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Legislative and Regulatory Update
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[No.143]
December
20, 2005 |
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To keep you informed about the latest Legislative
and Regulatory information manupatra.com
publishes this e-roundup highlighting the recent changes
brought about by the Notifications/Acts/Bills /Ordinances
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Supreme
Court |
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An interlocutory
application was filed by the applicant/ appellant in a disposed off appeal. The
applicant has earlier instituted a suit in the High Court for specific
performance of an agreement, possession of property and grant of permanent
injunction. The defendant contended that as per Section 16 of the Code the suit
for recovery of immovable property could be instituted only in the court within
the local limits of whose jurisdiction the property was situated. Accordingly,
the plaint was ordered to be returned to the plaintiff for presentation to the
proper Court.
The apex court
dismissed the application since the dispute related to immovable property and
the prayer was for specific performance of an agreement of sale of immovable
property and recovery of possession thereof, under section 16 of the code. Since
Delhi Court had no jurisdiction, the contention of the defendants was upheld and
the plaint was ordered to be returned to the plaintiff for presentation to the
proper Court.
A writ petition was
filed by the various undertakings in different High Courts challenging the
E-auction scheme and seeking interim protection of their right to get coal at
notified prices on the basis of the linkage with Coal India Ltd. and its
subsidiaries. Two conflicting judgments were passed by the Gauhati High Court
and the M.P. High Court. A special leave to appeal have been filed by the
petitioners against the order of the High Court which directed the linked
Undertakings to furnish bank guarantees for the difference in prices or to pay
cash or to furnish security for the difference while seeking supply of coal,
based on linkage.
The apex Court held
that it would be appropriate to direct the petitioners to pay a part of the
enhanced price while at the same time furnish security for the balance that
might become payable in case their challenge to the E-auction scheme is repelled.
As mere furnishing of security or bank guarantee would not enable Coal India
Ltd. and its subsidiaries to carry on their business which is in the interests
of the whole Nation direction to pay at least a part of the
enhanced price by the petitioners could be justified.
A writ petition was
filed by the states of Sikkim and Meghalaya in the Karnataka High Court
challenging the legality and validity of the notification which made a
declaration that the State of Karnataka shall be free zone from online and
internet lotteries under Section 5 of the Lotteries (Regulation) Act, 1998.It
was contended that as the dispute involved in the writ petitions related to two
State Governments, therefore the writ petitions were not maintainable, in view
of the constitutional bar under Article 131 of the Constitution of India. The
contention was upheld by the Division Bench against which an appeal was in the
apex court.
The apex court held
that the High Court has failed to take into consideration the status of the
Appellants vis-a-vis their contractual rights and obligations with their
principal coupled with their individual rights to maintain their Writ petitions
in proper perspective. The High Court therefore, was not correct in holding that
they had no personal right to enforce despite the fact that they would suffer
injuries or would otherwise be prejudiced by the notification issued by the
State of Karnataka. The Appellants had a legal right to carry on business. Such
a right having been impugned by reason of the impugned notification, a writ
petition at their instance was maintainable.
The respondent’s
election to the post of municipal Councilor was questioned in an election
petition as she was not a scheduled caste by birth and acquired such status
subsequent to her marriage. The district Judge while disposing this election
petition declared respondent’s election void. Against this respondents
appealed to High Court. High Court however held that as after marriage
respondent was accepted by her husband’s community therefore her election was
valid. Hence this present appeal was preferred.
The apex court held
that the High Court has committed a manifest error in coming to the conclusion
that the purposes of reservation under Articles 15(4) and 16(4) of the
Constitution, on the one hand, and Articles 330 and 332, on the other, are
different. It was further held that the respondent does not belong to backward
community by birth and acquired the scheduled caste status by marriage therefore
she was not eligible to contest in election in the post reserved for the
Scheduled caste.
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High Courts |
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Madhya Pradesh
In the present case,
the amount in question was deposited against allotment of a house .The
complainant refused to take delivery of house on account of two grounds -
inordinate delay in completion of its construction and undue escalation in the
price of house. It was observed that the complainant was justified in refusing
to take such delayed delivery of house on escalated price and was entitled to
seek refund of her entire money with interest.@ 12 % p.a. from the date of last
deposit. It was further held that there is no question of any deduction made by
the Housing Board.
