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Supreme Court asks labour courts to note 'emerging economic order'

M J Antony 

The Supreme Court last week set aside the judgment of the Bombay high court and the Mumbai labour court and rejected the allegation of the trade union of Siemens Ltd that the promotion scheme of the company was “unfair labour practice” under industrial laws. It also urged courts below to note the “evolving work culture of the company in facing the new challenge in the emerging economic order” which has changed considerably from 1982 when a settlement was signed between the management and the trade union. Even if it is assumed that the agreement still subsisted, the labour court and the high court should have considered it “reasonably and harmoniously keeping in mind the vast changes in economic and industrial scenario and the new challenges which the company has to face in the matter of reorganizing work in order to keep pace with the changed work culture in the context of scientific and technological development.” According to the scheme, the company created a separate cadre of junior executives. The trade union argued that it had blocked avenues for them and the junior executives were doing the job of workmen, which was against the 1982 settlement. The labour court and two judgments of the high court upheld their complaint. However, the Supreme Court overruled all those concurrent rulings.

SEBs denied interest on overcharged rates
The Supreme Court has set aside the judgment of the Appellate Tribunal for Electricity on an appeal moved by the NTPC Ltd involving claim of interest for dues overcharged. The Central Electricity Regulatory Commission, while determining tariff, had fixed the final rate at a level lesser than the pre-existing rate. So NTPC, the government-owned power generator, was found to have overcharged electricity boards of Punjab and Madhya Pradesh and Delhi Vidyut Board in the period around 2005. The boards moved the commission for refund and interest. It allowed certain adjustments in relation to refund, but denied interest. On appeal, the tribunal directed NTPC to pay interest also to the electricity boards on the differential amounts on the grounds of “equity and fairplay.” NTPC appealed to the Supreme Court against the order. Allowing the appeal, the court said that during the period of price fixation, interest cannot be claimed and that is also the practice in the industry. Equity and fairplay cannot be invoked in such cases, the court remarked.

Exporter’s appeal against award of international arbitrator dismissed
The Supreme Court last week dismissed the appeal of Phulchand Exports Ltd of Mumbai against the award of the International Court of Commercial Arbitration at the Chamber of Commerce and Industry of the Russian Federation, Moscow, in favour of OOO Patriot of that country. OOO Patriot bought polished rice from the Mumbai firm but it was dispatched late, the ship suffered engine failure, was rescued and taken to Turkey. The buyer lodged claim before the arbitration court, which went in its favour. The Mumbai firm challenged it before the Bombay high court and later in the Supreme Court arguing that once the goods was shipped the risk passed on to the buyer. Moreover, it argued, the buyer should have invoked the insurance of the cargo. Further, it was contended that the award was against public policy. The courts rejected these arguments and confirmed the award.

No duty on metal scrap produced during repair work

Metal scrap or waste generated while repairing worn-out machinery or parts of cement manufacturing plant would not attract excise duty, the Supreme Court ruled last week. The court set aside the Rajasthan high court judgment contrary to this view in the appeal of Grasim Industries. The company, manufacturer of white cement, does the repairs in its workshop. The process generates metal scrap or waste. The revenue authorities demanded duty on it under threat of penalty. Though the tribunal set aside the demand, the high court allowed the appeal of the central government. On appeal by Grasim, the Supreme Court said that “the repairing activity in any possible manner cannot be called as a part of manufacturing activity in relation to production of end product. By no stretch of imagination can the metal scrap be treated as a subsidiary product to the cement which is the main product.”

APERC asked to decide price for non-conventional power producers
The Supreme Court last week asked the Andhra Pradesh Electricity Regulatory Commission to sort out the dispute over purchase price of power between non-conventional energy producer, Sagar Sugars & Allied Products, and the Transmission Corporation of AP Ltd. The order noted that last year, the court had similarly remanded another dispute between the Transmission Corporation and Sai Renewable Power Ltd on the purchase price for procurement of electricity generated by non-conventional energy developers.

First Published: Mon, October 17 2011. 00:18 IST