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Delhi HC on Interpretation of Inconsistent Clauses

The High Court of Delhi in the Sunil Kumar Chandra case held that in case there is inconsistency between two clauses in an agreement, the former clause will have precedence over the latter clause. It also reconfirmed the legal position that one party cannot choose the arbitrator to resolve disputes between the parties. This Connect highlights the reasoning and judgement passed by the court.

PROPOSED DIGITAL INDIA ACT

The Union Ministry of Electronics and Technology has proposed the ‘Digital India Act, 2023’ (DIA) by way of a presentation. This presentation lists the DIA’s key aspects and analyses the current information technology framework of India.

Patna High Court on Reinstatement with Back Wages

The High Court of Patna affirmed a ruling by a Single Judge in the case of The Chairman, Uttar Bihar Gramin Bank and Ors. v. Ramendra Prasad Gauro, where the employer was directed to reinstate its employee with back pay. This was because Uttar Bihar Gramin Bank had committed a breach of statutory provisions and principles of natural justice by neglecting to take into account the employee’s response to its enquiry order.

KAR HC on Employee’s Unauthorized Long Absence

Karnataka HC in M Manjunatha v. Karnataka State Road Transport Corporation case, where an employee remained unauthorizedly absent for a period of 52 days only and therefore claimed that the quantum of punishment imposed on him was excessive, HC held that unauthorized absence of employee for a long period of 15 months is grave misconduct and dismissal is proportionate penalty.

Karnataka HC on Better Service Conditions in Employment

Karnataka HC, in the Karnataka State Medical and Sales Representatives Association and Ors. v. Astra Zeneca Pharma India Ltd. case, where an employee claimed that he was not provided accommodation and his legitimate expectation of better service conditions was violated, held that employees are barred from alleging better service conditions post acceptance of appointment letter.

Kerala HC on Essentials of ICC Hearing in Posh Complaint

Kerala High Court in The Managing Director, HDFC Standard Life Insurance Company Ltd. & Ors. v. Suresh Babu and Anr. case, where an employee was terminated from his services for sexually harassing employees at workplace, opined on the essentials of ICC Hearing in a POSH complaint. While it held that failure to cross-examine witnesses in the presence of respondents did not amount to violation of principles of natural justice, for other reasons it directed the ICC to re-conduct inquiry and gave specific directions.

Digital Personal Data Protection Bill, 2022 – An Analysis Part II

This Connect is Part II in the series that summarises the key features of the Digital Personal Data Protection Bill, 2022, which was issued by the Union Ministry of Electronics and Information Technology, on November 18, 2022. The Bill seeks to establish a consolidated framework for data protection in India, and details rights and duties of Data Principals and compliance obligations of Data Fiduciaries.

Digital Personal Data Protection Bill – An Analysis (Part I)

On November 18, 2022, the Union Ministry of Electronics and Information Technology released the Digital Personal Data Protection Bill, 2022 (Bill) for public consultation. This Bill seeks to provide a comprehensive framework for the processing of digital personal data. In two parts, Counselence Connect will analyse the Bill. Part I yields its focus to the salient features of the Bill with respect to Chapter I (Preliminary) and Chapter II (Obligations of Data Fiduciary). Part II, which will be released next week, will summarise the Bill in the context of Chapters III-VI.

Permission For Retrenchment– The Common Misconception

In light of large-scale separations by some tech companies, the Minister of Labour informed the Parliament that employers must take “prior permission” from the appropriate government in order to carry out the terminations. As per the Industrial Disputes Act, 1947, retrenchment in compliance with the conditions precedent in Section 25F is final. This CEC assesses the legal position vis-à-vis the Minister’s views.

Karnataka HC on Retirement Age of Workmen

Karnataka High Court, in The Management of Grasim Industries Ltd. v. The General Secretary, Harihar Polifibers Employees’ Union and Ors. case, where the industry challenged the enhancement of retirement age from 58 years to 60 years, held that the retirement age of workmen in the industrial sector has been enhanced based on the increased life expectancy and improvement in medical sciences and as a necessity based on the present circumstances.

