Case BriefsSupreme Court

Supreme Court: Taking note of the fact that several Tribunals and High Courts have been awarding compensation for both loss of consortium and loss of love and affection, the bench directed the Tribunals and High Courts to award compensation for loss of consortium, which is a legitimate conventional head.

“There is no justification to award compensation towards loss of love and affection as a separate head.”

The 3-judge bench of SA Nazeer, Indu Malhotra and Aniruddha Bose, JJ was hearing an issue relating to determination of compensation in a motor vehicle accident case.

On Loss of Consortium

The Constitution Bench in National Insurance Company Limited v. Pranay Sethi, (2017) 16 SCC 680, has recognized only three conventional heads under which compensation can be awarded viz. loss of estate, loss of consortium and funeral expenses.

Explaining the law on loss of consortium, the Court said that the right to consortium would include the company, care, help, comfort, guidance, solace and affection of the deceased, which is a loss to his family. With respect to a spouse, it would include sexual relations with the deceased spouse. Parental consortium is granted to the child upon the premature death of a parent, for loss of parental aid, protection, affection, society, discipline, guidance and training. Filial consortium is the right of the parents to compensation in the case of an accidental death of a child.

The Court noticed that in Magma General Insurance Co. Ltd. v. Nanu Ram, (2018) 18 SCC 130, this Court gave a comprehensive interpretation to consortium to include spousal consortium, parental consortium, as well as filial consortium. Loss of love and affection is comprehended in loss of consortium.

The Court, hence, said that it was necessary to provide uniformity with respect to the grant of consortium, and loss of love and affection.

On Future Prospects

In the wake of increased inflation, rising consumer prices, and general standards of living, future prospects have to be taken into consideration, not only with respect to the status or educational qualifications of the deceased, but also other relevant factors such as higher salaries and perks which are being offered by private companies these days. The dearness allowance and perks from which the family would have derived monthly benefit, are required to be taken into consideration for determining the loss of dependency.

The Court, further, reiterated:

  • The age of the deceased should be the basis for applying the multiplier.
  • Reasonable figures on conventional heads, namely, loss of estate, loss of consortium and funeral expenses should be Rs. 15,000/-, Rs. 40,000/- and Rs. 15,000/- respectively. The aforesaid amounts should be enhanced at the rate of 10% in every three years.
  • The decision in Sarla Verma v. Delhi Transport Corporation, (2009) 6 SCC 121, is to be relied upon for determination of the multiplicand, the deduction for personal and living expenses, and the selection of multiplier.

[United India Insurance Co. Ltd. v. Satinder Kaur, 2020 SCC OnLine SC 410 , decided on 30.06.2020]


Also read:

Future income of salaried or self-employed person to be considered while computing compensation under MV Act

Court duty-bound to provide ‘just compensation’ under MV Act irrespective of plea; compensation for ‘loss of consortium’ awarded under Article 142

Case BriefsHigh Courts

Karnataka High Court: A Division Bench of Abhay Shreeniwas Oka, CJ and Vishwajith Shetty, J., laid down the guidelines to be followed for payment of dues to the claimants in Motor Vehicle Accident Claim cases, Workmen’s Compensation Act, 1923 Matrimonial Cases and Land Acquisition Compensation cases etc.

Due to the partial functioning of the district and trial Courts in the State in view of the COVID-19 Pandemic, entry of litigants in the Courts premises has not been permitted.

The above has resulted in large number of litigants and especially the claimants and victims in Motor Vehicle Accident Claim cases, claimants under the Workmen’s Compensation Act, 1923 and claimants in Land Acquisition Compensation cases etc., to not being able to receive the amounts to which they are legitimately entitled, though the amounts payable to them are lying deposited in the judicial accounts of Khajane-2 (for short ‘K-2’).

Thus, in view of the above it is necessary to evolve a procedure to securely release payments to the litigants.

Additional Advocate General submitted that recipients of payments from K-2 are required to file certain documents for recipients registration like UIDAI, PAN or authentic photo identity.

