Legislative and Regulatory Update

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In This Issue

[No.152]                                                                    March 20, 2006

Supreme Court
High Courts
Ministry of Agriculture
Ministry of Commerce and Industry
Ministry of Company Affairs
PIB
International Cases & News

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Supreme Court

  • General Manager, Indian Overseas Bank Vs. Workmen, All India Overseas Bank Employees Union

The appellants in the present case assailed the legality of the judgment rendered by the Single Judge of Madras High Court, which affirmed the decision taken by the Industrial Tribunal regarding absorption of respondents as bank employees. The issue to be resolved in this case was whether "jewel appraisers for loans" are to be treated as workers and are to be absorbed as part time clerical staff of the Bank.

The Supreme Court while allowing the appeal discussed in detail the distinction between jewel appraisers and regular bank employees and reached the conclusion that the jewel appraisers are not employees of the bank basing on the premise that unlike regular employees, for jewel appraisers there was no prescribed qualification, no fixed working hours, no guaranteed payment, no disciplinary control and no control or supervision over the work performed.

  • Mahabir Vegetable Oils Pvt. Ltd. and Anr. Vs. State of Haryana and Ors.

The authorities rejected the appellant’s application for exemption from sales tax claimed on the basis of the Industrial Policy announced by the Sate of Haryana for the period 1.4.1988 to 31.3.1997. When the same was assailed by the appellants in the writ petition before the High Court it was dismissed on the ground that there was no manifest arbitrariness in modifying the Haryana Sales Tax Rules, 1975 and that the principles of promissory estoppel could not be applied in the present case. The core issue was whether the notification modifying the Haryana Sales Tax Rules, 1975, withdrawing the exemption with retrospective effect was ultravires the constitution as it was arbitrary and against the principles of public policy.

The apex Court while considering the retrospective operation of the subordinate legislation held that no statute should be construed to have a retrospective operation unless such a construction appears very clearly in the terms of the Act. The State did not have any competence to amend the rules by deleting Note 2, appended with notification in which equity was recognized, with retrospective effect as Sub-section (2A) of Section 64 came into force in the year 2001. Hence it was held that the rights of the appellant could not be taken away with retrospective effect as a retrospective effect to an amendment by way of a delegated legislation could be given only after coming into force of Sub-section (2A) of Section 64 of the Act and not prior thereto.

  • P.R. Murlidharan and Ors. Vs. Swami Dharmananda Theertha Padar and Ors.

The respondent who claimed himself to be a Sansyasi in the tradition of "Sree Chattambi Swamy Thiruvadikal" and Madathipathi and Sthiradhyakshan of Parama Bhattara Gurukula Seva Sangham sought for a declaration that he was entitled to continue in the said capacity which was dismissed for default. When the application for restoration of the suit was dismissed the respondents filed writ petition before the Kerala High Court praying for police protection and while allowing the prayer went into the question as to whether the first respondent was entitled to hold the office of Madathipathi and Sthiradhyakshan for the purpose of issuing an appropriate direction as regard grant of police protection. The finding of the High Court that he was entitled to hold the said office was the matter assailed in this case.

The Supreme Court allowing the appeal held that a person could not approach the High Court for the purpose of determining disputed questions of fact like holding of office and entitlement of police protection, which was beyond the scope and purport of the jurisdiction of the High Court while exercising writ jurisdiction as it also involved determination of disputed questions of fact. The respondent was directed to invoke jurisdiction of Civil Court and held that the writ proceedings could not be a substitute for the same.

High Courts

Allahabad

  • Savitri Devi v. Commissioner, Azamgarh Division, Azamgarh and Others

The writ petition was filed against the order of the Sub Divisional Magistrate, Sardar Mau and the Commissioner, Azamgarh Division, challenging the orders dated 10.01.2002 and 19.03.2002. The main issue involved was whether the cancellation of the license to run a fair price shop granted to the petitioner in 1996, was justifiable in law.

