Chairman absolved from charge against company

The Supreme Court (SC) last week quashed a criminal complaint against the former chairman of the Maharashtra State Electricity Board, now a distribution company. However, the new company will face prosecution for fabricating evidence and making false statements before an arbitrator hearing a dispute between the company and Datar Switchgear Ltd. Though the ex-chairman was in charge then, “It is a settled proposition of law one cannot draw a presumption the chairman of a company is responsible for all acts committed by or on behalf of the company.”

Arbitrator exceeded power in awarding damages
The SC last week partly set aside the judgement of the Uttarkhand HC upholding the arbitrator’s award in a dispute between Oil and Natural Gas Commission and Wig Brothers & Engineers Ltd. The court held the arbitrator exceeded his jurisdiction by granting compensation for delay to the construction firm when it was entitled only to extension of time, according to the contract between the parties. The arbitrator had held that since both parties were responsible for the delay of nearly 1 year to complete the project, the contractor was entitled to compensation.

 

Appeal of US firm alleging ‘passing off’ of drugs by Indian co. dismissed
The Bombay high court last week dismissed the appeal of Schering Corporation of the US alleging ‘passing off’ of drugs by Indian pharma company, United Biotech Ltd. The US firm claimed that its medicine, Netromycin, was being confused by consumers with Netmicin produced by the Indian firm. Therefore it sought a permanent injunction from a single judge of the high court. It was rejected on the grounds that there was no distinctiveness in the packaging, the two trademarks were not deceptively similar, and there was no possibility of confusion as one was sold to the hospital directly while the other was sold over the counter.

There would not be any adverse effect on the consumer since the chemicals used in both the products are common and there were many medicines and pharmaceutical products being manufactured and traded in the market ending with the letters Mycin , Micin and Cin . The division bench upheld the order of the single judge remarking that “when a trade mark is found from the common generic name, no single proprietor can claim absolute monopoly in such name or trade mark.”

The Madras high court last week quashed the complaint against the chairman of Indo Biotech Foods Ltd, Dilip Dhanukar, for the company issuing cheques to India Equipment Leasing Ltd which were dishonoured by the bank. The payee company issued notices to the company, but not to the chairman personally. However, it filed a criminal case against the company as well as sthe chairman for issuing the cheques. It asserted that the chairman would be liable along with the company though the notice under the Negotiable Instruments Act was not sent specially to the chairman. The high court rejected this argument and stated that “in the absence of statutory notice addressed to the petitioner individually the notice sent to the company will not amount to the individual notice to the chairman.” The high court clarified that the company will continue to face prosecution for the issuance of the cheques.

The Madras high court has dismissed a large number of petitions, led by the Southern India Chamber of Commerce and Industries, challenging the Tamil Nadu government order affecting the functioning of leather, dyeing and other industries which allegedly polluted the water sources in the state. The state government order in 1989 imposed restrictions on locations of industries within one kilometre from the embankment of rivers, streams, dams etc. In 1998, another order was issued extending the prohibition. It stated that there shall not be any industry of the red category within 5 km of certain rivers mentioned in the notification. The industries challenged the power of the government to ban the operation while they were treating their effluents and not polluting water. However, the high court rejected their petitions, citing the Supreme Court order on this question. “When the Supreme Court had directed the government to implement the 1989 order in letter and spirit, it cannot be argued that the said government order was illegal and that the state government had no power to pass the order. The dictum of the Supreme Court is the law of the land,” the high court emphasized.