They must also disclose their bank account particulars. AAG further pointed that it would be ideal if the mandate form generated by K-2, which is prescribed by the Reserve Bank of India, is signed by the recipients, as the said mandate form contains all the account particulars of the recipients. 

Court stated that AAG was right in his submission that it is necessary to ensure that the amount should go to the real recipients.

After implementation of K-2, the payments from judicial deposits are done only by way of electronic clearing by transferring the amounts directly to the accounts of the claimants and the cheques are not being issued. In case of current deposits (deposits which have not lapsed), the payment is authorized by the Court by generating the bills on K-2.

As far as the mode of payment through judicial accounts in K-2 is concerned, there are no specific Rules in Chapter XXVII of the Karnataka Rules of Civil Practice, 1967. The only provision is that when an amount exceeding Rs 5,000 is payable to a party, it shall be paid by drawing an account payee cheque only. Thus, the embargo is on paying a sum exceeding Rs 5000 by cash.

At present, all the payments to litigants are being made by direct transfer to their bank accounts from K-2 and the earlier practice of issuing account payee cheques has been stopped.

Thus in the present COVID-19 times, following guidelines shall be adopted by the Courts for making payments:

  • litigant who is entitled to receive the amount shall file an application giving all the details including the details of the decree/order of the Court under which he/she is entitled to withdraw the amount;
  • Along with the application, he/she must furnish the copies of several documents such as first page of the bank passbook containing the details of the bank account, such as the name of the bank, account number, name of the account holder and IFSC code of the bank. If the first page of pass book does not contain photograph of the account holder, a certificate of the Manager of the concerned Bank bearing photograph of the account holder and containing account details shall be produced
  • account must be in the name of the person who is entitled to withdraw the amount as per the Court order;
  • applicant is also required to furnish copies of PAN card/form 16, address proof and photo copies of the authentic identification documents such as Aadhar or election/ voter identity card or driving licence. The photo copies of the documents shall be self-attested as well as attested as true copies by his/her Advocate, if the applicant is represented by an Advocate
  • an affidavit in support shall be filed by the applicant containing all the account details, which are necessary for transfer of money. latest photograph of the applicant shall be affixed near the signature on the affidavit. The affidavit must affirm the correctness of the documents produced along with the application. Along with the application and affidavit, the applicant shall submit a blank voucher for payment of judicial deposit duly signed by him. If there are more than one applicant, affidavits of all of them are necessary. The signature on the voucher shall be identified by an Advocate by affixing his/her signature below the words “signature of the claimant” or below the place for affixing the revenue stamp. Below the Advocate’s signature for identification, he/she shall mention the Bar Council enrolment number. Few copies of the blank vouchers shall be made available by the Principal District Judge to the Bar Associations so that the members of the Bar can take photo copies of the same. The affidavit in support of the application must contain the statement that the blank voucher is signed by the applicant;
  • applications shall be placed before the concerned Court for passing necessary orders
  • If the Court is satisfied on perusal of the application and the documents furnished, the Court will pass an order directing transfer of the amount to the specific account of the applicant through K-2 process;
  • Thereafter, the Court office/accounts section, after logging on K-2 portal, will generate bank mandate form. Print out of the bank mandate form shall be handed over to the Advocate for the applicant for obtaining the signature of the party and the Advocate concerned shall countersign the same by verifying the signature of the party. He/she shall mention his/her Bar Council enrolment number below his/her signature. Physical presence of the party in the Court for signing the mandate form is not required. The mandate form must be returned with the maximum period of three days. Thereafter, the mandate form shall be signed by DDO. Further steps shall be taken by the Court office for generation of miscellaneous bill. As the mandate form containing all the account details is signed by the applicant, his/her signature on the miscellaneous bill is not required. Subsequently, all the procedure required by K-2 shall be followed and the requisite amount will be transferred directly from the judicial account in K-2 to the bank account of the concerned party.
  • Courts cannot insist on the person receiving the money affixing his/her signature on any register.

