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Pollution under Control (PUC) Certificate is now mandatory for the renewal of motor insurance policy. [READ CIRCULAR]

A circular has been issued by the Insurance Regulatory and Development Authority (IRDAI) mandating insurance companies to ensure that policyholders provide a valid Pollution under Control (PUC) Certificate at the time of renewal of their motor insurance policy.

By: Divyansh Saini

IRDAI, on August 20, 2020, issued a circular advising general insurance providers to not renew any motor vehicle’s insurance policy without the owner providing a valid PUC certificate as per Supreme Court’s Orders.

The Apex Court, on August 10, 2017, had passed orders after suggestions given by SC-appointed Environment Pollution Control Authority (EPCA) in the MC Mehta case mandating insurance providers to obtain valid PUC certificates for the vehicle while renewing its motor insurance policy.

It was stipulated that the vehicle owners who don’t have a valid pollution certificate will not be able to renew the insurance of their vehicles with the intent to ensure that polluting vehicles could be kept off the roads.

And since Delhi-NCR has been suffering due to the menace of air pollution year-on-year, and alarming levels of toxic emissions continue to harm its citizens, it appears that the Supreme Court’s Orders were not complied with, thereby prompting IRDAI to put specific emphasis for compliance in the National Capital Region of Delhi (Delhi-NCR) in the circular.

“Central pollution control board (CPCB) has raised concerns regarding the status of compliance of the above direction of Hon’ble Supreme Court of India in the National Capital Region of Delhi (Delhi – NCR). Please ensure that the direction of the Supreme Court of India is followed scrupulously with a special focus on compliance in the National Capital Region of Delhi (Delhi-NCR)”, reads the operative part of the circular which is addressed to all CEOs and CMDs of general insurance companies.

However, the Ministry of Road Transport and Highways stated the move to be “counter-productive”,

and said “While linkage of renewal of Insurance with PUC certificates may be desirable, it may be noted that the vehicle insurance renewal is an annual feature whereas the periodicity for PUC norms for any vehicle should be at shorter intervals. It has been observed with serious concern that the coverage of third party insurance for motor vehicles is very low at this stage. Linkage of PUC certificate with Insurance may be counter-productive to that extent. MoRTH is of the view that with the linkage of PUC Centres with VAHAN database and other enforcement measures, the PUC compliance by motor vehicle owners is likely to improve considerably”.

To this, a bench comprising of Justices Madan B Lokur and Deepak Gupta ordered that

“There is now no dispute or disagreement about this. However, it is made clear that the Insurance Companies will not insure a vehicle unless it has a valid PUC certificate on the date of renewal of the insurance policy. This should be implemented at the earliest”.

News, Top Stories

Plea seeking investigation on abused use of dominant position by WhatsApp and Facebook for launching payment option dismissed by CCI. [READ ORDER]

A plea seeking investigation against WhatsApp and Facebook for alleged abuse of dominant position by rolling out the WhatsApp Pay feature filed in the Competition Commission of India has been dismissed. 

By: Divyansh Saini

Harshita Chawla, the informant, had approached the Commission alleging that Facebook backed WhatsApp is violating the provisions of Section 4 of the Competition Act by using its dominance on the internet-based instant messaging App as it is bundling its messaging App with the payment option (WhatsApp Pay), thereby using such dominance to penetrate into the UPI enabled Digital Payments App Market. She further accused WhatsApp of taking advantage of its vast user base to popularize its newly launched WhatsApp Pay App and therefore, she sought an investigation against WhatsApp.

To this, WhatsApp submitted that the allegation is premature as its actual conduct is yet to be manifested in the market.

Also, as stated by WhatsApp, the number of users being served under the beta version is limited to less than 1% of its users in India.

The commission stated four essential conditions for tying which are: 

(i) The tying and tied products are two separate products; 

(ii) The entity concerned is dominant in the market for the tying product; 

(iii) The customers or consumer does not have a choice to only obtain the tying product without the tied product; and 

(iv)The tying is capable of restricting/foreclosing competition in the market.

