From trademark row to export duty, here are the key court orders

Participants alone can question tender

The Supreme Court has quashed the judgment of the Delhi High Court and the award of arbitration tribunal in a dispute between the National Highway Authority of India (NHAI) and Gwalior Jhansi Expressway Ltd. The contract was to widen a four-lane road on NH-75. The work was not satisfactory and the NHAI threatened to terminate the contract and called for a fresh tender to complete the remaining part of the project. This started the dispute.

The tender was challenged by the contracting firm arguing that it had an option to match the lowest bid, including the right to first refusal (ROFR). The High Court agreed with it. However, the Supreme Court noted that the firm did not participate in the tender though it was the existing concessionaire of the project.

The judgment stated: “An entity who stays away from the bidding process and fails to comply with the express terms and conditions of the tender documents cannot claim any right to match the lowest bid or exercise ROFR. Only a responsive bidder could do so.” Moreover, third parties who participated in the bidding process were likely to be prejudiced by allowing the existing contractor to match the lowest bid or exercise ROFR, without participating in the bidding process.

Trademark row over biryani rice
 

There is no exclusive right to the word 'Malabar', the Supreme Court has stated in a trademark dispute between two firms that sell biryani rice. In this case, Parakh Vanijya Ltd claimed that it was selling the rice under the name Malabar Gold since 2001. It alleged that a rival, Baroma Agro Products, used the word Malabar in conjunction with Baroma to sell a similar product. Parakh moved the Calcutta High Court, alleging infringement of trademark and passing off. The High Court allowed Baroma firm to sell its product after modifying the font, size and label design. It was done.

However, Parakh appealed to the Supreme Court challenging the High Court order. The appeal was dismissed stating that the label marks are substantially different and accepting the argument of Baroma that the word Malabar has been used by other firms selling coffee products naming them as Malabar Monsoon and Malabar Coast.

Directors to stand trial
 

The Supreme Court allowed the criminal trial of directors of a medical equipment supply company on the charge that the firm had replaced the original parts of a machine provided by Italian manufacturer with duplicates. The pathological clinic at Siwan, Bihar, run by a doctor, had ordered fully automatic biochemistry analyser from Logotech Ltd. It was found faulty. The firm replaced it with a costlier model. It also showed wrong results. Therefore, the service provider in India of the Italian firm was called. He found that the original parts were replaced with duplicates. When the doctor complained to the police, the doctor was threatened with murder and in fact, an attempt was made, according to his FIR. The magistrate took cognizance of it.

However, the Patna High Court quashed it on technical grounds. In the appeal, Om Prakash vs State of Bihar, the Supreme Court stated that there was a prima facie case against the directors of the company and the trial must proceed.

Pillion rider has no insurance cover
 

The Bombay High Court has ruled that an insurance company is not liable to indemnify a pillion rider as he is a ‘gratuitous passenger’ not covered by the insurance policy. The motor vehicle accident claims tribunal had awarded around Rs 300,000 to the wife, Hajrabi and imposed the burden on United India Insurance Co. The company was asked to deposit in court part of the compensation. The insurance company argued that the driver was not the owner of the vehicle and the deceased was riding pillion. Therefore, the terms of the policy were violated. The High Court accepted the argument but clarified that the amount already deposited with the court should not be withdrawn by the insurance company. It will go to the successors of the deceased person. But the amount can be recovered from the owner by the insurance company.

Liability to pay export duty

The Delhi High Court has dismissed the appeal of Nordic Intertrade AS (Norway) which had refused to pay export duty on the prime mild steel it bought from the Steel Authority of India (SAIL). The dispute was over whether Nordic was liable to pay duties imposed on export of the goods. Nordic disclaimed the liability to pay any export duties. On the other hand, SAIL insisted that since the title of the goods had passed on to the buyer, the liability is that of Nordic, according to the agreement and the provisions of the Customs Act. Nordic took the dispute to the Indian Council of Arbitration. The award was against it. Therefore, it appealed to the High Court invoking the provisions of the Arbitration and Conciliation Act. The High Court declined to set aside the award as it did not find any manifest error in the award and in any case, the scope of court interference was very narrow. It also pointed out that ‘costs’ mentioned in the contract included costs of customs. It rejected Nordic’s argument that the term did not include export duties.

Crop loss due to mix-up of seeds
 

Several farmers in Osmanabad who bought soybean seeds from Maharashtra State Seeds Corporation found that what sprouted were a mixture of other plants with different flowers and leaves, besides pods of varying lengths. They complained to the taluka agricultural officer. After taking samples and testing them, it was found that the seeds contained those of several other plants. The farmers took the corporation to the consumer forum. The corporation argued that the farmers did not have the status of a consumer as they had availed of the buy-back scheme for resale. It also contended that there was insufficient rain and therefore, the farmers suffered loss. It further submitted that the government and the crop insurance firms had compensated the farmers. The district forum and the appellate commissions did not find that the claim of getting compensation was true. The farmers were indeed consumers as they used the seeds for cultivation. The commission calculated the loss of the crops suffered by the farmers and their mental agony and awarded damages accordingly. While dismissing the appeal of the corporation, the National Commission cited a judgment of the Supreme Court which took a liberal view in such matters. That judgment said: “Majority of farmers in the country remains illiterate throughout their lives. They have no idea about the Seeds Act and the rulers framed under it.