The Supreme Court last week allowed Vam Organic Chemicals Ltd to reopen its demand for refund of tax paid to the UP government.
In a judgment in 2003, the court had said that the company did not make any payment and therefore there was no question of a refund. The company moved an application that it had made certain payments.
The state government said the company had collected various amounts from the customers, which amounted to unjust enrichment and disentitled the company from refund.
The Supreme Court stated that whatever had been passed on to the customer by the company had to be tested on the touchstone of the principle of unjust enrichment.
It said the company might move the authorities concerned with its refund claim and they shall examine it on the unjust enrichment principle laid down in well-known judgments.
Claims and counter-claims
The Supreme Court has said that when there are claims and counter-claims for recovery of debt, it will be better if both cases are tried by the same court.
The court said this while allowing the appeal of State Bank of India against a Patna High Court judgment in a dispute with Ranjan Chemicals Ltd. The bank moved the debt recovery tribunal for repayment of the loan taken by the company.
The company moved a civil court claiming that the bank had failed to release the credit according to the time schedule as a result of which it had become sick and the Board of Industrial and Financial Reconstruction recommended its winding up.
The bank moved the high court arguing that the company's counter-claim arose from the same transaction and therefore it should be tried by the tribunal. The high court rejected the request. On appeal, the Supreme Court agreed with the bank and transferred the suit to the tribunal.
No interest on insurance amount
The Supreme Court has set aside an order of the National Consumer Disputes Redressal Commission in the case, National Insurance Co versus Nipha Exports Pvt Ltd and granted relief to the insurance company from paying interest to the company for the insured amount.
The company sent goods with transit insurance to Sudan. The goods were found damaged on arrival. This resulted in a dispute, which ended in an agreement followed by a settlement through full and final payment.
The company then raised a demand for payment of interest from the date when the dispute was raised. The commission allowed its petition and granted 6 per cent interest. The Supreme Court ruled that since there was a settlement, there was no need to pay interest from the date the dispute was raised.
No need to modify clear family pacts
If the terms of a business family settlement are clear, categoric and unambiguous, the court should allow them to take effect rather than modify it, even with good intentions.
This has been stated by the Supreme Court in Hansa Industries Pvt Ltd versus Kidarsons Industries Pvt Ltd. The latter company was run by four brothers and had deals with Thyssen Sthal Union of Germany.
Later, one of them set up a separate company and got the German deal. This resulted in a split among the brothers, which affected the residential property also. Ultimately, they arrived at a settlement.
However, the Delhi High Court modified the terms of the settlement. On appeal by one brother, the Supreme Court modified the high court order to bring it in accordance with the terms of the settlement.
Arbitration case sent to Dehradun court
The Supreme Court last week remitted an arbitration dispute between the central government and Shring Construction Company to the Dehradun district court, which had not taken into account the reason for the delay by the government in moving the court.
The arbitrator was appointed by the Uttaranchal High Court. When the award went against the government, it moved the high court. But according to the Arbitration and Conciliation Act, it should have moved the district court.
Thus it lost time and the petition became time-barred. The Supreme Court said the district court must re-examine the government's petition and reason for the delay in moving it.