The Supreme Court last week ruled that in a petition against railways before the Railway Claims Tribunal, third parties cannot intervene with contractual claims of their own. In this case, a Tamil Nadu sugar manufacturer demanded from Southern and Eastern Central Railways Rs 9,46,85,726 together with 12 per cent interest. The sugar consignments sent to Bihar were delivered improperly to some parties. Since the goods passed through several railway units, and criminal cases were involved, Central Railway also wanted to intervene with three more parties. The tribunal rejected all of them, in the case, Shree Shyam Agency vs Union of India. It remarked that the Railway Administration, through those parties, was trying to linger on with the proceedings and more parties cannot be allowed to intervene. The Madras high court dismissed their appeal for intervention in the claims tribunal. On further appeal, the Supreme Court upheld the view of the courts below. It said: “the tribunal has to inquire into and determine the claim against the Railway Administration, that is, whether it is at fault in discharging its responsibilities and not the inter se disputes between the claimants and third parties.”
Delhi HC to decide Dhabol dispute
The Supreme Court last week remanded to the Delhi High Court the dispute between Ratnagiri Gas and Power Projects and RDS Projects over the international bidding for a project to revive the Dhabol power project. In view of the national importance of the project, the high court was asked to decide afresh within four months the question of eligibility of RDS to complete the works and other related questions. The high court last year had allowed the petition filed by RDS and quashed the rejection of the company’s tender. The high court further asked Ratnagiri to take a fresh decision in the matter. The Supreme Court stated that the findings recorded by the high court that the process of annulment of the tender process or the rejection of the tender submitted by RDS was vitiated by mala fides was unsustainable.
Bank manager to stand trial
Disciplinary proceedings against a bank officer can be continued even if he has been posted in another administrative jurisdiction, the Supreme Court ruled last week in the case, UCO Bank vs Sushil Kumar. In this case, the Calcutta High Court held that it was only the deputy general manager who could initiate disciplinary proceedings against the senior manager as he was under the jurisdiction of the DGM at the time of committing alleged offences. Since the assistant general manager initiated proceedings, the high court quashed the charge sheet, inquiry report and punishment. Setting aside the high court decision, the Supreme Court stated that the high court committed an error, and forgot to note that the purpose of the regulations is “speedy and expeditious disposal of cases with regard to disciplinary proceedings against erring officials.”
Kerala HC rapped in cheque case
The Supreme Court last week set aside the jail sentence and fine imposed on a woman who had issued a cheque which was dishonoured for insufficiency of funds in the account. According to the holder of the cheque, he had contracted to construct an old age home but the cheque bounced. The drawer maintained that no amount was due and the cheque was removed from her custody and it was presented for clearance with a forged signature. The trial court accepted the explanation. But the Kerala High Court imposed fine and jail sentence under the Negotiable Instruments Act. Reversing the decision, the Supreme Court criticised the high court for interfering in the trial court order, “displaying a total perversity in its approach.” Quashing the proceedings and sentence in the case, Rev Mother Marykutty vs Reni Kottaram, the Supreme Court stated that the high court had not examined the voluminous evidence before the trial court and interfered with the acquittal without proper reasoning.
Excise relief for garment designers
The Delhi High Court last week dismissed the appeal of Commissioner of Central Excise and accepted the argument of Diwan Sahib Fashions Ltd and other readymade garment manufacturers ruling that they were not liable to pay excise duty in respect of garments stitched by them from fabric either brought by the customers themselves or bought by the customers from the firm for stitching purpose. The dispute pertained to whether the tailoring activity of the manufacturers invited excise duty. The revenue authorities argued that when goods are manufactured through a job worker, the latter is the manufacturer and not those supplying raw material. In this case, counsel submitted, the job worker was the manufacturer and not the customer who gave the fabric. The manufacturing activity is therefore liable to excise duty. On the other hand, the manufacturers argued that liability to pay excise duty is that of those who supply the raw materials. The appellate tribunal rejected the department’s argument. The high court upheld it.