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In This Issue

[No.93]                                                                            July 30, 2004

International
Department of Revenue
CBEC Customs Tariff
RBI
DGFT
Ministry of Home Affairs
Department of Legislative
Supreme Court
High Courts and Tribunals

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International Legal News

Cases

Source: Westlawinternational.com

  • Family Law: Wife's marriage to postoperative female-to-male transsexual was void ab initio.

Under Florida law, a marriage between a wife and her husband, who was a postoperative female-to-male transsexual person, was void ab initio. Any marriage that was not between persons of the opposite sex, as determined by their biological sex at birth, would be invalidated. This was an issue of first impression.

Kantaras v. Kantaras

  • Government: Purchasers of tax sale certificates could enter into installment payment plans with taxpayers.

A municipality, having the authority to sell tax sale certificates in bulk to private purchasers, likewise transferred its authority to the purchasers to enter into installment payment plans (IPPs) with taxpayers for redemption of the certificates. Although private IPPs were not specifically authorized under the tax sale law, such transactions further facilitated the collection of property tax by making the investment more attractive to institutional investors.

Varsolona v. Breen Capital Services Corp.

  • Health: Expert testimony not necessary to establish duty to warn of threat by mental patient.

The presentation of expert testimony was not a necessary prerequisite to establishing a psychotherapist's liability for failure to warn a third person of a patient's violent propensities. Liability attaches only if the plaintiff is able to persuade the trier of fact that the psychotherapist actually believed or predicted the patient posed a serious risk of inflicting grave bodily injury upon a reasonably identifiable victim or victims. Thus, there is no need for expert guidance on the "standard of care" for psychotherapists' statutory duty to warn.

Ewing v. Northridge Hosp. Medical Center

  • Securities Regulation: Investors who purchased investments from associated person were "customers" of brokerage.

Investors who purchased fraudulent investments from an associated person of a brokerage that was a National Association of Securities Dealers (NASD) member were "customers" of the brokerage, as required for their claim against the brokerage to be subject to the NASD Arbitration Code, even though the brokerage never sold the investments at issue and the associated person was not a broker or dealer.

California Fina Group, Inc. v. Herrin

  • E-commerce: Release by user absolved website operator from liability for defamation by other user.

A website operator that maintained an Internet website that describes goods for sale by third party sellers, was not liable to a user for alleged defamation published by another user, under a release signed by the user. The broad language encompassed a claim or demand against the operator based on its display of or failure to remove objectionable comments by another user posted on the website. Also, a federal statute that did not clearly and directly address distributor liability and, in light of the common law distinction between liability as a primary publisher and liability as a distributor, therefore did not preclude distributor liability of the website operator for defamation.

Grace v. EBay Inc.

  • International Law: Aliens seeking asylum adequately raised Convention Against Torture (CAT) claim without mention of CAT.

Aliens, citizens of Indonesia seeking asylum and withholding of removal, sufficiently raised a claim for relief under the United Nations Convention Against Torture (CAT), even if they did not expressly mention the CAT during their hearing before the immigration judge (IJ), where their asylum applications expressly stated that they feared being subjected to torture in Indonesia. Immigration and Naturalization Service (INS) regulations do not elaborate on what constitutes a sufficient claim for CAT relief. There is no separate form that an applicant must file to claim relief under the CAT. Nonetheless, applicants who file for general withholding of removal under the Immigration and Nationality Act (INA), and express on such application their fear of torture, probably believe that they have raised a claim for CAT relief. Moreover, withholding of removal under INA does not require that an applicant have a fear of torture; therefore, the very existence of a question regarding torture on the application might lead an applicant to believe he has raised a claim for CAT relief. Thus, the aliens' application responses, which clearly evinced their fears of torture, constituted claims for relief under the CAT.

Eduard v. Ashcroft

  • Insurance: Burden for proving insurer's defense of misrepresentation was by a preponderance of the evidence.

An insurer was required to prove the policy's defense of concealment or misrepresentation by a preponderance of the evidence in an action by the insured for breach of contract and bad faith, after the insurer had denied the insured's claim. Societal concerns that supported the imposition of the clear and convincing burden in common-law fraud cases did not support the imposition of the same burden with respect to contract defenses, and applying the same burden of proof to all contract defenses an insurer raises simplified the analyses for the jury.

