When an auction is for large amounts, running in crores of rupees, nobody can expect the auction purchaser to pay the amount in cash on the fall of the hammer, the Supreme Court has stated while upholding the sale of a prime property in Delhi. Giving a liberal interpretation to procedures in the judgment, Ram Karan vs J S Exim Ltd, the court rejected the argument of one of the prospective bidders that the auction purchaser had not complied with the mandatory provisions of Order 21 Rules 84 and 85 the Civil Procedure Code, inasmuch as he did not deposit 25 per cent of the bid amount immediately on the fall of the hammer. Rejecting the contention, the Supreme Court said that the term &ldquo;immediately&rdquo; is required to be construed as meaning &ldquo;with all reasonable speed&rdquo;, considering the circumstances of the case.

M J Antony: Cash down in auction not vital

Business Standard

High courts should not exercise its writ powers to interfere in debt recovery matters, the Supreme Court has stated in the case, T P Vishnu Kumar vs Canara Bank. The bank moved the tribunal for recovering open cash credit, packing credit and foreign bills of exchange. The firm countered the move by demanding several documents from the bank. The latter opposed the demand stating that they were not germane to the case and it was made only to protract proceedings. This was accepted by the tribunal. The firm moved the Madras high court against it and succeeded before the single bench. The division bench, however, ruled that the firm should have moved the appellate tribunal and not the high court. The Supreme Court upheld this view. Chastising the single judge bench, the Supreme Court stated that â€œif the correctness or otherwise of each and every interim order passed by the tribunal is going to be tested in a high court, it will only defeat the object and purpose of establishing such trib

M J Antony: Debt recovery only by tribunal

The Supreme Court has ruled that the provision for deposit of 25 per cent of the purchase money in an auction sale under the Debt Recovery Act (DRT) is mandatory and the recovery officer cannot relax it. According to the law, if there is a default on this, the property shall be resold immediately. The court thus dismissed the appeal of the purchaser in the case, C N Paramasivan vs Sunrise Plaza, against the Madras High Court judgment. In this case, which was fought over two decades, the partners of a firm defaulted in repaying the loan advanced by Indian Bank. The property was sold in auction, which was challenged by the partners for violation of the rules. The debt recovery appellate tribunal held that the purchasers did not act bona fide and set aside the sale and asked the partners to deposit the entire loan amount. The buyer challenged that order, contending that the rule to deposit was not mandatory, but only directory.

M J Antony: DRT auction rule mandatory

Courts grant measly amounts in road accident cases after years of litigation

M J Antony: Tight-fisted compensation

The Supreme Court has dismissed two appeals moved by Kalinga Mining Corporation and ruled that legal heirs of a person who applied for mining lease can pursue the application even after the death of the original applicant. The dispute started in 1965 soon after the Odisha government opened 438 acres in Keonjhar district for mining manganese and iron ore. Six persons applied for the lease. One of them died during the protracted litigation over the lease in the high court  and the Supreme Court. Her legal heirs wanted them to be substituted in her place. Kalinga opposed it contending that on the death of the original applicant, her application for mining lease abated and the legal heirs cannot pursue the application. The high court rejected the objection. The Supreme Court upheld the high court view interpreting Rule 25A in the Mineral Concession Rules 1991.Cheque bounce case quashedA cheque issued towards security in business transactions is not covered under Se

M J Antony: Legal heirs can pursue mining lease

Supreme Court laments the corrosive effect of routine adjournmentsThough the Supreme Court is not a model for dispensing speedy justice, even in death sentence cases, its advisory for the rest of the judiciary should be heard with due respect. Some hard cases compel it to look inwards and spell out the faults in the system. Its recent judgment in the case, Noor Mohammed vs Jethanand, is one such that highlighted the havoc caused by adjournments granted for the asking.This civil suit over land started in 1990 and has taken two rounds to the Rajasthan High Court and the Supreme Court. The dispute is still unresolved. The Supreme Court blamed this state of affairs on the â€œcorrosive effect of adjournmentsâ€. It said the manner in which the case progressed was shocking.â€œIt is astonishing that the lawyers sought adjournments in a routine and nonchalant manner, and the court also acceded to such prayers in routine fashion,â€ the judgment said.

M J Antony: When wheels of justice clog

The Supreme Court last week held that dependents of a worker who dies in the course of employment are entitled to compensation both under the Workmenâ€™s Compensation  Act and under the Motor Vehicles Act, dismissing the appeal of Oriental Insurance Company. The insurer challenged compensation awarded by the Motor Vehicle Accident Tribunal and the Karnataka high court for the death of a Mormugao port trust worker in the course of employment. The port authorities had awarded compensation to the dependents under the Workmenâ€™s Compensation Act. The dependents had moved the tribunal before that. The insurance company argued that since the dependents had received compensation under the Workmenâ€™s Compensation Act, they were barred under the Motor Vehicles Act to claim compensation once again. The Supreme Court rejected the contention. It said that the dependents were the first to move the tribunal claiming compensation. In the meantime, the port authorities proceeded under the Workmenâ€™

M J Antony: Dual claims for compensation

Amounts doled out as part of the Union Budget are measly and skewed

M J Antony: Judiciary on a shoestring

The Supreme Court ruled last week that a leasing company is entitled to the benefit of depreciation under Section 32 of the Income Tax Act for vehicles it had let out to its customers. In this batch of cases involving non-banking finance companies, the assessees bought vehicles from manufacturers and leased them out to its customers as part of business. The lessees were registered as owners under the Motor Vehicles Act. When the companies claimed depreciation, the revenue authorities denied it on the ground that they were neither owners of the vehicles nor users. The dispute travelled to various appellate forums. In the lead case, ICDS Ltd vs Commissioner of IT, the Karnataka high court agreed with the revenue department. Reversing this view, the Supreme Court stated that the leasing firm was the owner as well as the user. The registration in the name of the lessee was only to fulfil the requirement of the Motor Vehicles Act.

