Companies & Sectors
HC refuses to quash allotment of a plot in Nashik to Mahindra & Mahindra

The order is considered significant against the backdrop of a MoU signed by Maharashtra government and Mahindra & Mahindra for commissioning of Rs700 crore project at Nashik for manufacture of 'Logan' car

Mumbai: The Bombay High Court has dismissed a petition filed by a company Zenith Metaplast Pvt Ltd praying for allotment of a three acre plot in Nashik to itself and cancellation of adjacent plots allotted to Mahindra & Mahindra Ltd and an industrialist, reports PTI.


The court observed that the Maharashtra government and the Maharashtra Industrial Development Corporation (MIDC) had acted in the interests of the state while allotting the adjacent plots admeasuring 17 acres and six acres to Mahindra & Mahindra and Nashik-based industrialist Abhay Kulkarni, respectively.


Zenith Metaplast also sought a writ of certiorari to quash the communications dated 16th December 2005 and 22nd June 2006, rejecting its application for the allotment of a plot admeasuring about 3 acres in the same MIDC area.


The order is considered significant against the backdrop of a MoU signed by Maharashtra government and Mahindra & Mahindra on 15 June 2005, in respect of commissioning of Rs700 crore project at Nashik for manufacture of "Logan" car.


"Having been through the records, we are satisfied that there is no arbitrariness in the decision. The decision to allot the said plots to Mahindra & Mahindra and Abhay Kulkarni was taken after due consideration of all the facts and circumstances of the case," observed Justices RY Ganoo and SJ Vajifdar in their recent order.


"MIDC and the state of Maharashtra considered the application of Mahindra & Mahindra and Abhay Kulkarni to be, inter-alia, in public interest for the benefit of the state. We find no reason to condemn this decision as arbitrary for any reason whatsoever," the judges observed.


The MIDC contended that the petitioner, over the years, had been allotted eight plots of land in the said area, but the full potential of even these plots was not exploited by the petitioner and therefore it has no case.


"The details of these eight plots and the extent to which they have been exploited have been furnished. The petitioner has not denied these statements or offered any cogent explanation for accumulating plots and not using them," the bench noted.


The judges noted that the petitioner was aware of the allotment in favour of Mahindra & Mahindra prior to 15 March 2006, as is evident from the letter dated 15 March 2006, addressed by it to MIDC. "The petitioner never objected to the allotment of the plot by MIDC in favour of Mahindra & Mahindra. This is evident from the correspondence addressed by the petitioner which we have already referred to."


By the letter dated 15 March 2006, the petitioner said that it could be allotted a plot "without disturbing the requirement of Mahindra & Mahindra". By the letter dated 3 April 2006, addressed to the MIDC's chairman, the petitioner requested MIDC to issue "the balance list of open space No.8 of 24,000 square meters left after allotment to Mahindra and Mahindra".


The petitioner, therefore, did not seek to disturb the allotment in favour of Mahindra & Mahindra, the judges further noted.


It was only by the letters dated 3 October 2006, and 10 October 2006, that the petitioner challenged the allotment in favour of Mahindra & Mahindra. This challenge was also essentially only on the basis of MIDC's circular dated 25 January 1994 and not on the basis that the allotment was not in accordance with the procedure or unfair, the bench observed.


As the result, therefore, Mahindra & Mahindra commenced the process as far back as 23 November 2005. There were detailed negotiations between Government of Maharashtra, MIDC and Mahindra & Mahindra with regards to the allotment for the mega project, the court noted.


Crores of rupees have been spent by this company in respect thereof, including the payment of premium of about Rs7.51 crore. The company also had the option to set up the mega project in two other states viz. Andhra Pradesh and Uttarakhand, the judges observed.


"The petitioner took no steps to challenge the allotment, although it knew about the same prior to 15 March 2006. We are not inclined to exercise our jurisdiction under Article 226 to annul the allotment in such circumstances," the judges noted.


