Page 18 - Banking Finance MAY 2017

LEGAL UPDATE

SAIL pardoned for foul- Spouse cannot be blamed for bounced cheque
up The Gujarat high court has stated that only the person who signed the cheque
which bounced is liable to be prosecuted under the
The Calcutta High Court observed Negotiable Instruments Act. A spouse cannot be
that a public corpo- prosecuted for issuing a bad cheque deeming him
ration could be to be an associate; the law does not permit it.
given some latitude
in litigation, "other- The high court was dealing with the appeal of the
wise, considering husband who was being prosecuted for the bounced
the state of affairs, cheque signed by his wife. The court quashed the
the state machinery will break prosecution in the case, Harshad vs State of Gujarat, stating that even if the
down." In this case, SAIL vs Amiya couple had a joint bank account, the signatory alone would be responsible. The
Steel Ltd, the public sector company law regarding vicarious liability of a company, which is a juristic person, and the
moved the wrong court against an officials of the corporate entity would not be applicable in this case.
arbitration award. The high court cited a few cases from Delhi and Haryana in which wives were
The suit lay there for two years before prosecuted for bad cheque signed by their husbands, as they had joint accounts.
the PSU realised its mistake. It with- Those high courts had stressed that only the signatory to the cheque is respon-
drew the suit there and moved the sible, except in the case of directors and officials of companies who were in charge
high court. The opposite firm objected of the issuing cheques.
to delayed petition, alleging that SAIL
had not acted with due diligence and Judges facing hardships during claim settlements for
lacked good faith. But the high court the victims
pardoned it, stating that if the SAIL's Evaluating deaths and victims from accidents by the judges is very difficult. This
petition was dismissed on those dilemma was reflected in the judgments delivered by
grounds, the rival firm would get Rs 4 the Supreme Court and the high courts. The Supreme
crore without contest from the PSU.
Court enhanced the compensation for an accident vic-
Fresh tender order for tim nearly four times, rejecting the computation of loss
of income adopted by the motor accident claims tribu-
Nagaland govt. nal. In this case, Sandeep Khanuja vs Atul Dande, a 30
The Supreme Court has asked the year-old chartered accountant lost 70 per cent of his
Nagaland gov- earning capacity in a road accident. The tribunal awarded him Rs. 5 lakh, the
ernment to in- Chhattisgarh High Court raised it to Rs. 6 lakh.
vite fresh ten-
On his further appeal, the Supreme Court fixed the amount at Rs. 20 lakh. In
ders for build-
ing a 330-km- another case, Oriental Insurance Co Vs Swapna Nayak, the court awarded Rs.
long road which could not be com- 3.75 crore for the death of an IT executive working in the US, who came to Odisha
pleted within reasonable time by the on a holiday. In the month of March Calcutta High Court blamed the lawmakers
contractor. It started as a public in- for not correcting typing/arithmetic errors in a chart to calculate damages in
terest litigation, titled Union of India the Motor Vehicles Act for over two decades, confounding the courts.
vs Hetovi Kappo, seeking to complete Challenge to tobacco rule dismissed
the project which was stalled due to
The Patna High Court has dismissed the petition of Prabhat Zarda Factory India
allegations against the contractor.
challenging the Chewing Tobacco and Unmanufactured To-
The court stated that since the con- bacco Packing Machines (Capacity Determination and Col-
struction of the road, connecting a lection of Duty) Rules notified by the central government.
village to the national highway, has According to the rule, the excise duty is determined not by
stopped and it would take nearly four the actual production but on the basis of the total manu-
years to complete it, the government facturing capacity of the unit. This rule along with heavy duty has affected the
should retender the work. industry all over the country and it was against the right to trade.

18 | 2017 | MAY | BANKING FINANCE

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