Based on the above conditions, the Commission dismissed the plea and stated that “WhatsApp Pay is embedded in WhatsApp messenger app when it is downloaded by users on their smartphones, the consumers are at free will to use WhatsApp Pay or any other UPI enabled digital payments app in India to make instant interbank transfers. Installation of the WhatsApp messenger does not appear to explicitly mandate/coerce the user to use WhatsApp Pay exclusively or to influence the consumer choice implicitly in any other manner, at present. Thus, the third condition does not seem to have been established.”

The Commission further observed that “Facebook and WhatsApp undeniably deal with customer sensitive data which is amenable to misuse and may raise potential antitrust concerns among other data protection issues. However, in the present case, the Informant has only alleged that WhatsApp/Facebook have access to data which they are using for doing targeted advertising. There is neither any concrete allegation, nor any specific information to support the competition concern of the Informant. In the absence thereof, there is nothing on record which the Commission can examine.” 

News, Top Stories

Lawyer’s PIL Seeking Regulation Of Print & Electronic Media Dismissed by Kerala HC [READ JUDGMENT]

The High Court of Kerala, on Friday, dismissed a Public Interest Litigation filed by a lawyer who sought the framing of guidelines to regulate Print and Electronic Media.

By: Divyansh Saini

Advocate Halvi KS had approached the High Court alleging that the media is misusing their right to Freedom of Speech and Expression guaranteed under the Constitution of India for political mileage and trying to use images and words to create apprehension in the minds of the viewers about their political leaders or government servants.

Referring to various instances of ‘media trial’, the lawyer contended that scathing attacks are made by the media by acting themselves as Judges, overriding the official justice delivery system, and thereby interfering with the Right to a Fair Trial of an accused in criminal cases.

According to the lawyer, the law prevailing in the country to deal with such situations is insufficient to tackle the irresponsible acts of the press and the print and visual media, and in that eventuality, the court should step in and form guidelines incorporating the restrictions.

The bench comprising- Chief Justice S. Manikumar and Justice Shaji P. Chaly referred to Sahara India Real Estate Corporation Limited v. Securities and Exchange Board of India [(2012) 10 SCC 603], in which it was held that laying down a guideline to regulate the activities of the media is not a wise proposition.

The court noted that it was also held in the said judgment that a prior restraint pre-empting the Right to Freedom of Speech and Expression guaranteed under the Constitution of India cannot be done, except under exceptional circumstances and that too after considering the issues on a case to case basis.

While dismissing the PIL, the court observed thus:

“We have no hesitation to hold that a public interest litigation to frame guidelines to restrict the media on the basis of the allegations made in the writ petition cannot be entertained and no guidelines can be framed taking into account the contentions put forth by the petitioner. We also feel that the judgements rendered by the Apex Court would make it clear that the media can be restricted by the courts on a case to case basis. Moreover, a Judge adjudicating any lis before it would be depending solely on the materials available on record, and definitely would not be guided by a press report unless the report itself is a material for consideration in the lis. We are also of the view that the petitioner is never an aggrieved person and no relief can be granted especially in view of the fact that the petitioner has not produced any materials to substantiate the pleadings. Thinking so, it is quite vivid and clear that the issue raised by the petitioner is set at naught by the Apex Court in Sahara (supra) by holding that general framing of guidelines for regulating the press is not possible. Therefore, it is a law declared under Article 141 of the Constitution of India having binding force thoughout India and therefore, binding on this Court also”

News, Top Stories

Madras High Court allows Individuals to observe Religious Ceremonies on Vinayaka Chathurthi; Bars Organizations [READ ORDER]

The Madras High Court has permitted individuals alone to observe Vinayaka Chathurthi by placing Vinayagar idols before the house and temples and by finally immersing them in the water bodies. However, the Court said that there is a total bar to undertake the same activities by organizations.

By: Dimple Kaushalya

In writ petitions filed by two persons who challenged overall banning of installation of Vinayaka idols in public places and taking them out in procession for immersion in water bodies or seas. The petitioner said that they would not insist upon either mass procession or mass immersion, however, individuals will have to be permitted to undertake and perform the religious ceremonies on the auspicious day.

Taking note of petitioner’s submission the bench comprising Justice MM Sundresh and R. Hemalatha issued the following directives:

(i) Individuals are permitted to have their Vinayaga idols after the ceremony’s performance in front of their respective houses.

