Directive to DGFT

LEGAL DIGEST

The Supreme Court has asked the director general of foreign trade (DGFT) to disclose to export-oriented units (EOUs) dealing in granites the reason for the change in policy last year. The ban on Domestic Tariff Area sales by 100 per cent EOUs under the OGL licence and limiting the issuance of licences to those that have imported crude marble under the new policy was challenged in several high courts.

Those petitions have been transferred to the Supreme Court. The EOUs complained that they were not heard before the policy was changed. The government undertook to give them the reasons. Therefore, the court asked it to supply the material. The EOUs can then make a representation to the DGFT. The latter will decide on the issue thereafter.

Tribunal order stayed

The Supreme Court on Wednesday stayed till January 31 an order of the Appellate Tribunal for Electricity asking Tata Power Company to refund Rs 451.35 crore to Reliance Energy Ltd.

The amount was to be paid on account of stand-by charges for electricity supply in Maharashtra. Stand-by charges are paid by both companies to the Maharashtra State Electricity Board for back-up arrangement in the event of power outages at their own generating stations.

The court granted the stay when Tata Power challenged the tribunal's order issued last month.The main case is listed for hearing on January 31. Therefore, the stay was extended till that date. The tribunal had directed Tata Power to refund the amount within 30 days of its order.

The deadline fell this week. Reliance Energy opposed the grant of stay, arguing that Tata Power was holding Reliance's money for the last five years, after recovering it from consumers. The tribunal had asked Tata Power to refund Rs 354 crore, along with interest at the rate of 10 per cent per annum, to the Anil Ambani group company as stand-by charges paid after April 2004 till the date of payment.

Proceedings quashed

The Supreme Court on Wednesday set aside the ruling of the Delhi High Court and quashed criminal proceedings pending against a director of VHEL Industries Ltd for issuing three cheques which were dishonoured. Complaints were made against the company, the managing director, and directors under Section 141 of the Negotiable Instruments Act.

Saroj Poddar, the director concerned, submitted that she had resigned before the issuance of the cheques. However, the high court did not accept her plea and allowed criminal proceedings to go on against her.

On her appeal, the Supreme Court pointed out that the complaints did not explain how she was directly responsible for the offence committed by the company. She did not sign the cheque. Unless the complaint made specific allegations against the role of the director concerned, she could not be made vicariously liable for the fault of the company and those in charge of its affairs, it said.