December 2021

The Supreme Court has directed all states, except Maharashtra, to fill up vacancies in the Districts and State Consumer Disputes Redressal Commissions by the end of January 2022. A bench comprising Justices S K Kaul and M M Sundresh noted that a large number of states are stated to be reaching the culmination of the process of appointment. With regard to Tamil Nadu, the top court said the acting Chief Justice of the high court would have to nominate some Judge and the state government would promptly approach the acting Chief Justice for the said purpose and ”we expect the nomination to be made on an urgent basis”. Advocate Aditya Narain, who has been appointed as amicus curiae in the case, submitted a comprehensive status report with regard to the appointment of members of the Commission. ”It is suggested by the amicus curiae that two months’ time, i.e., by the end of January, 2022 should be enough for the States to fully comply, which include the ones which have partially complied but their vacancies have not been filled up, the exception being State of Maharashtra which will have to wait the decision in the special leave petition stated to be filed both by the Union of India and the State but not listed as yet,” the bench said. On the issue of development of judicial infrastructure, the apex court noted that a large part of pending funds under category of utilisation certificate ”UC.” does not portray a very happy situation. ”It must be appreciated that the utilization of the Central funding in turn requires planning by the States so that the funds do not lapse. The project may be spread over a period of time and if the utilisation is on the basis of the total funds available without taking into account the time period within which that infrastructure would be built, there is bound to be a situation of funds lapsing,” the bench said. The top court, in its December 1 order, said that what is required is to take up as many projects as would result in a utilisation of the fund in the given financial year so that the fund does not lapse. ”It is suggested to us that in order to facilitate the utilization of funds within the stipulated time and to ensure that utilisation certificates are submitted so that no part of the fund lapses, there should be nodal officers assisting the Empowered Committees. ”We call upon the Central Government and the State Governments as well as the Union Territories to nominate the nodal officers for the said purpose within a week. These nodal officers will coordinate and assist the Empowered Committees,” the bench said. The apex court made it clear that the Empowered Committees, the nodal officers, states and the Union government are all responsible to ensure that the funds allocated are utilised properly and within the time stipulated with proper utilization certificate to ensure that no fund lapses, and are utilized under the Scheme. The top court was hearing a suo motu case, ‘Inaction of the Governments in appointing President and Members/Staff of Districts and State Consumer Disputes Redressal Commission and inadequate infrastructure across India’. Earlier, the apex court had expressed displeasure over delay in appointments in the Districts and State Consumer Disputes Redressal Commission and said if the government does not want the tribunals then it should abolish the Consumer Protection Act. It had directed that the process of filling up vacancies in the State Consumer Commissions as per its earlier directions must not be impeded by the judgment of the Bombay High Court which had quashed certain Consumer Protection Rules. Sankaranarayanan had apprised the court about the judgement passed by the Bombay High Court at Nagpur Bench quashing certain Consumer Protection Rules. The top court had in January said that Consumer rights are ”important rights” and non-manning of posts and inadequate infrastructure in the district and state consumer commissions across the country would deprive the citizens of redressal of their grievances. The top court had appointed senior advocate Gopal Sankaranarayan and lawyer Aaditya Narain as amicus curiae to assist it in the matter. Source: devdiscourse.com

The Supreme Court has held that even if there is no evidence on record of actual income, deceased person’s potential to earn can be considered while considering insurance claims in motor accidents matter. The deceased was a computer engineer with a B.Tech degree. While there was evidence on record to show that the deceased was earning Rs.10,000/ month, there was no documentary evidence to show an additional 10,000/month which Appellants claimed. The Motor Accidents Claims Tribunal, Ranchi in its judgement assessed the “future loss of income” of the deceased at Rs.20,000/month and on that basis arrived at a compensation figure of Rs. 30 Lakhs. The Jharkhand High Court in its impugned judgement reduced the amount of compensation from 30 Lakh Rupees to 15 Lakh Rupees. The impugned judgement held that: “this Court