In the event the applicants are not represented by an Advocate, the payments cannot be made unless the applicants personally appear in the Court.

In case of orders pertaining to payment of maintenance in matrimonial matters, it will be appropriate if the Courts concerned issue directions for payment of maintenance by way of RTGS or in any other mode of direct transfer by the person who is liable to pay the maintenance to the account of the person who is entitled to receive the maintenance.

Bench directed to all the Courts that they shall make an endeavor to dispose of the applications made for payment at the earliest and see that the eligible litigants can get the amounts at the earliest. The Courts cannot restrict the payments per day to a particular number of cases.

State Government is directed to ensure that quick access to K-2 is facilitated to enable the Courts to release the payment

Thus, the issue of making payment out of the judicial deposit during the limited functioning of the Courts during the pandemic of COVID-19 is answered in terms of this order. [High Court of Karnataka v. State of Karnataka, 2020 SCC OnLine Kar 762 , decided on 24-06-2020]

Op EdsOP. ED.

I. Introduction

“Tort” is a wrongful act or an infringement of a right leading to legal liability for which civil courts award compensation. The law of Torts is an uncodified law which is based on equity, justice and good conscience.

In its incipient stage, the English legal system was haphazard and was conducted on a case-to-case basis. Judges were asked to travel in each relevant region to comprehend the local laws which had developed over two centuries. Subsequently, based on their findings, the English judiciary introduced and implemented the said laws, by way of judgments, into the English legal system, which are now called legal precedents. These precedents form a part of the Common Law system.

The law of torts in India is based on the principles of the English Common Law. However, it has been modified to meet the local requirements. Some of the important principles of torts include negligence, nuisance, trespass, vicarious liability, strict and absolute liability. In context of the present article, we shall focus upon the concepts of strict and absolute liability vis-à-vis the two notable industrial disasters in India.

a)  Doctrine of Strict Liability

The doctrine of “strict liability” evolved in  Fletcher v. Rylands[1]. In this case, Rylands hired contractors to build a reservoir on his land. While building it, the contractors discovered some flaws and left them unfixed. After some time, Rylands’s reservoir burst and flooded Fletcher’s adjoining mine causing £937 worth of damage.  Blackburn, J. opined that any person who for his own purposes brings on his land and collects and keeps there anything likely to do mischief, if it escapes must keep it at his peril and if he does not do so, is prima facie answerable for all the damage which is the natural consequence of its escape[2].

b) Doctrine of Absolute Liability

The principle of “absolute liability” was first ever applied by the Supreme Court of India in M.C. Mehta v. Union of India [3](popularly known as Oleum gas leak case). In this case, oleum gas leaked from a fertilizer plant of Shriram Foods and Fertilizers, Delhi and caused damage to several people. A pending public interest litigation (PIL) by M.C. Mehta provided the opportunity to the Court to pass a series of orders dealing with the after-effects of gas leak. In this case, the Court disapproved the application of the principle of strict liability. The Supreme Court opined that:

an enterprise which is engaged in a hazardous or inherently dangerous industry which poses a potential threat to the health and safety of the persons working in the factory and residing in the surrounding areas owes an absolute and non-delegable duty to the community to ensure that no harm results to anyone on account of hazardous or inherently dangerous nature of the activity which it has undertaken. The enterprise must be held to be under an obligation to provide that the hazardous or inherently dangerous activity in which it is engaged must be conducted with the highest standards of safety and if any harm results on account of such activity, the enterprise must be absolutely liable to compensate for such harm and it should be no answer to the enterprise to say that it had taken all reasonable care and that the harm occurred without any negligence on its part.”[4]

II. Bhopal Gas Tragedy

Union Carbide India Limited’s (UCIL) plant at Bhopal was designed by its holding company Union Carbide Corporation (UCC), USA and was built in 1969 for making pesticides, produced by reacting Methyl Isocyanate and Alpha Naphthol. An incident of gas leak took place in the Bhopal pesticide plant of UCIL on the night of 2-3 December, 1984 causing severe loss to the lives of people in the vicinity. People were exposed to this gas all around the city and the immediate effects were coughing, vomiting, severe eye irritation and a feeling of suffocation. Thousands of people died immediately, and lakhs of people sustained permanent injuries.