American Pepper Supply Co. v. Federal Ins. Co.

News

  • 'DVD Hacker' Enjoys Legal Victory

An appeals court has cleared a Norwegian man of DVD piracy charges and has upheld an earlier verdict that Jon Johansen, 20, had not broken the law by creating a system that could get around copy protection on DVDs. The ruling is being considered as a setback to anti-piracy efforts by the Hollywood studios. The Motion Picture Association of America (MPAA) said it was disappointed by the court's decision, saying it encouraged others to circumvent copyright controls.

  • Zambia Getting Ready For New Cyber-Crime Law

A new internet crime bill in Zambia could see convicted hackers facing sentences of up to 25 years in jail. It is so because the government feels that the country's current legal system does not address high-tech cyber crime. The proposed legislation, currently before parliament, is backed by industry professionals who say hacking has become a real problem. However, critics are concerned that the law, if adopted, could be used to curb access to the internet.

  • 'Mercenary Leader' Pleads Guilty Before The Court

The alleged leader of 70 men accused of plotting to overthrow the government of Equatorial Guinea has pleaded guilty to security offences in a Zimbabwe court during his trial. Former British SAS captain Simon Mann, as he is known as, admitted trying to procure dangerous weapons - a charge which carries a possible 10-year jail sentence. The men's plane was impounded in March, when they picked up weapons bought from the Zimbabwe state arms supplier. The Zimbabwean government recently signed an extradition deal with Equatorial Guinea, where other South Africans are being held on suspicion of being the advanced party in the alleged plot.

  • Investigation Into Uganda 'War Crimes' Opens

The world court has begun an investigation into war crimes allegedly committed by Ugandan rebels. The Lord's Resistance Army (LRA) is accused of abducting some 20,000 children, forcing the boys to become fighters and the girls sex slaves, thereby totally ruining their lives. The investigation was initiated a day after Uganda's army said it had nearly captured LRA leader Joseph Kony. Four of his wives and many of his children were captured in a rebel camp in southern Sudan, the army says. However concerns have been raised that prosecuting the LRA leadership would be unlikely to bring an end to the devastating war as there is currently an amnesty for the LRA rebels.

  • US Decides To Place Duties On Shrimp Sales

The United States has decided to place tariffs on shrimp imports from Brazil and India in an attempt to tackle cut-price fish being dumped on the market. The tariffs will also apply to imports from Ecuador and Thailand and have been decided to be levied following an inquiry by the US Commerce Department into pricing. The inquiry found evidence that imports from the four countries were being sold at "less than fair value". The tariffs will range from up to 67% of sale price for Brazilian imports to up to 9% for imports from Ecuador.

  • Case Against Cleric Over Bali Bombings Dropped

Indonesian police have dropped plans to charge radical cleric Abu Bakar Ba'asyir over the 2002 Bali bombings. However, he still will be charged with heading Jemaah Islamiah, the militant group blamed for the attacks, according to Detective Chief Suyitno Landung. The announcement came after a ruling that an anti-terror law used to convict the Bali bombers was applied illegally and that the law passed after the Bali attacks, could not apply retroactively.

  • France Gets Tough On Net Pop Pirates

France is stepping up efforts to stop net users pirating pop music. The get tough policy is part of an agreement signed between French net providers and record companies under which net users who pirate music will be sent warnings and could face being cut off if they do not stop the illegal sharing. To give people an alternative to free, pirated tracks, French music firms are increasing the numbers of legitimate tunes available to buy and download.

  • Lawyers Concerned For Saddam’s Health

Lawyers for Saddam Hussein have asked for access to him following concerns about the former Iraqi leader's health. They wants to send an independent doctor to check on his health after the reports that he suffered a minor stroke while in prison, although those reports have been denied by the US military holding him in Iraq.

  • UN Comes To The Rescue Of Bangladesh

The United Nations has said that it will launch an international appeal for emergency aid to help flood-stricken poor Bangladesh, where 452 people have died. The condition of the nation is really bad. Millions of people have been stranded or left homeless by floods. Two-thirds of the country - and half of the capital Dhaka - are under water. A preliminary UN assessment says the floods have already caused extensive damage to infrastructure and there has been a warning of a humanitarian crisis.

