The Supreme Court has stated that the rule that lawyers cannot appear before a labour court/industrial tribunal under the Industrial Disputes Act without the consent of the workman and the leave of the court is unconstitutional as it violated the equality provision, Article 14 of the Constitution, and the freedom to pursue any profession in Article 19(1)(g). The court therefore took suo motu notice of the prohibition under Section 36(4) of the Industrial Disputes Act and has asked the Attorney General to assist it in examining the legality of the provision. It also requested senior lawyer F S Nariman to assist it in the effort and he has consented to do so. According to the order in M/s Hygienic Foods vs Jasbir Singh, “industrial law has become so complex that a layman cannot possibly present his case properly before the labour court/industrial tribunal. Similarly, Section 13 of the Family Courts Act, 1984 debarring lawyers from appearing before the family courts also appears to us, prima facie, to be unconstitutional because family law has become so complex that an ordinary layman cannot possibly be expected to put up his/her case properly before them. Hence to debar lawyers will really be denying justice to millions of people.” Meanwhile, the government last week notified Section 30 of the Advocates Act 1961 after a 50-year-long delay and consequently now lawyers can practise in all courts and tribunals as a matter of right. Several laws which barred appearance of lawyers in legal forums will require amendments after the notification.
SAT quashes Sebi order on rights issue
The Securities Appellate Tribunal last week stated that unsecured loans advanced by a promoter group could be adjusted against allotment of shares to them in the rights issue. The tribunal thus set aside the bar placed on SRM Energy Ltd by Securities and Exchange Board of India (Sebi). The company wanted to mobilize funds for a power project and therefore came out with a rights issue. According to the company, there was an oral understanding between it and the promoter, Spice Energy (SEPL), at the time of providing funds that if and when it came out with a rights issue, the unsecured loans would be adjusted against the share price. “Such payment by adjustment in the books of account is a well recognized mode by all accounting standards and we find no fault with this mode being adopted,” the judgment said. “All that SEPL has done is that it received shares in the rights issue and made payment by adjustment of the unsecured loans which were payable on demand. In the strict sense of the term, it is not a conversion of a loan into equity.” The tribunal therefore set aside Sebi’s instruction requiring SRM not to adjust the unsecured loans advanced by the promoter towards the price of the shares allotted in the rights issue.
Denial of refunding service tax ‘specious’, says Bombay high court
The Bombay high court last week described the denial of interest on refund of service tax by the deputy commissioner as “specious” in the case, Shroff United Chemicals Ltd vs Union of India. It asked the revenue authorities to pay interest for the delayed refund. The firm, in anticipation of import of intellectual property services, had obtained service tax registration. It then approached the Reserve Bank for the remittance of funds abroad, for a proposed acquisition of the registration of certain agrochemical products in the U.S. In anticipation of the permission of the Reserve Bank for the remission of funds abroad, it deposited Rs.1.02 crore. However, it did not receive permission on time and therefore it could not acquire the registration. It filed refund claim which was allowed. But the interest on delay was denied. Then the firm moved the high court for interest. The high court allowed the claim and stated that under Section 11BB of the Central Excise Act, the firm was entitled to interest after three months of receiving the application for refund.
Delhi High Court allows L&T appeal
The Delhi high court has allowed the appeal of Larsen & Toubro against the award of an arbitrator in its dispute with National Highway Authority of India (NHAI). The firm had argued that fluctuation in prices of boulder and sand would determine the wholesale price index and consequent reimbursement of enhanced royalty charges. The arbitrator did not consider this while giving the award. The high court stated that this issue has been decided earlier by the high court in two cases, though some appeals are pending before the Supreme Court. NHAI’s objection to interference in the arbitral award by the court was rejected.
National Consumer Commission dismisses Cox & Kings’ appeal
The National Consumer Commission has dismissed the appeal of Cox & Kings and asked the travel agency to pay compensation to a couple who were stranded in Thailand as the return ticket given to them was not confirmed. In this case, Dr Tushar Kanti and his wife bought a tour package from the firm, including tickets of Thai Airline. But on the day of return the ticket was not confirmed and they had to buy tickets with credit cards. They came back and filed a complaint of deficiency in service against the travel firm. The district forum, the state commission and the national commission all found the firm deficient in service under the Consumer Protection Act.