The doctrine of “absolute liability” was invoked in this case. In cases, where absolute liability is considered, liability of the company can be fixed even if there is no negligence on the part of the accused company.

In addition to the aforesaid, the Indian Government filed a case in the US Court for a claim of $3.3 billon against Union Carbide Corporation. By 1986 all these litigations in the US District were transferred to India on the grounds of forum non conveniens.[5]

Meanwhile, the Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985[6] was passed by Parliament  to confer certain powers on the Central Government to secure that claims arising out of, or connected with, the Bhopal gas leak disaster, are dealt with speedily, effectively, equitably and to the best advantage of the claimants and for matters incidental thereto. This Act made the Union Government representative of the victims of the tragedy and allowed them to file suits on their behalf. Along with this, an out of court settlement between the Government of India and Union Carbide was arrived at, which fixed the liability of the company to pay $470 million as per the full and final settlement of all claims, rights and liabilities arising out of that disaster. All in all, it was a bad move, as the settlement limited the liabilities for the claims which were filed later. It is a hard fact, but it is as clear as broad daylight that $470 million dollars were not sufficient to compensate all the injured. In fact, it is hardly 15% of the original claim of $3.3 billion.

The compensation awarded was around Rs. 1 lakh for the families of the people who lost their lives, Rs. 50,000 for permanently injured and Rs. 25,000 for temporarily injured.

III. Vizag Gas Tragedy

A similar incident of gas leak happened recently in Vishakhapatnam (Vizag), Andhra Pradesh on 7th May, 2020. Styrene gas leaked from the chemical plant owned by a South Korean company LG Polymers India Private Ltd. with similar repercussions on lives of the people living in the vicinity. The immediate worry was that this may be a repetition of the Bhopal Gas Tragedy of 1984. People in the neighbouring areas were evacuated immediately for preventing the damage. Even though this gas leakage was less dangerous than the leak at the Union Carbide factory in Bhopal, 13 people still lost their lives and many people were affected by it.

The Andhra Pradesh Government announced compensation of Rs. 1 Crore to the families of the people who had lost their lives, Rs. 10 Lakhs to the victims undergoing treatment on ventilators and Rs. 1 Lakh to the other victims who were hospitalised. It was made clear by the Government that the aforesaid compensation would be in addition to the compensation by LG Polymers.

Furthermore, the High Court of Andhra Pradesh took suo motu cognizance of the incident and  vide order dated 07-05-2020[7],  directed the State to take all necessary steps to mitigate the loss that may be caused due to this incident. Consequently, the National Green Tribunal (NGT) also took suo motu cognizance of the incident and directed[8] the company to deposit an initial amount of Rs 50 crores with the District Magistrate, Visakhapatnam. The Civil Appeal[9] preferred against this Order before the Supreme Court has been kept pending. However the Supreme Court neither issued notice nor, did it interfere with impugned order of the NGT.

The National Green Tribunal invoked the principle of ‘strict liability’ against LG Polymers for adversely affecting the public health and environment through its failures. However, in our opinion, considering the facts and circumstances of the case of LG Polymers, it is evident that the nature of the substance used and the activities of both the companies (UCIL and LGPI) are similar in nature, and thereby, the principle of absolute liability should have been applied in this case too.

