The Supreme Court last week asked the Madras
high court to reconsider the claims of Indian Bank and other secured and unsecured creditors against a company in liquidation. The company had taken a loan from VGP Finance Ltd but as it could not repay, the latter took over its assets. The bank and other creditors were not parties to the proceedings in the high court. Indian Bank hence appealed to the Supreme Court. The court stated that the high court had not taken into account certain vital aspects which it was bound to consider, like the interest of other creditors of the company, their right to be heard, the list of assets, and the list of creditors. Therefore, the high court was asked to reconsider the claims.
Cargo handlers not staff of IAAI
The Supreme Court ruled last week the cargo handling workers at the Chennai airport were not direct employees of the International Airport Authority of India and rejected the claim of the International Air Cargo Workers' Union the agreements with private contractors were a sham to defeat their claim of absorption. Earlier, the industrial tribunal had directed IAAI to absorb the union members. The Madras high court had upheld the tribunal’s view. On appeal, the Supreme Court stated (i) The contract labour agreement between IAAI and the union was not sham, nominal or as a camouflage and the contract labour were not direct employees of IAAI. (ii) There was no violation of Section 9A of the Industrial Disputes Act. (iii) the workmen employed as contract labour are not entitled to claim absorption.
BSEB appeal on fuel surcharge
The SC has dismissed the appeal of the Bihar State Electricity Board challenging the ruling of the Patna high court in a dispute over the calculation of fuel surcharge. The board buys power from various generating companies. The board argued that in order to neutralise the increase in the cost of purchase of power, it collected fuel surcharge from its consumers, mainly coal companies. Surcharge is part of the tariff, it argued. However, on the petitions of private companies, the high court asked the board to re-calculate the surcharge rate from 1997 onwards. The board appealed against this, but the Supreme Court dismissed the challenge. The court also asked the board to adjust Rs 100 crore paid by coal companies to the board within three months.
SC adds bidders in NHAI project
The SC has increased the number of bidders from six to eight for the construction and maintenance of the Hyderabad-Vijayawada section of the national highway. This was done though only six can be short-listed according to the policy of the National Highway Authority of India. When the authority chose six, two companies which were left out had opposed the short list of six in the Delhi high court. It ruled in favour of the two. The short-listed companies appealed to the Supreme Court, arguing that the short list could include only six and moreover, the credibility of one of the companies was under challenge in the high court itself. The Supreme Court stated that adding two more bidders would not matter much while evaluating their competence. If any bidder lacked credibility, the authority was free to take appropriate action. Considering the importance of the project, the authority could go ahead with the selection, the Supreme Court said in the judgment, Isolux-Soma-Omaxe Consortium vs Madhucon Projects Ltd.
Dismissed not to be absorbed
The retrenched employees of Teletronix Ltd and Kumaon Television Ltd, subsidiaries of Kumaon Mandal Vikas Nigam Ltd, would not be absorbed in government companies as the Uttarkhand government has not yet included the companies in the schedule of the Uttar Pradesh Reorganisation Act 2000. While allowing the appeal of the Uttarakhand government against the high court order against it, the Supreme Court also noted that notifications necessary to absorb them also have not been issued by the Uttarakhand government. Moreover, employees have to be recruited from the public service commission and not directly absorbed. Thus the Supreme Court set aside the order of the high court in a batch of cases by the employees of the liquidated companies.
While computing the compensation of a road accident victim, the wages drawn by him at the time of the mishap should be taken into account, and not the later revision of pay scales by the government, the Supreme Court stated in the case, Sarla Verma vs Delhi Transport Corporation. Though the fatal accident took place two decades ago, and there were two wage revisions by the government, this could not be a reason to enhance the compensation package, the court said. The fact that the case dragged on for two decades was not anyone’s fault, the court said while awarding Rs 9 lakh for the death of a government scientist.