Tripura High Court on Denial of Hearing by POSH Committee

Tripura High Court, in the case of Shila Debnath vs. National Institute of Technology, while ordering from fresh inquiry of a POSH complaint, held that deviation from laid-down procedure including giving the aggrieved woman an opportunity of being heard is a ground to render the IC proceedings invalid. This Connect highlights the reasoning and judgement passed by the court.

Delhi High Court on Change in Service Conditions.

The Delhi High Court, in the Food Corporation of India case, while allowing employee unions to raise industrial dispute, observed that an employer notifying change in service conditions is mandatory under the Industrial Disputes Act and the format of notice must be as prescribed. This Connect highlights the reasoning and judgement passed by the court.

Allahabad HC on Determination of ‘Workman’

Allahabad High Court, in the Leayan Global Private Limited v. Presiding Officer and Ors. case, where a workman was terminated on the grounds of his work being supervisory or managerial in nature, held that the nature of work of a person is determined based on the principal duties and not on ancillary tasks such as allocation of work to other employees or approving leave permissions.

Delhi High Court on Denial of Maternity Benefit

The Delhi High Court, in the Asia-Pacific Institute of Management case, held that maternity benefit can only be denied to an employee if her dismissal was on account of serious misconduct. The court also held that any contract of service between an employer and employee which contracts out of the provisions of the Maternity Benefit Act, 1961, is contrary to law.

Supreme Court on Recovery of Excess Payments.

Supreme Court, in Thomas Daniel v. State of Kerala and Ors. case, where a claim for recovery of erroneous excess payment was made after ten years post retirement of an employee, held that any payments made by employer by erroneous interpretation of a rule/order, wrongful application of a principle or by wrong calculations are not recoverable.

Gujarat HC on Forfeiture of Gratuity

The High Court of Gujarat, in the recent judgment in CMD, Union Bank of India vs. Jaykant R. Gohil, observed that UBI forfeiting gratuity of the employee was an “afterthought” as only after the employee demanded the gratuity. The Court ordered payment of all retiral dues to the employee with reduced interest.

Delhi HC on Imposing Liquidated Damages in Contracts

On assessment of whether liquidated damages (LD) were payable by a contractor for delays in completion of work, the Delhi High Court (HC) in North Delhi Municipal Corporation v. IJM Corporation Berhad, held that once a request for extension is received and granted, and the contractor completes the work in the contractual and extended periods, LD is not payable. The HC also held that a competent authority cannot, after the extended period, turn around and re-evaluate the extension granted, to the detriment of the contractor.

Supreme Court on Amendment to Bonus Act

The Supreme Court considered the Union of India’s contentions seeking transfer of writ petitions that challenged constitutional validity of Payment of Bonus (Amendment) Act, 2015 filed before various High Courts to the Supreme Court in the Union of India and Ors. vs. The United Planters Association of Southern India and Ors. It however declined the transfer of the cases from the High Court with a direction to the courts to proceed on the matters expeditiously and on priority.

Delhi HC On Forfeiture Of Gratuity

The Delhi High Court in two Union Bank of India cases observed in March 2022 that an employer has the right to forfeit gratuity of its employee sunder Section 4(6)(a) of the Payment of Gratuity Act, 1972 to the extent of loss or damaged caused by the employee. However, the damage must be quantified, opportunity afforded to employees to present their case and be heard before forfeiture.

Supreme Court on Claim for Back Wages

Supreme Court, in the case of Allahabad Bank and Others vs. Avtar Bhushan Bhartiya, clarified the legal position on proof of gainful employment while claiming reinstatement with back wages. It held that in the first instance, there is an obligation on the part of an employee to plead that he is not gainfully employed. It is only then that the burden would shift upon the employer to make an assertion and establish that the employee was gainfully employed. This Connect highlights the changed views of the apex court and its reasoning in this case.

SC on Non-Applicability of Equality to Wills

Supreme Court in Swarnalatha case held that in the matter of appreciating the genuineness of execution of a will, there is no place for court to see whether the distribution made by the testator was fair and equitable to all of his children and the court must not apply Article 14 to dispositions under a will.

