Legislative and Regulatory Update
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In This Issue [No.159]
May 30, 2006
Supreme Court High Courts PIB RBI SEBI TRAI International Cases & News
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Bhagwati Prasad Pawan Kumar Vs. Union of India (UOI)
In the present suit, two consignments of iodised salt booked in favour of the Appellant were not delivered by the Respondent Railways. The appellant therefore lodged two claims for Rs. 53,264/- and Rs. 51,686. in respect of the two consignments. The Respondent Railways admitted the claims only to an extent of Rs. 9,111/- and Rs. 9,032/ and issued two cheques for the said amount in respect of the two claims. The said two cheques were encashed by the appellant. A claim application was then filed by the appellant before the Railway Claims Tribunal, Guwahati for the balance amount which dismissed the application of the appellant. The appellant then preferred an appeal before the High Court which also ruled in favour of the Respondent Railways. The Railways contended that by retaining the cheques and encashing them, the appellant signified its acceptance of the amounts comprised in the two cheques in full and final settlement of its claims. On the other hand the appellant contended that it had written a letter rejecting the offer and placing the claims "under protest" and called upon the respondent to pay the balance amount. The appellant, therefore, submitted that there was no acceptance by conduct as envisaged by Section 8 of the Contract Act. The court after considering the evidence and contentions of both the parties held that in the absence of any contrary evidence it must be held that by encashing the cheques received from the Railways, the appellant accepted the offer by adopting the mode of acceptance prescribed in the offer of the Railways and therefore the appeal by the appellant fails.
The Chairman, SEBI Vs. Shriram Mutual Fund and Anr.
The present appeal was filed by the Appellant SEBI against the final judgment and order of the Securities Appellate Tribunal, Mumbai. The contention of the Appellant was that the Respondent Shriram Mutual Funds, registered with SEBI in 1994 failed to comply with the terms and conditions attached to the Certificate of Registration prescribed by Regulation 15 (D)(b) of the Securities and Exchange Board of India Act, 1992. Accordingly, an Adjudicating Officer was appointed by the Appellant to inquire into acts of contravention by the Respondent who confirmed the charges and imposed a penalty on the Respondent. The Tribunal set aside the order passed by the Adjudicating Officer on the ground that the penalty to be imposed for failure to perform a statutory obligation is a matter of discretion which has to be exercised judicially and on a consideration of all the relevant facts and circumstances. This decision of the Tribunal was questioned in the appeal. The Supreme Court after considering the facts and circumstances of the case held that mens rea is not an essential ingredient for contravention of the provisions of a civil act. . Hence once the contravention is established then the penalty is to follow. Therefore the appeal was allowed and order of the Tribunal set aside.
Arvinder Singh Bains Vs. State of Punjab and Ors
The Appellant and others were selected by the Punjab Public Service Commission as PCS Officers on the basis of competitive examination. The vacancies for the posts had occurred in the interregnum 1978 to 1982 and these vacancies were filled up only in the year 1986. In the meantime, the promotee candidates from other sources were brought in as PCS officers. According to the appellant, had these vacancies been filled up timely, direct recruits coming through competitive examinations would have found higher places in the impugned seniority list. The appellant filed a writ petition before the High Court which was dismissed. The case of the appellant is that the inter-se seniority should be fixed by applying roster provided for in Rule 18 of Punjab Civil Services (EB) Rules, 1976 by reading Rules 18 and 21 together. The State Government contended that a perusal of various rules of the 1976 Rules reveals that these rules do not permit application of rota system provided in Rule 18 for the purpose of determining seniority which is governed by Rule 21 alone. The Honourable Supreme Court after considering the contentions of both parties ruled that the seniority must be based on a collective interpretation of Rule 18 and Rule 21 of the 1976-Rules. The Court therefore issued a writ of mandamus directing the respondents to prepare the seniority list of the appellants in accordance with Rule 18 and read with Rule 21 of the 1976-Rules. It also directed the respondents to grant all the consequential benefits in the nature of scale of pay, promotion etc to the appellant.
Delhi
Fedders North American Vs. Show Line and Ors.
The plaintiff - corporation incorporated in the United States of America agreed to grant to LEECO the sole and exclusive right and license for a period of five years to assemble, manufacture and sell room air-conditioners under its trade name and label for period of five years. The trademark or trade name Fedders was registered in the name of plaintiff. The issue relating to using trademark by defendants continued for years. In the present case the plaintiff sought permanent injunction restraining the defendants from infringing its registered trademark by using its corporate name after agreement between plaintiffs and defendants has been terminated. The defendants took the defence that since the Plaintiff abandoned its trademark and for last 40 to 50 years the defendants were using the name Fedders there was no infringement.
The High Court allowing the case of the plaintiff held that the plaintiff has made out a prima facie case in their favour. There is no dispute about the fact that the plaintiff is the registered proprietor of the trademark Fedders and the defendant was using that trademark in goods manufactured by it as well as in its corporate name. It was further held that the registration of the trademark is prima facie evidence of its validity. And since the plaintiff has the exclusive right to use the trademark Fedders defendants can be injuncted from using the trademark.
Madras
Srinivasam Pillai Vs. Subramanian and Kandasami
The respondents alleged that the suit property purchased by mother of plaintiff on behalf of respondents when they were minors, were obtained by appellants fraudulently by a sale deed and hence a suit for recovery of possession of suit property with mesne profit was filed. The lower court rendered the decision in favour of the respondents and held that the suit was not barred by limitation even when the respondents came after three years after attaining majority. The issue to be resolved was whether the suit was maintainable, as the respondents had not sought to set aside the transaction by paying the court fees.
The High Court held that the suit was not maintainable as the defendant has proved that the plaintiffs have derived the benefits out of the impugned transaction and that since the transaction was not liable to be set aside as a void one, the plaintiffs ought to have elected under Section 35 of Transfer of property Act, to return the benefits derived by them. Since such election was not done as per provisions of law and no court fees were paid, suit for recovery of possession was liable to be dismissed.
Bombay
R. Piyarelall Import and Export Ltd. Vs. The Union of India (UOI) and Ors.
The present writ petition sought to challenge the constitutional validity of the Destructive Insects and Pests (Amendment and Validation) Act, 1992 on the ground that the Parliament has no competence to overrule a binding judicial pronouncement between the petitioners and the respondents. The main issue that was involved was whether the legislature can by a bare declaration, directly overrule, reverse or override a judicial decision.
Relying on various decisions of the Supreme Court, the High Court held that it is well settled that the legislature possess competence to make a fresh law free from unconstitutionality and then provide that anything done under the offending law shall be deemed to have been done under the new law or subject to its provisions, but the legislature cannot overrule the decision, judgment and order of the competent Court by reference to legislative power but always has competence under its legislative power free from unconstitutionality to remove the basis of a decision rendered by a competent Court and thereby rendering that decision ineffective. The court held that by validation, the Parliament removed the defect that the Bombay High Court and the Calcutta High Court found in Section 3 under Section 3(1) of the Destructive Insects and Pests Act, 1914 in levy and collection of inspection fee. All the three necessary tests as laid down by the Supreme Court in the case of I.N. Saksena, R.D. Doongarji to judge the validation of the Validating Act are satisfied. The Validation Act of 1992, therefore, cannot be said to be unconstitutional. Accordingly, the petition was dismissed.
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