Since the civil courts are slow and expensive, there is a tendency to turn disputes into criminal cases which apparently move faster or approach the high court through writ petitions in labour or contractual matters. Two judgments of the Supreme Court last week spoke out against this practice. In the judgment, Swati Ferro Alloys Ltd vs Orissa Industrial Infrastructure Development Corporation, the dispute was over land belonging to certain firms which had mortgaged it to the corporation. The ownership of the firms involved and the nature of the transactions were not clear and therefore the Orissa High Court felt it was a civil dispute involving complicated question of facts. It asked the parties to move a civil court. Instead, the firms appealed to the Supreme Court. It affirmed the view of the high court. Further, the apex court asked the state corporation to inquire into the whole affair as it appeared that the different firms were using the land only to mortgage it and not to put it to any industrial use. The second case was about termination of K K Saksena, an executive of International Commission on Irrigation and Drainage. He challenged it in the Delhi High Court, which dismissed his writ petition, stating that it was not maintainable as the commission was not funded or controlled by the government of India. The judgment emphasised that contractual or commercial obligations, like the employment contract in this case, should not be taken to the high court or the Supreme Court. A writ petition would lie only against a public body exercising statutory functions or a public duty.
Court can't order labour law change
The Allahabad High Court found the definition of a 'workman' in the Uttar Pradesh Industrial Disputes Act so anomalous that it requested the government to amend it. But the Supreme Court observed that the high court had exceeded its jurisdiction by asking the legislature to change the law. In the judgment delivered last week in Pepsico India Holding Ltd vs K K Pandey, the apex court stated that the high court should not have asked the government to amend the definition of 'workman'. According to the Act, anyone who draws a salary above Rs 500 per month could not be considered a workman and he is beyond the purview of the law. Pepsico terminated a fleet executive and he challenged the management's action. The company invoked the rule and said that since he was drawing a salary of about Rs 8,000, he could not move the labour court. His plea was dismissed by the labour court. But on appeal, the high court said that the rule was an archaic hangover of the 1947 Act when the money value was high. The high court considered the executive as a workman and asked the labour court to consider his petition. The firm appealed to the Supreme Court. It set aside the high court order.
Arbitration not allowed after suit
Once a court takes a decision not to refer disputes between two parties to arbitration, that order cannot be altered by approaching the chief justice seeking arbitration under the Arbitration and Conciliation Act, the Supreme Court stated in its judgment, Anil vs Rajendra. The partners of a firm earlier took the dispute to the civil judge of Aurangabad. He heard the suit and while it was at the final stage, Rajendra approached the Bombay High Court chief justice for appointment of an arbitrator. The assigned judge proceeded to appoint an arbitrator. On appeal, the Supreme Court set aside the high court order and affirmed that the decision of the Aurangabad judge not to allow arbitration had become final. It cannot be overridden by a plea for arbitration.
DDA told to return forfeited earnest money
The Supreme Court last week asked Delhi Development Authority to return to real estate firm Kailash Nath Associates the earnest money paid to it in 1982 with 9 per cent interest. The firm was the highest bidder in a land auction and paid Rs 78 lakh as earnest money. But due to various factors like economic slump, the full payment could not be made and the time was extended twice. However, DDA forfeited the earnest money without notice to the realtor alleging breach of promise. When the firm moved the Delhi High Court, it dismissed its petition. On appeal, the Supreme Court held that DDA acted arbitrarily as there was no breach of contract on the facts of the case and DDA did not suffer any loss as the plot was sold at a much higher price at re-auction. Compensation can be paid only if a party suffered loss. "If damage or loss is not suffered, the law does not provide for a windfall," the judgment said. The Supreme Court set aside the high court judgment stating that it had applied wrong principles of law in this case while upholding the forfeiture.
DGFT rule on military goods quashed
The Delhi High Court last week set aside a 2008 circular issued by the Director General of Foreign Trade (DGFT) whereby the DGFT had prohibited export of goods which are apparently in the nature of military stores, without a No Objection Certificate (NOC) from Department of Defence Production and Supplies. The circular was challenged by an exporter who received a large order for bullet proof vests from Tunisia. But he could not sell it due to the NOC restriction. He challenged the rule arguing that the prohibition was against the Foreign Trade (Development and Regulation) Act and the Foreign Trade Policy. Accepting the contention in its judgment, D G Exports vs Union of India, the court noted that the DGFT had so far failed and neglected to specify items falling within the expression 'military stores'. The court further directed DGFT to specify the items of military stores that require a NOC within two months.
Heavy damages for death in lift
The National Consumer Commission last week imposed a compensation of Rs 1.23 cr for the death of a young Kingfisher Airlines executive who died when the lift of a condominium went up before he entered it, locking his head in the door. The commission stated that there was utter negligence on the part of the maintenance firm and the condo where the airline had an office. The maintenance firm did not put up a warning notice when repair work was going on and the inbuilt locking system was disabled. In this judgment, P G Pai vs Care Elevators & Engg Ltd, the commission stated that the executive was 25 years old, drawing a salary of Rs 25,000 per month. He was in good health and could have lived up to 70 years earning additional 30 per cent income in his life. After deducting his personal expenses, the commission came to the present figure. The maintenance firm will pay 75 per cent of the compensation and the rest will be paid by the condo management with 6 per cent interest from the date of filing the complaint which was done ten years ago.