SC on Interpretation of Contracts

Executive Summary: Supreme Court, while interpreting the commissioning date of an electricity project in Bangalore Electricity Supply Company Limited Vs. E.S. Solar Power Pvt. Ltd. and Ors, reiterated the established principle of interpretation of contracts that there is no scope for adopting either a liberal or a narrow approach, whatever that may mean. The exercise which must be undertaken is to determine what the words used in the contract mean.

SC on Mandatory Covid-19 Vaccinations

In a key ruling decided on May 2, 2022, the Supreme Court, in Jacob Puliyel v. Union of India and Others, stated that no one can be forced to take the Covid-19 vaccine, and that bodily integrity is protected under Article 21 of the Constitution. However, where cases are rising, state governments’ vaccine mandates cannot be construed as disproportionate, as they may impose reasonable restrictions on individual rights for the wider interest of public health and safety.

SC on Waiver of Liquidated Damages

Supreme Court, in the Welspun Specialty Solutions Limited and Ors. v. Oil and Natural Gas Corporation Ltd. and Ors. case, where a claim for liquidated damages (“LD”) was made post waiver of such claim, held that on waiver of LD, a subsequent claim cannot be made unless the other party expressly accepts the imposition.

Delhi High Court on Maternity Benefit to Ad-Hoc Employee

The Delhi High Court, in the case of Dr. Baba Saheb Ambedkar Hospital vs Dr. Karti Mehrotra, where claim of maternity benefit was made by a contractual employee employed on ad-hoc basis, held that the employee is entitled to maternity benefits beyond the term of contract if conception of pregnancy takes place during the period of contract of employment and where other eligibility conditions were met.

Supreme Court on Abandonment of Contract

Supreme Court, in Shripati Lakhu Mane v. The Member Secretary, Maharashtra Water Supply And Sewerage Board case, laid down the principles on the law of contract relating to ‘abandonment’ and differentiated between abandonment as a right vs. abandonment as a liability or obligation.

Supreme Court On Reinstatement With Back Wages.

The Supreme Court in National Gandhi Museum v. Sudhir Sharma, held that when evaluating whether an employee has discharged their burden to prove they are not gainfully employed, it is to be decided on the facts and circumstances of each case. The SC further prescribed that reinstatement of an employee after he has lost confidence of the management is not justified. This Connect analyses this judgment.

SC on Subordinate Legislation as Law

The Supreme Court, while deciding the G.T.Girish vs. Y. Subba Raju case, clarified that rules passed by authorities which derive their power from the legislature constitute ‘law’ and any declaration of illegality of a consideration or object under the Rules will declare a contract void.

Note on the Mediation Bill

The Ministry of Law and Justice introduced the Mediation Bill, 2021, in the Rajya Sabha on December 20, 2021. This Bill seeks to establish a uniform code on mediation; making India one of the few countries to have legislation primarily dedicated to resolving disputes through commercial and civil mediation. Key features of this Bill are discussed in this Connect.

SC on Grant of Post-Award Interest on Interest Awarded by Arbitrator

Supreme Court in UHL Power Company Ltd case on January 07, 2022, reiterated that arbitrator can grant post-award interest on the interest awarded by the Arbitrator in the Arbitral Proceedings. It also held that the Arbitral Tribunal must decide in accordance with the terms of the contract. If a term is construed in a reasonable manner, then the award ought not to be set aside merely on the ground that another view could have been taken by the tribunal.

Delhi HC on Trademark of Common Terms

The Delhi High Court in Hamdard National Foundation vs. Sadar Laboratories reiterated that the standard to examine the infringement of a well-known mark by a similar mark, must always be from the minds of a common consumer and there can be no proprietary claims made over common term/word. This Connect summarises the judgment and ratio of the Court.

