Non-use of acquired land makes it invalid

It is not just under the old central Land Acquisition Act 1894, but even under state laws, land is acquired and not used for decades, making a mockery of the whole exercise. This was revealed in a judgment of the Supreme Court last week involving the Maharashtra Regional Town Planning Act. In 1991, the state government reserved for acquisition prime land in Mumbai's Vikhroli suburb for laying additional railway tracks. Even more than a decade later, no steps were taken by the authorities to utilise the land and no explanation was given. The land use was changed and the plan was to build a road. The land owner, Godrej & Boyce Manufacturing Co, then moved the Bombay High Court arguing the state government had no power to change the usage. Its writ petition was dismissed. On appeal, the Supreme Court set aside the high court ruling and quashed the notification due to the long lapse of time. Recently, the Supreme Court had passed several judgments in cases in which the land was not utilised for more than five years after acquisition and, therefore, the new law was applied and acquisitions were quashed. Even last week, in a large batch of cases, the court invoked Section 24 (2) of the 2013 law to set aside the acquisitions (Karnail Kaur vs state of Punjab).

Banks have high responsibility in LoC

Supreme Court has stated that a bank opening a letter of credit (LoC), cannot "disregard, delay or dilute its responsibility to make payment strictly and promptly as obligated by the terms of the letter of credit." It has a duty to all concerned to ensure that its action would not frustrate obligations. The court stated so while dismissing the appeal, National Bank Ltd vs G D Agarwal, and upholding the judgment of the Calcutta High Court. Though the decree of the high court has been satisfied, the Supreme Court felt that the law should be emphasised. The complaint of the Indian exporter of rice to a Bangladesh firm was that the importer there had managed to clear the entire consignment by devious means and the bank there did not take adequate precaution against such eventuality. "In trans-border transactions, trade depends almost entirely on the faith reposed in banking institutions to secure the price of goods," the judgment said and emphasised that there is a "heavy and fiduciary responsibility rested on the opening bank."

Stingy compensation for road deaths

In recent judgments, the Supreme Court has found fault with the calculation of compensation for road deaths by the tribunals under the Motor Vehicles Act and the high courts. As a result, the victims get meagre amounts. Last week, yet another case came to light and the Supreme Court tripled the amount awarded by the tribunal. The tribunal and the high court had not followed the principles laid down in leading judgments of the Supreme Court. In this case (Neeta vs MSRTC), two youths died when their scooter was hit by a bus. The tribunal awarded Rs 7 lakh each, the Karnataka High Court raised the amount by Rs 2 lakh. On further appeals by the widow, the apex court awarded the widow and children Rs 21 lakh and Rs 23 lakh in each case.

Bank manager gets jail for fraud

The Supreme Court has upheld the conviction of a manager of UCO Bank, Mumbai, for hatching a conspiracy with Harshad Mehta in the securities scam. The manager was accused of cheating his bank, causing losses to it and effecting illegal gain to Mehta, the key figure in the scam. He was convicted by the special court under the Indian Penal Code and the Prevention of Corruption Act. Though his sentence was suspended all these years, the court cancelled it and ordered him to surrender and serve the period of imprisonment.

Philips' injunction plea on LED rejected

The Delhi High Court, last week, rejected the plea of Philips India Ltd seeking permanent injunction against a firm, Shree Sant Appliances, in a dispute over the claims of the latter in advertisements and internet representations about the advantages of LED over CFL bulbs and their prices. The ads did not name Philips and used only generic names while comparing the prices of the products. However, it asserted that it had 30 per cent market share in the goods, was the only player in the business with direct reach in 1,000 semi-urban markets and had invested huge sums in the new technology. The ads by the rival indirectly disparaged its products by false representations. The high court rejected these arguments. Merely because of some inconsistencies in the claim it does not warrant an injunction. There was no malice in the disputed ads nor did Philips proved that it had suffered losses. "In a sense," the court said, "Philips stands to profit, at least partially, if the sale of LED bulbs gains momentum in the market."

ITPO gets income tax exemption

The Delhi High Court, last week, allowed the petition of India Trade Promotion Organisation challenging the withdrawal of certain income tax exemptions granted to it till 2012. It had challenged the Constitutional validity of Section 2(15) of the said Income Tax Act, but the court upheld it and only read it down. The organisation claimed exemption under the charitable clause provision, as they conducted activities relating to the promotion of Indian trade and such activities fell within the ambit of the expression "advancement of any other object of general public utility." But according to the new proviso to Section 2(15), these objects were not regarded as charitable purposes. The revenue authorities contended that the organisation had huge surpluses in banks and it had derived income from trade fairs. The high court rejected this line of argument and asserted that the expression "charitable purpose" could not be construed literally. "If a literal interpretation is given, the proviso would be at the risk of running foul of the principle of equality enshrined in Article 14 of the Constitution."

PWD not covered by competition law

The Competition Commission of India has ruled that the Haryana Public Works Department (PWD) is not an "enterprise" covered under the anti-trust law as it is "not directly engaged in any economic and commercial activities". The majority members viewed the role of PWD as limited to being a government department providing infrastructure without any commercial consideration. Therefore, its dominance in the market did not arise. The commission was considering a complaint that PWD had imposed unfair conditions on bidders of works connected to Northern Railway.