Legislative and Regulatory Update

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In This Issue

[No.154]                                                                    April 10, 2006

Supreme Court
High Courts
Ministry of Shipping, Road Transport and Highways
IRDA
RBI
SEBI
International Cases & News

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Supreme Court

  • Nagarathinam and Ors. Vs. State rep. by Inspector of Police

The appellants were convicted Under Section 302 and 34 and 149 of IPC for the murder of two deceased persons by the Trial Court, which was later on confirmed by the High Court. The High Court and Trial Court rejected the appellant’s plea of private defence even though there were sufficient circumstances to sustain their plea. Hence, this present appeal was preferred against the conviction.

The Supreme Court examining the circumstances of the cases observed that the High Court went in error in rejecting the plea of self defence while there were serious injuries on the vital part of the person of the appellants and while bringing on record held that the same were not sustained by them while exercising their right of self-defence. It was held that in a case of this nature where a plea of right of exercise of self- defence was raised, several factors such as the apprehension of death or bodily injury in the mind of the accused persons would have to be determined having regard to the number of people assembled to take part in assaulting them, the manner in which they were assaulted, the arms used as also the seriousness of injury received by them. Hence, keeping in view of the circumstances of the case the possibility that the appellants have exercised their right of private defence could not be totally ruled out and was therefore acquitted.

  • Ranjit Singh Vs. Union of India (UOI) and Ors.

A disciplinary proceeding was initiated against the appellant for allegedly possessing assets disproportionate to his known source of income. The Enquiry Officer’s Report was in favour of the appellant but the Disciplinary Authority did not accept the same. The appellant was dismissed from service without giving him an opportunity of being heard. The appellate authority, the Tribunal and the High Court dismissed the appeals filed before them on the ground that the charges were established.

The Supreme Court while allowing the appeal held that the principles of natural justice were required to be complied with by the Disciplinary Authority. The Disciplinary Authority while dismissing the appellant from service ought to have considered the materials relied on by the Inquiry Officer either than to rely on the reasons disclosed by him in his show cause notice which, it will bear repetition to state, was only tentative in nature. Hence the Disciplinary Authority was directed to consider the matter afresh in the light of the show cause filed by the appellant and to provide the appellant with an opportunity of being heard.

  • United India Insurance Co. Ltd., Shimla Vs. Tilak Singh and Ors.

The appeal arises from the finding of the High Court that the insurance company was jointly and severally liable along with the appellant (before High Court) for the payment of the amount of compensation in favour of a third party who was not covered under insurance. The core issue involved in this appeal was whether a statutory insurance policy under the Motor Vehicles Act, 1988, intended to cover the risk to life or damage to properties of third parties, would cover the risk of death or injury to a gratuitous passenger earned in a private vehicle.

The Supreme Court extending the ratio of Asha Rani's case, which states that the statutory insurance policy would not be applicable to passengers in a goods vehicle, held that the same could be applicable with equal force to gratuitous passengers in any other vehicle also. Hence, the contention of the appellant-insurance company that it owed no liability towards the injuries suffered by the deceased Rajinder Singh who was a pillion rider, as the insurance policy was a statutory policy, and hence it did not cover the risk of death of or bodily injury to gratuitous passenger was upheld and accordingly allowed the appeal.

High Courts

Bombay

  • Victor John Gomes (Deceased) & Ors. V. Thomas John Gomes & Anr

The appeal was filed against the order passed by the motion Judge appointing Court Receiver in respect of the estate of the deceased. The main issue involved was whether the petitioners were mismanaging the estate of the deceased.

Dismissing the appeal, the High Court held that there was no infirmity in the impugned judgment of the motion Judge as the petitioners had projected false facts before the court with a view to appropriate unto themselves as much out of the income of the estate of the deceased. The records also showed that during the mismanagement of the estate, the petitioners had changed certain tenancies and had not accounted the amounts received in connection with the changes of tenancies. The court therefore held that the petitioners were guilty of manipulating the accounts and could not be allowed to continue with the management of the estate.

