M J Antony: Arbitrator free to fix interest

The Supreme Court stated last week that a high court cannot interfere with the discretionary power of the arbitrator to fix the rate of interest in the award. When there is no mention of interest in the contract, the arbitrator has discretion to award interest on the amount awarded. In this case, P Radhakrishna Murthy vs NBCC Ltd, the arbitrator rejected the claim of interest at the rate of 24 per cent. On appeal, the civil court ruled that the arbitrator's view that he could not award interest was wrong in law. It awarded 16.5 per cent. The matter went up to the Karnataka High Court. It reduced the interest to 12 per cent, the bank rate prevailing at that time (1988). The contractor appealed to the Supreme Court, but it dismissed the appeal and confirmed the interest awarded by the high court.

Mining lease order quashed
The Supreme Court last week set aside the order of the Orissa High Court in a case involving iron and manganese ore mining lease in favour of M/s Mesco Steel Ltd. The high court had ordered the state government to execute a mining lease for an area measuring 1,520 hectares in favour of the company. The state government appealed to the Supreme Court. It ruled that the writ petition moved by the company was premature as the government had not taken any final decision. It allowed the company to reply to the objections of the government within three months and the government shall take a decision within two months thereafter.

Govt told to return land

The Supreme Court has directed the Rajasthan government to return the land acquired illegally to the owners. The land was taken over for building a bus stand at Dungarpur in 1980 but it was not built for seven years. The government then invoked emergency powers and tried to retain the land. The land owners moved the high court. But both the single judge and the division bench rejected their petitions. On appeal, the Supreme Court held the high court decisions wrong and restored the land to the owners, though only their successors will receive it. The original owners have died.

Gem show is 'entertainment'
The Bombay High Court last week dismissed the petition of the Gem and Jewellery Export Promotion Council and stated that it was liable to pay entertainment duty on the events it organises in Mumbai annually called 'IIJS' and 'IIJS Signature'. It is claimed that 800 companies participate in them and orders worth Rs 5,200 crore are placed there. The events are said to be the second largest in Asia for diamonds, gems and jewellery. The state revenue authorities demanded entertainment tax for the show. The council protested that it was not organising 'entertainment' as defined in the Bombay Entertainment Duty Act. On the other hand, the authorities maintained that the term 'entertainment' is defined to include any exhibition to which persons are admitted for payment.

Website not for posting replies

The Bombay High Court has ruled that mere posting of information on the website does not constitute communication. In this case, Institute of Cost Accountants of India vs Registrars of Trade Marks, Mumbai and Kolkota, the institute applied for a trade mark 'CMA' in 2010 for its services providing for training and award of degrees on the "newest branches of management and accountancy". There was no reply for a long time despite reminders. The institute accidentally got information in 2012 that the trade mark authorities had posted objections on their websites in 2011 to the application and one month was given to respond. When the information on the website was discovered, the institute sought a hearing within one month. It was denied as time-barred. The institute moved the high court, which asked the trade mark authorities to hear the application of the institute. The order said: "The trade mark authorities were bound to communicate any objection or proposal in writing to the applicant. They admittedly did not do so. Placing the notice on the website does not constitute compliance of the rules. The authorities have not indicated anything that obliged the institute to inspect the website on a daily basis."

Bid rigging by 29 firms

The Competition Commission of India has passed a 'cease and desist' order against 29 companies which bid for providing South Eastern Railway anti-theft devices. Though the firms were from different parts of the country and the cost of production and freight were different, they quoted identical rates. The commission directed an inquiry into this at the instance of the railway. The Director General found that the bid was rigged by the firms. He did not believe the excuse of the firms that it was a coincidence that they quoted identical price, in the same handwriting and same format with common omissions and commissions of language. The commission accepted the report and passed the prohibitory order. However, since none of the firms qualified for the contract even otherwise, they were not imposed penalty.