Trade union rivalries still alive and well

A weekly selection of key court orders

Though trade unions have fallen on bad days, it would seem that rivalry between them has not subsided proportionately. Last week, the Supreme Court in one case and the Bombay High Court in two others had to deal with rival claims for recognition of competing unions. The Trade Union Act mandates that a union must have at least 10 per cent or 100 workers employed in an establishment or industry who are members of such trade union on the date of making the application for registration. It also stipulates that the union must have not less than seven persons as its members who are employed in the industry with which it is connected. Disputes start when rival unions claim that they are eligible while the others are not. Last week, the Supreme Court decided a case, R G D'Souza vs Poona Employees Union, arising from rivalry between the latter and the Bhartiya Kamgar Sena. The registrar of trade unions cancelled the Poona union on a complaint of a labour leader who alleged that the registration was obtained by fraud. The industrial court and the Bombay High Court quashed that order. The Supreme Court upheld the high court order. Last week again, the Bombay High Court had to deal with rivalry among three unions regarding settlement of service conditions and wages. They were General Employees Union, Bhartiya Kamgar Sena and Bhartiya Kamgar Karmchari Mahasangh. The high court dismissed the petition, General Employees Union vs Inter-Gold Ltd, refusing to review the decision of the industrial court, stating that it would not exercise its writ jurisdiction in trade union matters. In yet another judgment, Bhartiya Kamgar Sena vs Otis Elevator Employees Union, the Sena argued that the rival union did not have the requisite number for recognition as only some 20 persons worked inside the company and others were field workers. However, it was recognised by the industrial court. The high court upheld the industrial court's view. The Andhra Pradesh High Court last fortnight decided another case of union rivalry in Dr Reddys Formulations vs Govt of Telangana.

20-year litigation over a cotton ball
The Supreme Court has asked scooter manufacturer LML Ltd to pay Rs 5 lakh to a semi-skilled worker who was dismissed more than 20 years ago for allegedly throwing a cotton waste ball weighing 5 -10 gm on the foreman, abusing him in filthy language and threatening to face consequences outside the Kanpur factory. He later tendered apology for throwing the cotton ball "by mistake" but after an inquiry, he was dismissed. The labour court and the Allahabad High Court upheld the dismissal. However, in the appeal case, Collector Singh vs LML Ltd, the Supreme Court felt that dismissal was too harsh a punishment for throwing the cotton ball at the foreman. The rest of the allegations were not admitted. Since the labourer has already superannuated during the two-decade-old litigation, he could not be reinstated, but only be compensated in money.

Outdoor ads free from municipal tax

The Delhi High Court last week quashed the orders of the Municipal Corporation of Delhi (MCD) imposing "damages" at the rate of Rs 7.36 lakh per month from April 2010 for displaying an advertisement in contravention of the corporation's Outdoor Advertisement Policy, 2007. The corporation maintained that the advertisement was unauthorised as no permission was taken from it. In this case, Sports & Leisure Apparel Ltd vs MCD, the firm is a producer of apparels and footwear with the brand Lacoste. It put up ads in the heart of the capital displaying its wears. The MCD passed orders alleging that the ads were unauthorised and caused financial loss to it and thus demanded compensation. The firm challenged the orders arguing that the corporation law did not authorise the authorities to levy any charge or compensation. It cannot impose a tax under the law. MCD contended that it was a fee, which it had the authority to impose. Rejecting the defence, the high court stated that there was no rule allowing the corporation to impose tax or fee without any quid pro quo and "a taxing provision cannot be inferred by implication but must be expressed unambiguously".

Choosing the sole arbitrator
If an arbitration clause clearly stipulates that if either of the disputing parties fails to appoint its arbitrator, the nominated arbitrator appointed by one party shall act as a sole arbitrator. The Delhi High Court stated so in its judgment, Utkal Galvanisers vs Power Grid Corporation. In this case, the Corporation had invoked the arbitration clause and appointed its arbitrator. However, Utkal Galvanisers failed to nominate its arbitrator in terms of agreement. Therefore, the Corporation nominated its arbitrator as the sole arbitrator. Utkal moved the high court seeking a sole arbitrator. The Corporation refused to do so as it felt that the firm had defaulted on its part in following the procedure and the court in such circumstances had no jurisdiction to appoint any other person as an arbitrator.

Contempt power only with higher courts
The Madras High Court last week ruled that subordinate courts cannot invoke the Contempt of Court Act to punish a person disobeying judicial orders. That power belongs only to the Supreme Court and the high courts. The Madras High Court stated so in a tenancy dispute, Venkatakrishnan vs S Vijayalakshmi. The landlord in this case allegedly cut off water supply to his tenants. They moved the small causes court, which ordered restoration of the basic amenity. The landlord failed to comply with the order. So the tenants moved the rent controller, who issued notice to the landlord under the Contempt of Court Act for disobedience of the court order. The law provides for imprisonment of the contemner. The landlord, therefore, moved the high court. It allowed the appeal stating that subordinate courts have no jurisdiction to proceed against a person under the Contempt of Courts Act, "if the contempt is not an ex-facie contempt." The subordinate courts can only refer the matter of disobedience to the high court. The tenants in this case have other ways to enforce the order. Instead, they took the wrong course. "Unfortunately," the rent controller interfered in this matter when he had no jurisdiction to do so, the judgment said.