SC refers cement firms pleas to larger bench

Written by Indu Bhan | Indu Bhan | Updated: Dec 25 2013, 10:58am hrs
Cement companies appeals

Referring a bunch of four appeals filed by Tamil Nadu-based cement companies to a larger bench, the Supreme Court has flayed the firms for their wholly bald and vague assertions in their petitions and also the Tamil Nadu government for callous, imprecise counter. However, it allowed the companies and the state to file all the details in a clear manner and tagged their appeals with another similar appeal, Mineral Area Development Authority & Ors vs Steel Authority of India & Ors, pending before it since 1999. The issue to be decided by the apex court is about the true legal character of the expression royalty under the Mines and Minerals (Development and Regulation) Act, and whether it is a tax or a consideration for a contract of mining lease

The Tamil Nadu government had in May 1982 addressed a letter to the collectors asking them to stop sharing 50% of the royalty and dead rent with the patta land holders in respect of mining leases and to collect the whole amount due as royalty and dead rent prescribed in the second and third schedules to the Act. Pursuant to the letter, the collectors called upon these companies to remit royalty and the dead rent at the rates prescribed under the Act. This was challenged by the firms in the Madras High Court on the ground that as a matter of right they were liable to pay only 50% of the royalty payable on extraction of the minerals as the right emanated from the law prevalent in regard to the subsoil rights.

IPAB to decide afresh

Setting aside the Intellectual Property Appellate Boards (IPAB) decision, the Supreme Court has asked the board to decide afresh on merits a trademark dispute between the proprietor of Kundan Cables India and Balar Marketing Ltd. In this case, Lakha Ram Sharma vs Balar Marketing P Ltd & Ors, the former (the proprietor of Kundan Cables India) manufactured electric accessories and fittings under the trademark Kundan since 1980. It supplied its products with that name to Balar Marketing. In 1994, Kundan Cables came to know that Balar had been using the trade name Kundan. It filed a suit for injunction in a trial court in Delhi. During the pendency of the suit, Balar obtained registration of the trade mark in its favour. This prompted Sharma to move the Delhi High Court for cancellation of the registered trade mark. But its rectification plea was dismissed by the HC as Balar objected to the territorial jurisdiction of the Delhi HC to entertain the petition.

After the constitution of IPAB in Sept 2003, the matter was taken there. In 2012, IPAB dismissed the petition on the ground that it was filed after a lapse of about 10 years from the date when registration was obtained by Balar. The apex court quashed IPABs order, saying that Kundan Cables had pursued its remedy in a bonafide manner and with due diligence, without brooking any delay and if it had pursued his remedy wrongly by filing it in Delhi HC, instead of Madras High Court, the principles of limitation will not bar it from moving the board.

Cos rights over land

Quashing the Andhra Pradesh High Courts decision in the case, APII Corporation Ltd vs Team-Asia Lakhi Semiconductors Ltd, the Supreme Court has ruled that mere possession of a plot given to a company for a limited purpose would not create any interest or right in its favour. In this case, the Government-owned APII Corp had allotted a plot to Team-Asia for which the entire money was to be paid within 60 days. The company could not make entire payment and resulted into forfeiture of the part amount already paid. Though the company was given possession for a limited purpose, it was permitted to occupy the plot. The company later went into liquidation and the official liquidator (OL) wanted to take possession of the plot so that the plot could be sold and dues of the company paid.

APIIL filed an application for taking possession of the plot as the same was in unauthorised possession of the company. The HC in March 2011 dismissed its plea and directed OL to take steps to dispose of the plot in question. The Corporation then appealed to the Supreme Court, which quashed the HC order and said: The plot in question did not belong to the company in liquidation, the OL had no right to deal with it or dispose of it and it would be open to the Corporation to deal with or allot the plot as per its own policy.