Reinstatement may not mean back wages

LEGAL DIGEST

The Supreme Court stated last week that though in the past it had awarded reinstatement with full back wages in case of illegal dismissal of an employee, the time has come to change the principle.

In Allahabad Jal Sansthan vs Daya Shankar, the court pointed out that industry could not be "compelled to pay the worker for a period during which he had apparently contributed little or nothing at all, for a period that was spent unproductively, while the worker is being compelled to go back to a situation which prevailed many years ago when he was dismissed.

"It is necessary for us to develop a pragmatic approach to problems dogging industrial relations. However, no just solution can be offered, but the golden mean may be arrived at."

Adani Exports' tender upheld

The Supreme Court last week dismissed the appeal of Global Energy Ltd against the Calcutta high court judgment in a dispute over awarding a tender in favour of Adani Exports Ltd.

The West Bengal Electricity Board invited tenders for sale of its surplus power to different state electricity boards through power trading agencies.

According to the conditions, the quotation must be accompanied by Rs 30 lakh as earnest money. Government organisations were exempted from this condition.

Global Energy challenged it as discrimination. The high court ruled against it. The Supreme Court upheld the high court ruling, stating that the terms of the tender could not be subjected to judicial review except in gross cases, and the company in this case did not possess the required licence.

Time limit for interest demand

The Supreme Court has ruled that the revenue authorities must make demand of interest on trade tax within reasonable time.

While dismissing the appeal of the Commissioner of Trade Tax, Lucknow, against the judgment of the Allahabad high court, the Supreme Court set aside the demand of interest on the trade tax already paid by the assessee (M/s Kanhai Ram).

It said: "Since the demand of interest was made after almost four years, we hold that the demand is not within a reasonable period and the assessee is not liable to pay the interest demanded. The department is not entitled to recover the interest from the assessee, but it is at liberty to recover the amount of interest demanded from the assessing officer concerned who had not taken steps for four years."

Furnish security to trial court

The Supreme Court has allowed the plea of Sihor Nagar Palika Bureau to furnish security to the trial court instead of making a cash deposit while hearing the suit by Bhabhlubhai Virabhai & Co.

The dispute was over the termination of the contract for collection of octroi by the corporation. The latter appealed to the Gujarat high court which asked it to deposit the money before hearing the appeal.

On appeal to the Supreme Court, it argued that it was in financial difficulty on account of abolition of octroi and it was finding it difficult to carry out its public utility activities and other statutory duties.

Allowing the appeal, the Supreme Court said that it would be in public interest to allow the corporation to retain the amount during the pendency of the appeal.