SC asks Delhi HC to dispose of Bank of India versus Deutsche Bank Asia case expeditiously

LEGAL DIGEST

The Supreme Court has asked the Delhi High Court to settle a 26-year-old dispute involving Bank of India, Deutsche Bank Asia and Mehta Brothers as early as possible, preferably within six months. Bank of India filed a suit for recovery of Rs 91,58,480 against the firm and the German bank. It was alleged that at the request of the firm, it had issued an irrevocable letter of credit in favour of M/s Bentrex & Co, Singapore. 

The beneficiary presented it to the German bank. After negotiations, the New York branch of the Indian bank paid the amount. Later, the Indian bank received documents from the German bank which allegedly contained discrepancies and violative of the Uniform Customs and Practice of Documentary Credits 1974. This triggered off the long litigation. The single judge of the Delhi High Court granted the request of the German bank to hear its side, which order was set aside by a division bench. The Supreme Court restored the single judge’s order and asked the high court to dispose of the case expeditiously.

SC dismisses Shakti Bhog’s appeal against arbitration proceedings 

The Supreme Court has dismissed the appeal of Shakti Bhog Food Ltd challenging the arbitration proceedings in London under the English Arbitration Act 1996 of a dispute between the Indian firm and Kola Shipping Ltd. The Indian firm exports food. In this case, it was to export sorghum to Niger from Kakinada port. According to the charter party agreement, the cargo had to be loaded within nine days. 

However, the export order from Niger was caught in a dispute and therefore the cargo could not be loaded. This led to a dispute over demurrage. The shippers invoked an arbitration clause, which was denied by the exporter. The district judge of Kakinada allowed the arbitration application and it was upheld by the Andhra Pradesh High Court. The Supreme Court also gave the green signal for the arbitration proceedings.

Holding company not liable to recover provident fund dues of subsidiary: SC 

The Supreme Court has reiterated that a holding company could not be held liable for the recovery of provident fund dues of its subsidiary company. The Orissa High Court had allowed the petition of ABS Spinning Orissa Ltd, which had challenged the demand of the provident fund commissioner for provident fund dues. 

The commissioner appealed to the Supreme Court which dismissed the petition stating that “we are of the view that the subsidiary company has an independent existence as against the holding company and, therefore, the holding company is not liable to clear the provident funds dues of its subsidiary company.”

Insurer absolved from its liability, if driving licence found to be fake: SC

In a batch of appeals against the national consumer commission’s decisions moved by National Insurance Company, the Supreme Court has clarified that once the insurer was able to prove that the driving licence was fake, the insurer was absolved from its liability to compensate the victims or his representative. Relaxation in this rule would apply only in relation to the cases of third party and not in relation to the own damaged cases, in which eventuality the insurer is only liable to show that the licence was fake one. 

The Supreme Court has ruled in another case, United India Insurance vs Rakesh Kumar that if a minor without driving licence takes out a motor vehicle causing death on the road, the owner will be liable and not the insurance company. The apex court thus set aside the judgment of the Punjab and Haryana High Court in the appeal, United India Insurance Co Ltd vs Rakesh Kumar, in which the high court had ordered the insurance company to compensate for the death. The admitted fact was that the driver was below 15 and had no licence. Therefore, the insurance company could not be fastened with the burden of compensating the victims.

Appeal by Commissioner of Central Excise, Jaipur, dismissed The Supreme Court has dismissed the appeal of the Commissioner of Central Excise, Jaipur, and ruled that Mewar Bartan Nirmal Udyog was entitled to excise exemption, which was denied by the department. The controversy was whether the trimmed or untrimmed circles of brass would fall Serial No 200 or 201. 

If the product fell under 200, the rate of duty is nil. If it fell under the other category, the duty will be Rs 3,500 PMT. The court, interpreting the relevant notification of 2001, stated that “it is clear that if the goods in question are goods other than trimmed or untrimmed circles of copper, intended for use in the manufacture of utensils, then what is attracted is the nil rate of duty.”