The company had submitted an affidavit to the State Environment Impact Assessment Authority on 10th May, 2019 admitting that the unit did not have ‘environment clearance substantiating the produced quantity issued by the competent authority for continuing operations’ from the Ministry of Environment and Forests (MoEF). That affidavit was transferred to the Centre by the State for consideration. The affidavit submitted by the company proves the fact that there was clear hobnobbing and negligence of the government officials who were involved and designated by the respective government departments to ensure compliance of the environmental laws, and thereafter issue commencement certificate. The affidavit also brings out the fact that LG Polymers did not have the requisite permissions and clearances right from the inception[10]. However, the chemical plant carried on the industrial activities without any mandatory clearance and the facts prove that the industry was even de-listed as it refused expansion as per the directions of the ministry, yet it carried on the production and the negligence of the authorities, both at the Centre and at the State, proved costly and thirteen precious lives were lost and it is historically proven since the Bhopal gas tragedy, such poisonous gases gets into the genes and affects future generations also.

In the instant case, the erring government officials should be taken to task immediately by the High Court and departmental inquiries should be initiated against such erring officials and it should be seen that the people responsible in our system along with the Directors of the Company, are awarded the maximum punishment for such deliberate negligent act, which claimed innocent lives. Only then, it can act as a deterrent for other erring officials and erring companies who act in such brazen defiance of the statutory norms. This incident proves the very fact that no matter how much we try, until and unless we raise our voice against corruption, innocent lives will continue to get sacrificed.

The Andhra Pradesh High Court in Poisonous gas leakage in Visakhapatnam v. State of Andhra Pradesh[11]  vide order dated 22-05-2020 issued the following directions: The Government was ordered to seize the company premises of the LG Polymers chemical plant, Vizag and the directors were not allowed to enter the premises. In addition to this, assets, fixture, machinery and contents were not allowed to be shifted without Court’s permission. The Directors of the Company were ordered to surrender their passports and hence, they were not allowed to leave the country without the Court’s permission.

IV. Conclusion

On an analysis of the given circumstances, it is proved that the management of the company (LG Polymers) did not comply with the necessary environmental laws which were necessary for a Grade-A chemical plant and the affidavit submitted on 10.5.2019 to the State Department is a blatant admission of the same. The chemical plant was functioning even after de-listing from the Ministry of Environment and Forests (MOEF). It restarted its functions without the clearance from MoEF and the requisite permissions and licenses. Moreover, the government department and officials concerned who were entrusted and empowered to give such clearances did not scrutinise the very fact that the Company was de-listed for non-compliance and the affidavit dated 10.05.2019 admits such default on the part of the company and yet the plant started its operations. This act is nothing but a glaring example of corruption and scant regard for the rules, regulations or the safety of people.

Furthermore, the Constitution of India ensures checks and balances on the part of executives and citizens of the country. The Directive Principles of State Policy in Part-IV of the Constitution ensure that the necessary safeguards should be taken for environmental protection[12] and even the Supreme Court in a catena of decisions, has interpreted the  right to clean environment as a facet of Article 21 of the Constitution of India. The legislations pertaining to environmental law ensure that necessary prerequisites are in place.

The situation as it existed in 1986 has not changed much even after thirty-four years. The attitude of big companies seems to be of non-compliance and the government officials appear to be turning a blind eye to such companies at the cost of human lives. The law must ensure that such cases are treated with the utmost seriousness and urgency and that all the erring officials and directors of the company, should be punished appropriately so that justice prevails and a zero tolerance attitude is cemented for such cases.


*Partner, L&L Partners, New Delhi

**Senior Associate, L&L Partners

***Intern, L&L Partners

[1] (1866) LR 1 Ex 265.

[2] Fletcher v. Rylands , (1866) LR 1 Ex 265

[3] (1987) 1 SCC 395 

[4] M.C. Mehta v. Union of India, (1987) 1 SCC 395

[5] Forum Non Conveniens is a doctrine which allows a Court with jurisdiction over a case to dismiss it because the convenience of the parties and the interest of justice would be better served if the case were brought in a court having proper jurisdiction in another venue.

