The Supreme Court has stated that mediation through an institutional mechanism is more productive than one without it. This is because a third party "steeped in the techniques of mediation" will help the contesting parties to win as much as possible and lose as little as possible. The occasion to make this recommendation was a decade-old dispute between Central Bank of India and its employees in Mumbai. The Maharashtra housing authority had given a 90-year lease of land to accommodate its middle-level staff in 1982. Later it wanted to demolish the ten buildings and raise a better complex for the managerial staff. The residents challenged the move in several tiers of courts and lost. The efforts of the Bombay high court to refer the disputes to mediation also failed, because no institutional mechanism was invoked. While dismissing the employees' final appeal, Suresh Narayan vs Central Bank, the Supreme Court stated that the employees could not interfere in the lease agreement between the housing authority and the bank as they were outside it. Further, housing was not part of the service conditions. The court, while ordering the employees to vacate the premises, prevented the bank from recovering compensation from the occupants.
Trust the electricity meter, says SC
The Supreme Court has quashed the judgment of the Patna High Court which had granted benefits in electricity charges to a steel unit that drew more power than was sanctioned. The high court had also observed that "greater consumption of power will result in economic development, generation of employment and income and is better for Bihar." The Supreme Court stated that it was an "irrelevant consideration". There was also a dispute over the reliability of the meter reading. The Supreme Court ruled that the 'Maximum Demand Indicator' was reliable. "The meter is more credible and reliable than the stand of the industry that the meter was faulty; it was set up just to escape from liability," the court observed in the case, Bihar SEB versus Bhola Ram Steel.
Negligent worker too gets damages
Death or injury resulting from negligence of a worker in the course of employment is no reason to deny compensation under the Employees Compensation Act, the Supreme Court asserted in the case, Jaya Biswal vs IFFCO Tokio General Insurance. Negligence is a factor under the Motor Vehicles Act, but not relevant in the Employees Compensation Act. In this case, a young truck driver died in an accident. His dependants approached the Commissioner of Compensation. He awarded Rs 10.75 lakh. The insurance company appealed to the Odisha high court. It reduced the compensation by half, "in the interest of justice". The parents appealed to the Supreme Court. It castigated the high court for reducing the amount by merely claiming that it was in the interest of justice. The apex court awarded Rs 11 lakh with 12 per cent interest. Moreover, the court stated that "in light of the unnecessary litigation and hardship of the dependants in spending on litigation to get the compensation we deem it fit to award them Rs 25,000 as costs."
Managing director not barred by age
After the 2013 amendment to the Companies Act, a person who has attained 70 years may be appointed managing director by passing a special resolution. It shall be accompanied by an explanatory statement annexed to the notice for such motion justifying the appointment. The Bombay high court explained the new position while deciding the case, Sridhar vs Ultramarine & Pigments Ltd. The joint director sought an injunction against the chairman & managing director continuing, since he was over 70 years. He was appointed before the amendment. The incumbent stated that the amendment could not be enforced retrospectively. The high court therefore explained that if he was already appointed prior to the amendment when he was below 70, "the disqualification would operate automatically, subject to the provison i.e. special resolution being passed by the company."
Creditors can't chase grandchildren
The debt recovery tribunal and the appellate tribunal "misdirected themselves" by pursuing the grandchildren of a guarantor when there was no evidence that they had inherited the estate of the guarantor, the Delhi High Court stated last week in the case, Rohini Kanoi vs Allahabad Bank. In this case, a firm took loan from Allahabad Bank which was not repaid. The bank took the firm and the guarantors to the tribunal. Since one guarantor had died, his grandchildren were also made parties by the tribunal. They challenged their impleadment, that too after ten years. The high court stated that the tribunal could not make the grandchildren suffer the trial on a "bald assertion", after a long delay, that the bank had learnt that they had inherited the estate of the guarantor.
McDonalds wins fight over 50 paise
The Delhi High Court last week accepted the argument of McDonalds Family Restaurant that establishments could round off bills to the nearest rupee. It is in accordance with statutory circulars, notifications and guidelines. In a 2007 circular, Reserve Bank of India had directed nationalised banks that all transactions, including payment of interests should be rounded off to the nearest rupee. The high court noted this while disposing of the appeal of McDonalds against the ruling of the National Consumer Commission. A consumer bought fast food which cost Rs 52.50. But the establishment rounded it off to Rs 53. This was challenged in the consumer forum. It ordered the restaurant to return Rs 0.50, along with Rs 3,000 for mental agony and Rs 1,500 as cost of litigation. The consumer commission dismissed the appeal of the firm as it was a trivial amount.
HDFC to compensate for harassment
The Consumer Commission has directed HDFC Ltd to compensate a woman for harassment by putting up her house for auction without providing her details of the arrears due in the home loan. When her estranged husband stopped instalments, she offered to pay instead; but the company would not disclose the amount to her for three years and proceeded to auction her Mumbai house. The Delhi consumer forum held the company guilty of deficiency in service and abuse of dominant position in the case, Shalima vs HDFC Ltd. The company appealed to the commission. It upheld the finding of guilt.
