THE Supreme Court has referred to a larger bench the question of the authority of an arbitral tribunal to award interest on interest from the date of the award. A two-judge bench of the court noted divergence of opinion among several of its earlier judgments. This was pointed out in the latest case, M/s Hyder Consulting (UK) Ltd vs Chief Engineer, Odisha. The high court relied upon a Supreme Court judgment while quashing the order of a district judge on the arbitration award. However, the UK company argued the high court decision was wrong as it was against the Act and a series of judgments of the Supreme Court. Therefore, the present case will be heard for settling the differences on this issue by a three-judge bench. The Chief Justice of India will set up the bench.
Duty on polyester fabric
The Supreme Court has dismissed the appeal of the commissioner of central excise challenging the order of the Customs, Excise, Service Tax Tribunal, Surat, which had granted exemption to M/s Favourite Industries Co, engaged in manufacture of processed polyester grey manmade fabric out of raw materials obtained indigenously or imported under the obligation of export of final product. The revenue authorities issued showcause notices for short payment of duty for contravening provisions of the Exim policy and excise rules. The company claimed exemption under a 1997 notification. The tribunal quashed the order. The court upheld the order, observing the established rule was that “a liberal construction requires to be given to a beneficial notification.” In another judgment, Commissioner of Customs vs M/s Konkan Synthetics Fibres, the court upheld the Mumbai tribunal’s decision granting exemption of customs duty for the import of high speed draw warping machine.
Claim after 45 years rejected
The Supreme Court last week set aside a judgment of the Jharkhand high court which had asked the state authorities to assess the value of the land acquired and issue a notification under the Land Acquisition Act. In the judgment, State of Jharkhand vs K N Farms and Industries Ltd, the Supreme Court stated that the high court had committed a “grave error” by entertaining the petition of the land owner after 45 years, overlooking the rule that the court should not entertain belated claims.
Rule on bounced cheques
The Delhi high court has stated that while issuing a notice under Section 138 of the Negotiable Instruments Act, “an omnibus notice without specifying the amount due under the dishonoured cheque, not even calling upon the alleged accused to pay the amount of cheque”, will not meet the requirement of the law. Quashing the complaint in the case, Brainobrain Kids Academy Ltd vs Continental Advertising Ltd, the court noted that “the demand for return of the amount is an essential ingredient to constitute an offence punishable under Section 138 of the Act. Thus, if the amount is not specified, the same cannot be said to be a valid demand.”
Insurers lose appeal against awards
The Delhi high court has dismissed the appeals of insurance companies which had argued they were not liable to pay interest on the award amount from the date of a motor vehicle accident, but only from the date of the award, if at all. In several cases, the commissioner under the Employees Compensation Act had awarded 12 per cent interest on the amount of compensation in accidents involving employees who were on employers’ duty. New India Assurance Co Ltd and Oriental Insurance Co Ltd contended interest fell due on the date of adjudication, and as such, it was not payable after 30 days of the date of accident, as was held by the commissioner. Rejecting the argument, the high court ruled that the liability arose as soon as personal injury was caused to the workman and the employer has to pay compensation, and failure to pay entailed liability to pay interest and penalty.
