Business Standard

Land acquisition quashed under new law

A weekly selection of key court orders

M J Antony 

In the first judgment applying the provisions of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, the last week quashed acquisition of land for a canal in Chennai because though more than five years have lapsed after the award, physical possession of land has not yet been taken over by the government. Under Section 24 of the new law, such time gap is ground for quashing the acquisition altogether. In this case, vs State of Tamil Nadu, the award was in 2006 and till 2014, possession of the land was not taken over by the authorities. Though there was litigation between land owners and the authorities with stay orders from courts that period could not be counted for the time limit. The added that the state could initiate fresh proceedings under the new law.

Dispute over gold coin scheme settled
The last week quashed criminal charges against an international numismatic company on the ground that the customers who were allegedly cheated by a scheme floated by the company had settled the issue. The company adopted multi-level marketing through direct selling of products, eliminating middlemen and rewarding consumers by reducing prices of products. Some persons complained that the company had not issued numismatic gold coins on receipt of Rs 16,800 as promised by the company in 2003. A case was registered for cheating and under the Prize Chits and Money Circulation (Banning) Act. However, when the company moved the Madras High Court, it quashed the complaint on the ground that all claimants had settled the disputes with the firm. The state moved an appeal before the division bench of the high court. It reversed the decision and allowed the prosecution to go ahead. The firm appealed to the Supreme Court. It ruled in the case, Gold Quest International Ltd vs State of Tamil Nadu, that "if the parties have entered into settlement and it has become clear that there are no chances of conviction, there is no illegality in quashing the proceedings."

Limits of arbitrator's powers
The Supreme Court has ruled that an arbitrator cannot give an award on issues which have been excepted in the contract. In this case, Harsha Constuctions vs Union of India, the agreement contained an arbitration clause which gave a list of items which should not be referred to arbitration. They should be decided by the chief engineer. However, when disputes arose over extra payment for additional work done on the project, the arbitrator gave an award on all issues. The firm moved the Andhra Pradesh High Court which dismissed the petition. The Supreme Court dismissed the contractor's appeal stating that the terms of the contract should be strictly followed and "there cannot be a presumption or a conclusion that the parties had agreed to refer the issue to the arbitrator."

Compensation for joy ride deaths
When there is deficiency in service causing deaths, the insurance company and the authorities are liable to pay compensation, the Supreme Court held last week. In this case, there was an accident in which 22 persons drowned in Sursagar lake at Vadodara in 1993. The lake was managed by the city municipal corporation. It appointed a contractor, Ripple Aqua Sports, to ply boats for joy rides. The safety of the public was insured with Oriental Insurance Company. When the accident occurred, the victims' relatives moved the Gujarat Consumer Commission for damages. It awarded a total compensation of Rs 30 lakh with 10 per cent interest from the date of the incident. The three guilty parties moved the National Consumer Commission, without result. Their appeals to the Supreme Court were also dismissed which asserted that the deficiency in service stood established.

Jurisdiction in cheque bounce cases
The question of jurisdiction of criminal courts to hear complaints of bounced cheques was once again answered by the Supreme Court in the judgment, Indiabulls Financial Services Ltd vs Delhi High Court Legal Services Committee. The committee had moved a public interest litigation in the high court pointing out that a large number of complaints under Section 138 of the Negotiable Instruments Act were pending in the courts of metropolitan magistrates, though they had no territorial jurisdiction to take cognizance of them. They took cognisance only because the statutory notices to the drawers of the cheques were issued from Delhi. The high court ordered that all such complaints should be returned. This was done because of the huge number of complaints over bad cheques which flooded the criminal courts. The Supreme Court upheld the high court view, and pointed out the propositions made recently in the case, Dashrath vs State of Maharashtra.

CESTAT ruling in Maruti set aside
The Supeme Court has set aside the ruling of the Customs, Excise, Service Tax Appellate Tribunal which exonerated Maruti Suzuki India Ltd from tax liability, observing that the tribunal had "misdirected itself in law and on several counts and erroneously decided appeal in favour of the company." The Commissioner of Central Excise had issued a show cause notice to the car manufacturer in Haryana on the ground that it had retained 50 per cent of sales tax collected by it from the buyers of vehicles. It was retained allegedly on the strength of an entitlement certificate issued by the Haryana Excise Commissioner. However, the Supreme Court stated that a bare reading of the relevant rule showed that it was not applicable to Maruti. Rule 28-C(5)(a) dealing with tax concessions and class of industries excluded "prestigious units". There is no dispute that Maruti is a prestigious unit. Therefore it was not entitled to the tax benefit, the judgment said.

First Published: Sun, September 14 2014. 21:33 IST