From patents office to sale of repossessed cars, here are key court orders

A weekly selection of key court orders

PF trust opened to contract labourers

The contractual employees of government-owned Pawan Hans helicopter company emerged victorious in the Supreme Court when it ordered that they must be treated on a par with the rest of the employees for the purpose of provident fund. They were not recognised as employees, and thus denied the benefit under the Employees’ Provident Funds Act. The company has its own provident fund trust but contract workers were denied that benefit also, though they were working for decades and were paid directly by the company without a contractor. They moved the Bombay High Court for the PF benefit. It ruled that they were eligible for the scheme under the Employees PF Act. The court stated that a liberal view must be taken in extending social security benefits to contractual employees. The company, therefore, moved the Supreme Court. It argued that since it has its own PF trust, it was exempted from the general PF Act. The question was whether the contractual employees are entitled to provident fund benefits under the company’s trust or under the general law. The Supreme Court modified the high court order and directed that “the members of the trade union and other similarly situated contractual employees be enrolled under the Pawan Hans Employees Provident Fund Trust Regulations so that there is uniformity in the conditions of service of all employees of the company.” The court also ordered the company to pay 12 per cent interest on the amount payable so far. Besides, the court asked the company to pay Rs 5 lakh to the Aviation Karamchari Sanghatana towards expenses in litigation.

Corporate debtor’s assets taken over

The Supreme Court last week set aside the order of the National Company Law Appellate Tribunal (NCLAT) in the appeal case, Maharashtra Seamless (MSL) vs Padmanabhan, and directed the resolution professional to take physical possession of the assets of the corporate debtor, United Seamless Tubulaar, and hand it over to MSL. The police and administrative authorities were directed to assist the resolution professional to enable him to carry out these directions. Indian Bank was the initiator of the resolution process before the tribunal in Hyderabad and the issues involved term loans given by DB International (Asia) and Deutsche Bank, Singapore.

Patents office is an ‘industry’

The definition of ‘industry’ in the Industrial Disputes Act is still in flux. The issue had been referred by the Supreme Court to a nine-judge Constitution Bench in 2005. But that matter, called the ‘Bangalore Water Supply case’, has not been heard so far, leaving the law undecided. Confronted with such a situation, the Delhi High Court last week observed that “as on date, however, the Bangalore Water Supply case remains pristinely undisturbed. Having weathered the storms of judicial scrutiny thus far, that judgment necessarily continues to bind this high court”. The high court made these observations while declaring that the controller general of patents, designs and trademarks is an ‘industry’ according to the Supreme Court ruling, which is yet to be examined by the larger Bench. Several employees of the patent office were terminated. They moved the industrial tribunal. It directed the controller general to reinstate with back wages. Therefore, the government appealed to the high court. It upheld the tribunal’s order.

Sale of repossessed vehicles expedited

The Delhi High Court has removed a hurdle in the sale of vehicles seized by banks for non-payment of instalments by the borrower. The suits are stuck in long litigation and adjournments easily granted hurt the financiers. In its judgment in ICICI Bank vs Priya Baveja, the court set a deadline of 60 days for disposing of the bank’s applications to sell the vehicle which it took possession according to the agreement of hypothecation. The judgment noted that a large number of such applications are pending in trial courts and banks’ applications are merely getting adjourned at different stages of the proceedings. Several borrowers do not appear in the court at all. “No useful purpose would be served by leaving the vehicle to deteriorate and letting the bank incur further charges to store and preserve the vehicle,” the judgment said. Narrating the facts of the case, it allowed the bank to sell the vehicle, observing that “the car has a limited life value, which deteriorates with each passing day. The bank ought to be permitted to sell the car to recover whatever amount it can to satisfy the decree.”

‘Disparaging’ video on YouTube stopped

The Bombay High Court prefaced its judgment in Marico vs Abhijeet Bhansali with the remark that “the rapid expansion and commercialisation of the internet has brought forth novel legal disputes, which challenge the conventional principles and precedents”. In this case, the company, which produces and markets the fast-moving coconut oil product, called Parachute, complained that the opposite party uploaded disparaging content against its brand on YouTube. The court passed an injunction against Bhansali, weighing the balance of convenience on both sides. Bhansali is described as a "YouTuber"/"V-Blogger", who has his own channel titled Bearded Chokra. He published a video titled "Is Parachute coconut oil 100% pure?" In this video, he is alleged to have made disparaging and denigrating claims against Parachute. However, he defended the contents arguing that it was a bona fide opinion based on his studies. The court observed that statements have been made with recklessness and without caring whether they were true or false. “The video reeks of malice,” according to the judge. The video is “commercial speech” but the fundamental right to freedom of expression cannot be abused.

Arbitrator snubbed for poor reasoning

The Delhi High Court set aside an arbitration award between a dealer of motor spirit and Hindustan Petroleum Corporation stating that its reasoning fell short of minimum standards. The dispute was over the quality of spirit seized and the lab report. The corporation terminated the dealership and the matter was referred to arbitration. The award blindly accepted the corporation officials’ version. The high court stated that the reasoning “betrayed the arbitrator’s implicit faith in the officials of the corporation -- of which he also incidentally was one.” The court stressed that “while acting as an arbitrator, it is the duty of a person to approach the dispute objectively and eschew preconceived notions about the credibility of either party’s case.”