Appellate Tribunal dismisses Tata Power's plea over cross subsidy surcharge

The Tribunal dismissed Tata Power's petition challenging MERC's order to impose cross subsidy surcharge from high billing consumers, who have migrated from Reliance Infra to TPC

Mumbai: The Appellate Tribunal for Electricity (ATE) has dismissed the petition of Tata Power Company (TPC) challenging the Maharashtra electricity regulator's order on imposing cross subsidy surcharge from high billing consumers, who have migrated from Reliance Infra to TPC, reports PTI.


Tata Power had challenged the Maharashtra Electricity Regulator Commission's (MERC) order, which allowed Anil Ambani-led RInfra to collect cross-subsidy surcharge from its high-billing customers, who have migrated to rival Tata Power in the interest of the consumers as well as the licensees.


In a September last year, the MERC had said that if high-end consumers of a supplier move to another one under open access system, they will have to continue to cross subsidise the lower-end consumers of their previous supplier.


The ATE, in its order dated 21st December said: "Without reasonable subsidy, there is a possibility that all the consumers in RInfra may move to TPC and in that event, the monopoly of the TPC would be created.


"This action of imposing cross subsidy surcharge is to preserve the competition in order to promote the industry and simultaneously to protect the interest of the consumers".


Under the cross-subsidisation regime, consumers with higher power usage compensate for lower costs per unit charged from those consuming less than 300 units a month.


After the consumers were given the choice to switch power discoms, some high-end customers shifted to Tata Power, which had lower rates as a result of no obligations to serve low-end consumers at cheaper rate, the spokesperson said.


Upholding the decision of the state Commission, the ATE said: "MERC is required to look after not only the interest of the consumers but also the interest of licensees.


"Therefore, the Commission, while deciding that the change over consumers are liable to pay cross subsidy surcharge to RInfra for using their network has in fact taken into consideration the interest of the consumers as well as the interest of the licensees. Therefore, findings and directions given (by MERC), which would promote healthy competition are perfectly justified".


RInfra is at present serving around 28 lakh consumers in its distribution areas in suburbs, out of which, almost 23 lakh consumers are low-end ones, including 12 lakh coming from the unstructured developments in the suburbs, who are cross subsidised.


On the contrary, nearly 90% (bulk) of Tata Power customers include railways, refineries, large housing and commercial complexes and multiplexes.


PSUs, insurers face tough time in consumer fora during 2012

Pulling up PSUs for behaving 'penny-wise, pound-foolish', the consumer fora in 2012 also made clear its displeasure with insurance companies -- private or state-run -- for denying rightful claims of consumers by asking the Centre to examine the issue and take action against the erring companies

New Delhi: Insurance companies and public sector units (PSUs) had to face some tough time in 2012 from the consumer fora which pulled up these entities for causing a rise in frivolous litigation, reports PTI.

The apex consumer commission pulled up PSUs for behaving 'penny-wise, pound-foolish' and spending more money in fighting cases than they might have to pay to the claimants.

The National Consumer Disputes Redressal Commission (NCDRC) made the observation while pulling up Haryana Urban Development Authority (HUDA) for "gross negligence, deliberate inaction and lack of bonafides" in delaying by 204 days filing of a plea against a state consumer commission's order.

The NCDRC also imposed a fine of Rs50,000 on HUDA while blaming the legal staff of the PSUs for not examining cases properly and forcing litigants to approach courts, resulting in a rise in frivolous litigation.

Apart from PSUs, the consumer fora made clear its displeasure with insurance companies -- private or state-run -- for denying rightful claims of consumers by asking the Centre to examine the issue and take action against the erring companies.

The fora had also asked the Union finance ministry to deal strictly with private insurance firms and consider cancelling their licences for harassing customers and illegally rejecting their claims.

State-run insurance company LIC was also not spared, with the Delhi State Consumer Commission saying that it has become the "richest" organisation in the country by rejecting rightful claims of insured under mediclaim policies on "flimsy" grounds.

Airlines, banks, auto majors, insurance firms, hospitals, food joints, manufacturers of electronic gadgets, government wings like Railways and postal department, none escaped the stringent scrutiny of consumer fora on complaints of their indulgence in unfair and deceptive trade practices.

While the telecom sector managed to avoid scrutiny of the consumer fora in cases of billing disputes due to a 2009 Supreme Court ruling, matters related to value added services -- like caller tunes, number portability, SIM activation -- offered by the telecom majors were taken up by the fora.

