Construction companies from various parts of the country lost their appeals in the Supreme Court (SC) when it held that they are obliged to pay welfare cess to building workers. The argument of the firms was that the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act and the related Welfare Cess Act did not apply to them, as they were registered under the Factories Act. They had challenged the show-cause notices issued by various state authorities demanding cess but the high courts of Allahabad, Odisha, Madhya Pradesh and Karnataka had rejected their writ petitions. All the appeals and petitions before other high courts raising the firms’ objections were dismissed by the SC, which ruled that construction workers are not covered by the Factories Act. Therefore, the welfare measures provided under the two legislation cannot be denied to them. Citing earlier decisions, the present judgment in a batch of appeals, led by Lanco Anpara Power Ltd vs State of Andhra Pradesh, said: “Semantic luxuries are misplaced in the interpretation of ‘bread and butter’ statutes. Welfare statutes must, of necessity, receive a broad interpretation. Where legislation is designed to give relief against certain kinds of mischief, the court is not to make inroads by making etymological excursions.”
Discretion in penalty for cheque bounce
If two or more cheques are issued consecutively in a common transaction between the same parties and they bounce, the punishment of imprisonment could run concurrently — and not one after the other — for each bouncer. In this case, Shyam Pal vs Dayawati, the man borrowed Rs 5 lakh two times from the woman. He returned the money in two cheques with consecutive numbers. Both were returned for insufficiency of funds, leading to two complaints by the woman invoking Section 138 of the Negotiable Instruments Act. The trial court sentenced the accused person to 10-month simple imprisonment for each invalid cheque. He moved appeals arguing that as both the complaints had arisen out of successive transaction in a series between the same parties, and had been tried together on the basis of the same set of evidence, the sentence ought to have run concurrently and not separately. But, the appeal court and the Delhi High Court rejected this argument. On appeal, the Supreme Court set aside the orders of courts below and directed that the accused person shall undergo the sentence concurrently in this case. The Criminal Procedure Code confers discretion on the judge and it should be exercised according to the circumstances of the case. In this case, the accused person had already undergone 10 months imprisonment. The court observed that “the legal position favours the exercise of discretion to the benefit of prisoners in cases where the prosecution is based on a single transaction, no matter even if different complaints might have been filed.”
Sale of defaulter’s properties upheld
The Supreme Court has set aside the order of the Madras High Court which had ruled that the sale of two properties of a borrower firm was illegal. In this case, ICICI Bank Ltd vs M/s Aburubam & Co, the properties were put on public auction due to payment default but there were no takers. So, the bank itself bought it. The borrower firm challenged the sale in the Debt Recovery Tribunal and its appellate tribunal where it lost. But, the high court asked the tribunal to reconsider the sale as it found two illegalities. The SC found both the findings wrong. It said that the argument that the borrower was not allowed to participate in the fixing of the offset price was wrong because it was a party to the recovery proceedings and the offset price was set by the valuation officer. Secondly, there was no violation of the provisions of the Income Tax Rules, as there was no bar on the bank to participate in the public auction once the invitation to bid did not result in any response from any interested bidder.
Alcohol in medicines permissible
The Patna High Court has quashed the order of the Bihar Excise Commissioner directing collectors and district magistrates not to issue or renew licences granted under the Medicinal and Toilet Preparations Act to manufacturers of medicines if they contained alcohol. The prohibition issued in March this year covered allopathic, Ayurvedic, homeopathic and other indigenous systems of medicines. The order came in two petitions moved by Shree Baidyanath Ayurved Bhawan Ltd and another company. They contended that the state has no power to do so and they are covered by the central legislation, the Drugs and Cosmetics Act. The government argued that alcohol was an intoxicant and its policy was to bring in total prohibition in the state. The high court stated that “medicinal and toilet preparations, containing alcohol, be it Ayurvedic, allopathic or other forms of indigenous medicines, cannot be equated with ordinary alcoholic beverage as they are consumed only for medicinal purposes.”
Luxury soaps with weight problems
The Bombay High Court has rejected the application of Colgate-Palmolive to quash prosecution against it for selling two soap brands which weighed less than what was declared on the package. Authorities under the Packaged Commodities Rules started prosecution in 2002 after confiscating the goods. The high court ordered the cosmetics firm to stand trial. It found prima facie evidence that the average weight was less than the declared weight in one case and in the other, the deficiency was greater than twice the permissible error. The court was not impressed by the company’s argument that soaps which contain moisture were likely to undergo significant variations in net contents on account of environmental and other conditions. The court also did not agree with the firm’s contention that the rules specified that the weight declared was “when packed”, that is, when manufactured and packed and not when sold in the market.
Row over what GSK stands for
The Delhi High Court last week allowed the petition of GlaxoSmithKline, global user of GSK brands, and passed a permanent injunction against a Secunderabad-based firm which used the trade name ‘GSK’ for pharmaceutical products. The director of the firm, GSK Life Sciences Ltd, defended the use of GSK explaining that it stood for his full name, Gadikota Sarath Kumar. However, the court held that the trademarks were similar and likely to confuse consumers who buy medicines. Therefore, the court barred the Secunderabad firm from using the name GSK in the logo, products or in advertising.
