Legislative and Regulatory Update

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In This Issue

[No.174]

October 30, 2006
Supreme Court
High Courts
PIB
RBI
SEBI
International Cases & News

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Supreme Court

  • Adishwar Jain Vs. Union of India (UOI) and Anr

Appellant was an exporter and held a valid licence for export of alloy steel. Said export of alloy steel was entitled to credits under the Duty Entitlement Pass Book (DEPB) Scheme introduced by the Government of India. Appellant allegedly misdeclared both the value and description of goods by procuring fake and false bills. An order of detention was issued against him under Section 3 of Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974. Appellant challenged said order of detention on ground of non- supply of documents relied on or referred to in order of detention by detaining authority as well as non-application of mind on part of detaining authority. Appellant therefore, filed a writ petition before High Court and same was dismissed by a learned Single Judge. A letters patent appeal was filed against said judgement and same was also dismissed. Hence, present appeal. Held, if documents were material so as to enable detenue to make an effective representation which is his constitutional as also statutory right, non-supply thereof would vitiate the order of detention. Appeal is allowed.

  • M.D., Hindustan Fasteners Pvt. Ltd Vs. Nashik Workers Union

Appellant, a company engaged in engineering services, was declared a sick unit under Sick Industrial Company (Special Provision) Act, 1985. Respondent No. 1 is a trade union registered under the Trade Unions Act. A settlement was arrived at between the parties in regard to the demands raised on behalf of the workmen. After the period covered by the settlement was over, the workers went on strike and a second settlement was then arrived at. However an industrial dispute arose with regard to lock-out declared by appellant company. The Industrial Tribunal ruled in favour of the worker’s union and awarded wages to workmen during the period of lock-out. A writ petition was filed against said decision of Tribunal. The appellant contended that the workers have given up their rights to demand wages during lock-out period as part of settlement arrived between parties. However, writ petition was dismissed by learned Single Judge. An appeal against same was also dismissed wherein it was held that under aforesaid settlement, workmen had not given up their rights to wages. Hence, present appeal. Held, applying the principles of interpretation of a document and having regard to the circumstances thereto, findings of Tribunal and High Court cannot be faulted with. Appeal is dismissed.

  • Major Singh and Anr. Vs. State of Punjab

Accused–appellants were charged with murder of their brother-in- law. Accused were alleged to have committed murder of brother-in-law on suspicion that he killed their sister. The trial court after consideration of evidence found the accused guilty and sentenced them to death under 302/201 IPC. On appeal, the High Court upheld the judgment of the trial court and dismissed the appeal. Hence, present appeal. Held, there is no reason to set aside the conviction of the accused. However, in the facts and circumstances of the case and considering the fact that there was probably some enmity due to suspicion about sister’s death which could have been a motive for crime, we reduce the sentence awarded to both the accused from death sentence to life sentence under Section 302 IPC.

High Courts

Delhi

  • Smt. Santosh Dhawan Vs. Delhi Development Authority

Petitioner’s father in law was allotted a shop plot in 1970 by respondent DDA. Thereafter in 1975, as part of a rehabilitation scheme by respondent DDA, residential plots were exclusively allotted to original allottees of shop plots. Accordingly, husband of petitioner applied for same as a partner in petitioner’s father-in-law or original allottee’s firm and was handed over possession of residential plot or suit property. Said allotment of suit property was later revoked by respondent DDA on ground that allotment of shop plot in 1970 was in favour of original allottee or petitioner’s father –in –law and therefore he alone could be considered for allotment of residential plot or suit property. Husband of petitioner was informed by respondent DDA that he would be entitled to allotment of suit property provided shop plot was transferred to his name. Upon expiry of petitioner’s husband, petitioner requested transfer of residential plot in her name, whereupon she was informed by respondent DDA that allotment of residential plot or suit property already stood cancelled on account of a resolution passed by it that old cases of 1975-76 in which cancellation of plots where payment of premium was either not made or delayed, should not be re-opened. Therefore, her request for transfer of residential plot in her name could not be acceded to. Hence, present petition. Held, facts indisputably point to petitioner being a legitimate heir who was entitled to restoration of allotment. Therefore, decision not to restore allotment was therefore clearly arbitrary, and taken in a mechanical manner, without application of mind to relevant facts. Writ petition is allowed

