Page 19 - Banking Finance MAY 2017

LEGAL UPDATE

Fincorp can choose Dispute over bottle design
speedy remedy The Bombay High Court has passed an order of injunction under the Designs Act
in a dispute between two plastic water bottle manu-
A financial institution can withdraw facturers. Cello Household Products alleged that a ri-
a suit for recov- val, Modware India, is selling a product, Kudoz, with
ery of loans and the same design as Cello's Puro, which is an infringe-
then invoke the ment of its design and additionally, passing off. Cello
faster remedies argued that its design has both novelty and original-
available under ity. Agreeing with Cello and comparing the two products, the court stated that
special laws, the "everything points but in one direction that Modware was attempting to de-
Supreme Court ceive consumers into believing that its products came from the house of Cello.
stated in the This is, therefore, prima facie, an attempt calculated to deceive and the decep-
judgment, Himachal Pradesh Finan- tion and misrepresentation is as to source or origin." The court made two no-
cial Corporation vs Anil Garg. In this table observations: The suit must now go to the commercial division according
case, two loans were taken from the
to the new Commercial Courts, Commercial Division & Commercial Appellate
state corporation, but the borrower Division of High Courts Act 2015. The judgment also noted that now the losing
repaid only small amount. party must pay costs to the winner. If the court deviates from the new rule, it
Therefore, the corporation filed a must provide reasons.
regular suit before a civil judge.
Later, it was withdrawn unilaterally Repacking and mixing gases is not manufacturing
because the Himachal Pradesh Pub- The Supreme Court has dismissed the appeal of the Commissioner of Central Excise
lic Moneys (Recovery of Dues) Act against Vadilal Gases Ltd, raising the question whether
provided a speedier remedy to re- repacking and mixing of industrial gases amounts to
manufacture, which attracts higher duty under the Tar-
cover loans. The borrower chal-
lenged this move in the high court, iff Act. According to the law, labelling or relabelling of
containers and repacking from bulk packs to retail packs
arguing that once the suit was with-
drawn, the corporation can be pre- or the adoption of any other treatment to render the
sumed to have abandoned its claim. product marketable to the consumer, shall amount to 'manufacture'.
In this case, the company received liquefied nitrogen and argon in bulk in cryo-
The high court allowed the petition
and stopped the auction of the mort- genic tankers. They are re-gassified and packed in smaller cylinders for retail sale.
Some other gases are also repacked and labelled with details by the sister com-
gaged vehicles. The financial corpo- pany which does the marketing. The court noted, after examining the process in
ration appealed to the Supreme
this case, that there was no manufacturing involved.
Court contending that it had not
abandoned the claim but the with- Calcutta HC asks land acquisition collectors to pay
drawal was made to initiate fresh
proceedings under the Act, as it pro- compensation
vided for a more speedy and effec- The Calcutta High Court has asked the West Bengal government and the land
tive remedy, under a special law. acquisition collector to pay compensation and occupation charges to Punalur
Paper Mills for occupying its premises in central Kolkata since 1998 through an
The Supreme Court allowed the auc-
illegal land acquisition. The premises were acquired in 1973 for the offices of
tion stating that the withdrawal of Sugar Industries Development Corporation and the notification expired in 1998.
suit did not bar a fresh petition un- Then by another notification in 2000, the premises were acquired while the
der the Act. "The loan was disbursed corporation continued to hold the property. The mills challenged the acquisition
from public funds of the taxpayers' invoking the urgency clause, while the government justified it and blamed the
money. The borrower was a trustee mills for not allowing it to measure the premises. It also raised objection to a
for the loan amount. It could not sick company to approach the high court. Rejecting these arguments, the high
become a windfall for him," the judg- court observed that no compensation was paid and there was no urgency when
ment said.
the premises were occupied for long years.

BANKING FINANCE | MAY | 2017 | 19

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