Delhi

  • Kanwal Malhotra v. The State

The application under Order VII R.11 of the Code of Civil Procedure, 1908 was filed on behalf of the objector on the ground that the application for the grant of probate in respect of the alleged last will that was left by the deceased was barred by law in terms of Order VII R.11 (d).

The main issue involved was whether the application that was filed after 3 years of the death of the testator was barred by law under Article 137 of the Schedule to the Limitation Act, 1963. The High Court held that the issue of limitation in this case was covered by the decision of the Division Bench in the case of S.S.Lal wherein it was held that the ratio in Hari Narian would not be applicable to a case where an application was moved for the grant of probate or letter of administration and the ratio in the said case was limited to an application which sought revocation of a probate that was granted earlier. An application for grant of probate and an application for the revocation of a probate granted earlier stood on different footings. Accordingly, the court held that Article 137 of the Schedule to the Limitation Act, 1963 was not applicable to the present case. The application was therefore dismissed.

Orissa

  • Rajesh Kumar Sharma v. Director Animal Husbandry & Veterinary Services, Orissa, Cuttack

The writ petition was filed for quashing the order dated 9-12-2004 by which the Director, Animal Husbandry & Veterinary Services, Orissa, Cuttack blacklisted the petitioners firm and debarred it from participating in future tenders issued by the Directorate.

The main question involved was whether any illegality had been committed in blacklisting the petitioner’s company for not informing about the death of the ‘qualified person’ in charge of the drug lisence to the competent authority and for selling sub-standard quality of drugs. The High Court held that non-reporting of the death of such ‘qualified person’ whose name appears in form 21-C by which lisences are renewed, does not amount to any offence under the Drugs and Cosmetics Act. With regard to the allegation of selling sub-standard quality of drugs, no prosecution was lodged against the petitioner’s firm and neither report of the analyst was given to the petitioner and nor any opportunity given to defend himself against the said allegation. Accordingly, the court held that it was not proper to blacklist the petitioner’s firm on the said ground.

Ministry of Shipping, Road Transport and Highways

Shipping

  • The Madras Port Trust Employees' (Classification, Control and Appeal) (Amendment) Regulations, 2006

Notification No: GSR180(E) dated 28.03.2006. Vide this notification the Central Government has approved the Madras Port Trust Employees (Classification, Control and Appeal) Amendment Regulations, 2006. The same shall come into force from the date of publication of this Notification in the Official Gazette. Vide this notification in the Madras Port Trust Employees' (Classification, Control and Appeal) Regulations, 1988, sub-regulation (10) and (11) shall be included under Regulation 7.

Insurance Regulatory and Development Authority

  • Guidelines on Anti Money Laundering programme for Insurers

Circular No.: 9a/LIFE/AML/2005-06 dated 31.03.2006. Vide this circular the IRDA has advised the insurers to ensure that a proper policy framework as per the Guidelines on anti-money laundering measures is put into place by 1st July 2006. And to designate an officer as ‘Principal Compliance Officer’ who would be responsible for ensuring compliance of the provisions of the PMLA.

RBI

  • Senior Citizens Saving Scheme, 2004 – Issues relating to TDS - Clarifications

Circular No.: DGBA.CDD.No.H.14965/15.15.001/2005-06 dated 29.03.2006. Vide this circular RBI clarified that since the interest payment under Senior Citizens Savings Scheme (SCSS)-2004 is not exempt from deduction of Tax at Source, Banks are required to deduct income tax at source while disbursing interest payment under the Scheme. Therefore the Banks are requested to convey the above clarification to designated branches of the bank for immediate implementation / guidance. And ensure that a copy of clarification is displayed on the notice board by designated branches for guidance of agents / investors.

  • Operations in Relief/Savings Bonds – Opening of single Bond Ledger Account

Circular No.: DGBA.CDD No. H-15318/13.01.299/2005-06 dated 05.04.2006. Vide this circular RBI has mentioned that some of the Agency banks are opening multiple Bond Ledger Accounts in the name of existing Bond Ledger Account holder, every time the investor makes fresh investment in the Relief / Savings Bonds Scheme. This is contrary to instructions contained in Memorandum of Procedure (MOP). Vide the same it has been advised to issue instructions to the designated branches to strictly adhere to the above instructions while accepting fresh investments and also review the existing multiple BLAs, if any, in the name of the same investor and merge all the BLA into one BLA.

