Page 11 - Banking Finance AUGUST 2015

LEGAL UPDATE

Excuse delay, but not at high cost: SC Extension of contract on

Several litigants approach the court to claim their rights long after the period phone is legal
of limitation set by law. Some do it deliberately as a
strategy; some others out of sheer neglect. There An arbitration agreement could be ex-
is even a suspicion expressed in Supreme Court judg- tended even by an email from a
ments, that government servants support the delay.
cellphone. The
On the other hand, sometimes the courts could be Bombay High Court
harsh on private parties for coming with application for condoning delay. The observed it last
Supreme Court found last fortnight that the trial court and the Madras high week in its judg-
court imposed "unreasonable and onerous" condition on a litigant who ap- ment in the case,
proached them for condoning delay (GMG Engineering Industries vs Issa Green Diversey India Ltd vs
Power Solution). Waverly Ltd, Sri
Lanka. The agreement to distribute the
The courts below directed the party to deposit Rs 1.5 crore and Rs 10 lakh re- products of the Indian company in Sri
spectively in two suits if the delay had to be condoned. The Supreme Court re- Lanka was terminated by Waverly, but
duced it to Rs 50,000. The high court, said the apex court, should have kept in it was extended for a few weeks during
view that the parties had not even got a chance to contest the suits on merits. talks which were recorded in the
So it was wrong to shut them out with a heavy financial burden, especially since Lankan MD's email sent from his phone.
they had given satisfactory explanation for the delay.
This was confirmed in emails from the
Wipro loses claim on energy tablet Indian company. When the dispute of
the companies went before the arbi-
The Madras High Court has rejected the application of Wipro Enterprises seek- trator, he ruled that the contract was
ing permanent injunction against Heinz India Ltd. from using the trade mark not extended, ignoring the emails. The
Volt. Wipro sells glucose based chewy tablets with the mark 'Bolts', promising high court held that his view was "per-
instant energy 'anytime anywhere' for body and brain. verse and patently illegal". An arbitra-
tion clause could be extended by email,
The trade mark is pending registration. Last year, the com- followed by subsequent conduct of the
pany found Heinz is selling a similar product with the name parties as in this case.
'Volt'. Wipro alleged in its petition that the rival product
not only adopted a deceptively similar name but also Cheque bounce: Magi-
colour scheme for the product.
strate's order quashed
So it alleged the action was with mala-fide intention to
pass off its product. Heinz replied that Bolts is a generic name and commonly The Calcutta High Court recently dis-
used by other firms. There is also no monopoly on the phrase 'anytime, any- missed the appeal of a company and
where'. The court ruled that there is no need for injunction at this stage and some of its directors facing the charge
the issues should be decided at the trial. of issuing cheques that were

Revival plea of defunct firm rejected dishonoured, observ-
ing that the magis-
The Madhya Pradesh High Court disallowed a company to revive itself after the trate need not give
Registrar of Companies struck it off the register in 2008. The company had run elaborate reasons for
into losses earlier, but claimed that it wanted to revive its agri business. When issuing process. In
the registrar declined, the company moved to the high court invoking Section this case, Fairdeal
560(6) of the Companies Act. However, the high court dismissed its plea be- Suppliers Ltd vs
cause it could not comply with the condition imposed in the 2000 Act which Piyarelal Iron & Steel
fixed the minimum paid-up capital of Rs 5 lakh. The high court emphasized in Ltd, the latter complained that the
the judgment, Shree Mohan Sugar vs Registrar of Companies, that the statu- cheques bounced. The magistrate at
tory rule cannot be relaxed on any equitable consideration. first issued process to all the accused
persons and they appeared before
him. However, later the order was re-
called and a fresh police report was
demanded.

BANKING FINANCE | AUGUST | 2015 | 11