The Court held that the entire process of cancellation of the license creates a doubt on the intention of the respondent authorities and the cancellation was not justifiable in law. The action of the respondent authorities appear to be motivated in favour of respondent No. 4 and it could not justify as to why and how after the cancellation of the license of the petitioner, an order granting license to respondent No. 4 was passed on the same date. Accordingly the writ petition is allowed.

  • Raj Bahadur and others v. Addl. Commissioner (six) Allahabad Division, Allahabad and others

The writ petition was filed against the orders dated 29.09.2004 and 7.12.2004 passed by the trial court and the revisional court respectively whereby the application filed by the defendants under Order VII, Rule 11, C.P.C. was dismissed. The main issue involved was whether the order non- compliance of the requirement of notice under Section 80, C.P.C. read with section 106 of the Panchayat Raj Act would result in dismissal of the suit on this ground.

The court held that the trial court and the revisional court had considered the averments made in the affidavit as well as paragraph 5 and 6 of the plaint and had rightly held that it was cogent and convincing and was right in holding that the suit was maintainable. It was held that the suit was rightly filed in compliance with the requirement of sub-section (2) of Section 80 of the C.P.C. and the same was maintainable and the mandatory requirements of notice is deemed to have been waived, as there was no allegation of misuse of powers by the State Government or the Goan Sabha. Accordingly the petition is dismissed.

Kerela

  • Assistant Commissioner of Central Excise v. Krishna Poduval

The writ petition was filed challenging sub-section 85 of the Finance Act, 1994 that prescribes a maximum period of three months as the period during which the Commissioner (Appeals) could condone the delay in filing of the appeals and also challenged the imposition of penalty under Section 76 of the Act. The main issue involved was whether the demand for service tax and interest under Section 75 as also the penalty under Section 78 was right.

The court held that the penalty imposable under Section 76 is for failure to pay service tax in accordance with the provisions of Section 68 and the Rules made thereunder, whereas Section 78 relates to penalty for suppression of the value of taxable service and the incidents of imposition of penalty are distinct and separate and even if the offences are committed in the course of the same transaction, the penalty is imposable for both offences. The Single Judge was not correct in directing the 1st appellant to modify the demand-withdrawing penalty under Section 76 and is therefore set aside and the writ petitions are dismissed.

Delhi

  • Bombay Snuff Pvt. Ltd. v. Union of India

An objection was raised objecting the territorial jurisdiction of the Delhi High Court to entertain this appeal under Section 35G of the Central Excise Act 1944, by the respondents. The issue involved was whether the fact that the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) who passed this impugned order is situated in Delhi confers a jurisdiction upon the Delhi High Court to entertain this appeal.

It was held that if a petition seeking reference under Section 35G was not maintainable, there is no reason why an appeal under the said provision after its amendment can be said to maintainable. The court held that the fact that the main seat of the CESTAT is situated in Delhi or the appeal was heard and decided in Delhi does not mean that all appeals arising from cases so decided the Delhi High Court can maintain regardless from which state the case has originated. The court held that the appeal is not maintainable and the preliminary objection raised by the respondents succeeds and it is returned to the appellant for proper presentation to the proper court.

Ministry of Agriculture

Agriculture and Co-operation

  • Department of Bio Technology to Act as Certification Agency

Notification No: SO306 (E) Dated 10.03.2006. Vide this notification the Central Government has authorized Department of Bio-Technology, Ministry of Science and Technology, Government of India to act as Certification Agency for the purpose for certification of the tissue culture-raised propagules upto laboratory level and to regulate its quality as prescribed by them. The same shall come into force on the date of its publication in the Official Gazette.

Ministry of Commerce and Industry

DGFT

  • Correction in Chapter 29 of the Schedule 2 of ITC (HS) Classifications of Export And Import Items, 2004-2009

Notification No: 51(RE-2005)/2004-09 Dated 09.03.2006. Vide this notification the Central Government has made the following correction in Chapter 29 of the Schedule 2 of ITC (HS) Classifications of Export And Import Items, 2004-2009. Vide the same the word ‘Heptachloro difluoro propane’ mentioned against Sl. No.113 may be corrected to read as ‘Heptachloro-fluoroprapane.

