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Business Standard

Public purpose invoked for profiteering

M J Antony 

In an instance of glaring abuse of the powers under the old Land Acquisition Act, the Supreme Court has castigated the Haryana government for acquiring land from farmers in the name of public purpose and giving it to a builder to advance his business interests. "The present case is a gross abuse of law on account of the unholy nexus of the concerned authorities and the builder, enable the builder to profiteer. The land could either be taken by the state for a compelling public purpose or returned to the land owners and not to the builder," the court stressed in the judgment, Uddar Gagan Properties vs Sant Singh. The government acquired the land for a housing colony and while compensation was being determined, the builder "suddenly surfaced" with a licence to build a colony of his own with power of attorney from some land owners and other documents. Other land owners moved the high court, which quashed the acquisition. The government files "deceptively projected" that the land was released to the builder at the instance of the farmers whereas the intention was to transfer the land to the builder. The effort was to defeat the law. The court emphasised that "ownership of land cannot be allowed to be acquired by the sword of acquisition on the head of the original owners." It added even the plight of investors in plots/ flats in land covered by acquisition or litigation cannot be a ground to ignore illegal actions of depriving a farmer of his land." The land will revert to the government and the persons responsible for the illegalities shall be proceeded against according to law. The court also called for periodic compliance reports.

Penalty on NHAI for dragging case

Corporate litigants appear to be at the receiving end of judicial ire in recent weeks, with the lead taken by the Supreme Court in the case of Star India, which was imposed a heavy penalty for dragging proceedings. The Bombay High Court imposed a hefty fine on two branches of the Singhania family. Last week, the Delhi High Court penalised the National Highway Authority of India (NHAI) for "unwarranted litigation". It was an arbitration case between the public sector undertaking and M/s Oriental Pathways, in which the award went against NHAI holding that it was guilty of breach of the concession agreement for a project in Maharashtra. The high court said the arbitrator had adopted a reasonable formula for arriving at his award and the court would not interfere in his decision. "NHAI has dragged the firm into this clearly unwarranted litigation. The appeal is completely devoid of factual or legal merit which renders the NHAI for punitive costs," the court said, adding the payment of the award amount has also been unreasonably delayed. Imposing Rs 5 lakh as punitive cost to be paid to the opposite party, the judgment said it was justified under the new law, namely, the Commercial Courts Act, 2015.

UCO Bank told to review nomination

The Supreme Court has asked the nomination committee of the board of directors of UCO bank to reconsider the case of a director who was declared ineligible to continue in the post because he was over-aged (65) and he had already served two years in that capacity. The bank had appealed against an interim order of the Calcutta high court. The Supreme Court did not go into the merits of the case, but citing the various criteria laid down in RBI circulars and finance ministry guidelines, it stated that the committee had considered only two criteria, whereas there are other factors which determine whether the person was 'fit and proper' to be nominated as director. "All the criteria will be taken into account without giving any one or more criteria undue weightage," the judgment clarified. Some other criteria are educational qualifications, experience and field of expertise, track record and integrity.

Punishment only after hearing

Imposing a major penalty like dismissal on a bank manager can be done only after following the statutory provisions governing the disciplinary proceedings, the Supreme Court stated in its judgment, Chamoli District Co-operative Bank vs Raghunath Singh. In this case a branch manager was charge-sheeted for irregularities in 1992 and 1993 which he denied. But the disciplinary proceedings were not conducted for a long time till his dismissal in 2002. He moved the Uttarakhand High Court which quashed the dismissal. The bank appealed to the Supreme Court which found that the proceedings were not according to the rules and the manager was not given an opportunity of being heard. It allowed the bank to start disciplinary proceedings afresh.

Power tribunal can't be short-circuited

The High Court of Madhya Pradesh last week rejected a batch of writ petitions moved by National Steel & Agro, Jaiprakash Associates, Ultratech Cement and others challenging the imposition of parallel operation charges by the state electricity commission accepting the recommendations of the Electrical Research and Development Association. The court accepted the preliminary objection of the state commission that the consuming companies could not approach the writ court directly while there was a provision for appeal to the Central Appellate Tribunal in the Electricity Act.

Customs, FSSAI to draft protocol

The Delhi High Court last week directed the customs authorities and food safety officials to coordinate their functions in the matter of import of food items. They must work out the modalities of ensuring the requirements of the Food Safety and Standards Act. The coordination committee shall meet within two months and a protocol shall be drawn up and notified by the customs authorities to ensure that the requirements of the FSSAI Act are complied with. The order was made in a case of import of energy gel and energy chews by Mumbai firm, Unlimited Nutrition Ltd, from GU Energy Labs of USA. There were several issues, and the main one was with regard to packaging and labelling, which led to the court order.

Breather for condom manufacturer

The Delhi High Court last week asked the government authorities concerned to give a hearing to Reckitt Benckiser Ltd before cancelling its licence for manufacturing condoms containing 4.5 per cent benzocaine. The chemical is used to delay men in bed and has side effects. The court noted that no show cause notice was issued to the firm before cancellation. Challenging the abrupt order, the firm contended it was manufacturing such "delay condoms" since 2001.

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First Published: Sun, May 29 2016. 21:31 IST
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