The Supreme Court last week ruled that even if the main contract is terminated, the arbitration clause will survive. This is because the Arbitration and Conciliation Act treats the main contract and the arbitration agreement as separate from each other, the court stated in its judgment, Reva Electric Car Co Ltd vs Green Mobil. In this case, the Indian manufacturer of electric cars had a distribution agreement with the Belgium firm. However, the Indian company terminated it as it was not satisfied with the performance of the foreign distributor. This led to a dispute. The Belgian firm moved a court in that country for damages for terminating the contract. The Indian firm took the arbitration route and named its arbitrator. But the Belgian was not willing to join the arbitration. Reva moved a Bangalore court to restrain the Brussels court from proceeding with the case. Since it was an international dispute, it landed in the Supreme Court. Green Mobil argued that the main contract had expired before the arbitration clause was invoked. Rejecting the contention, the court stated that according to Section 16(1) of the Act, the arbitration clause continued to be valid. That would be so even if the main contract is null and void.
Employees cannot be forced to work in new firm
The Supreme Court has stated that when a company is sold or transferred to another, workers of the first transferor company cannot be compelled to join the transferee company against their wishes and without their consent. In this case, Sunil Gosh vs K Ram Chandran, a section of the employees of the Consumer Electronics Factory in Kolkota, opposed the sale of the unit by Philps India Ltd to Kitchen Appliances India Ltd, a subsidiary of Videocon International Ltd. They were offered voluntary retirement scheme but they did not accept it. When the company proposed a resolution at an extraordinary general meeting to approve the sale, the employees raised an industrial dispute and also moved the high court. The dispute travelled to the Supreme Court and back during a decade. Ultimately, the high court ordered Philips India to pay retirement benefits, including retrenchment benefits, to the employees who did not want to join the transferee company. The management did not comply with the order, contending that since the workers had neither been retired nor resigned nor retrenched from service, there was no question of any payment. The employees moved a contempt of court petition in the high court, but it was dismissed. Their appeal was allowed by the Supreme Court, which asked the company to pay all the benefits within three months.
Appeal in supari trade mark dismisssed
The Supreme Court last week dismissed the trade mark appeal case, Rasiklal Manickchand Dhariwal vs MSS Food Products. The latter company, manufacturers and supari, masala and other products had sued Dhariwal Industries Ltd and Rasiklal Manickchand Dhariwal in a Madhya Pradesh court against the latter two companies using the trade mark Manikchand to sell similar products. It argued that the word Manikchand and Malikchand were phonetically similar and tended to confuse the consumer. It also alleged that inferior quality product was passed off instead of the original goods. The trial court and the Madhya Pradesh high court restrained the two firms from using the name. Their appeal to the Supreme Court was also unsuccessful.
Civil court can execute cheque bounce order
The order of the Lok Adalat in a case of bounced cheque can be considered as a decree of the civil court and enforced, the Supreme Court stated last week in the case, K N Govindan vs C D Shaji. Though the offence of tendering a cheque without sufficient balance in the bank is punishable under the Negotiable Instruments Act, if the magistrate sends the matter to Lok Adalat and there is a settlement, the execution of the order should be through a civil court. In the Lok Adalat there is no difference between references made by a civil court or a criminal court. The Lok Adalat also is not restrained in its powers once the case is referred to it by civil or criminal court, family court, motor vehicle accident tribunal, consumer court or the rent control court. In this case, the magistrate sent the cheque bouncing case to the Lok Adalat, where it was settled. However, the drawer of the cheque did not comply with the terms and an execution petition was filed in a civil court. It rejected the petition stating that it was a criminal case. On appeal, the Kerala high court also took the same view. The Supreme Court set aside the orders of the courts below and asked the civil court to execute the settlement of the Lok Adalat.
Death while going to work not covered by workmen’s insurance
The Bombay high court ruled last week that the death of a worker, while proceeding to work, could not be construed as death “arising out of or in the course of employment” and therefore he would not be covered by insurance under the Workmen’s Compensation Act. The dependents in this appeal, Oriental Insurance Co vs Daivshala, argued that he was not provided quarters and therefore he had to live 21 km away from the establishment and since he was going to work, the accident happened in the course of employment. The civil judge accepted the argument, but on appeal, the high court stated that the insurance company was not liable to pay compensation.
