Legislative and Regulatory Update
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In This Issue [No.171]
September 30, 2006
Supreme Court High Courts PIB RBI SEBI International Cases & News
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Shobika Attire Vs. New India Assurance Co. Ltd. and Anr.
The appellant-firm, dealing in textile goods, has its showroom in Coimbatore. It was expressly covered by an insurance policy with the respondent No. 1 insurance company, for damages that might be caused due to riots, strike, malicious and terrorist attacks on all the stock in trade of textile items and garments. Consequent to a series of bomb blasts, which rocked the city of Coimbatore, the appellant’s showroom was looted and set on fire. Thereafter, the appellant firm filed a complaint with the police and lodged a claim for compensation to the tune of Rs 2.20 crore with the respondent-insurance company. The respondent insurance company appointed surveyors to estimate the loss caused to the appellant firm and submit a report. It also appointed investigators to enquire into the claim that the owners of the appellant-firm themselves looted some of the goods of the showroom during riots. The investigators, in the absence of substantial evidence, were unable to prove the above claim. The surveyors submitted a report working out the estimated loss to be around Rs 1 crore, excluding stocks in the two levels of the basement of the showroom. The appellant-firm then filed a claim petition before the National Consumer Disputes Redressal Commission. The appellants reiterated that the entire stock in the showroom, including the stock in the two levels of the basement was looted during the riots. As against the above, the insurance company’s stance was that that soon after the mob set fire to the showroom on the ground floor, the police and fire fighting personnel arrived at the scene and in their presence no more looting could have taken place and so stock in the two levels of the basement of showroom was not looted and therefore excluded to calculate damages. The Commission dismissed the complaint filed by the appellant-firm holding that there was remote possibility of the riotous mob having entered the 1st and 2nd levels of basement as the only point of entry from the elevated ground floor was blocked by fire, heat and smoke and particularly in the absence of any lights in the basement area. Hence, present appeal filed under Section 23 of the Consumer Protection Act, 1986 challenging the decision of the Commission. Held, insurance company, despite report of investigator, failed to establish that claim of appellants was not justified and was not covered by policy of insurance. Appeal is allowed.
The Managing Director, Northeast K.R.T.C. Vs. Devidas Manikrao Sadananda
Respondent-workman was working as a driver for appellant Corporation. While on duty, the bus driven by the respondent met with an accident while trying to takeover another bus, causing injuries to several passengers and death of 4 passengers. The respondent-driver was dismissed from service after a domestic enquiry was conducted into the matter by the appellant Corporation. A dispute against the said order of dismissal was raised by the respondent-driver under Section 10(4A) of the Industrial Disputes Act, 1947 before the labour court. The labour court set aside the order of dismissal and directed the respondent-driver to be reinstated back into services, on the ground that there was no evidence to show that the respondent-driver had not taken reasonable care in the process of driving. The said Award by the labour court was challenged by the appellant Corporation in a writ petition before the Single Judge of the High Court, who held that in absence of any evidence before the labour court, reinstatement was rightly awarded by the labour court and directed reinstatement of respondent-driver back into services of appellant Corporation. Aggrieved by the same, a writ appeal was preferred by the appellant Corporation before the Division Bench of the High Court. The Division Bench of the High Court dismissed the writ appeal and held that in the absence of evidence, the doctrine of res ipsa loquitur, which created a presumption that the respondent was negligent and is resorted to when the cause of the accident is primarily within the knowledge of the respondent, is not applicable to the present case. Hence, the present appeal. Held, labour court failed to apply correct standard of proof in relation to domestic enquiry, which is "preponderance of probability" and thus a case for judicial review was maintainable. Matter is remitted back to labour court. Appeal is allowed
Jay Engineering Works Ltd. Vs. Industry Facilitation Council and Anr.
Respondent No. 2, a small scale industry, supplied its products to the appellant company. The appellant company was declared as a sick company by the Board for Industrial and Financial Construction in terms of a reference made under Section 15 of Sick Industrial Companies (Special Provisions) Act, 1985. A rehabilitation scheme to revive the appellant sick company was declared to be failed by an order. A fresh revised rehabilitation scheme submitted by the Industrial Development Bank of India (IDBI) to revive the appellant sick company by providing financial assistance was accepted by the Board. Meanwhile, respondent No. 2 filed a claim petition as regards products supplied to appellant company before the Industry Facilitation Council in terms of provisions of Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993. Before the Council, the appellant raised a plea that it had been declared a sick company by the Board and as such, the matter could not be proceeded against it further. However, the Industry Facilitation Council proceeded against the appellant company and made an award in favour of respondent No. 2. A writ petition was filed by the appellant before the High Court questioning the said award and same was dismissed by the learned Single Judge. A letters patent appeal preferred against the said judgment by the appellant was dismissed by the High Court on the ground that the 1993 Act could prevail over the 1985 Act. Hence, the present appeal. Held, both Acts operate in different fields. If 1985 Act is attracted, question of its giving way to 1993 Act would not arise. Impugned judgment therefore cannot be sustained. Appeal is allowed.