is of the opinion that without any evidence with regard to income and only on the basis of oral statement income of the deceased was considered by the learned Tribunal to the tune of Rs.20,000/- is not just and proper, though there no contrary evidence was brought by Insurance Company nor cross-examination has been done by the Insurance Company, but the learned Tribunal ought to have been very reasonable in granting compensation as the same cannot be bonanza rather the same must be just and fair compensation.” (Para 28) Before the Supreme Court, the Respondent-Insurance Company argued that there was no documentary evidence produced on record to show that Rs.20,000/ month was the actual income of the deceased at the time of death. In this light, the Order holds: “assuming that there was no supporting evidence laid, in that case also considering the potentiality to earn, as the deceased was a Bachelor of Engineering in Computer Technology, his income can safely be assessed at-least at Rs.20,000/- per month.” On the basis of this reasoning, the Order dated 06.12.2021 sets aside the impugned judgement noting that the “High Court has committed grave error in reducing the compensation.” Case name: Basant Devi v Divisional Manager, The New India Assurance Company Ltd Coram: Justice M.R. Shah and Justice B.V.Nagarathna Counsels: Mr.Kaushik Laik for Appellants, Mr.J.P.N.Shahi for Respondents. Citation : LL 2021 SC 728 Source: https://www.livelaw.in/top-stories/motor-accident-claims-potential-to-earn-can-be-considered-to-determine-compensation-if-there-is-no-evidence-for-actual-income-supreme-court-187406

The Supreme Court delivered the split Verdict on chargeability of Service Tax on Card-Issuing Bank For Interchange Fees. Justice Joseph, in his judgement, was in agreement that the respondent­ Citibank, as issuing bank, was providing service, as found by the Commissioner. However, this service was a part of a single unified service– of settling transactions – which is provided by both the acquiring and issuing bank (which in some circumstances may well be the same bank). “I am in agreement with J. Joseph that prior to 01.07.2012, the service of issuing bank fell within Section 65 (33a) (iii); interchange fee cannot be treated as interest, as argued by Citibank; and lastly the case that credit card transaction, being a transaction in money and therefore excluded from the definition of “service” in Section 65B (44) is unacceptable,” said Justice Ravindra Bhat. Justice Bhat further added that the question of remand to the tribunal does not arise. The only point of contention seems to be whether they were reflecting the payment of service tax separately in their ledgers, as issuing and acquiring bank. However, as a result of the reasons already elaborated, this is rendered to be a purely academic question. A question of returns should not detain this Court, because the business reality is that every bank is both an issuing bank and an acquiring bank, and it is nobody’s case that the banks are not filing their returns on service tax. However, Justice KM Joseph allowed the appeals filed by the Revenue Department and remanded the matter back to the Customs, Excise and Service Tax Appellate Tribunal. The judgement of Joseph, J. with respect, is mainly concerned by the fact that Citibank retains ₹ 2 before crediting the rest of the money towards settlement of the transaction; and therefore, in the absence of proof that acquiring bank has paid service tax on amount including the interchange fee, it is liable to pay for the specific service provided by it, as a distinct service provider. As explained in the earlier portion of this judgment, the activity or part played by the issuing bank is undoubtedly a service. However, it is part of the service; by itself, and without the role of the acquiring bank, it becomes a pure advance or loan transaction. However, the provision of service by the issuing bank and the acquiring bank together, triggers the levy. In other words, the component of service by the issuing bank is just that – a part of a single unified service, which for business convenience is structured in a manner, that the issuing bank retains ₹ 2, and tax is paid on the overall service, in the hands of the acquiring bank. There is no revenue leakage. The manner in which the credit card transaction, particularly the inter se transaction between the issuing bank and the acquiring bank is fashioned is such that instead of releasing the entire amount, in the first instance, and claiming the interchange fee later, the issuing bank retains the component of interchange fee. Source: https://www.taxscan.in/supreme-court-delivers-split-verdict-on-chargeability-of-service-tax-on-card-issuing-bank-for-interchange-fees/144327/