The apex court had ruled that as per section 7B of the Indian Telegraph Act of 1885, a dispute between a consumer and a telephone service provider can be resolved only through arbitration and the consumer is barred from moving a consumer forum for redressal of grievances against a telephone company.

Despite the ruling, Bharti Airtel was ordered by a consumer forum here to pay Rs25,000 to a post-paid subscriber as compensation for harassing him by demanding fresh documents to verify his six-year-old connection and then stopping outgoing calls on his number.

The aviation sector also faced ire with several major airlines -- international as well as Indian -- being rapped for providing deficient service to fliers.

While Kuwait Airways was ordered by NCDRC to pay Rs25 lakh as compensation to Rajasthan Art Emporium for delaying the delivery of its consignments of handicrafts to the US, Air India was asked to cough up over Rs one lakh by a Delhi district consumer forum to make its "rude" staff "learn a lesson" for their "callous" service towards a flier.

Continuing to safeguard the interests of travellers, be it by air or by rail, a district consumer forum ordered Indian Railways to pay Rs60,000 to a woman whose purse was stolen in 2009 during her journey from Secunderabad to Delhi on Andhra Pradesh Rajdhani Express. It also advised Railway Board to provide lockers in trains for passengers to keep their expensive articles safe. .

In another case involving the state monolith, a consumer forum held that a passenger's failure to check the requisite date of his train ticket during the booking does not absolve Railways from the liability of giving him the wrong ticket and of rendering deficient service.

Issues related to consumers' health and medical negligence by doctors and hospitals were also addressed by the various consumer fora.

In one such case, a leading children's hospital in the national capital -- Kalawati Saran Children Hospital -- was ordered by Delhi Consumer Commission to pay Rs10 lakh as damages to the parents of a child for transfusing HIV-infected blood to him 14 years ago in his infancy.

The children's hospital, affiliated to Lady Hardinge Medical College, and its doctor were held guilty by the commission of committing "sheer medical negligence" in giving the HIV-infected blood to the then three-day-old child.

In another case, Escorts Heart Institute and Research Centre was ordered by the NCDRC to pay Rs50,000 to a woman who had contracted Hep-B due to transfusion of tainted blood to her during her cardiac surgery.

On what constitutes accidental death for availing benefits due to the same, a district consumer forum here held that death due to mosquito bite is accidental and the NCDRC ruled that a patient's death due to rash or negligent act of a doctor is also an accident.

The banking and financial services sector also came under the scanner of the consumer fora, which pulled them and their officials up on issues ranging from forceful seizure of vehicles bought on loan to leaking of customers' account details to a third party.

While HDFC Bank was directed by a district consumer forum to pay Rs3 lakh as compensation to a borrower for seizing his car bought on loan without giving him notice, a Citi Bank branch manager was ordered by Delhi State Consumer Commission to pay Rs15 lakh as compensation to a credit card holder for leaking his account details to a third party.

Electronics companies like Samsung, Nokia and Sony were pulled up for sale of defective goods to consumers as well as deficiency in after sales services provided to buyers.

In one case, Nokia was directed to pay Rs67,000 for selling a defective mobile handset and failing to repair it.

Eating joints, be it a local sweet shop or a food lounge run by a luxury hotel chain in the IGI airport in Delhi, were made to compensate their customers for serving sub-standard food.

While a local eatery was made by a consumer forum to cough up Rs20,000 as fine and compensation to a customer for serving her 'sambar' having a dead lizard in it, ITC-Welcome Group was ordered to pay Rs15,000 to a passenger as compensation for serving him "stale food" at its IGI Airport lounge and making him fall ill after its consumption.

Even auto giants were not spared with Maruti Udyog Ltd being asked by a district consumer forum to pay Rs 1 lakh to one of its customers as compensation for "inducing" him to buy a car through misleading advertisements on its mileage.

Luxury car manufacturer Skoda was directed by the Delhi State Consumer Commission to pay one of its car buyers Rs20.17 lakh, including compensation of Rs2.5 lakh, for selling him a defective car.


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