(ii) Individuals are permitted to drop the Vinayaga idols at the entry point of the temples. This direction is issued by taking note of Clause (3) of para 2 of the order under challenge, which does not prohibit even the worship before the temples coming under certain categories.

(iii) Individuals are allowed to immerse the idols, which can only be carried out by a single person in the water bodies. No such activities shall be carried out in the stretch between Santhome to Napier bridge.

(iv) The permission given is restricted only to the individuals alone, and therefore, there is a total bar to undertake the same activities by organizations.

(v)The aforesaid directions are subject to regular restriction, which are already in place, including the time restriction and the social distancing.

(vi) For any violation of these directions, the respondents are at liberty to take appropriate action in the manner known to the law as they are applicable only to the individual cases alone.

The Court also held that:-

“Thus, there is no difficulty in holding that the practice which has been followed for decades by the individual having faith either by placing the idol after the performance of the ceremony in front of their house, temples, and immersion in water bodies will not have any bearing to either the pandemic situation or law and order. At the risk of repetition, we wish to say that it is the individual who does these practices, and therefore there is no possibility of any spread of the pandemic. Secondly, it is these individuals who are going to immerse and not and not the organization. Therefore, the regular restriction with respect to the number of persons also would apply to these cases.”

The Court also observed that local artisans would suffer in case the aforesaid Act is prohibited. The scores of local artisans who are involved in this business, their business is drastically affected due to the pandemic, and now they will be reduced to starvation and poverty.

News, Top Stories

“The final decision regarding the signing of the Power Purchase Agreement based on tariff determined by the Electricity Regulatory Commission lies with the parties.”, the Appellate Tribunal for Electricity (APTEL) [READ JUDGMENT]

The classic principle is that the formation of a contract can only be when the parties are ad-idem.

By: Ayushi Sahu

The Appellate Tribunal for Electricity (APTEL) faced the question “Whether the State Commission can issue directions to amend the PPA that the parties mutually agreed to and force the parties to sign the PPA without their consent.”

Haryana Power Purchase Centre [HPPC] appealed before APTEL under Section 111 of the Electricity Act, 2003 aggrieved by the Order dated 08.03.2019 passed by the Haryana Electricity Regulatory Commission (Haryana Commission), whereby the Haryana Commission had directed the amendment/modification of the Power Purchase Agreement [PPA], negotiated and mutually agreed by the Generator-DANS Energy Pvt. Ltd. and Distribution Company-HPPC, namely, to delete the clause related to exit option.

Having approved the purchase of power vide Order dated 13.11.2017, the Haryana Commission directed the parties to revisit the PPA agreed to in between the parties. Re-negotiated terms of the PPA were drafted and submitted to the Haryana Commission’s initial version on 08.05.2018. In the draft PPA, the parties also agreed to an “Exit option” to either party to terminate the PPA in case the tariff determined by the Haryana Commission is not acceptable (Article 3.3.2).  

On 20.02.2019, the Haryana Commission perceived the submissions filed by the Appellant dated 18.02.2019. The Haryana Commission vide Order dated 08.03.2019 did not accept the term related to exit option, held the same to be unprecedented, and directed to remove the same.

The HPPC submitted that “On the advice of State Commission, the Appellant and Respondent No. 2 negotiated the terms of the agreement. The parties arrived at mutually agreed terms, finalized the draft of the agreement, and submitted the initial version for approval of the State Commission for procurement of power. The initial agreement cannot be said to be a binding contract between the parties. One of the terms negotiated and agreed to by both parties was that either party (the Appellant or the Respondent No. 2) would have the right to terminate the agreement if the tariff, as determined by the State Commission, is not acceptable. Thus, the parties agreed to an exit option to be exercised on the determination of tariff by the State Commission.” 

The appeal was thereafter filed with the parties’ intent to include “Exit Option” in the PPA. The clause rendered the right to terminate the PPA to either party, within 30 days of the Order regarding the initial determination of tariff by the Haryana Commission, in case the tariff determined by the Haryana Commission is not acceptable to them. It was included to avoid litigation and to give a fair and reasonable opportunity to the parties to embrace an appropriate decision regarding the continuation of the PPA. 

