Stream of decisions on cheque bouncing

A weekly selection of key court orders

The Supreme Court has been sorting out several issues regarding bounced cheques recently. Last fortnight, it reconsidered its earlier conflicting decisions and ruled finally that complaints should be filed before the magistrate where the cheque was dishonoured. In April, it had issued a series of directions on the trial of cheque bouncing cases under the Negotiable Instruments Act, which has snowballed to more than 400,000 all over the country. In yet another judgment last week, it took the rare step of exercising its extraordinary power under Article 142 of the Constitution to set aside the order of the Delhi High Court in a cheque bounce case. The high court had also exercised its special discretionary powers under the Criminal Procedure Code to quash the criminal trial for stopping payment of Rs 60 crore. The reason given by the high court was that the complaint was filed beyond the time limit set by the Act. In this case, Pawan Kumar vs Maninder Singh, when the cheques bounced, the payee wrote a letter to the drawer in his handwriting about the dishonour. When there was no response, he got a lawyer to issue notice. The criminal complaint was filed beyond the time limit if the date of the handwritten letter was taken into account. The high court quashed the complaint on that account. However, if the date of the lawyer's notice was considered, the complaint was within time. The Supreme Court appointed a senior counsel to help sort out the issue and stated in its judgment that the issue should be decided by the trial court and not by the high court. While allowing the complaint to be revived before the magistrate, the Supreme Court said that its order using extraordinary constitutional power was meant "to meet the ends of justice" and it should not be treated as a precedent.

SC corrects earlier ruling on arbitration
The Supreme Court has overruled its own earlier view in an arbitration case and asserted that the central Limitation Act would apply if the state laws do not make special rules of its own on time-barred applications. The Madhya Pradesh Arbitration Act did not bar condonation of delay in case an application is filed beyond the prescribed time limit. Therefore, the high court had the power to extend the time limit as provided in the central law. In this case, State of MP vs Ansuman Shukla, the high court had ruled that it could not allow time-barred applications. It based the decision on the 2004 Supreme Court judgment in the case of Agarwal Construction Company. Setting aside the high court ruling, the Supreme Court stated that its earlier decision was wrong and therefore the high court cannot bar the application on the ground of delay.

Professors' help sought in patent dispute

The Delhi High Court has referred to a panel of three professors disputes over patent for two telecom technologies used by rival companies in the judgment, Vringo Infrastructure Inc vs Indiamart Intermesh Ltd. The dispute was over "a method and a device for making a handover decision in a mobile communication system". Vringo alleged that the rival was infringing its patent in India and in several other countries leading to litigation in many jurisdictions. According to it, the patent originally belonging to Nokia Corporation was assigned to them by a Confidential Patent Purchase Agreement in 2012. The rival company denied any infringement and stated that it was using a different technology. In view of this, the court decided to appoint a three-member panel consisting of professors, headed by one from Delhi IIT. According to Patent Rules, a panel can be appointed when intricate scientific questions are involved in a dispute.

NHAI appeal in contract row dismissed
The Delhi High Court has dismissed the appeal of National Highways Authority of India against the arbitral award of Rs 1,369.57 lakh in its dispute with Sricon Infrastructure. While undertaking works contract on National Highway 8 (Haryana-Rajasthan), several disputes arose between the parties. One of the main complaints of the contracting company was that the condition of the road in certain stretches was extremely distressed and different from that envisaged in the specifications of work as per contract agreement. It requested the engineer to look into this but despite several exchange of letters, it did not get relief. These and other factors were considered by the arbitral tribunal while giving its award. While dismissing the appeal, the high court stated that it was not sitting as a court of appeal and is not expected to re-appreciate the entire evidence and reassess the case of the parties. The award passed by an arbitrator cannot be set aside on the ground that it was erroneous or another view was possible, the judgment said.

Single member cannot pass verdict
The Calcutta High Court has stated that a member of a consumer commission sitting alone cannot pass a judgment in a dispute. In this case, New India Assurance Co vs Bhagwandas Vyapar Udyog Ltd, the insurance company challenged the order of the West Bengal State Consumer Commission on the ground that a single member passed the order, and it was against Section 14 of the Consumer Protection Act which provides that every proceeding should be conducted with at least two members sitting together. Agreeing with this contention, the high court pointed out that two office orders of the commission had constituted division benches and therefore, no single member can pass orders. The order passed in this case was set aside.

Court will not decide tender dispute
The Bombay High Court last week dismissed the petition of GVK Emergency Management Institute challenging the award of contract to BVG India Ltd by the Maharashtra government. The contract was for developing and operating the Maharashtra Emergency Medical Services, including provisions for 937 ambulances under the rural health mission. The high court stated that it would not interfere in disputes over tenders called by the state unless public interest was compromised or there was mala fide in the deal. There was no such vitiating factor in this case and the project has already started; so there was no reason for judicial interference.

"The modern trend points to judicial restraint," said the judgment, "particularly as this court does not sit as a court of appeal. A certain measure of freedom of play in joints to the executive is required to be allowed."