  • Amendment in the Appendix 39 of Handbook of Procedures (Vol.I), Notified vide Public Notice No.61 (RE-05)/2004-2009 dated 13.10.2005

Public Notice No: 92(RE-05)-2004-2009 Dated 09.03.2006. Vide this public notice the Director General of Foreign Trade has made the following amendment in the Appendix 39 of Handbook of Procedures (Vol.I), notified vide Public Notice No.61(RE-05)/2004-2009 dated 13.10.2005. Vide this notification “Column 5 (ii) and Note 2” of the above Appendix stand deleted with immediate effect.

Ministry of Company Affairs
  • The Producer Companies (General Reserves) (Amendment) Rules, 2006

Notification No: GSR 146(E) Dated 09.03.2006. Vide this notification the Central Government has amended Producer Companies (General Reserves) Rules, 2003. The same shall come into force on the date of their publication in the Official Gazette. Vide the same in the Producer Companies (General Reserves) Rules, 2003, in rule 4, the following rules (a), (b), (c), (d), (e), (f) shall be substituted

PIB

  • Linking of Pension Reforms with Financial Reforms

Dated 14.03.2006. Vide this press release it was mentioned that official amendments to the Pension Fund Regulatory and Development Authority (PFRDA) Bill, 2005, based on the recommendations of the Standing Committee on Finance that examined the Bill, are under the Government’s consideration. The objective of pension reforms in India is to provide a well-regulated, modern, sustainable pension system, which offers portability, flexibility and choice to subscribers. The nature of the institutional architecture will depend on the PFRDA Bill, 2005.

International Legal Cases and News
Cases

Labor and Employment

  • Farber v. City of Paterson

Held that the people who have political affiliation are not cognizable under section 1985(3) of 42 U.S.C. Further, to the EERA-DFR claim (claim for union's breach of duty of fair representation stated in the New Jersey Employer-Employee Relations Act), the New Jersey's six-year statute of limitations applies.

Enviorment Protection

  • Natural Res. Def. Council v. Envtl. Prot. Agency

The United States and other countries entered into a treaty to reduce the use of methyl bromide to protect the stratospheric ozone layer from degradation. However, the respondent, Environment Protection Agency issued a rule implementing exemptions from the treaty's general ban on production and consumption of methyl bromide and the same was challenged in the court. The court held that NRDC lacked standing, as the reality of injury was valid for standing inquiry and not plaintiff’s mere apprehensions.

Criminal Law

  • US v. Newsome

Held that the offence of creation of forged driver’s License and employer’s ID for fraudulent withdrawals from the bank qualified for the two level sentencing enhancement under the sentencing guidelines for "the unauthorized transfer or use of any means of identification unlawfully to produce or obtain any other means of identification."

News

  • Google’s Search Ranking Challenged in the court

Kinderstart .com, which is a directory and search engine for children of zero to seven years of age has filed a suit against Google in federal court in San Jose, alleging that search engine of Google has unexpectedly dropped the Kinderstart.com’s search rank which resulted into 70 percent fall in page views and an 80 percent fall in ad revenue. Further, it contends that Google should explain its tightly guarded Pagebank technology, which ranks a website on the basis of the number of other websites link to that site. However, Google contends that its search results are both democratic and objective.

  • Leader of a Democratic Republic of Congo militia arrested on ICC warrant

The International Criminal Court (ICC) was set up to deal with war crimes and genocide around the world. Thomas Lubanga, the leader of a Democratic Republic of Congo militia became the first person who got arrested on an ICC warrant. The court said that he would face three charges related to the use of children in armed groups and other charges for killing the peace keepers in February 2005 (nine Bangladeshi UN peace keepers were killed in the volatile Ituri area) and for being behind the continuous insecurity in the area.

  • Protest of Egypt Judges against the prosecution of their colleagues

The Members of the professional association of Egyptian jurists made a silent protest in Cairo on Friday, against the order of government to interrogate six judges who spoke against the December parliamentary election result and were stripped of judicial immunity. They demanded greater judicial independence in Egypt. Also, the judges decided to support their colleagues' decision to reject the government's interrogation order requiring them to appear before prosecutors.