M J Antony: Depreciation of leased vehicles

Recently, there has been a wave to set up tribunals, but establishing them seems easier than making them work. Most of the tribunals are born in the fiery crucible of litigation, like the administrative tribunals, the National Company Law Tribunal, the tax tribunals and the Competition Commission of India. Even after overcoming the constitutional hurdles, they limp along with skeletal structures, starved of funds, staff and stationery, in badly maintained rented buildings.

M J Antony: Abandoned at birth

All the hard work done in drafting contracts by shrewd lawyers can come to nought if the typist is weak in grammar and punctuation. In a recent Canadian case between a phone company and a television cable firm, one party lost a million dollar contract because a comma was put in the wrong place. In the Bhopal gas compensation case, crores of rupees were saved in the nick of time when a typing mistake was corrected by the Supreme Court of India.

M J Antony: Tyranny of the typos

Each year, the Supreme Court starts with bleak statistics. This year, it has slipped back to growing arrears after a marginal improvement last year. At present, 66,692 cases are pending.

M J Antony: Reforms from within

The insurance company must first pay the victim of a road accident and then it may recover the amount from the owner of the guilty vehicle in a third party insurance case, the Supreme Court stated last week. In this case, the injured person was travelling in a goods vehicle as a spare driver, though he was employed as a driver of another vehicle of the owner of the insured vehicle. When the spare driver sued the insurance company, the latter argued that he was travelling as a gratuitous passenger in a goods vehicle and therefore the risk was not covered by the policy. Moreover, he was not in employment when the accident occurred, which permanently disabled him. The tribunal and the Kerala high court rejected its plea and awarded compensation. When the appeal case, National Insurance Company vs Saju Paul was taken up, the Supreme Court asked the company to deposit the compensation money in a fixed deposit.

M J Antony: Insurer told to pay first 

The Supreme Court stated last week that rules regarding issue of liquor licences should be strictly applied. Since the trade is &ldquo;inherently noxious and pernicious&rdquo;, there should be no scope for relaxing the rules, the court said in the judgment, State of Bihar vs Nirmal Kumar, setting aside the ruling of the Patna High Court. In this case, a bidder was issued licence but he did not deposit one-fourth of the annual licence fee as advance security as prescribed under the rules. He paid it in three instalments. Alleging breach of the conditions of the licence, a demand was made for the fee for the delayed period. The excise commissioner rejected the objections of the licencee. However, the high court allowed his appeal. The government appealed to the Supreme Court. It said the concept of &ldquo;condonation&rdquo; cannot be imported into liquor trade.

M J Antony: Law on liquor licence

Though most sensible people avoid long and expensive lawsuits, if the cost is borne by the government, it turns into an engaging game. All the more so if both sides are financed by public money. So, more than half the litigation in courts involves the government. The latest high-profile case between the National Highway Authority of India and the environment ministry is one example. It might mark the total collapse of the machinery set up by the Supreme Court to avoid legal sparring between various arms of the government as well as public sector undertakings and local authorities.

M J Antony: Trickle-down litigation

The Supreme Court last week dismissed the appeal of Bangalore Club seeking exemption from payment of income tax on the interest earned in the fixed deposits kept with certain banks, which were corporate members of the club, invoking the &ldquo;doctrine of mutuality&rdquo;. It paid tax on interest earned on fixed deposits kept with non-member banks. The assessing officer rejected the claim holding that there was lack of identity between the contributors and the participators to the fund. He treated the amount received by the club as interest as taxable business income. The appellate authority reversed the finding and stated the doctrine applied to the club. The tribunal upheld that view. But the Karnataka High Court found the view of the assessing officer correct. The club appealed to the Supreme Court which ruled that the doctrine did not apply to the club.

M J Antony: Club not a facade to avoid tax

Arbitration is flaunted as a cheap and fast method of resolving disputes. But, in practice, it seems to be neither. Those who are disappointed with both civil courts and arbitration and want to get on with business must look for some new forensic invention.

M J Antony: Arbitration in the doldrums

The Supreme Court today asked the CBI to file an affidavit on the status of its investigation into the 'coalgate' scam. The order came in a public interest petition by eminent people under the banner of Common Cause seeking the cancellation of leases of coal blocks issued to selected corporations, citing the report of the CAG.

SC asks CBI to file 'Coalgate' probe status report

A decade-old experiment of the Supreme Court to reduce fratricidal litigation between various arms of the government has fallen flat, and the battles within the camp have resumed with greater vigour.

M J Antony: Back to costly bickering

With a dysfunctional Parliament and an executive busy trying to shield itself from a myriad scams, the Supreme Court of India has increasingly asserted its power over the years. It has proved to be the most powerful court among all democratic constitutions.

M J Antony