From insolvency process to temporary staff, here are the key court orders

The SC has held that the Limitation Act covers applications filed for initiating corporate insolvency resolution process (CIRP) under the Insolvency and Bankruptcy Code from its inception in 2016

Limitation law in insolvency process

The Limitation Act covers applications filed for initiating corporate insolvency resolution process (CIRP) under the Insolvency and Bankruptcy Code from its inception in 2016, the Supreme Court has ruled in its judgment in BK Educational Services Ltd vs Parag Gupta Associates. In this batch of appeals, the court was concerned with Section 238A of the code, which was inserted in the second amendment to the code with effect from June 6 this year. According to this, "The provisions of the Limitation Act shall as far as may be, apply to the proceedings before the adjudicatory authority, the National Company Law Appellate Tribunal (NCLAT), the Debt Recovery Tribunal or the Debt Recovery Appellate Tribunal.” The NCLAT had ruled in several cases that the Act is not applicable for initiating CIRP and that a stale claim of dues three years old without explanation normally should not be entertained for triggering CIRP. Disagreeing with that view, the Supreme Court stated that even Section 433 of the Companies Act, which applies to the NCLT and the NCLAT, expressly stated that Limitation Act covered them. The analogy of other tribunals like the Competition Commission, the Securities Appellate Tribunal and the Telecom Disputes Settlement and Appellate Tribunal would not apply in the present case, as each of them is covered by the terms of the relevant legislation, the judgment said. All the appeals were returned to the NCLAT for fresh decision following this interpretation of the law. 

Auction not must in land for school

Allotment of public land to an educational institution can be justified if it is for common good, for social purpose and the decision is fair, the Supreme Court stated in its judgment in J S Luthra Academy vs State of Jammu & Kashmir. However, if the land is given away for commercial purpose or for private gain, it should take the auction route. The judgment recalled these principles laid down in the judgments dealing with the 2G spectrum and the coalmine cases.  In this case, a school was running on wakf land in Jammu but the wakf wanted the land back. The government gave two kanals free to the school and another two for a price. Writ petitions were filed against this arguing that state resources should be distributed only through auction. The high court allowed the petitions. But on appeal, the Supreme Court asserted that education is a public duty enshrined in the Constitution and, therefore, exempted from the rule of the auction sale.

Temporary staff entitled to equal pay

The Supreme Court last week declared that temporary employees are entitled to wages at the minimum of the pay scales which are applicable to the regular employees holding the same post. The Bench applied the constitutional principle of equal pay for equal work while allowing the appeals filed by daily-rated workers employed in the Forest Department in Uttar Pradesh against the Allahabad High Court judgment. While allowing the appeals in Sabha Shanker vs Divisional Forest Officer, the Supreme Court asserted that temporary employees are entitled to the minimum of the pay scales as long as they continue in service. The court cited an earlier judgment which stated that “any act of paying less wages as compared to others similarly situated constitutes an act of exploitative enslavement, emerging out of a domineering position.” 

‘Future prospects’ in counting damages 

While calculating compensation following the death of a youth in a road mishap, courts cannot neglect the future prospects of the deceased, the Supreme Court stated while raising the damages to a widow from Rs 1.8 million to  Rs 2.645 million with 7.5 per cent interest from 2007. The 37-year-old victim was a traffic constable, who was run over by a truck driven negligently. The Supreme Court set aside the orders of the courts below. The judgment in Dolma Devi vs Mohinder Kumar said the lower courts had “plainly ignored the future prospects, which is gross violation of the law laid down by this court.”  It explained that “future prospects would necessarily mean advancement in future career earnings and progression in one’s life.” They include promotions grant of selection grades, the judgment said.

Intermediary websites exemption

E-commerce websites acting as intermediaries suffered a bad week in the Delhi High Court as three trademark judgments went against them. In Skullcandy Inc vs Shri Shyam Telecom, the high court reiterated its stand on the status of intermediaries in e-commerce. The court had laid down principles earlier this month in its judgment in Christian Louboutin SAS vs Nakul Bajaj.  The complaint of Skullcandy, a foreign firm selling phone accessories, was that the website run by the Indian company had been selling counterfeit products misusing its name. It sought an injunction against use of the trademark Skullcandy and the sale of 'Skullcandy' products on the website www.shopclues.com. The high court granted the prayer and imposed restrictions on the website. It stated that the website could not claim exemption under Section 79 of the Information Technology Act, 2000, as the role of the website was more than that of an intermediary.
 

A similar order was passed in the case, Luxottica Group SPA  vs Mify Solutions Ltd. The website www.kaunsa.com cannot claim the exemption under the IT Act, the judgment asserted while decreeing in favour of Luxottica, which specialises in eyewear. The third case was with regard to the trademark L'Oreal, which was sold through the website www.shopclues.com. In this judgment, L’Oreal vs Brandworld, the website was denied the exemption available to intermediaries as it was acting more than that role.

Minor variations in bids permissible

Deviations from the instructions to bidders must be crucial to the choice of the contractor if he/she is to be disqualified, the Himachal Pradesh High Court stated in its judgment in Andritz Hydro Ltd vs  SJVN Ltd. The petition was against the choice of Voith Hydro Ltd by the state corporation for the construction of Naitwar Mori Hydro Electric Project in Uttarakhand. There were four bidders, including BHEL and GE. The bidders had to submit commercial-technical envelope and price bid envelope separately. The bid of Voith was found to be the lowest. Andritz challenged the choice alleging that the winner had deviated from the terms by uploading certain documents in the wrong envelope. The high court rejected the contention stating that the error was not a crucial deviation to reject the choice of the bidder. It could not have caused any material prejudice to the rival bidders. Citing Supreme Court judgments, the high court stated that deviation from the terms is permissible so long as the level playing field is maintained and there is no arbitrariness or discrimination.