Department of Revenue

  • Order Extending Due Date for Filing of Returns of Income

Order Dated 22.07.2004: The Central Board of Direct Taxes under the Department of Revenue vide its order dated 22.07.2004 states that the due date for filing of returns of Income for Assessment Year 2004-2005 is extended from 31st July, 2004 to 31st October, 2004.

CBEC Customs Tariff

  • Computers (Additional Duty) Rules, 2004

Notification No: 76/2004 Dated: 26.07.2004: The Central Board of Excise and Customs vide the above notification makes the Computers (Additional Duty) Rules, 2004. By this rule the Central Government specifies the additional excise duty rates which shall be levied, when imported into India, on computer shall include central processing unit (CPU) separately or CPU with monitor, mouse and key board, imported together as a set. The notification also states that this will not include input or output devices or accessories such as monitor, key board, mouse, modem, uninterrupted power supply system or web camera imported separately.

RBI

  • Gold Card Scheme for Exporters

Circular No: DBOD.IECS.No. 13/04.02.02(Gold Card)/2004-05 Dated 20.07.2004: The Reserve Bank of India had issued a circular IECD.No.12/04.02.02/Gold Card/2003-04 dated May 18, 2004 enclosing a copy of the Gold Card Scheme. It has come to the notice of the RBI that some banks have fixed certain minimum annual turnover for the issuance of Gold Card as an eligibility criterion. The RBI vide Circular No: DBOD.IECS.No. 13/04.02.02(Gold Card)/2004-05 Dated 20.07.2004 states that the Gold Card Scheme extends to all credit worthy exporters including those in SME segment to simplify credit access and therefore banks are advised not to prescribe such a criterion as eligibility for the Gold Card Scheme.

  • Foreign Exchange Management (Foreign Currency Accounts by a Person Resident in India) (First Amendment) Regulations, 2004

Circular No: A.P. (DIR Series) Circular No. 6 Dated 20.07.2004: The Reserve Bank of India vide Notification No.FEMA.10/2000-RB dated May 3, 2000 had stated that eligible entities in India may open, hold and maintain Resident Foreign Currency (RFC) Account and Resident Foreign Currency (Domestic) [RFC(D)] Account with an authorised dealer out of foreign exchange received by them in respect of transactions specified therein. Thereafter, the RBI vide Circular No: A.P. (DIR Series) Circular No. 6 Dated 20.07.2004 states that the foreign exchange received by a resident individual by way of the proceeds of life insurance policy claims/maturity/surrender values settled in foreign currency from an insurance company in India permitted to undertake life insurance business by the Insurance Regulatory and Development Authority may also be credited to RFC Account or RFC (Domestic) Account of the beneficiary as the case may be.

  • Indo-Sri Lanka Credit Agreement Dated 23.03.2004 for USD 25 Million

Circular No: A.P.(DIR Series) Circular No. 5 Dated 20.07.2004: The RBI vide the above circular notifies that the Government of India have made available a credit of USD 25 million (U.S .Dollar Twenty five Million only) out of the line of credit of USD 100 Million extended to the Government of the Republic of Sri Lanka under the credit agreement signed by the two Governments on March 23, 2004. This credit will be available to the Government of Sri Lanka for importing from India capital goods of Indian manufacture including original spare parts and accessories purchased together with the capital goods and also consultancy services, consumer durables and food items - sugar, wheat flour, rice, red split lentils, wheat grains etc. It has been categorically stated vide the said circular by the RBI that the credit will not cover third country imports and that the export of goods and services from India and their import into Sri Lanka under the line of credit shall take place through normal commercial channels and will be subject to the laws and regulations in force in both the countries.

