SC holds sick company liable for not honouring cheques

LEGAL DIGEST

In this case, the directors were well aware that it was declared sick under the Sick Industrial Companies Act when they issued cheques. But when the cheques were dishonoured, and Jindal initiated criminal proceedings, Southern pleaded that it was a sick company and therefore, the proceedings should be dropped. The Karnataka High Court dismissed its petition.

The Supreme Court also dismissed its appeal observing that "Southern Steel is not entitled to any indulgence of this court. It had lost their total credibility because of their conduct. When it was declared sick, without disclosing this fact, it ought not to have made huge purchases from Jindal. Ultimately, Southern did not pay for the purchases. This clearly indicates that it had no intention of making payment of the purchases made by it." The trial court was asked to speed up the criminal trial and conclude it within six months.

HSIIDC asked to re-allot plots

The dispute between the Haryana State Industrial & Infrastructure Development Corporation (HSIIDC) and companies that were allotted industrial plots have been settled in the Supreme Court with the corporation offering to re-allot plots on payment of current market rate.

Most companies have agreed to pay the prevailing rate fixed by the corporation. The court therefore asked the corporation to re-allot plots subject to the regular terms and conditions. The public sector corporation had allotted plots to the firms in 2001. Some of them had not started work due to various reasons, some of them contributed by the corporation itself. The corporation then withdrew the allotments from them.

They challenged this action in the Punjab and Haryana High Court. It asked the corporation to restore the allotment and repay the refunds paid to the firms. The corporation then moved the Supreme Court. Though the court examined several individual cases, ultimately the offer of the corporation to re-allot plots was accepted. The court asked the firms to deposit the requisite amounts within six weeks and the corporation shall hand over possession within a month thereafter.

MRTPC cannot order allotment of plots, says SC

The Supreme Court has ruled that the Monopolies and Restrictive Trade Practices Commission (MRTPC) has no power to order a housing authority to allot a plot to an applicant. It can impose damages or order compensation to a person who complains against the authority for practising unfair trade practice but it cannot order allotment of plots to the applicant.

In this case, Ved Prakash Aggarwal had applied for a plot in a project floated by Ghaziabad Development Authority. After some time it was cancelled. So he moved the commission alleging unfair trade practices. The commission accepted his claim and asked the authority to allot him an alternative plot.

The authority appealed to the Supreme Court. It set aside the commission's order stating that it had no power to order alternative plot. This power belonged to the civil court. Therefore, the commission was asked to reconsider its decision only from the point of compensation and refund.

ONGC appeal against employees' regularisation quashed

The Supreme Court has dismissed the appeal of ONGC against the order of the Gauhati High Court which asked the public sector oil exploration company to regularise its casual employees employed in Cachar in late 1990's.

The high court had ruled that the members of the ONGC Contractual Workers Union were indeed direct employees of the corporation and not those of the contractors. The industrial tribunal had found that there was no contractor appointed by ONGC. It used to supervise and allot work to individual workers.

It paid the wages directly to the workers. It also took disciplinary action against some workers. All these showed that there was master and servant relationship between ONGC and the members of the union.