The Supreme Court has indicted
Bharat Petroleum Corp Ltd for terminating in haste the 30-year-old dealership of Allied Motors Ltd “even without giving a show cause notice or giving an opportunity of being heard.” It clearly indicated that the entire exercise was carried out by the corporation on “non-existent, irrelevant and extraneous considerations,” the court remarked. There has been total violation of law and the principle of natural justice, the judgment said while directing the company to restore the dealership. The action against the petrol pump in Delhi was taken following a raid and taking samples. The corporation maintained that the petrol samples were adulterated. The dealer challenged the whole procedure as arbitrary and the police officer who took the samples had no authority. The Delhi high court dismissed the petition, leading to the appeal in the Supreme Court where the dealer succeeded.
Drug firms’ petition dismissed
A division bench of the Bombay High Court has dismissed the petitions of Indian Drug Manufacturers Association and the Organisation of Pharmaceutical Producers of India challenging the show cause notices to their members, who produce bulk drugs, about their liability under paragraph 7 (2) of the Drugs Prices Control Order (DPCO) 1979. The authorities had also asked them to furnish information regarding prices between 1979 and 1987. Their reply was that the department of chemicals had no power or authority to issue such notices. According to them, on a true interpretation of the DPCO, 1979 read with the DPCO, 1987 and DPCO, 1995, only those amounts which had been finally determined to be due and payable by a manufacturer and which had actually accrued during the continuance of the DPCO, 1979, could be recovered from the concerned manufacturer for deposit in the Drug Price Equalisation Account. The high court rejected their contentions and the government was allowed to proceed with appropriate action.
Pre-deposit dues on Sarfaesi notice
A division bench of the Madras High Court has set aside the ruling of the Debt Recovery Appellate Tribunal (DRAT) and ruled that the obligation of the debtor to pre-deposit dues before DRAT is related to the demand made by the creditor in the preliminary notice issued under the Sarfaesi Act and not what was sought in the proceedings before the tribunal. In this case, ICICI Bank’s notice under Section 13 was for repayment of Rs 2.89 crore lent to Sivakumar Textiles. But before the tribunal, the bank raised the claim to Rs 3.27 crore. The tribunal asked the mill to deposit a percentage based on the claim made before the tribunal. Setting aside the order, the high court stated that the pre-deposit before hearing should be based on the original demand of Rs 2.89 crore.
Award of arbitral tribunal upheld
A division bench of the Delhi high court last week dismissed the petition of Indian Farmers Fertiliser Cooperative Ltd (IFFCO) and upheld the award of the arbitral tribunal against it. IFFCO selected Duggal Constructions India Ltd for a construction project in Uttar Pradesh. The project was to be completed within 18 months. But it was inordinately delayed leading to arbitration proceedings over escalation of material and labour costs and other issues. The high court slightly modified the award and stated that “the arbitral tribunal has given a finding that on account of various faults on the part of IFFCO there was a delay attributable to it.” Citing a Supreme Court judgment, the high court stated that the parties would be bound by the terms agreed upon but if one of the parties to the contract is unable to fulfill its obligations which has a direct bearing on the work to be executed by the other party, the arbitrator is vested with the authority to compensate the second party for the extra costs incurred by him as a result of the failure of the first party to live up to its obligations.
Glass makers’ trade mark case
The Intellectual Property Appellate Board sitting at Ahmedabad last week allowed the rectification applications of several glass manufacturers in Gujarat and Maharashtra with reference to the trade mark Xtrong. Their argument was that the mark is an abbreviation of the words extra strong. They have been using the word Xtrong or Xstrong to describe the joints of glass equipment. Extra strong is the only way to describe the product, through a misspelling which is a descriptive word. No one can claim monopoly over the word, as Goel Scientific Glass Works Ltd did in this batch of cases, they argued. Goel firm contended that it invented the strong joints and had been using the name for a long time. Rejecting its contentions, the board stated that no one could obtain registration of a mark which is purely descriptive and non-distinctive. “The fact that so many rectification proceedings have been filed only goes to prove they are all affected by the registration of a word which is common in the industry. Everyone has been using the word Xtrong for a long time continuously.” With these observations, the board directed that the mark shall be removed from the register.