Bombay
Kay Iron Works Pvt. Ltd. Vs. Union Ministry of Labour, its Secretary and The Board Constituted under Provident Fund Act and Trustees through RegionalCommissioner
The petitioner, a company registered under the Companies Act 1956, has challenged the legality of a government notification issued under Section 5 read with Section 7(1) of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 in the present petition. The impugned notification incorporated certain amendments to the Employees Provident Fund Scheme 1952. As per the amendment to the said notification, the Provident Fund Scheme has been amended to incorporate that every employee on joining an establishment covered under the P.F. Act would be covered under the scheme right from the first day of employment rather than waiting for three months. This has been challenged by the petitioner company on the ground that employees employed for short periods are not employees under the P.F. Act and that requiring employers to contribute towards provident fund of employees employed for very short periods causes unnecessary financial burden on employer and that practically it is not possible to have funds back by employees who worked for a couple of days and contributed a very very short amount towards Provident Fund. The prayer for interim relief seeking to stay the impugned notification has been rejected and hence the present petition. Held, grounds of challenge raised by petitioner do not make out a case to hold that impugned notification is erroneous or without authority in law or in any way anti-labour. Petition is dismissed.
Sudhakar Baburao Mali Vs. The State of Maharashtra
The appellant-accused was married to the victim. As per the prosecution case, the appellant-accused attempted to murder the victim by setting her on fire and thereafter, ran away. The victim thereafter doused the fire by engulfing herself in a quilt and went to the hospital and a case was registered. A dying declaration of the victim was recorded wherein she stated that no body assisted her and she came to the hospital directly. There is material change in the first information report and the dying declaration of the victim. Contrary to the victim’s statement in the dying declaration, the victim stated in the first information report that her mother took her to the hospital. The deposition of PW5 was entirely different from the victim’s version given in the dying declaration and both are different from the version given by her in the First Information Report. The Sessions Judge convicted the appellant accused under Sections 302 and 498A of IPC and sentenced him to life imprisonment. Hence, the present appeal. Held, circumstantial evidence as is available on record is grossly insufficient to confirm finding of guilt. Appeal is allowed.
Chennai
R. Aravazhi Vs. The Secretary, The Selection Committee, The Director of Medical Education, No.162, E.V.R. Periyar High Road, Kilpauk, Chennai-10 and The Secretary to Government, Health Department, Government of Tamil Nadu, Fort St. George, Chennai-9
The petitioner, after completion of his MBBS and MD, was working with Government Theni Medical College Hospital. The 2nd respondent invited applications for admission to super speciality course in “D.M Cardiology” for a total of eight seats. The selection process for the same is done by the first respondent. Out of the eight seats, four seats are reserved for in-service candidates and remaining four seats for general category. Clause-49 of the Prospectus shows that the merit list for the course will be prepared by computing the entrance examination marks and service marks i.e. marks awarded for serving in Government run Primary Health Centres (PHCs) in rural areas. As per Clause-50.b. of Prospectus, service candidates will be awarded one mark for every year of rural service. The petitioner could not secure admission to the super speciality course as candidates who had longer service in rural areas got more weightage, as service marks were added to entrance examination marks to compute the total aggregate marks. Hence, the present petition filed by petitioner contending that selection to super speciality courses should be purely based on merit in examinations. Held, when doctors come forward to serve in rural areas; and government, in order to motivate them, offer weightage to their service in rural areas in matter of admission to super speciality courses keeping in view that they would earn higher professional qualification, which in turn would reflect upon availability of advanced medical facilities in rural areas, such constructive decision made by government cannot be faulted with. Writ petition is dismissed.
Greaves Employees Development Union, rep. by its General Secretary, Ranipet and Greaves Mazdoor Sangam, rep. by its General Secretary, Vellore District Vs. Ranipet Greaves Employees Union, rep. by its General Secretary, Arcot, Greaves Labour Union, rep. by its Secretary, Ranipet, The Commissioner of Labour, Teynampet, Chennai and Labour Officer-I, Vellore
A settlement dated 9th August, 1990 under Section 12(3) of the Industrial Disputes Act was entered between the Management of Greaves Limited Company and several workers’ unions. As per the said settlement, election by secret ballot would be held once in every two years to elect workers representatives body which would get recognition from the management and would have the right to negotiate with the management. The term of office for the workers representatives elected in the year 1999 came to an end in the year 2001 and thereafter no election has been held. Accordingly, the petitioner unions requested for conduct of election under supervision of Labour Officer. The appellant unions opposed the same and stated that settlements entered into under Section 12(3) of the I.D. Act are no longer in force. Therefore, Labour Officer instead of conducting election as per the terms and conditions of the 12(3) settlement dated 9th August, 1990 expressed his inability to conduct elections as other unions i.e. appellant unions were not inclined to participate in the election. Aggrieved by the same, a writ petition was filed by the petitioner unions. The Learned Single Judge allowed the writ petition by the petitioner unions and quashed the impugned order of Labour Officer and directed conduct of elections. This was challenged by the appellant unions and hence the present writ appeal. Held, settlement has force till it is replaced by another settlement. In case on hand, appellants instead of proceeding as per law, invents shortcut methods to continue in office. Order passed by learned Single Judge is confirmed. Appeal is dismissed.
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