Page 16 - BANKING FINANCE JUNE 2016

LEGAL UPDATE

Delight for lawyers; despair for judges SC directs demolition of

In 2000, disputes arose between the Though the proceedings were going on building for violation of
central government and members of a for 13 years, there is no stopping in this plan
consortium of oil companies, including case, Cairn India Ltd versus Union of
ONGC, resulting in the con- The Supreme Court has ordered
stitution of two arbitral tri- India. The dispute remains demolition
bunals. According to two whether the arbitration of a multi-
contracts, arbitration should be conducted in storyed resi-
would be governed by the London or Kuala Lumpur. dential
laws in India while the seat of arbitra- Narrating the complex building in
tion would be Kuala Lumpur. course of this arbitration, the judg-
ment stated that "the courts in India Patna for gross violations of the sanc-
According to another limb of the cannot resolve this dispute. tioned plan. The deviations are
agreement, the constitution of the "shocking and can be undertaken
arbitration tribunal and procedure Either the parties agree to the place of only by such person who considers
would be according to the laws of En- sitting by expressly recording that it himself to be law unto himself," the
gland. Arbitration had been held in would only be the venue or they await a court stated.
Kuala Lumpur from where it travelled decision by the Federal Court of Appeals
to Amsterdam, due to a contagion in in Kuala Lumpur… The situation is fairly One of the deviations is that against
Malaysia, then to London. paradoxical, but courts are faced with the sanction for 24 flats in six floors
such situations. It cannot be helped." at the rate of four flats per floor,
nine floors have been constructed
Project delay a factor in fixing power tariff with six flats an each floor.

Those who draw power cannot be made liable to pay when there is a delay in All flat owners shall vacate the build-
installing switchgear, protection system, and meters ing in six weeks and they will get
on the part of the producer. The Supreme Court compensation at the rate of Rs 7,000
stated so while dismissing the appeal case, Power per sq ft. The plea for compounding
Grid Corporation vs Punjab Power Corporation. the offence was rejected and those
who resist the order shall be force-
The Grid Corporation is a transmission licencee of the fully evicted, the court stated in the
Barh-Balia transmission unit in Bihar, built by NTPC. case, Babita Badasaria vs Patna Mu-
The Punjab Corporation was a beneficiary. They entered into a power supply nicipal Corporation.
agreement for providing transmission lines. NTPC was supposed to provide
switchgear and other equipment. The original order of demolition was
passed in July 2014. But, the resi-
The Grid Corporation claimed that it had completed its work and wanted the dents moved several applications
Central Electricity Regulatory Commission to determine the tariff. The Punjab with proposals to avoid the crisis.
Corporation, then, raised an objection that the line was not operational. The However, the court rejected all of
commission ruled that the tariff was payable. them stating that "we do not find any
reason to change our mind and al-
Refund claim for excise to be decided within 3 months low this illegal construction which is
contrary to law".
The Supreme Court has ruled that if there is a delay in the
refund of excise duty, the assessee firm is entitled to inter- The court appointed a commissioner
est on the amount the refund claim should be decided to determine the claims of compen-
within three months from the date of the application. sation and other modalities. It di-
rected the demolition within four
After that, interest shall be paid according to Section 11BB months and report compliance to it.
of the Central Excise Tariff Act, the court stated while dismissing the appeal of
the revenue authorities in the case, Union of India vs Hamdard Laboratories.
The company was engaged in the manufacture and sale of various items includ-
ing Rooh Afza, a sweetened non-alcoholic beverage.

16 | 2016 | JUNE | BANKING FINANCE

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