Page 15 - Banking Finance December 2016

LEGAL UPDATE

Bombay HC quashed DRT can interfere into SARFAESI Act: SC
ONGC's order for black- The Supreme Court ruled that the Debt Recovery Tribunal (DRT) constituted
under the DRT Act has jurisdiction to entertain an
listing JK Surface appeal arising from the SARFAESI Act even if the

The Bombay High Court has quashed amount involved is less than Rs 10 lakh. This expla-
the order of ONGC blacklisting JK Sur- nation became necessary because there was some
face Coatings Ltd for three years and grey area in the DRT Act and the SARFAESI Act re-
allowed it to participate in future garding loans below Rs 10 lakh. The DRT Act says it
tenders/bids floated by the govern- has jurisdiction for suits only above Rs 10 lakh; otherwise, the bank should move
ment oil corporation. The private the civil court. However, SARFAESI Act bars any role to civil court. Therefore,
company specialises in corrosion re- the court had to harmonise the provisions. The Supreme Court did so and al-
sistant coating for offshore industries lowed the appeal of the bank, against the ruling of the Delhi High Court.
and claims to be the only one such in
this country. Power firm liable for accidents from ill kept high-ten-

The High Court stated that though sion wires
private companies can blacklist one The Madhya Pradesh High Court ruled that the electricity distribution company
another, a government entity must is liable for the deaths and injuries caused by bad mainte-
follow the principles of natural justice nance of high tension wires.
and proportionality. If these principles The parent of an eight-year-old boy, who was electrocuted
are violated, the court can intervene. when a bus carrying a marriage party came into contact with
live wire loosely hanging on the road. She made a complain
SYL canal to be built and received Rs. 25,000 as damages. The company opposed
soon: SC orders Punjab even this small sum arguing that the motor vehicle accident
The Punjab-Haryana water dispute tribunal had already awarded Rs. 1.8 lakh and therefore the
flared up parent was not entitled to further payment. The high court
rejected the argument and stated that the victim was entitled to both amounts.
ahead of
Punjab It further held that electricity was a "hazardous substance" according to the
law. So the company handling it had a duty to keep it out of danger to the people.
polls due
If there is an accident and injury, compensation must be paid without apportion-
early next
ing blame, because it is a "no-fault" liability.
year with the Supreme Court declar-
ing as "unconstitutional" the state's
2004 law, which unilaterally scrapped SBI not liable for the purchase tax on Exim Scrips
the 1981 agreement to share the The Supreme Court has ruled that State Bank of India and its branches are not
Ravi and Beas waters through the liable to levy purchase tax for accepting Exim Scrips (export
Satluj-Yamuna Link (SYL) canal. import license), dismissing the appeal against the judgment
of the Calcutta High Court.
The SC decision immediately heated
up Punjab politics with Amarinder The question was whether SBI which are registered dealers
under the Bengal Finance (Sales Tax) Act would be liable to
Singh, who is seeking to unseat the
Akalis and regain office, resigning his levy of purchase tax for accepting the scrips on payment of premium of 20 per cent
Amritsar Lok Sabha seat and the rul- of the face value in compliance with the direction of Reserve Bank of India. The rev-
enue authorities as well as the taxation tribunal had held against the SBI but the
ing SAD-BJP making it clear that
Punjab could not spare water for high court had ruled in favour of the bank and quashed the show cause notices.
other states. The court also said 57 debtors defaulted on Rs. 85,000 cr loan: SC
Punjab has to construct the unfin-
The Supreme Court said RBI's loan defaulters list, submitted in a sealed cover,
ished portion of the SYL canal, as per
showed that 57 debtors had failed to repay Rs. 85,000 crore and asked why their
the SC's 2002 and 2004 judgments.
names should not be made public.
BANKING FINANCE | DECEMBER | 2016 | 15

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