The Supreme Court observed that the allotment of public properties on the basis of discretionary quota has to be done away with. Such allotment must be transparent and has to be fair and non arbitrary, the bench of Justice MR Shah and BV Nagarathna observed. The court added that even in the case where the policy decision is taken to allot the plots to a particular class – downtrodden class etc. in that case also the guidelines must be strictly followed. In this case, the allegation against certain public servants who were occupying crucial positions in Bhubaneswar Development Authority and in the Housing and Urban Development Department, Government of Odisha was that they surreptitiously distributed prime plots in Commercial Complex District Centre, Chandrasekharpur, Bhubaneswar. It was alleged that all the accused persons have committed the offences under Section 120B IPC and Section 13(2) read with Section 13(1)(d) of the 3 Prevention of Corruption Act, 1988. Allowing their petition filed under Section 482 CrPC, the Orissa High Court quashed the FIR. In appeal, the Apex Court bench noted that, in the instant case, the allegations are an instance of abuse of the powers with a mala fide intention and allotment of the plots to the family members by hatching a criminal conspiracy and to allot the plots to the family members at throw away price causing loss to the B.D.A. and the public exchequer. The court observed that action has to be initiated against the officials who are prima facie responsible for the illegality in the allotment of the plots to the relatives and/or family members resulting in huge loss to the B.D.A. and the public exchequer. While concluding the judgment, the bench made these observations: 11. Before parting we may observe that now the day has come to do away with allotment of government largess on the basis of discretionary quota as this inevitably leads to corruption, nepotism and favouritism. Government and/or the public authorities like B.D.A. are the custodian of public properties. Allotment of public properties must be transparent and has to be fair and non­-arbitrary. In such matters public interest only has to be the prime guiding consideration. The aforesaid principle is in order to get the best or maximum price so that it may serve the public purpose and public interest so as to avoid loss to the authority and/or the public exchequer. The court added that the allotment of plots in the discretionary quota cannot be at the whims of the persons in power and/or the public servants who are dealing with the allotment of plots in the discretionary quota. “When a democratic government in exercise of its discretion selects the recipients for its largess, then discretion should be exercised objectively, rationally, intelligibly, fairly and in a non­-arbitrary manner and it should not be subjective and according to the private opinion and/or the whims and fancies of the persons in power and/or the public servants. Even if guidelines are issued to be followed while allotment of the plots under the discretionary quota and it is found that many a time they are hardly followed or are manipulated to suit the particular circumstances. Therefore, the best thing is to do away with such discretionary quota and allotments of the public properties/plots must be through public auction by and large. Even in the case where the policy decision is taken to allot the plots to a particular class – downtrodden class etc. in that case also the guidelines must be strictly followed and as observed hereinabove the allotment must reflect the fair play and non­-arbitrariness and should have objective, criteria/procedure.”, the court observed. https://www.livelaw.in/top-stories/supreme-court-discretionary-quota-public-properties-allotment-187433 Source: Livelaw.in

The Indian government has no plans for boosting the cryptocurrency sector in the country, says Pankaj Chaudhary, Union minister of state for finance. Giving a written reply in the Lok Sabha, the minister reiterated that cryptocurrencies are currently unregulated and the government does not collect data on the cryptocurrency sector. “A bill on cryptocurrency and regulation of official digital currency has been included for introduction in the Lok Sabha Bulletin-Part II as part of government business expected to be taken up during the seventh session of 17th Lok Sabha.” Jagdambika Pal, a member of Parliament (MP), had asked for data available for active cryptocurrency exchange companies working in India for both, local developers and international developers and the details of cyberattacks that happened on these companies in the past two years. He also asked about the size of the cryptocurrency market in India and if it is trustworthy. However, Mr Chaudhary, the state minister, only says a bill will be introduced in the current session of the Parliament. Replying to another question about digital currency asked by Rakesh Singh, an MP, the minister said a central bank introduces central bank digital currency (CBDC). “Government has received a proposal from the Reserve Bank of India (RBI) in October 2021 for an amendment to the RBI Act to enhance the scope of the definition of ‘bank note’ to include currency in digital