  • Dilshad Garden A Block RWA Reg Vs. Govt Of NCT Of Delhi & Ors

Petitioners, a registered welfare association, sought directions against respondent MCD’s decision to grant permission to fifth respondent to hold “Sri Durga Pooja” in park in question. Suit property-park was declared as an Ornamental Park by respondent MCD in order to ensure permanent green area for welfare of local residents and therefore holding of social and religious functions was not permitted in said park. Thereafter, fifth respondent representing local residents of Bengali Community was subsequently granted permission to hold Durga Pooja in said park by respondent MCD even though an adjacent park was available for conduct of said religious function. Hence, present suit. Held, public interest in retaining and preserving character of Ornamental Park far outweighs interests of community which insists upon its use for socio-religious purposes, particularly when there is no dispute that another site in vicinity is, and can be made available. Therefore, petition succeeds.

Bombay

  • Mrs. Reshma Rafiq Desai Vs. The State of Maharastra & Ors

The petitioner was elected as the President of the Maharashtra Nursing Council set up under the provisions of Maharashtra Nurses Act, 1966. The petitioner was alleged of illegalities and abuse of power. The petitioner, as President of Maharashtra Nursing Council, lost confidence of overwhelming majority of the elected members of the Council. Therefore, a meeting of the general body of the Council was held and as per recorded minutes of the meeting, but disputed by the petitioner, petitioner agreed to resign from the post of the President. Thereafter, as the petitioner refused to resign from the post of President as agreed in the first meeting, an extra-ordinary meeting of the general body of the Council was convened and members of the Council passed a motion of no confidence against the petitioner and expelled the petitioner from office. Hence, present petition by petitioner challenging said no confidence motion and her expulsion from post of President. Held, resolution of no confidence passed against petitioner was without authority of law and consequently, illegal, null and void. Therefore, petition succeeds.

Press Information Bureau

  • Protection of Women from Domestic Violence Act comes into Effect

PIB dated 25.10.2006: Ministry of Women and Child Development has issued a notification notifying the effective date of The Protection of Women from Domestic Violence Act 2005 as 26th October, 06. The Act was passed by the Parliament in August last year and assented to by the President on 13th September, 2005. But implementation was pending as detailed consultations were required with the State and other agencies for framing the rules. The Act is aimed to provide protection to the wife or female live-in partner from violence at the hands of the husband or male live-in partner or his relatives. The law also extends its protection to women who are sisters, widows or mothers. Domestic violence under the act includes actual abuse or the threat of abuse whether physical, sexual, verbal, emotional or economic. Harassment by way of unlawful dowry demands to the woman or her relatives would also be covered under this definition.

  • CBDT Guidelines to Deal with Grievances of Scrutiny Cases Based on Air

PIB dated 26.10.2006: The Central Board of Direct Taxes vide the above press release notifies the issuance of new guidelines for dealing with grievances arising out of cases selected for scrutiny on the basis of information contained in Annual Information Returns (AIR). As per the new guidelines, all cases selected for scrutiny on the basis of information contained in AIR during a month will be displayed by the 15th of the following month. Queries made on the basis of information contained in AIR will be specific and to the point. It shall be mentioned in the scrutiny notice that written reply along with supporting documentary evidence will be sufficient compliance to the scrutiny notice. It shall be affixed on the scrutiny notice that "Personal attendance not essential". If the information and supporting evidence received in response to the scrutiny notice is sufficient, personal attendance of the taxpayer shall not be insisted upon. Chief Commissioners and Commissioners shall fix a reasonable period every day to hear grievances of such taxpayers, if any, without prior appointment and display the same publicly. Chief Commissioners and Commissioners may also hold open house meetings in this regard. Drop Boxes shall be provided for such taxpayers who wish to file their grievance in writing. Also, steps shall be taken to redress such written grievances expeditiously.

