corporation. In this dispute, the foreign award went against the Kandla Corporation, which sold grain to the other party. It was asked to pay a total of $ 815,000 with a compound interest at the rate of 4 per cent. Its appeals before the English courts were dismissed. Oci Corporation then approached a Gujarat civil court for execution of the award. It was challenged by Kandla Corporation without success. On appeal, the high court dismissed the objection and allowed execution of the award. Aggrieved by that order, the Kandla Corporation filed an appeal under the Commercial Courts Act, which was later dismissed by the high court stating that the Act did not provide any additional right of appeal. Upholding that view, the Supreme Court asserted that in all arbitration cases of enforcement of foreign awards, it is the Arbitration Act (Section 50) alone that provides an appeal. The court also observed that “enforcement of foreign awards should take place as soon as possible if India is to remain as an equal partner, commercially speaking, in the international community...Given the objects of both the enactments, if we were to provide an additional appeal, we would be turning the Arbitration Act and the Commercial Courts Act on their heads.”
 
Charge of coercion must be proved
 
A mere allegation by a contractor that he issued a ‘no-dues certificate’ under duress and coercion cannot be accepted, provided there is sufficient evidence for it, the Supreme Court stated last week, while allowing the appeal of ONGC Mangalore Petrochemicals Ltd against the order of the Karnataka High Court. The high court had appointed an arbitrator in the dispute between ONGC and ANS Constructions Ltd. After completing the work, ONGC paid all dues and the contractor issued the no-dues certificate. But 12 days later, the firm withdrew the certificate, alleging that it was coerced to do it due to financial constraints. It moved the high court for arbitration and its prayer was allowed. ONGC appealed before the Supreme Court. It said that a bald assertion of coercion would not warrant appointment of an arbitrator when all dues have been paid by ONGC and accepted by the contractor.
 
Limitation under Companies Act
 
The Supreme Court has dismissed the appeal of the Bengal Chemists and Druggists Association, challenging the order of the National Company Law Appellate Tribunal, and asserted that the tribunal was well within its power to dismiss the petition on the ground of delay. Invoking Section 421(3) of the Companies Act, the court stated that an appeal against a tribunal order should be filed within 45 days. A further period of 45 days may be granted at the discretion of the appellate tribunal. The Supreme Court stated that this is a new and special provision. The Limitation Act or the provisions of the Arbitration and Conciliation Act has no application in the case of the Companies Act 2013, the judgment clarified.
 
Delay defeats land reservation
 
The Supreme Court last week set aside the reservation of land for town planning by the Maharashtra government as no follow-up action was taken for 15 years. According to the Maharashtra Regional Town Planning Act, if any land reserved for any public purpose is not acquired by agreement within 10 years, the owner may serve notice on the planning authority and if still no steps are taken, the land shall be released to the owner. In this case of Jalgaon city plan, there was an inordinate delay and “the owner or person affected cannot be left to hang indefinitely without a decision to follow up the purchase notice by acquisition of the land in question,” the judgment said. The government, however, can keep alive the plan beyond 10 years by issuing a second purchase notice.
 
Registered owner to pay damages
 
The Supreme Court ruled last week that a person whose name is found in the records of the motor vehicles registering authority is the owner of the vehicle for the purpose of fulfilling the obligation to pay compensation in case of a road accident. The owner might have changed, but the person on the record is liable to compensate. In this case, Naveen Kumar vs Vijay Kumar, the latter had sold his car in 2007 but did not change the name in the register. The car, meanwhile, had changed hands several times. It met with an accident at the hands of the fifth owner, and one person was killed. The motor accident compensation tribunal held the original owner liable for paying damages. But, the Punjab and Haryana high court reversed it. The Supreme Court set aside the high court ruling and asked the original owner to pay a compensation of Rs 400,000. The judgment asserted that the victim of the accident should not be left in a state of uncertainty. “A claimant for compensation ought not to be burdened with following a trail of successive transfers, which are not registered with the registering authority,” stated the judgment and pointed out that the object of the law was to provide relief to the victims of road accidents.
 
Bail is the norm in cheque bounce cases
 
In a case of bounced cheque, the Supreme Court last week granted bail to the accused person, invoking the principle that bail is the general rule and jail is an exception. The accused person, in this case, was charged with cheating and issuing a cheque for Rs 1,800,000 which he stopped from payment by the bank. The drawee filed a case under the Negotiable Instruments Act. The drawer was charge-sheeted and jailed. He was denied bail by the trial court and the Allahabad High Court. On appeal, the Supreme Court reiterated the bail-not-jail principle and released him on bail. The judgment in the case, Dataram Singh vs the State of UP, noted that there was no apprehension that the accused would abscond or hamper the trial in any manner. He was no shady character. The high court ought to have judiciously exercised discretion and granted bail, the apex court said.