Law on temporary workers to fee on telecom towers, here're key court orders

A weekly selection of key court orders

SC to review law on temporary workers
 
The Supreme Court has decided to revisit the law on regularisation of temporary and daily workers as its earlier judgments are not harmonious regarding the power of labour and industrial courts. The order was passed in five appeals against judgments delivered by the high courts of Delhi, Andhra Pradesh, Madras and Uttarakhand. The high courts were ordering regularisation following the Supreme Court judgment in the 2015 case, Oil and Natural Gas Corporation v Petroleum Coal Labour Union. However, in the new set of appeals, ONGC vs Krishan Gopal, a two-judge Bench doubted the correctness of the 2015 judgment and referred three questions to a larger Bench. The questions involve the power of labour and industrial courts to order regularisation. Sometimes, there might not be any vacancy, still by judicial order workers have to be reinstated. The employes might have indulged in unfair trade practices and then the regularisation would take another colour. If the employer appoints workers after terminating temporary hands, it would raise questions of equality under the Constitution. Another question is whether employees can move a high court bypassing the industrial court. Regularisation of temporary workers has been a staple of appeals to the Supreme Court, which passed varying orders in the past decades. This was because of the haziness in the interpretation of the Industrial Disputes Act. When the larger Bench is constituted, its verdict could clarify the law on the rights of temporary workers who are kept in an uncertain state for years without granting them the benefits given to permanent employees.

 
Insurer told to compensate farmers
 

A fire in a cold storage holding agricultural produce led to litigation involving some 90 farmers in Karnataka, the cold storage owner, Canara Bank, and United India Insurance. The farmers had taken a loan from the bank by hypothecating their produce. They also paid a premium for insuring their produce kept in the cold storage. When the fire occurred, the tripartite agreement involved all of them. The insurer repudiated the claims of the farmers arguing that the fire was not accidental and the store was deliberately set ablaze, the farmers are not consumers, and the insurer had no privity of contract with the farmers. The farmers moved the consumer forum and its appellate commissions. Dissatisfied by the orders, all parties moved the Supreme Court. It set at rest the complex case by giving a seven-point formula by which the insurance company will take the main burden to satisfy the claims of the farmers. The company shall pay to each farmer the loss assessed by the consumer forum, with a 12 per cent interest. It shall also pay to the bank the loans taken by the farmers with 12 per cent interest.

 
SBI freed from liability to pay damages
 
In an appeal involving the liability of the insurance company in a fire incident, the Supreme Court allowed the appeal of State Bank of India and set aside the order of the National Consumer Commission. The bank had extended a loan to the borrower, and it was charged on the assets of the borrower. The assets were insured with New India Assurance Co. There was a fire, which damaged the assets. When the claim was rejected, a complaint was filed before the Andhra Pradesh consumer commission. Meanwhile, there was a settlement between the bank and the borrower. However, the National Commission allowed the appeal of the insurer and cast liability on the bank. The Supreme Court quashed the commission’s order and absolved the bank from the liability.

 
Maruti’s claim of deductions rejected
 
The Supreme Court has dismissed the appeal of Maruti Suzuki India claiming deductions on income tax on two counts. The company is engaged in manufacturing and sale of various Maruti cars and also trades in spares and components of the vehicles. It acquires raw materials and inputs, which are used in the manufacturing of the vehicles. It had been taking benefit of MODVAT credit on the raw material and inputs.  In the assessment year 1999-­2000, Rs 699,300,428 (nearly Rs 70 crore) was left as unutilised MODVAT credit. In the return, it was claimed that the company was eligible for deduction under Section 43B of the Income Tax Act as an allowable deduction. Similarly, it claimed deduction of Rs 30,888,171 (over Rs 3 crore) in respect of Sales Tax Recoverable Account. Both these were rejected by the revenue authorities. The company’s appeals to the Income Tax Appellate Tribunal and the Delhi High Court were dismissed. Taking the same stand, the Supreme Court stated that the unutilised credit under the MODVAT scheme does not qualify for a deduction.

 
Hospitals’ plea on CGHS dismissed
 
The division Bench of the Delhi High Court has dismissed the appeal of the Association of Health Care Providers requesting the court to direct the government to constitute a committee to monitor the implementation of the Central Government Health Scheme (CGHS) and the contracts entered into by the government with empanelled hospitals. Earlier, a single judge Bench had dismissed the petition moved by the association, which has around 2,000 private hospitals. Their complaint was that their bills are not cleared fully and 10 per cent is deducted from all claims. The court ruled that if the hospitals find that the contract was unviable, they could opt out of the scheme or take legal remedies. There is also an arbitration clause, which the hospitals could invoke, the court stated.

 
State can charge fee on telecom towers
 
The Chhattisgarh High Court last week dismissed a large number of writ petitions of telecom companies, led by Reliance Infratel, challenging various levies on mobile towers. They had argued that the tax, initial permit fee, renewal fee and compounding fees were hiked exorbitantly. They contended that the state and local authorities like gram panchayats had no power to do so as the subject belonged to the central government under the Constitution. The Constitution, in the Seventh Schedule, has listed the powers of the Centre and states on various subjects. In this context, the companies also pointed out the Indian Telegraph Right of Way Rules, 2016. Rebutting the arguments, the state government contended it had the power under the Seventh Schedule to deal with land and buildings. Rejecting the arguments of the telecos, the court stressed the state has the power to levy charges on the occupier of the land and the court could not go into the rate of the charges fixed by the local authorities as they were dependent on various factors.