Page 15 - Banking Finance June 2017

LEGAL UPDATE

Apex court finds it cor- Civil suit stands back for arbitration
rect to connect PAN When an agreement is terminated by one party alleging breach committed by the
other, the arbitration clause still survives and continues
with Aadhaar to be operative. This is particularly so when the contract

According to the latest Finance Bill, is revoked by mutual consent and the arbitration clause
the PAN is framed in general terms, as stated by the Supreme
should be Court in the case of Hema Khattar Vs Shiv Khera, while
linked with setting aside the ruling of the Delhi High Court.
Aadhaar There was an agreement to reconstruct a building between the two parties.
Card to con- The land owner found out that the construction was faulty and the agreement
tinue to be was terminated. The owner named a sole arbitrator invoking the arbitration
active. The Supreme Court has men- clause, but the builder moved the high court in a civil suit claiming dues and
tioned that there was nothing prima other points. The owner opposed it on the ground of the arbitration clause.
facie wrong with the Modi The high court, however, proceeded on the line of the suit. On appeal, the Su-
government's insistence on linking preme Court quashed the orders of the high court and allowed the sole arbitra-
Permanent Account Number (PAN)
of citizens with their Aadhaar num- tor named by the owner to decide the issues.
bers to check the endemic problem Courts not to interfere in Govt's discretion
of tax evasion. Section 11C of the Central Excise Act empowers the government to issue or not
The government, through its top- to issue a notification exempting units if there was a "gen-
most legal officer, Attorney General erally prevalent practice". The petition was filed by a
for India Mukul Rohatgi, defended manufacturer of rosin and turpentine and it demanded
the move as necessary to weed out a notification claiming that it fulfilled the conditions for
fake PANs and check tax evasion and getting exemption, namely, it used a manual method
black money. without using power and such procedure was exempted
from duties in other cases.
SC whittled penalising
The Supreme Court rejected the contention and stated
powers of Competition there was no such general practice obliging the government to issue a notifica-

Commission (CCI) tion. It states that "unless it is made with oblique end or extraneous purposes or
upon extraneous considerations, or arbitrarily, without applying its mind to the
The Supreme Court cuts competition
relevant considerations, or where it is not guided by any norms which are rel-
commission's evant to the object to be achieved". The court stated so while dismissing the
penal powers
appeal case, Mangalam Organics Ltd vs. Union of India, against the order of the
by an order Delhi High Court.
mentioning
that penalties Validity of ship's registration
imposed by the CCI on companies Halliburton Offshore Services Inc vs. Mercantile Marine Department: The Su-
should be only on the turnover rel- preme Court has ruled that a provisional certificate of
evant to a case in dispute, not their registration of a ship has validity only for six months or
overall turnover. The same was de- till the ship arrives at an Indian port for registration. If
cided by the Apex Court on an ap- the ship is in the territory of another country where
peal where CCI had imposed 9% pen- there is an Indian consul, he can grant temporary reg-
alty on the average of 3 years' turn- istration but it will mandatorily expire within six months
over of each Company involved. In- or when it arrives in a port where it can get registration.
volved parties were Excel Crop,
United Phosphorus and Sandhya Or- The conditions for temporary and permanent registration are the same and they
are meant to develop the shipping industry, the Supreme Court stated in its judg-
ganic Chemicals,
ment in the case.

BANKING FINANCE | JUNE | 2017 | 15

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