Delhi
The Plaintiff has
filed a suit for permanent injunction for restraining the defendants from
infringement of the copyright under Section 55 of the Copyright Act, 1957. The
plaintiff claims to be the author and owner of the copyright in the
cinematographic film, sound recordings and the tracks. The plaintiff states that
rights were given under the agreement by the plaintiff to the defendants for a
period of 25 years from expiry of the date of the contract, which was initially
for a period of 4 years. It is the submission of the defendants/ applicants that
it is only the Calcutta High Court which would have the territorial jurisdiction
to determine the dispute between the parties. It is the submission that the
registered office of defendant being within the territorial jurisdiction of the
Calcutta High Court and the agreement having been signed at Calcutta, Calcutta
High Court would at least be one of the courts, which could have jurisdiction
and, thus, in view of the parties having selected the forum, it is not open to
the plaintiff to approach the courts at Delhi. Reading of clause 19 of the
agreement entered into between the parties makes it clear that the agreement was
accepted at Calcutta and it is clearly stipulated that all matters, claims and
disputes arising in respect of the terms and conditions thereof shall be settled
by the parties at Calcutta.
It was held that
there cannot be a doubt that Calcutta Court will at least be one of the Courts
which would have territorial jurisdiction in the matter. Thus, even if both
Delhi and Calcutta have jurisdiction, the fact that the parties have agreed to
confer jurisdiction on the Calcutta High Court exclusively would suffice to oust
the territorial jurisdiction of this court.
Karnataka
The Appellant is a
Nationalized Bank. At the relevant time the respondent was working at the Ilkal
Branch of the Bank. Against the respondent a criminal case was registered.
Appellant in terms of regulations placed the respondent under suspension.
According to the prevailing rules he was paid subsistence allowance during the
period of suspension. The criminal case ended in an acquittal, giving the
benefit of doubt to the respondent. Thereafter the bank revoked the suspension
order and reinstated the respondent into service. Respondent made a
representation to the bank for payment of full salary and allowances for the
period of suspension. The appellant relying on regulation 15 contends an
employee is entitled to full salary during the period of suspension, only if he
is fully exonerated or that the suspension was unjustifiable. In the instant
case he was kept under the suspension because of the criminal case and giving
him the benefit of doubt he has been acquitted; he is not fully exonerated, thus
both the aforesaid conditions are not satisfied.
Held that the
principle involved is that when the complaint is not at the behest of the
management, the management has no role to play in the criminal prosecution
launched against such employees.The respondent is absent from work, for reasons
of his involvement in the criminal case and the bank is in no way responsible
for keeping him away from duties.The order of suspension was on account of the
operation of law and not by the act of the management. Therefore it cannot be
said that the order of suspension is unjustifiable. Even otherwise the
respondent was acquitted of criminal charges by giving benefit of doubt, it is
not a case of full exoneration. The order of the appellant is strictly in
conformity with regulations 12 and 15 and denial of full salary and allowances
during the period of suspension was fully justified.
Kerala
This is a petition
filed by the petitioner to have an order under s.427 Cr.P.C. to the effect that
the substantive sentence of imprisonment imposed on the petitioner shall run
concurrently. The petitioner faced trial in the above two cases for the offences
punishable under s.138 of the N.I. Act, 1881. The complaints in both the cases
have been filed by the common complainant alleging that the petitioner had
borrowed certain amounts from the complainant, the first respondent herein and
in discharge of that debt, the petitioner had issued two cheques which were
dishonored when the same were presented for encashment. The petitioner had filed
appeal and the appellate court confirmed the judgments of the trial court and
now the petitioner submits that he is not in a position to pay the compensation
and hence he may be permitted to undergo the substantive sentence of
imprisonment ordered by the trial court concurrently. The question whether this
court can exercise this jurisdiction under s.482 Cr.P.C. is to be considered.
Held that the basis
for the formation of a crime under s.138 of the N.I. Act is the transaction
between two parties and the transaction is through a negotiable instrument and
if so this court can exercise the power available under s.427 Cr.P.C. by
invoking the jurisdiction under s.482 Cr.P.C. To support this view this court
relies upon the decision by the apex court in which it was held that though the
compliant cannot be quashed as a matter of right, the power can be exercised
sparingly.
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Telecom Regulatory Authority of India (TRAI)
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Press Release
No.101/2005 Dated 16.12.2005. Vide this notification the TRAI has released its
recommendations on the issues relating to Promotion of competition in
International Private Lease Circuits (IPLC) segment. The salient features of the
recommendations includes (i) Entry Fee & Annual License Fee, (ii) Resale for
IPLC to be permitted w.e.f. February 2007, (iii) Equal ease of access to
bottleneck facilities at Cable Landing Station (CLS) and permission for landing
of new cables to be mandated without any time limit, and iv) International cable
carriers to be allowed to terminate cable capacities on existing cable landing
stations.
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RBI |
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DNBS
Circular No. DNBS
(PD). CC. No. 61/02.82/2005-06 Dated 12.12.2005.The Reserve Bank of India vide
the said circular has emphasized on the growth of good corporate governance to
increase the investors confidence and other stakeholders. Vide the said
notification scrutiny of the books of account conducted by auditors rotated
periodically would add further value in strengthening corporate governance.