  • Investment by Banks in Mortgage Backed Securities – Lending to Priority Sector under Housing Loans

Notification No : RPCD.Plan.BC.No.8/04.09.01/2004-05 Dated: 20.07.2004: The Reserve Bank of India vide the above circular states that it has been decided to classify the investment made by banks in the mortgage backed securities (MBS) under direct lending to housing within the priority sector lending, provided it satisfies the following conditions: -

i. The pooled assets are in respect of direct housing loans which satisfy the definition for inclusion under the priority sector;

ii. The securitised loans are originated by the housing finance companies/banks; and

iii. The mortgage backed securities (MBS) satisfy the conditions laid down in paragraph 3 of DBOD's circular DBOD. No. BP.BC. 106/21.01.002/2001-02 dated May 24, 2002.

DGFT

  •  Import of Approved and Unapproved Drugs under the Advance Licensing Scheme Exemption from Registration Procedure

Circular No: 41(RE-2004)/2002-2007 Dated 22.07.2004: The Directorate General of Foreign Trade vide the above circular lays down conditions for Import of Approved and Unapproved Drugs under the Advance Licensing Scheme. It states that no advance licence shall be issued for a period of 30 days from the date of issue of this Policy Circular for import of Penicillins and its salts and that wherever import of Penicillins and its salts is allowed under the advance licensing scheme, export obligation period for such licences shall be restricted to three months from the date of clearance of import of first consignment and wherever Advance Licences have already been issued for import of the sameno further Export Obligation period extension shall be granted. Previously. the DGFT had allowed import of approved and unapproved drugs under Advance Licencing Scheme without requirement of registration procedure under Drugs and Cosmetics Act

Ministry of Home Affairs

  • State of Nagaland Declared as Disturbed Area

Notification No : SO833(E) Dated 21.07.2004: The Central Government vide Notification No : SO833(E) Dated 21.07.2004 of the Ministry of Home Affairs declared the whole of the State of Nagaland as a disturbed area for a period of one year beyond 21st My, 2004 and as such the government considers that the use of armed forces in aid of the civil power is necessary.
Department of Legislative 

  • Disqualification of Rahul Gandhi Rejected

Notification No: SO835(E) Dated 21.07.2004: The Legislative Department of the Ministry of Law and Justice vide the above notification notifies the Presidential Order Rejecting the Disqualification of Rahul Gandhi as a sitting member of Lok Sabha. Dr. Subramanian Swamy had earlier submitted a petition dated 5-6-2004 for the disqualification of Shri Rahul Gandh as a member of Lok Sabha under clause (d) and (e) of Article 102(1) of the Constitution of India read with Section 9(1) of the Citizenship Act, 1955.
Supreme Court

  • Jeet Mohinder Singh Vs. Harminder Singh and Anr.

In an Election petition, an application purported to be in terms of Order XVI Rule 3 of the Code of Civil Procedure, 1908 for recalling a witness for the purpose of confronting him with the judgment already passed in a different case was rejected by a learned Single Judge of the Punjab and Haryana High Court on the ground that a witness could not be confronted with the judgment in which there was a reference to the previous statement. The contention of the appellant was that though the application was styled as one under Order XVI Rule 3, but in essence it was a petition under Order XVIII Rule 17 of the Code and, therefore, the prayer should have been accepted.

The Hon’ble Court held that though the nomenclature of an application was really not material and the substance was to be seen, yet it could not be said that a party would be permitted to indicate any provision and thereafter contend that the nomenclature should be ignored. Hence it was held to be proper to permit the appellant, if he so chose, to file a fresh application in terms of Order XVIII Rule 17 of the Code.

  • State of Haryana Vs. Hasmat

The State of Haryana called in question grant of bail to accused by the Punjab and Haryana High Court granted primarily on the ground that after the conviction the accused respondent had been granted parole on three occasions and there was no allegation of any misuse of liberty during the period of parole.

The Hon’ble Court held that one of the essential ingredients of Section 389 was the requirement for the Appellate Court to record reasons in writing for ordering suspension of execution of the sentence or order appealed which clearly indicated that there has to be careful consideration of the relevant, aspects and the order directing suspension of sentence and grant of bail should not be passed as a matter of routine. The mere fact that during the period of parole the accused had not misused the liberties did not per se warrant suspension of execution of sentence and grant of bail. Hence, finding the order directing suspension of sentence and grant of bail clearly unsustainable, the same was set aside.

  • Suhas Sandilya Vs. Central Industrial Security Force and Ors.