RBI

UBD

  • Priority Sector Lending -Housing Loan Ceiling Enhanced -- UCBs

Circular No UBD.(PCB).Cir.No.16/09.09.001/06-07 Dated 17.10.2006: As per RBI circular UBD.BPD (PCB).Cir.No.29/09.09.01/04-05 dated December 14, 2004, banks were permitted to grant housing loans up to a maximum of Rs 15.00 lakh per beneficiary of a dwelling unit as against the earlier limit of Rs 10.00 lakh. Vide the present circular, RBI notifies that it has been decided to allow UCBs to extend individual housing loan upto the limit of Rs 25.00 lakh per beneficiary of a dwelling unit. However, housing finance to borrowers availing loans above Rs 15.00 lakh will not be treated as priority sector lending. Accordingly, banks may with the approval of their Boards and subject to prudential exposure ceiling extend direct housing finance repayable within a maximum period of 15 years. The present stipulation that the amount of installment and interest should not exceed 30 % of the income of the borrowers stands dispensed with.

SEBI

Secondary Market Department

  • Mandatory requirement of Permanent Account Number (PAN) - Issues and clarifications (III)

Circular No MRD/DoP/Dep/SE/Cir-17/06 Dated 27.10.2006: Pursuant to representations received from Non-Resident Indians (NRIs)/Persons of Indian Origin (PIOs), SEBI vide Circular No. MRD/DoP/Dep/Cir-09/06 dated July 20, 2006 enabled such NRIs/PIOs who are not able to obtain PAN for one reason or the other but are holding securities in physical form and desires to sell the same, to open a "limited purpose BO account" without PAN, subject to certain conditions. The same was also extended for trading in cash market for such NRIs/PIOs through circular MRD/DoP/Dep/SE/Cir-13/06 dated September 26, 2006. SEBI had thereafter taken the matter with CBDT and accordingly, the Directorate of Income Tax (Systems) vide its circular had issued guidelines to its service providers (M/s UTITSL & NSDL) facilitating Indian citizens residing outside India, foreign citizens and other persons (like companies,/trusts/firms) having no office of their own in India to obtain PAN based on the copy of their passport as ID proof and copy of passport/copy of bank account in the country of residence as address proof. Accordingly, vide present circular, SEBI notifies that since NRIs/PIOs/foreign nationals have now been enabled by the Income Tax Department to obtain PAN as stated above, it has been decided to withdraw the facility of opening a "limited purpose BO account"/trading account by them without PAN. However, the NRIs/PIOs who have already opened such BO accounts/trading accounts without PAN shall be required to comply with the mandatory requirement of PAN on or before December 31, 2006, failing which such accounts shall be made inoperable by the Depository/Depository Participant/Broker.

International Legal Cases and News

Cases

  • Jacob Winkelman, A Minor, by and through his Parents and Legal Guardians, Jeff and Sandee Winkelman, Et AL Vs. Parma City School District

The Individuals with Disabilities Education Act (IDEA) provides federal grants to States for assistance in the education of children with disabilities and requires local school systems to develop an individualized education program (IEP) for each child with a disability. The petitioner’s son is afflicted with autism spectrum disorder. The respondent school district proposed an IEP for the 2003- 2004 school year that would have placed petitioners’ son at a public elementary school. Petitioners believed that the proposed IEP was inadequate and requested a due process hearing. The administrative hearing officer rejected petitioner’s plea and held that respondent had proposed to provide said child with free appropriate public education as required by IDEA. Thereafter, petitioners appealed to a state-level review officer, who affirmed the hearing officer's decision. Petitioners thereafter, filed an action in Federal Court challenging said administrative decision rejecting their IDEA claims. District court rejected all of petitioners' IDEA claims and granted judgment in favor of respondent. Petitioners then filed pro se appeal challenging District Court decision and seeking to represent child on their own as they could not afford a lawyer. Court of appeals ordered dismissal of said appeal holding that petitioners cannot themselves represent child on their own. Hence, present petition. Held, as amended in 2004, IDEA expressly allows States and local school districts to recover attorneys' fees from a parent "if the parent's complaint or subsequent cause of action was presented for any improper purpose, such as to harass, to cause unnecessary delay, or to needlessly increase the cost of litigation as per" 20 U.S.C. 1415(i)(3)(B)(i)(III). This provision may serve as a check on meritless pro se lawsuits or possibly defray some of the costs. Therefore, petition is granted