SEBI

Mutual Fund

  • Applicability of Investment Restrictions for Securitised Debt

Circular No.: SEBIIMD/CIR No.6/63715/06 dated 29.03.2006. Vide this circular SEBI notified that the applicability of restrictions on investments in Debt Securities including securitised debt are specified under Clause 1 of Schedule VII to the SEBI (Mutual Funds) Regulations, 1996. Vide the same it was clarified that for investments made in securitised debt (mortgage backed securities/asset backed securities) restrictions at the originator level would not be applicable.

International Legal Cases and News
Cases

Criminal

  • US v. Valdez-Maltos

Court upheld the conviction of the accused for being unlawfully present in the United States after his deportation and sentenced him to imprisonment for 77 months, three years of supervised release, and special assessment of $100. The court rejected his contention related to the admission of testimony of Border Patrol Agent. Also, offense of burglary of a habitation for which he had been convicted in the past was held to be an act of violence and his constitutional challenge to 8 U.S.C. Section 1326(b) was rejected.

Insurance

  • MBIA Ins. Corp. v. Royal Indem. Co.

Appellant by way of the impugned contracts had agreed to insure repayment of several million dollars of student loans. The beneficiaries under the policies sued him when the default was made in the repayment of loans and appellant also, failed to pay the claim money. The appellant contested the suit on the ground that he was fraudulently induced by the lender of the underlying obligations to issue the impugned policies. However, the contention of fraud was rejected by the court. But the issue, “whether all of the losses claimed by the beneficiaries were covered under its policies” was held to be triable and the matter was remanded to District Court for decision on the same.

IPR

  • Zoltek Corp. v. US

United States Court of Appeals affirmed the decision of the Trial Court to the extent that Under 28 U.S.C. section 1498, the Government of United States was liable for the use of a method patent only when it practiced every step of the claimed method in the U.S.

Labour and Employment

  • Raymond v. Ameritech Corp.

Plaintiff-Raymond alleged in a lawsuit that defendant-SBC, employer of the plaintiff had discriminated against her on the basis of race, sex, and age in the course of employment. In a summary judgment her allegations were rejected by the District Court as she failed to produce any evidence to the fact that she was treated differently than a similarly situated employee outside her protected class. Court of appeals affirmed the summary judgment and upheld the decision of the district court by which it refused to consider Raymond’s late response to SBC’s motion for summary judgment.

Family

  • Pearlstein v. Pearlstein

It was held that family law court erred in including in the husband’s gross income for child support purposes, both cash and the value of stock he received for selling his business as it included the value of marketable, but unliquidated stock in the calculation of gross income.

News

  • Judiciary asked Bush and Cheney to explain the allegations in the CIA leak case

Former Cheney Chief of Staff I. Lewis "Scooter" Libby is facing charges for obstruction of justice and perjury in an investigation in the case of leak of information concerning the CIA identity of Valerie Plame, the wife of former US Ambassador Joseph Wilson, a sharp critic of the administration's Iraq policy. Libby alleges in his testimony that he was authorized by Bush through Cheney to disclose classified information. The US Senate Judiciary Committee chairman has asked the president and vice president to give explanation on this account.

  • Accused complains of maltreatment in custody

Rabei Osman Sayed Ahmed, an accused of 2004 Madrid train bombings had complained about mistreatment and humiliation by Spanish and Italian law enforcement officials since his arrest in Milan, in the papers filed before the Italian court hearing his criminal case.

  • Former Chilean dictator Augusto Pinochet charged for Tax Evasion

The charges of forging Chilean Defense Ministry documents and failing to declare assets in a tax return against former Chilean dictator Augusto Pinochet had been dismissed by the Santiago Court of Appeals. However, his tax evasion indictment was upheld on other two other counts.