form. RBI has been examining use cases and working out a phased implementation strategy for the introduction of CBDC with little or no disruption,” he said. According to the state minister, the introduction of CBDC can provide significant benefits, such as reduced dependency on cash, higher seigniorage due to lower transaction costs, and reduced settlement risk. He said, “Introduction of CBDC would also possibly lead to a more robust, efficient, trusted, regulated and legal tender-based payments option. There are also associated risks which need to be carefully evaluated against the potential benefits.” “As CBDC is backed by the central bank of a country, apart from other benefits, it will not have volatility which is normally associated with the private cryptocurrencies,” the state minister for finance said.  Source: moneylife.in

However, it said that since “there shall be a huge liability on the Commission if it has to now refund the amount of additional surcharge recovered at a stretch, we direct that the additional surcharge already recovered from the captive consumers/captive users shall be adjusted in the future wheeling charges bills.” A bench led by Justice MR Shah while upholding the Appellate Tribunal for Electricity’s March 2019 decision said that once it is held that the captive consumers/captive users are not liable to pay the additional surcharge leviable under Section 42(4) of the Electricity Act 2003, MERC has to refund the additional surcharge collected from the captive consumers like JSW. A bench led by Justice MR Shah while upholding the Appellate Tribunal for Electricity’s March 2019 decision said that once it is held that the captive consumers/captive users are not liable to pay the additional surcharge leviable under Section 42(4) of the Electricity Act 2003, MERC has to refund the additional surcharge collected from the captive consumers like JSW. In a major relief to captive consumers of electricity like the JSW group of companies, the Supreme Court on Friday held that a group of users of captive power plants are not liable to pay an additional surcharge of Rs 1.25 per unit, as directed by the Maharashtra Electricity Regulatory Commission (MERC). A bench led by Justice MR Shah while upholding the Appellate Tribunal for Electricity’s March 2019 decision said that once it is held that the captive consumers/captive users are not liable to pay the additional surcharge leviable under Section 42(4) of the Electricity Act 2003, MERC has to refund the additional surcharge collected from the captive consumers like JSW. However, it said that since “there shall be a huge liability on the Commission if it has to now refund the amount of additional surcharge recovered at a stretch, we direct that the additional surcharge already recovered from the captive consumers/captive users shall be adjusted in the future wheeling charges bills.” The levy of an additional surcharge under sub-section (4) of Section 42 can be justified as compensatory in nature only where the state commission permits a consumer or class of consumers to receive a supply of electricity from a person other than the distribution licensee supplying of its area subject to payment of additional surcharge on the charges of wheeling as may be specified by the state commission to meet the fixed cost of such distribution licensee arising out of his obligation to supply. Ordinarily, a consumer or class of consumers receives electricity supply from the distribution licensee in its area of supply. So far as captive consumers/captive users are concerned, no such permission of the state commission is required, thus no additional surcharge is payable by them, the SC said, adding that the captive consumers/captive users being a distinct and separate class by themselves have also to incur the expenditure and/or invest the money for constructing, maintaining or operating a captive generating plant and dedicated transmission lines. “… in that case, it will be discriminatory and it can be said that unequals are treated equally,” the judgment stated. The Commission in September 2018 had held that the additional surcharge leviable under Section 42(4) of the Electricity Act, 2003 does not apply to captive users to the extent of their self-consumption from such plants, but applies to all consumers who have availed open access to receive supply from sources other than the distribution licensee to which they are connected. JSW Steel, JSW Energy, JSW Cement and other group companies had challenged MERC’s decision in the Aptel, saying that the Commission had ignored the concept of non-discriminatory open access in terms of the Act as well as National Electricity Policy which eliminates competition and provides a supply of power directly to the consumers through open access. The tribunal also held that there cannot be any distinction between an individual captive consumer and group captive consumers or original captive consumers and converted captive consumers. Source: Financial Express