Brief case: Trade union can't include staff of separated firm

A weekly selection of key court orders

Trade union can't include staff of separated firm  

When one unit of a group of companies separates itself to form an independent firm, the trade union of the original group cannot keep the employees of the new firm on its rolls. The bye-laws of the union cannot be amended to allow erstwhile employees of the group to continue as members, even if they pay subscription fees, the Supreme Court stated in its judgment, All Escorts Employees’ Union vs State of Haryana. 

The Escorts group originally included Escorts Ltd, Escorts Yamaha Ltd (a joint venture), Escorts JCB Ltd, Escorts Class Ltd and Escorts Hospital. In 2001, the two-wheeler manufacturer Yamaha segregated and formed a separate company, which was an Indian subsidiary of the Japanese parent. Escorts stopped making two-wheelers. The trade union tried to attract the erstwhile employees of the Yamaha unit by changing the bye-laws. The registrar of the trade union did not allow it. The Punjab and Haryana High Court upheld the registrar’s decision. 

The union came up on appeal to the Supreme Court arguing that its membership was open to anyone who wanted to join it and every worker has a constitutional right to do so. The court rejected the arguments of the union and stated that various provisions of the Trade Union Act implicitly confined the membership to those who are workmen of the industry where they are employed. Moreover, in this particular case, Yamaha employees have formed their own union which was registered in Kanpur, Uttar Pradesh.

RTI excludes info on bank staff 

A bank is not bound to disclose personal information about its employees under the Right to Information Act, the Supreme Court ruled in the judgment, Canara Bank vs C S Shyam. In this case, a clerk in the Kerala branch of the bank sought information about the transfer of staff during a certain period, including the date of joining, the place of transfer and the like. 

The public information officer of the bank denied it, maintaining that the information was protected and there was no public interest in the information. However, on appeal, the Chief Information Officer allowed the application of the employee and asked the bank to provide the details of the transferred staff. The Kerala High Court upheld his order. 

Setting aside the high court order, the Supreme Court stated that the information sought was matters between the employer and the employees, such as show-cause notices and punishment. Releasing such personal information is protected by the Act and would amount to invasion of privacy of the employees. In given cases, in larger public interest, some information can be provided, but no one has a right to claim them.

Chance in computing damages 

Computing the compensation for the road death of a youth appears to have an element of chance. In the case, Joseph Philip vs Judie, the motor accident claims tribunal awarded his parents ~3.13 lakh, while the Kerala High Court enhanced the amount by ~2.60 lakh, on a different calculation of the loss. 

The parents appealed to the Supreme Court, which applied another formula and reached the figure ~11.22 lakh. The owners of the guilty vehicle did not appear in the court. The insurance company was directed to pay the amount with eight per cent interest. 

BHEL row with Turkish firm sent to the UK

The Delhi High Court last week stated that in the dispute between BHEL and Electricity Generation Incorporation of Turkey over the invocation of a performance guarantee by the Turkish government firm should be decided in the Commercial Court at London and the Indian court has no jurisdiction to deal with it. The judgment emphasised that when one party is not subject to the laws of India, the parties may vest jurisdiction outside the country at a neutral forum. 

The factors to be considered on the question of jurisdiction are the place where evidence on issues are more readily available, the effect of relative convenience and expense of trial, the law applicable with which country either party is connected, whether the defendant genuinely desires trial or is only seeking procedural advantage. In this case, BHEL challenged the invocation of the bank guarantee alleging that the termination of the contract, in which it was to rehabilitate eight hydropower plants in Turkey, was unjust and fraudulent. 

Indian court to keep out of Paris award

The Calcutta High Court last week declared that Indian courts cannot set aside an award made by an arbitral tribunal in Paris following the rules of the International Chamber of Commerce, though the law applicable to the contract was agreed to be Indian law. The dispute arose out of an agreement between the parties which provided that the majority shareholding and control of Haldia Petrochemicals Ltd would be transferred to Chatterjee Petrochem (Mauritius) Co by the Government of West Bengal and West Bengal Industrial Development Corporation. 

The agreement contained an arbitration clause which stated that the proceedings would be held in Paris, and the law applicable would be the Indian law. Deciding the question of jurisdiction, the high court stated in the judgment, Govt of West Bengal vs Chatterjee  Petrochem (Mauritius) Co: “In this case although the parties have chosen Indian law as the law of the underlying contract, the venue or the seat of the arbitration was chosen as Paris. The curial law applicable was the ICC rules…. The law governing the agreement to arbitrate and enforcement of challenge to the award is the law of the place where the seat of the arbitration is located or in other words Paris.”

Blacklisting of firm lifted

An error of judgement in technical matters should not invite the punishment of blacklisting of a consultant firm, disqualifying it from all contracts by a public authority, the Bombay High Court stated in its judgement, Mahimtura Consultants vs State of Maharashtra. In this case, the consultant firm was given a project but an employee complained against its functioning leading to a probe and blacklisting of the firm. 

There were two technical reports which went into the allegations. They were contrary and one cleared the firm of all suspicions regarding the escalation of costs. The firm moved the high court to lift the blacklisting. It did so. The judgment stated that when two expert bodies differed in their conclusions regarding the escalation of costs and other issues, no mala fide or criminal intention could be attributed to the construction firm. 

There was no evidence to show that the firm tried to enrich itself at the cost of the public exchequer. The action violated the principle of natural justice and equity and was disproportionate to the allegations, the court said.