SC split on land acquisition issues

The Land Acquisition Act is about 120 years old, and the proposed new one is mired in controversy, but it seems there are issues of interpretation yet to be settled by the Supreme Court. Last week, a two-judge bench delivered a split verdict on the question of interest on solatium in the case of land acquisitions, and the question has been referred to a larger bench. This means that the final word of the court on this two-decade old case will not come for years, going by the enormous backlog.

In this case, Periyar and Pareekanni Rubbers Ltd vs state of Kerala, the company was aggrieved by the denial of interest payable on the component of solatium. It argued that the denial and its approval by Kerala High Court were illegal. One judge asked the government to pay interest but the other judge expressed his "respectful disagreement" with that order, leading to the request to the Chief Justice to set up a larger bench. Meanwhile, the CJ's court is currently struggling with hundreds of land acquisition cases which have been divided into different sets according to their origin.

'Family' does not include brother, sister

The Supreme Court has ruled that the 'family' of a married man includes only his wife, not his brother or sister for the purpose of registration for LPG dealership from Bharat Petroleum Corporation Ltd. In this appeal case against the judgment of Allahabad High Court, BPCL vs Meet Kalar, the applicant claimed that he had the minimum liquid fund of Rs 15 lakh.

However, in his bank account he had only around Rs 2 lakh and his wife had Rs 54,000. His joint account with his brother had Rs 37 lakh. When the government corporation rejected his application for dealership on the ground that he did not have sufficient funds, he moved the high court. It accepted his argument that he had sufficient funds in the joint account. But the corporation appealed in the Supreme Court. It set aside the high court ruling and stated that 'family' in the corporation guidelines included only his wife and himself.

BIFR firm cannot claim incentives

The Supreme Court upheld coercive action against a company which was denied sales tax incentive when it was referred to the Board for Industrial and Financial Reconstruction (BIFR) under the Sick Industries Act. In this case, I C Textiles vs state of Gujarat, the company applied for registration for sales tax incentives offered to premier and prestigious units in the state. Tax exemption and deferment were given according to location, investment and status of the project.

This company was a producer of cotton yarn and other goods. It was granted provisional registration for the benefits. However, while the application for permanent registration was pending, it became sick. The government started proceedings against the firm for sales tax dues and its application or permanent registration was rejected. It moved the high court, but it rejected its petition stating that the firm did not have the threshold asset of Rs 100 crore to become a prestigious unit. The firm appealed in the Supreme Court but it was dismissed.

SC appoints former judge as arbitrator

Supreme Court appointed its former judge Justice M K Sharma as arbitrator in the dispute between Taiyo Membrane Corporation PTY and Shapoorji Pallonji Ltd, rejecting the objections of the latter. Shapoorji had obtained a contract for renovation of Jawaharlal Nehru stadium and several sub-contracts were signed between the two firms.

The complaint of Taiyo was that it did not get certain payments from the Indian firm. Shapoorji contended that the other firm did not fulfill its contractual obligations, and therefore payments were withheld. Supreme Court stated that the dispute by its nature was arbitrable and Taiyo had validly invoked the arbitration clause.

Rs 4 Lakh each for casual workers

Lucknow University was directed by the Supreme Court to pay Rs 4 lakh each to some 20 casual workers in addition to wages for the period when they were removed. The employees were "orally engaged" in the accounts department in 1989 and were kept in a limbo since 1990. Later, they were terminated without giving reasons. They moved the industrial court. It directed the university to consider their regularisation in suitable posts and till then pay wages.

The university appealed to the high court without success. When it moved the Supreme Court, it held that the courts below were wrong, but in the facts of the case, as these employees were out of job for more than 20 years and now they are over-aged, "the interest of justice will be served by directing payment of monetary compensation."

Hoteliers' challenge to Food Act dismissed

The Bombay High Court, last week, dismissed a group of writ petitions moved by the Association of Traders in Food Business, Mumbai Mewa Masala Merchants Association and AHAR Indian Hotel and Restaurant Association against certain provisions of the Food Safety and Standard Act and regulations. They wanted a declaration that they were not 'manufacturers' under the rules and they should be represented in the advisory committee, modify penalty rules and exemption from filing returns under a regulation.

They argued that the law conferred excessive and vague powers on the authorities, violating the constitutional guarantee of equality and right to trade. Rejecting their arguments, the court observed that the powers conferred on officers are to protect human life and "the object of these provisions is laudable. We strongly deprecate the approach of the associations in assailing the provisions in such a cavalier manner and on superfluous issues."

Beware of 'as is where is' condition

The common condition in auctions, 'as is where is', should not be used for misrepresenting facts, the Patna High Court stated last week while allowing the petition of Sun Biotechnology Ltd against the Bihar State Financial Corporation. Thirteen years ago, the company had bought assets of a firm which failed to refund a loan.

However, in the auction, it was not disclosed by the corporation that parts of the land had already been acquired by the state for a Burma colony and Food Corporation. It was alleged that only 27 acres out of 77 acres were actually delivered. The high court stated that the corporation, "in making misrepresentation of facts and selling the land. without being its owner, amounted to commission of the offence of cheating."