When it was dishonoured, the payee, Godfather Travels, proceeded only against the signatory but not the company. The high court refused to quash the proceedings. So, she moved the Supreme Court. One judge felt that she could not be prosecuted under Section 141 of the Negotiable Instruments Act if the cheque was not honoured. Merely because she signed it, she does not become the drawer of the cheque.
In fact, the company also should be made responsible. Otherwise, it would lead to an anomaly as the company and its directors would become accused persons without hearing them. Some directors might have lost interest in the company or even be hostile. However, the other judge wrote a separate judgment justifying the action only against the authorised officer. Now the issue will be decided by a three-judge bench.
Labour awards should be honoured
The Supreme Court has allowed the appeal of Andhra Bank in its appeal against the industrial tribunal's ruling to grant wage benefits to its employees in Visakhapatnam.
The court said if there are awards based on settlements between the management and the employees, they should be followed; the industrial court cannot claim jurisdiction to interfere under the Industrial Disputes Act.
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The Supreme Court stated that the industrial tribunal and the Andhra Pradesh high court ignored the effect of awards and settlements between the two. The apex court therefore remitted the two-decade old dispute to the tribunal for a fresh decision.
Govt can withdraw power tariff concessions
The Supreme Court has held that the government can withdraw electricity tariff concessions as they were granted by it in the first place. The court stated so in the judgment, Tamil Nadu Electricity Board vs Status Spinning Mills Ltd, in which the dispute was over the withdrawal of the concessions granted to high-tension industries.
In 1995, certain concessions were given to the industries. Later, by two amendments in 1999 and 2000, some benefits were taken back. A large number of industries in the state challenged this action in the Madras high court. It did not go into individual cases, but merely set a cut-off date. The board appealed to the Supreme Court. It asked the appropriate authorities to decide the cases of each industry according to their entitlements.
Status quo on sale of company's assets
The Supreme Court has imposed status quo in the dispute between Sajjan Textile Mills and ICICI Bank and set aside the order of the Madras High Court allowing time to the buyer of the sick mill to pay the sale amount.
The bank extended a loan to the mill in Coimbatore which it could not repay. It was declared a sick mill and BIFR recommended its winding up. The assets were sold to another company. After long-winding litigation, the Supreme Court has now ordered status quo and asked the high court to decide the issues expeditiously.
Garment exporter's plea dismissed
The Supreme Court has dismissed the appeal of Seema Silk & Sarees, exporters of garments, against the criminal action taken against it by the Directorate of Enforcement under the Foreign Exchange Regulation Act.
The exporting firm sent consignments abroad but could not repatriate the value of goods from the export proceedings, as its business became standstill. Though it replied to the directorate's notice, criminal cases were filed against it.
The firm challenged the provisions of the Act as draconian as it discriminated against exporters, the law was put in the Ninth Schedule of the Consitution and the burden to prove innocence was on the exporter. The court rejected all these contentions and upheld the provisions of the Act.