HPPC also relied upon Gujarat Urja Vikas Nigam Limited v. Solar Semi-Conductor Power Co. (India) P. Ltd (2017) 16 SCC 498 reading as under-

 “64. As pointed out earlier, the State Commission has determined tariff for solar power producers vide Order dated 29.01.2010 and tariff for next control period vide Order dated 27.01.2012. The Order dated 29.01.2010 is applicable for projects commissioned from 29.01.2010 to 28.01.2012, and the Order dated 27.01.2012 is applicable for projects commissioned from 29.01.2012 to 31.03.2015. As pointed out earlier, the tariff is determined by the State Commission under Section 62. The choice of entering into contract/PPA based on such tariff is with the Power Producer and the Distribution Licensee. As rightly contended by the learned Senior Counsel for the Appellant, the State Commission in the exercise of its power under Section 62 of the Act, may conceivably re-determine the tariff, it cannot force either the generating company or the licensee to enter into a contract based on such tariff nor can it vary the terms of the contract invoking inherent jurisdiction. 

The State Commission relied upon it being a carrier of statutory duty and submitted, “The justification provided for the ‘exit option’ is unacceptable as well as un-precedented in the Power Purchase Agreements. As far as the respondent Commission is concerned, it has not accorded approval to any such hydro project or, for that matter, any project with the ‘exit option’ of nature under dispute. The powers of the Commission under Section 86 of the Electricity Act ought not to be compromised or usurped by any party, albeit with mutual consent as this clause clearly built-in uncertainty regarding the supply of power once the tariff is determined by the State Commission.”

The APTEL held,

The fundamental thing in a contract/ agreement is the free will/consent of the parties. The parties who are signing the agreement/contract should do so with free will without any compulsion or under any influence of any other party.

The parties enter into a contract with an open mind, taking care of their commercial interest and all other aspects, as an independent commercial entity without any influence from any third party. In the Power Procurement Agreement, the tariff is the most important aspect, which in this case, is not known initially but will be known only after the same is determined by the State Commission at a later stage. It is because of this reason that the parties have reserved their right regarding the continuation of tariff and have included the exit option to take the final decision regarding termination of PPA, within a period of 30 days after the determination of tariff by the State Commission.”

The APTEL explicitly elucidated that it is the duty of the Haryana Commission to not only ensure that the PPA is as per the Electricity Act and Regulations but also to ensure that it is by free will or consent of the parties. The direction issued by the Haryana Commission to the parties in regards to the amendment of the “exit option” mutually agreed by the parties disregarding whether the parties are satisfied or not satisfied with the tariff determined by the Haryana Commission is objectionable.

The APTEL propounded,

No doubt that the tariff will be determined by the State Commission only but, the final decision regarding the signing of Power Purchase Agreement on the basis of tariff determined by the State Commission lies with the parties only.

It is a commercial decision, and the parties will take an independent decision taking into consideration their commercial interest in the long term during the tenure of the PPA without any influence from a third party. This is an utmost important aspect. As such though the State Commission in the exercise of its power under Section 62 of the Electricity Act, 2003 may determine the tariff but it cannot force either the generating company or the licensee to enter into a contract based on such tariff against their will/ consent and cannot give direction to change the terms of the contract invoking inherent jurisdiction. We find that the State Commission while exercising its powers conferred to it under the law, has not examined the PPA submitted by the parties from all angles of law. In this case, the State Commission was fully aware that the parties have mutually agreed to include the “Exit clause,” but it has ignored this important aspect and directed to amend the PPA by deleting the “exit clause.” Accordingly, we are of the considered opinion that the direction passed by the State Commission in the impugned Order regarding the deletion of exit option is bad in law and thus is wrong“.

The APTEL set aside impugned Order dated 08.03.2019, and the matter is therefore remitted to Haryana Commission.

Counsels:

Counsel for the Appellant (s): Ms. Ranjitha Ramachandran, Ms. Poorva Saigal, Ms. Anushree Bardhan, Mr.Arvind Kumar Dubey 

Counsel for the Respondent(s): Mr. Sandeep Kumar Mahapatra for R-1, Mr. Sanjay Sen, Sr. Adv. Mr. Anand K. Ganesan, Mrs. Swapna Seshadri, Mr. Amal Nair for R-2


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