The Supreme Court has ruled that an arbitration clause in a deed which is compulsorily registrable but not registered and insufficiently stamped cannot be enforced. In this case, Naina Thakkar vs Annapurna Builders, the Hyderabad civil court rejected her application invoking the Arbitration and Conciliation Act because the lease deed was not registered properly. The Andhra Pradesh High Court upheld the civil court order. She moved the Supreme Court contending that she should have been given an opportunity to make up the deficit stamp duty and pay penalty following the procedure prescribed in the Indian Stamps Act. The court rejected her contention remarking that “it is not the duty of the court to adjourn the suit indefinitely until the defect on stamp duty concerning the arbitration agreement is cured.”
HCs not to hear writs by consumers
The Supreme Court has issued a “direction of caution” to the high courts that they should not accept writ petitions against orders of the National Consumer Commission. According to the Consumer Protection Act, appeals against the order of the commission lie to the Supreme Court only. But in this case, Cicily Kallarackal vs Vehicle Factory, the Kerala High Court admitted a writ petition challenging the order of the commission and passed certain orders. The Supreme Court asserted that the Act did not prescribe this procedure.
New India to pay compensation
The Supreme Court has asked New India Assurance Company to pay Rs 19.75 lakh to a person who had suffered amputation and other serious disabilities in a road accident. The motor accident compensation tribunal had awarded only Rs 4 lakh in the case, N Suresh vs Yusuf Shariff. The Karnataka high court raised the amount marginally to Rs 7.26 lakh. On further appeal, the Supreme Court re-calculated the compensation due in such serious cases causing permanent disabilities and hiked the amount, to be paid by the insurance company.
Notify acquisition publicly: SC
If the government does not issue a public notification regarding acquisition of land, the acquisition will be invalid and illegal. Notification in the official gazette is not enough. On this reasoning, the Supreme Court has quashed a land acquisition by the Maharashtra government as it did not issue public notification to that effect. The Land Acquisition Act makes it mandatory to announce the acquisition in the official gazette as well as publicly. In this case, the government’s defence was that it had published the notification in the gazette but did not issue public notification. The claimant to the land challenged the acquisition as the procedure was not followed. However, the Bombay High Court dismissed the petition. Therefore, the claimant moved the Supreme Court. Allowing the appeal in the case, Kulsum Nadiadwala vs State of Maharashtra, the court emphasised that when a procedure is prescribed in the law, it should be strictly followed. Both requirements under Section 4 should be mandatorily followed. This is so even if the land owners have been served with individual notices or are aware of the acquisition from other sources. Merely because the land owners had failed to file objections within the prescribed 15 days after the gazette notification, the acquisition would not be valid.
Delay fatal to preventive detention
Inordinate delay in executing a preventive detention order will make it illegal, the Supreme Court asserted in the case, Saeed Malik vs State of Maharashtra. In this case, the Directorate of Revenue Intelligence launched investigation into fraudulent exports made from Nhava Sheva port under the drawback scheme of the Customs Act by fictitious firms. One of the alleged racketeers was arrested and later released on bail. While he was on bail, a detention order was issued against him. But it was executed only after some 15 months. He moved the Bombay High Court challenging the detention. The high court dismissed the petition, leading to the appeal. The Supreme Court pointed out the rights a detenu under Article 22 of the Constitution. The detenu’s representation must be considered with urgency. In this case it was not done. The authorities could not give any satisfactory explanation for the undue delay and other violations of procedure. Therefore, setting aside the high court order, it quashed the detention order.
OIL challenge to award dismissed
The Delhi High Court last week dismissed with costs the petition of Oil India Ltd (OIL) challenging the majority award by a three-member arbitration tribunal in the dispute with Essar Oil Ltd. The dispute arose out of a 1995 contract entered into between the parties for drilling of offshore wells on turnkey basis offshore Saurashtra coast, Gujarat and offshore North East Coast, Orissa for the purpose of exploration of oil and/or gas. OIL alleged delays on the part of Essar and the latter made counter charges. After a year, OIL terminated the contract alleging that Essar was “incompetent and incapable of performing its obligations under the contract.” This led to arbitration by former Chief Justice of India, Justice R S Pathak, and two retired Delhi High Court judges, which went against OIL. The Delhi High Court stated that the majority award was well-reasoned and did not require interference by it.