  • Microsoft Corporation Vs. AT&T Corp

The present patent dispute relates to overseas distribution of a Microsoft Windows program utilizing speech-coding technology of respondent AT&T, valued at more than $1 billion. Respondent AT&T Corp. brought a patent infringement action against petitioner Microsoft Corp., alleging that computers loaded with petitioner's Windows Operating system infringe respondent's patent related to digitally recorded speech. After petitioner conceded liability as to Windows-based computers manufactured and sold in the United States, the district court held that petitioner was also liable for Windows-based computers manufactured and sold outside the United States and therefore liable for patent infringement under 35 U.S.C. 271. The same was challenged by petitioner. The Federal Circuit affirmed the decision of the District Court. Hence, present appeal by petitioner. Held, although the Court of Appeals correctly held that soft ware can be a component of a patented invention, it erred in holding that the creation of software copies overseas by replication of a master version provided from the United States constitutes the "suppl[y]" of software "from the United States" within the meaning of 35 U.S.C. 271. Petition is allowed.

  • Boxer X Vs. A. Harris

Plaintiff-appellant, an inmate of a State Prison, filed a complaint before Magistrate Court alleging that Defendant-Appelle, a prison guard, harassed him sexually by repeatedly approaching his cell and demanding that he perform sexual acts for defendant’s self gratification. Magistrate Court rejected said complaint and held that said harassment endured by plaintiff even under threat from defendant was not severe enough to warrant a claim under the Eighth Amendment and that plaintiff had not factually or legally implicated defendant in denying him an opportunity to be heard during the administrative punishment process. On appeal, District Court affirmed decision of Magistrate Court. Hence, present appeal under 28 U.S.C. § 1915A. Held, harassment does not present more than de minimus injury. Therefore dismissal of claim under Eight Amendment is affirmed.

News

  • Private property bill in China revised

A landmark private property bill intended to protect state, collective and private property introduced in China's legislature has been revised. If the National People's Congress passes the legislation in the amended form, it will be the first bill in China's history to specifically protect private ownership. The controversial bill has already sparked public debate on whether the law represents a serious departure from Communist values or a realistic modern view of the nation's economic position. The legislation has been in revision since its introduction in 2002 and has had more reviews than any other in the NPC's history. In March 2004, the NPC officially enshrined private property protection in the Chinese constitution by approving an amendment declaring "legal private property is not to be encroached upon."

  • Lawsuit challenging section 215 of Patriot Act withdrawn

The American Civil Liberties Union (ACLU) withdrew a three-year-old lawsuit challenging Section 215 of the Patriot Act. Congressional amendment of the Act was cited as the reason for dropping the suit. Before amendment, Section 215 provided that federal agents, empowered by an order from a secret court, can access personal information such as medical or library records without probable cause. Changes to Section 215 allow persons faced with federal demands for information to seek legal counsel and bring a challenge in court.

  • Appeals court blocks US handover of Iraqi-American to Iraqis before high court ruling

The US DC Circuit Court of Appeals ruled that Iraqi-American, Mohammed Munaf, sentenced to death by an Iraqi Judge for his alleged role in kidnapping of three Romanian Journalists be given ten days to appeal his case to the US Supreme Court and that high court be accorded time to rule on that before the US military can legally transfer him to Iraqi custody and likely execution. Earlier, the accused’s lawyers had filed an emergency motion declaration in federal court to prevent the military from transferring him to Iraqi authorities. Accused claimed that his confession was coerced, authorities did not confront him with the evidence brought against him, and that he was not allowed to present his own exculpatory evidence.

  • Federal judge dismisses religious intolerance lawsuit against USAF Academy

A federal judge rejected a claim by US Air Force Academy graduates that a military chaplain illegally forced Christianity on them. US District Judge rejected the claim on the ground that the cadets could not give specific examples of when cadets were harmed and that they no longer attend the academy. Last year, a Pentagon investigation found religious insensitivity at the academy, but no overt acts of religious discrimination were reported. In February, the Air Force revised its guidelines on religious expression, removing restrictions on the promotion of religious views.