In the matter the appellant had been granted pro-rata pension under Central Civil Services (Pension) Rules, 1972 with effect 24.4.1996 for the services rendered by him in the Army and Central Industrial Security Force (for short the 'CISF'). The appellant approached the High Court of Delhi claiming pro-rata pension from 9.2.1984 under the provisions of Rule 37 of the Pension Rules. The High Court negatived his claim relying on the terms of his permanent absorption contained in letter dated 21.2.1990 conveying sanction of the President to the permanent absorption of the appellant in the services of the CISF. Hence, this appeal.

The Hon’ble Court after having gone though the case found no fault with the order of the High Court and said that in terms of the order of absorption, the appellant completed thirty years of qualifying service on 24.4.1996 treating him to have notionally continued in the services of CISF. His permanent absorption in Bank services is from 9.2.1984 but the date of his completion of qualifying service is 24.4.1996 and it being later, he was entitled to pro-rata retirement benefits only from 24.4.1996 in accordance with Rule 48. Hence, the appeal was dismissed.

  • National Organic Chemical Industries Limited Vs. Miheer H. Mafatlal and Anr.

In this case there was an allotment of shares by Mafatlal Industries Ltd. (MIL) to the appellant which was challenged by the respondents. An interim injunction was issued by City Civil Court directing MIL to maintain status quo of allotment of shares An application was moved by MIL for scheme of amalgamation under Section 391 which received approval of more than 94% of shareholders of MIL. However, respondent challenged the same. While sanctioning the scheme of Amalgamation the company judge also held that allotment of shares in favour of appellant were in breach of injunction order of city Civil Court which is under challenge. While allowing appeal the Hon’ble Supreme Court held that Courts below in impugned order erred in going far beyond their jurisdiction by giving findings as to validity of shares acquired by appellant. Question whether transfer of shares by the MIL to appellant was in contravention of the interim order of injunction granted by the City Civil Court or not, was a matter to be decided by City Civil Court in pending proceedings before it and it could not have been decided in an alien proceedings before Company Court.

High Courts and Tribunals

Delhi

  • Amar Singh Thukral, S/o Shri Joumphi Ram, vs. Sandeep Chhatwal, S/o Shri Peshori Lal,

The appellants were aggrieved by an award passed by the learned Motor Accidents Claims Tribunal (MACT). The question that arose was what would be the amount of compensation in respect of the death of a housewife who had no apparent source of income and whether court can award compensation amount exceeding the claimed amount.

The Court held that there was no scientific method of assessing the contribution of a housewife to her household therefore resort should be had to the wages of a skilled worker as per the Minimum Rates of Wages in Delhi. The court also held that there was no bar in awarding an amount higher than what was claimed but the appropriate procedure should be followed.

Madras

  • K. Sampath Vs. Commissioner, Kandili Panchayat Union and K. Veerabadran

The order of termination issued by the Commissioner against the petitioner, was under challenge in this writ petition. The main grievance of the writ petitioner was that the impugned order was mala-fide, as the same had been done under political pressure and the termination of the services of the petitioner on the ground that he had not been working properly, was without prior notice.

The Court held that if the employer did not want to inquire into the truth of the allegations against the employee, the allegation would be a motive and not the foundation for the simple order of termination and the termination would be valid. The Court further held that the termination order said that the petitioner's work was unsatisfactory as he was not working properly. Therefore the impugned order was not stigmatic and could not be said to be invalid, merely because it was passed without conducting any enquiry.

CESTAT

  • Aviat Chemicals Pvt. Ltd. Vs. CCE (Service Tax)

The appellant, a manufacturer of medicines, entered into an agreement for patents, trademarks, brand names, etc. and allowed other manufacturers to produce medicines under trademarks owned by it. The Revenue authorities had directed the appellants to pay service tax in respect of the receipts under these agreements as the relationship between the appellant and other parties was that of "Consulting Engineer" to a client. The Appellant contented that trademark was in the nature of property and the right to use trademark was a transaction in property and not consultancy or advice.

CESTAT held that no consultancy or advice was involved in leasing or sale of trademarks. It was a transaction in intangible property and not a case of granting any advice. The impugned order was, therefore, an error in demanding service tax after treating the grant of right to use trademark as consultancy.

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