The Supreme Court has ruled that offenses under the Customs Act and the Central Excise Act are non-cognisable and bailable. In non-cognisable offenses, the police have no authority to arrest a person without warrant. The central government argued in the case of Choith Harchandani vs Union of India, that the offenders under these two laws were not entitled to bail, quoting the Criminal Procedure Code. The court rejected the governments arguments and allowed the appeals of the alleged offenders about arrest and bail. There were several appeals from high courts in excise and customs cases. All the offenders under these two laws were ordered to be released.
Sale of mortgaged property must be transparent
The Bombay high court has set aside the order of the Mumbai Debt Recovery Appellate Tribunal in the sale of the Mysore unit of Jay Electric Wire Corporation, now closed, and asked the recovery officer to issue public advertisements inviting fresh bids. The earlier sale was challenged by the employees union, Central Bank of India and Standard & Chartered Bank, who were secured creditors. According to them, the sale did not fetch fair market value and was vitiated by irregularities. Allowing their writ petitions, the court observed that it is necessary that the sale process must be conducted with transparency and in accordance with law. In the present case, we find that the element of transparency was completely lacking. The grounds which weighed with the appellate tribunal are misconceived. Its conclusion that there was no material irregularity is specious.
Italian bidders challenge to selection rejected
A full bench of the Delhi high court has dismissed the petition of Italian corporation, Selex Sistemi Integrati Spa, against the selection of Tata Power in the bid for modernisation of 30 airports of the Indi an Air Force. In the world-wide tender, six bidders were short-listed. The Italian company cleared the technical test. However, in the commercial qualification, it was rejected, leading to the petition. It was contended, among other things, that the Tata bid was non-responsive and there were other irregularities. However, the high court examined the six bids and concluded that it is clearly demonstrable that the proposal of Tata Power is the lowest at '1,094.79 crores as against the commercial proposal of the Petitioner being 4 per cent higher at '1,141.86 crores. After taking into account the dimensions of each airfield and the per-meter cost-rates given in the commercial proposal, the final total project cost of Tata Power works out to '1,219.99 crores. Thus, the final negotiated cost of the petitioners proposal is '66.21 crores higher. Therefore, the public interest lies in ensuring that procurement is effected at the lowest possible cost to the state exchequer.
Reckitt Benckiser (India) petition allowed
The Delhi high court last week allowed the petition of M/s Reckitt Benckiser (India) Ltd to reduce the share capital, rejecting the opposition of a share holder that it was a bid to eliminate minority share holders. He also contended that the alleged buy-back scheme must follow the rules of Section 77A of the Companies Act. He blamed the government policies in the health sector for this kind of operation. The company argued that the court could not go into government policies, and Section 100 of the Act permitted a company to reduce its share capital in any manner; it only required passing of a special resolution by the equity shareholders. The court stated that the fact that minority shareholders are Indian and the majority promoter shareholders are foreigners is of no relevance as long as the mandate of law is complied with.
Delhi high court dismisses petition against demand of service tax
Is the Hindu marriage conducted in a pandal/ shamiana a religious function or a social occasion? The answer will determine the service tax on the tent maker. The Delhi high court has dismissed the petition of the All India Tent Dealers Welfare Organisation against demand of service tax on their activities like arranging pandals or shamianas for Hindu marriages. They contended that the marriage was a religious function. As it is fundamentally a sacrosanct and sacred religious function it could never be treated as a social function to invite the levy of service tax. Rejecting the argument, and overruling its earlier judgment, the high court stated that according to the Finance Acts, when a pandal or shamiana is used for marriage, it earns the status of social function because the service component is involved. According to the statute and the dictionary meaning, marriage is to be regarded as a social function. The court asserted that the pre-requisite is the use of pandal and therefore the contention that Hindu marriage is not a contract but a sacred institution must be rejected.
United India Insurance asked to pay higher compensation
The National Consumer Commission has asked United India Insurance Co to pay a higher compensation to its policy holder, Shyama Rama Structural and Power Ltd, for four accidents covered by the standard fire and special perils policy. When the industry manufacturing steel ingots suffered the losses, it filed claims before the insurer. The surveyors lowered the compensation drastically on various grounds. The Chhattisgarh consumer commission, and on appeal, the National Commission, found that the surveyors had not assessed the loss properly and the commission raised the damages.