SC on Entitlement to Gratuity

The Supreme Court in the recent case of G.B. Pant University of Agriculture and Technology, held that an employee who exercises an option provided under the University’s statute to extend their retirement age would not be deprived of their entitlement to gratuity unless there is an express exemption under the Payment of Gratuity Act, 1972.

Acceptance of Conditional Offer

Supreme Court, in Padia Timber Company (P) Ltd. v. Board of Trustees of Visakhapatnam Port Trust upheld here that acceptance of an offer is the cardinal principle of law of contract. If the acceptance is conditional, the offer may be withdrawn at any time till the absolute acceptance of the offer. This Connect summarises the judgment and its ratio.

Key Highlights of the LLP Amendment Act

The Limited Liability Partnership (Amendment) Act, 2021, which is yet to be brought into force, amends the LLP Act, 2008 to bring in significant improvements. This Connect highlights the key features of the Amendment Act, such as creation of special courts to adjudicate matters related to LLP, recognition of small LLP, and change in nature of penalty based on its gravity

BBMP mandates vaccination for Employees

The Chief Commissioner of Bangalore’s municipal corporation, Bruhat Bengaluru Mahanagara Palike, has issued a circular instructing employers of commercial establishments, industries, offices, etc., to mandate their staff/employees to be vaccinated against Covid-19. The Circular prescribes other similar directions as a measure to contain the transmission of the virus.

Bombay High Court on powers of Arbitral Tribunals

Bombay High Court, relying on several rulings of the Supreme Court, has clarified that arbitral tribunal can rule upon its own jurisdiction, including on any objections with respect aspects of non-arbitrability and validity of arbitration agreement. With constant legislative changes and judicial pronouncements, interference of courts has reduced in arbitration matters. Role of the courts is minimal in arbitral process and court should nominate/appoint an arbitrator without loss of time and leaving all contentious issues to be urged and agitated before the arbitral tribunal.

Supreme Court on the legality of Letter of Intent

Supreme Court, in the case of South Eastern Coalfield Ltd. & Ors. versus S. Kumar Associates AKM (JV), clarified that a ‘Letter of Intent (LoI) merely indicates a party’s intention to enter into a contract with the other party in future. Whether a contract has been concluded between the parties through an LoI, can be concluded by determining the terms and conditions of the LoI and the conduct of the parties.

Parallel proceedings against borrowers and guarantor is maintainable

Court, in the case of SBI v. V. Ramakrishnan & Ors.,clarified in 2018 that the NCLT will be the adjudicating authority for insolvency resolution of a personal guarantor. Creditors had earlier to approach DRT since guarantees for loans of corporates was issued by its promoters in the form of personal guarantees. Therefore, now parallel proceedings against borrower and guarantor are maintainable before the NCLT.

Canadian Court on Amul’s Trademark Rights

The Federal Court of Canada permanently restrained a company ‘Amul Canada’ from infringing and using the trademark and copyright of Kaira District Co-operative Milk Producers’ Union Limited and Gujarat Co-operative Milk Marketing Federation Limited, owners of the trademark ‘Amul.’ This Connect highlights the judgment and reasoning of the Court.

Revised Telecom guidelines for other Service Providers

The liberalized telecom Guidelines for Other Service Providers (OSP) released on November 5, 2020 (Nov. 2020 Guidelines), were further simplified, and revised by the Department of Telecommunication’s order released on June 23, 2021 (Jun. 2021 Guidelines). The Nov. 2020 Guidelines sought to overhaul the OSP framework, by removing procedural obligations, reducing compliance burdens, and improving operational flexibility between OSP centres. Although a comprehensive overhaul, some doubts persisted regarding definitions and the extent of permission granted to data interconnectivity between OSP centres. The Jun. 2021 Guidelines clarify these ambiguities.

Supreme Court on Adjudicating Authority for Personal Guarantors

Supreme Court has upheld the amendments made to personal guarantors of corporate debtors by clarifying the position of law which is constantly evolving under the Insolvency and Bankruptcy Code,2016 and has confirmed that NCLT is the adjudicating authority, with DRT being the appropriate forum prior to this amendment. This Connect gives highlights and importance on this judgment.