The Supreme Court last week set aside the judgment of the Bombay high court on the appeal of Voltas Ltd and stated that the company had not violated any of the terms of change of use of surplus land allotted to it 25 years ago. The authorities had issued forfeiture show cause notice to the company for giving the land to developers. The judgment stated that the Maharashtra government had allowed the company to change the use of the land for housing. Such permission was in accordance with the relevant terms and conditions. The terms did not stipulate any charge on the unearned income of the company and therefore, the company was not required to pay 50 per cent of its unearned income. Further, no hearing was given to the company before passing orders against it by the collector. There is nothing on record to suggest the basis on which the authorities determined the unearned income. The authorities were therefore asked to consider the case afresh.
Half a century to get compensation
In a 1964 case of land acquisition for an industrial development project in Maharashtra, the state government settled the issue of compensation in the Supreme Court last week by agreeing to pay land owners within four months. In the chequered history of land acquisition in the case, Tukaram Kana Joshi vs Maharashtra Industrial Development Corporation, the land was acquired from illiterate farmers who had no knowledge of their constitutional rights. Some were paid compensation, but some were not. The acquisition lapsed and a fresh notification was issued in 1981 and the land was transferred this time to the City Industrial Development Corporation of the state. Still these land owners were not able to get compensation. They moved the Bombay high court, but it dismissed their pleas only on the ground of long delay in filing the petition and non-availability of documents. Therefore an appeal was filed in the Supreme Court. It asked the authorities to be “sensitive, sympathetic” and put forward positive suggestions to solve the problem. Therefore, the state authorities agreed to expedite the acquisition process and pay compensation at the prevailing market price.
Delhi HC snubs NBCC
The Delhi high court last week stated that the National Building Construction Corporation Ltd (NBCC) has forfeited its right to appoint an arbitrator in its dispute with M L Dalmiya & Co and therefore the court itself appointed one of its retired judges as the arbitrator. The court pointed out that arbitral proceedings which commenced with Dalmiya invoking the arbitration clause way back in 2002 were yet to conclude. “There have been three arbitrators appointed by NBCC in this long period of over ten years with no significant progress being made in the arbitral proceedings,” the judgment said. “The court is, therefore satisfied that permitting NBCC to further appoint another arbitrator would be a futile exercise as the arbitrators so far appointed have not been able to carry on with the arbitral proceedings without undue delay. This court, therefore, holds that NBCC should be held to have forfeited its right to appoint an arbitrator.”
Arbitral award upheld
The Delhi high court last week upheld the arbitral award in the dispute between Jagson Airlines Ltd and its unit, Indian Ports Warehousing Co Ltd (IPWC) on the one side and Bannari Amman Exports Ltd on the other. The arbitrator ruled that Bannari was entitled to Rs 88,16,500 together with 18 per cent interest. The dispute started over the lease agreement between Bannari Amman and IPWC for the lease of a tank at New Mangalore Port for storage of cane molasses and removal of cargo. The high court stated that the award has given adequate reasons for its conclusion and did not call for interference.
Conditions for winding up
The Bombay high court has dismissed the winding up petition moved by Hindustan Dorr Oliver Ltd against Jet Airways on the contention that the latter had not cleared the service tax liability for the rented space. The judgment stated that the basic requirement for such an application under Section 433 of the Companies Act is that the amount should be due and payable and crystallized on the first date of the statutory demand raised and even on the date of filing of such a winding up proceedings. In this case, the amount due and payable was not crystallized on the relevant date and even today. Moreover, Jet Airways never admitted the liability of service tax and there was no specific written agreement with regard to the service tax. Since there is no agreement and no admitted liability and since basically the service tax is an indirect tax the court was not inclined to interfere in the matter especially since there were disputed facts.