Despite repeated calls by the Supreme Court to public authorities to sort out their differences among themselves and not to resort to prolonged litigation using tax-payers' money, this fratricidal syndrome has not faded a bit. A committee to sort out such disputes was disbanded some time ago. Public-sector undertakings continue to fight, benefiting their favourite lawyers. This was evident in two recent judgments of high courts. The central government and Steel Authority of India (SAIL) have been fighting a legal battle for years before the railway claims tribunal, the single judge of the Orissa High Court and the division bench on appeal. The tribunal had awarded Rs 1,32,87,74 towards the claim made by SAIL. The dispute was over the route to be taken on South Eastern Railway for carrying imported coal from Visakhapatnam port to SAIL's plant. The shortest route was 667 km. However, the central government exercised its power under the Railway Act and insisted on a "rationalised route" which was 1,082 km long. SAIL refused to pay the higher bill and challenged it before the tribunal. It gave an award in favour of the PSU. The government appealed to the single judge of the high court. It dismissed the government's petition.
The government moved the division bench. It dismissed the appeal stating that only one appeal was permissible under the relevant rules. In another judgment delivered by the Delhi High Court, LIC wanted to evict Cement Corporation of India from its Delhi prime property. While dismissing the appeal of the government cement firm, the court observed: "We are constrained to observe that the present appeal demonstrates a sad state of affairs. Both PSUs have been litigating before this court and continue to litigate even after the prime minister recently issued a statement against continuance of such litigations. Not only so, the continuance of this appeal for nearly seven years, with neither party having been able to reap benefits from the use of the property, is most unfortunate."
Dispute over place of arbitration
The Supreme Court has ruled that when an arbitration agreement specifies a particular court which has jurisdiction, that prescription must be followed. In this case, B E Simeos von Staraburg Niedenthal vs Chhattisgarh Investment Ltd, the foreign firm operated mines in Goa and the Indian firm in Raipur, Madhya Pradesh, bought iron ore from it. The raising agreement between the two firms stated that the courts at Goa will have exclusive jurisdiction. When disputes arose, the Indian firm moved the district judge in Raipur and later the Chhattisgarh High Court. They ruled against the mining firm on technical points. The Supreme Court allowed its appeal, citing its recent decisions on this question.
Disqualification in tenders quashed
The Supreme Court last week set aside the judgment of the Punjab and Haryana High Court, which had upheld the disqualification of two firms from tenders for five years by Food Corporation of India (FCI). The corporation had rejected their tenders for Mandi labour contracts as they had failed to deposit earnest money in an earlier contract bid for road construction. The model tender form stipulates that the tenderer whose earnest money deposit was forfeited in any other contract with FCI during the last five years will be ineligible to participate in a new bid. The firms contended in their appeals, Shree Shyamji Transport Company vs Food Corporation of India, that in the earlier tender, the lapse was not intentional as it was caused on account of failure of banking operations. This was found true by the Supreme Court and therefore it ruled that the disqualification, already three years old, was unjustified.
Land allotment 'arbitrary'
The Chandigarh Administration was indicted by the Supreme Court in a land allotment case, accusing it of conferring largesse on a private institute "for inadequate consideration without following procedure." The land allotment was arbitrary, illegal and violative of Article 14 of the Constitution, the court stated while dismissing the appeal, Institute of Law vs Neeraj Sharma. Educational institutions these days are run on commercial model and therefore the state's discretion should not be misused to allot land to such institutions. The state can prohibit "commercialisation of education", the judgment emphasised.
Thirteen-year struggle to get Rs 10,000
The Supreme Court last week stated that postal authorities could not enrich themselves by denying the maturity amount on National Savings Certificate (NSC) merely because of irregularity in name. The certificate was issued in the name of the single proprietor firm, Bhagwati Vanaspati Traders. According to rules, only individuals can buy NSC, not firms. When proprietor B K Garg claimed the amount, which was Rs 10,000 in 2001, the authorities denied it invoking the rule about the name. He moved consumer forums which went against him. However, the Supreme Court allowed his appeal and asked the authorities to change the name and pay him the full amount with 12 per cent interest, compensation and cost of litigation. The 13-year-old litigation ended with the court's observation that the authorities should not have insisted on enforcing the rule strictly. Garg could have been asked to clarify the position and the defect could have been rectified. Instead, the postal authorities chose to interpret the terms of the scheme rigidly, denying the claim.
Field workers can be union members
The Bombay High Court ruled last week that field workers of a company could be considered "connected or attached" to the undertaking for purposes of recognising a trade union. There should be a minimum of 30 per cent of the workers of an establishment as members to get recognition for a union in Maharashtra. In this case, Bhartiya Kamgar Sena vs Otis Elevator Employees Union, the Sena argued that the rival union did not have the requisite number as only some 20 persons worked in the company premises and others were field workers installing or servicing elevators. However, it was recognised by the industrial court in Mumbai under Section 11 of the Maharashtra Recognition of Trade Union & Prevention of Unfair Labour Practices Act. This was challenged in the high court, where the management of the company was not a party. It upheld the industrial court's view that the field workers were attached to and were under the supervision and control of the management.
