Tuesday, December 28 2004 17:55 Hrs (IST) - World Time -

New Delhi: The dynamics of corporate warfare is no longer confined to the boundaries of markets as the year 2004 saw Courts become the preferred place to settle disputes over money and economic policies of Government.

Birla-Lodha fight

The much talked about Birla-Lodha fight over the Rs 5,000 crore M P Birla group, the fight for control over liquor company Herbertsons Ltd between Vijay Mallya's UB group on one side and the Chhabria group on the other, the contentious issue pertaining to ban on sale of gutka and the Rs 800 crore excise demand on tobacco giant ITC - all ended up in Courts.

While the Birla-Lodha fight is still making rounds of the lower courts and the High Court in West Bengal, the Supreme Court's jurisdiction was invoked in many important economic and corporate issues.

Mallya Vs Chhabria

The Supreme Court encouraged an amicable solution between Mallya and Chhabrias but Reliance Infocomm was not so lucky as it was asked by the apex Court to pay up the entire demand of Rs 182.7 crore raised by Bharat Sanchar Nigam Ltd, which alleged the private service provider had caused a revenue loss to it by re-routing international calls as local ones.

After directing the Reliance Group company to pay up the money, the apex Court referred the matter back to the High Court for adjudication of the dispute between the two.

Litigation between Power Corporations

The multi-tier litigation over disputes on several fronts between the beleaguered Dabhol Power Corporation (DPC) on the one hand and Maharashtra State Electricity Board (MSEB) and Maharashtra Electricity Regulatory Commission (MERC) on the other took a lot of time of the apex Court.

On a petition filed by Centre for Indian Trade Unions (CITU), the apex Court decided to examine in entirety the decade-old issue pertaining to the validity of the power purchase agreement (PPA) between MSEB and DPC.

SC upholds validity of Sarfaesi Act

What came as a major relief to the financial institutions reeling under the heavy burden of non-performing assets (NPA) was the Supreme Court's ruling upholding the Constitutional validity of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests (Sarfaesi) Act, 2002.

However, the Court struck down the clause making it mandatory for the companies defaulting in repayment of loans to pre-deposit 75 per cent of the defaulted amount with the Court before challenging an order under Sarfaesi Act by the FIs ordering attachment of the assets for sale to recover the non-recovered loan.

Competition Commission Act

The Court also reserved its verdict on the Constitutional validity of the Competition Commission Act, enacted in accordance with the WTO mandate. It had taken strong exception to the appointment of a bureaucrat as the head of the Commission, which had vast adjudicatory powers and, worse, its decrees were to be enforced by the High Court.

The Government agreed to make changes but till the last call did not carry them out making the Court to hear parties on merits of the issue.

Sugar mills, which faced financial crunch with politics over cane price, suffered a setback as the Supreme Court upheld the power of the State Governments to fix cane price.

The Court ruled that a State Government could provide for State Advised Price (SAP) on the purchase of sugarcane by Mills over and above the Statutory Minimum Price (SMP) fixed by the Centre under the Sugarcane Control Order, 1966.

Amendments to the Patents Act

Carrying the impression that amendments to the Patents Act could fuel a multi-fold increase in the price of medicines including the life saving drugs, a petition was filed in the Supreme Court challenging the amendments alleging they would restrict grant of production licence to pharma companies. The Court agreed to examine the issue and issued notice to the Union Government.

Ban on sale of gutkas

The ban imposed on the sale of gutkas - a proven cause for many diseases - by Governments of Maharashtra and Andhra Pradesh came to be undone as the Supreme Court set aside the State Government notifications; saying the State legislature had no power to enact the law on the issue, which fell squarely in the domain of the Centre.

To add to the drama of corporate battles in the court rooms, an unassuming counsel of tobacco giant ITC took away the original copy of the judgement pronounced by the Court quashing a whopping Rs 803 crore excise demand.

The Court was furious to say the least and withdrew its judgement within minutes of pronouncing it, sending chills down the spine of ITC. Within an hour the judgement was found. The very next day the Court pronounced the very same verdict without any fuss.