Nod to Bank of Rajasthan

LEGAL DIGEST

The Supreme Court has allowed the Bank of Rajasthan to raise capital, subject to regulations in accordance with law. In an interim order last week, the court permitted the bank to raise capital pending decision on the appeal relating to listing of 90 lakh shares on the Bombay Stock Exchange.

Earlier, the bank had moved the Securities Appellate Tribunal (SAT) challenging the inaction on the part of market regulator Sebi, in granting approval for the listing of its 90 lakh shares on the BSE.

The tribunal took the view that the allotment of the fresh 90 lakh shares were not for existing shareholders and were allotted to the promoters as a select group. The SAT had said this would result in 'preferential allotment' under Section 81(1A) of the Companies Act, 1956.

According to the Bank of Rajasthan, the tribunal had failed to appreciate that these shares were earlier offered to the warrant-holders or shareholders of the bank through unconverted warrants and were refused by them. It argued in the Supreme Court that the SAT had erred by holding that the unconverted warrants did not represent any part of the bank's capital, until they were converted into shares in January 2001 by a resolution of its board of directors.

Trademark case: 'Fruity' hearing

The Supreme Court last week deferred hearing on a transfer petition filed by confectionery major Cadbury India, alleging infringement of its trademark, Fruity, by Parle Agro Pvt Ltd. Cadbury India has sought transfer of Parle's suit from the Bombay High Court to Delhi so as to avoid any conflicting judgements.

While seeking restraint on Parle from using the word, Fruity, or any other deceptively similar word in relation to any confectionery product, Cadbury stated in its petition that the word was commonly used in English and Parle cannot claim exclusivity to a completely descriptive term.

Cadbury stated that various trademarks including 'Fruity' were registered in its name before being assigned to Cadbury Schweppes Overseas Ltd in 1994. The mark was later licensed to it for exclusive use in India, the company stated, adding, however, that it was yet to be recorded in the Trade Marks Registry.

Cadbury said it was "shocked" to receive a "cease-and-desist notice" in September 2006 from Parle's lawyers, claiming right to 'Frooti' and raised allegations against use of the word for its (Cadbury) flavoured variants of Gems launched in July 2005. While refuting charges, Parle stated that it was "anxious to preserve, protect and enforce" its intellectual property rights in the mark 'Frooti' which it had been using for more than two decades.

Bajaj moves SC on proposed sugar unit

Bajaj Hindustan Sugar and Industries Ltd has moved the Supreme Court challenging an order of the Allahabad High Court that stayed the construction work of its sugar factory at Itia Maida in Uttar Pradesh.

According to Bajaj, the impugned stay order obtained by Balrampur Chini Mills Ltd was an attempt to settle business rivalry and the latter was fully aware about the construction work going on full swing for the last three months at its site.

Bajaj contended that the Allahabad High Court's direction would jeopardise the construction work, causing irreparable loss to its company as it had already committed more than Rs 300 crore on the project.

Bajaj's business rival in sugar production, Balrampur Group had moved the High Court alleging that by construction of a new proposed mill within a radius of 15 km it has violated the Sugarcane (Control) Order, 1966, that prohibits two sugar mills within 15 km. Balrampur had filed an Industrial Entrepreneur Memorandum (IEM) at Kalu Bankat, which was about 13 km from the rival's site.

'Earning not the only loss in on-job mishaps'

While computing compensation for the injuries suffered by a worker in the course of employment, the loss of earning capacity is only one of the factors to be taken into account, said the Supreme Court while allowing the appeal of National Insurance Company Ltd.

In this case, a doctor had given a detailed account of the percentage of permanent and temporary disablement, functional disability and loss of earning capacity. Without taking into account all these, the Allahabad High Court held that there was 100 per cent loss of earning capacity. The Supreme Court set aside the HC judgment, observing that "loss of earning capacity is not a substitute for percentage of the physical disablement. It is one of the factors taken into account."

Delhi HC order protects 'Infosys'

The Delhi High Court has directed computer education institute Park Infosys not to use the word Infosys in its name, as it is a registered trademark of an IT giant.

Delivering the judgement on trademark infringement suit filed by Infosys Technologies Ltd, the court said: "There can be no... doubt that use by the computer institute is likely to result in confusion and the same has a propensity of diverting customers and business of the plaintiff (Infosys) to the defendant. The service range of the defendant is also similar to that of the plaintiff (Infosys).'

SC urges TN court

The Supreme Court has asked the Madras High Court to reconsider the cases of stone-crushing units which are operating in the neighbourhood of villages in Kanchipuram district of Tamil Nadu.

According to them, such units can function within 300 metres of habitation, whereas the high court had taken the view that they should be further away. The factual position was not assessed by the court. Therefore it was asked to make factual evaluation of the disputed point.

'Loopholes in Second Schedule of MVA'

The Supreme Court has again pointed out that the Second Schedule to the Motor Vehicles Act suffered from many defects. This schedule is meant to calculate the compensation in road accident deaths.

However, it was a poor guide only and could not be used as a ready reckoner, the court said while partly allowing the appeal of New India Assurance Company in a compensation case, and modifying the order of the Uttaranchal high court.

The high court had awarded Rs 8 lakh to the widow and dependents of a person who died in a road accident. He was 33 years old and his income was multiplied by 17 working years to get at the figure. The insurance company appealed to the Supreme Court. It held that the multiplier was too high. It reduced the multiplier from 17 to 13, and the amount was reduced with interest to Rs 4.7 lakh.