Therefore it is desirable that NBFCs (including RNBCs) with public
deposits/deposits of Rs 50 crore and above, stipulate rotation of partners of
audit firms appointed for auditing the company.
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| Ministry of Finance |
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CBDT
Notification No:
259/2005 Dated 13.12.2005. The Central Government vide the said notification has
amended the Equity Linked Savings Scheme, 2005. The same shall come into force
on the date of its publication in the Official Gazette. Vide this notification
in paragraph 2, clause (g) the following clause shall be substituted, namely:
-'(g) "Year" means a year commencing from the date of allotment or
holding of units, as the case may be, in the plan". And after paragraph 8,
paragraph 9 shall be included stating Open Ended Equity Linked Saving Plan.
Revenue
The Prevention
of Money-Laundering (Maintenance of Records of the Nature and Value of
Transactions the Procedure and Manner of Maintaining and Time for Furnishing
Information and Verification and Maintenance of Records of the Identity of the
Clients of the Banking Companies, Financial Institutions and Intermediaries)
(Amendment) Rules, 2005
Notification No:
GSR717 (E) Dated 13.12.2005. Vide the said notification the Central Government
has amended the Prevention of Money-laundering (Maintenance of Records of the
Nature and Value of Transactions, the Procedure and Manner of Maintaining and
Time for Furnishing Information and Verification and Maintenance of Records of
the Identity of the Clients of the Banking Companies, Financial Institutions and
Intermediaries) Rules, 2005. The same shall come into force on the date of their
publication in the Official Gazette. Vide this notification certain words have
been substituted in rule 5, 7 (a) (b), 8 and 10.
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| Ministry of
Home Affairs |
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Notification No:
SO1723 (E) Dated 06.12.2005. Vide the said notification the Central Government
published the order of the Unlawful Activities (Prevention) Tribunal which was
constituted for the purpose of adjudicating whether or not there was sufficient
cause for declaring the Deendar Anjuman as Unlawful Association. The Tribunal
held that the said association has not produced any evidence before the Tribunal
to rebut the evidence led by the Government and to controvert the allegations
being made against it. Therefore there is sufficient cause for declaring Deendar
Anjuman to be unlawful.
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| International Legal
Cases and News |
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Cases
Labour and
employment
The landowner who
had hired an independent contractor will be held liable for his acts, if
the landowner was
aware of any latent or concealed hazardous condition that existed on his
property ,the contractor could not under normal circumstances have discovered
such hazardous condition and where there had been failure on the part of the
land owner to inform the contractor of existence of such a condition.
Criminal
The court affirmed
the conviction and sentence of the defendant who was charged with carjacking and
use of firearms during the commission of crime and in relation to it. The
defendant had claimed of error, regarding denial of his motion to suppress
evidence and Booker error
Contract
In a dispute between
the plaintiff and contractors damages had occurred on account of collision
between the contractor in a construction project. The court affirmed the
judgement and award for the plaintiff as the claim against the defendant was not
barred by the waiver of subrogation provision provided in the contract governing
the project.
Cyberspace law
The order that
certified class and a subclass in a securities fraud class action which involved
an internet holding company was affirmed by the court. The district court had not
erred while determining market efficiency for the purpose of establishing
fraud-on-the-market.
News
With the aim to put
a check on smog forming chemicals that drift into atmosphere during
fermentation, California Air regulators approved the US first air quality
controls on wineries. The approved rules require developers and other industry
to cut down on pollution through out the California Valley and instruct the 18
largest wine makers in the eight-country region to reduce pollution from their
plants by 35%. The government has put the Wineries under scrutiny as the process
that turns grape sugars to alcohol releases ethanol, methanol and other organic
compounds into the atmosphere, where they react with sunlight and heat to form
ozone.
A new border
security and immigration bill that includes plans to build a security fence
across 621 miles of the Mexican border and authorises the US department of
Homeland Security to study the possibility of barriers across the famously "undefended"
US border with Canada, the longest undefended border in the world, has been
approved by US House of Representatives. The Border Protection, Antiterrorism,
and Illegal Immigration control Act, 2005 would require employers to conduct
immigration status checks of their employees, and would cease the practice of
releasing non-Mexican illegals on bond pending a hearing and also reclassify
being in US as criminal and not a civil offense.
The Terrorism Risk
Insurance Extension Act, 2005 that extends the Terrorism Risk Insurance Act,
2002 for two years has been approved by the US House of Representatives. Under
this Act federal government guarantees insurance coverage for catastrophic
losses caused by terror attacks, however the compromise version reduces federal
guarantees and requires private insurance companies to pay more initial costs,
while moving to eventually eliminate government involvement in the terrorism
insurance market.
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