[6] Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985 

[7] Poisonous gas leakage in Visakhapatnam, In re v. State of Andhra Pradesh, Suo Motu WP (PIL) No. 112 of 2020

[8] Gas Leak at LG Polymers Chemical Plant in RR Venkatapuram Village Visakhapatnam in Andhra Pradesh, In re., 2020 SCC OnLine NGT 128

NGT vide order dt. 1-6-2020 [Gas Leak at LG Polymers Chemical Plant in Vishakhapatnam, In re, 2020 SCC OnLine NGT 129] has since directed the appropriation of Rs 50 crores deposited by LG Polymers, towards part liability and interim compensation to be spent for restoration of environment and compensation for victims. 

[9] LG Polymers India Pvt. Ltd. v. Andhra Pradesh Pollution Control Board, Civil Appeal Diary No. 11327/2020, order dated 19-5-2020

[10]. https://www.thehindu.com/news/cities/Visakhapatnam/lg-polymers-did-not-have-environmental-clearance-alleges-hrf/article31561365.ece

[11]. Suo Motu WPs (PIL) Nos. 112, 117 & 119 of 2020

[12]. Article 48-A of the Constitution of India, 1950 (inserted vide 42nd Amendment Act, 1976)

Case BriefsHigh Courts

Orissa High Court: Mohammad Rafiq, CJ while addressing a petition non-effectuated the Odisha Human Rights Commission’s Order of payment of an interim compensation for subjecting a tribal boy to brutal behaviour at Patna Police Station and the same to be recovered from petitioners salary.

Petitioner aggrieved by the Order of Odisha Human Rights Commission wherein Principal Secretary of Government, Home Department and Director General of Police, Odisha, Cuttack recommended to pay sum of Rs 10,000 as an interim compensation to the victim alleged to have been subjected to brutal behaviour by use of excessive force by a police officer at Patna Police Station in the District of Keonjhar, Odisha.

Victim who has subjected to brutal behaviour by police force was a tribal boy.

As per the visual shown in the electronic media, the victim was beaten up by baton and kicked by the police officer and at that point of time, a lady in civil dress was trying to take away the baton from the police officer. The incident took place inside the police station in presence of three to four persons.

Petitioner’s counsel had submitted that by an interim order, Commission had given a finding that was adverse to the petitioner and required an amount of interim compensation to be paid to the victim by the State and the same to be recovered from petitioners’ salary.

According to clause 26 of Odisha Human Rights Commission (Procedure) Regulations, 2003, the Commission may in its discretion afford a personal hearing to the petitioner or any other person on his behalf.

Had the Commission given the petitioner an opportunity to present her case, she would have explained her position to the Commission. But the Commission had passed ex parte order without an opportunity of hearing to the petitioner relying on an e-mail based on an unverified news paper report.

Decision of the Court

Even though, the order has been described recommendatory in nature, asking the Principal Secretary to the Government, Home Department and the Director General of Police, Odisha, Cuttack to pay a sum of Rs. 10,000 as an interim compensation to the victim and recover the same from the salary of the petitioner, but in the opinion of this Court, the Commission considering the spirit of Clause-26 of the Regulation ought to have been heard the petitioner prior to passing such order as it is bound to affect service career of the petitioner who is a lady police officer serving as Inspector of Police.

One of the cardinal principles of natural justice that any order which is likely to adversely affect a person ought to be passed only after providing opportunity of hearing to the person concerned.

Thus, Court not interfering with the impugned order of the Commission directed the petitioner to submit an appropriate application before the Commission itself which is yet to make final recommendation and further directed that till such final recommendation of the Commission is made, in as far as that part of the impugned order, by which an amount of Rs 10,000 had been ordered to be recovered from the salary of the petitioner, shall not be given effect to.

Petition was disposed of in view of the above terms. [Sandhyarani Jena v. State of Odisha, WP (C) No. 12656 of 2020, decided on 28-05-2020]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Green Tribunal: A 3-Member Bench of A.K. Goel, Chairperson, and Sheo Kumar Singh, Judicial Member, and Dr Nagin Nanda, Executive Member, held that it was well within NGT’s jurisdiction to pass the earlier order dated 8th May 2020 wherein it had directed LG Polymers (India) (P) Ltd. to forthwith deposit an initial amount of Rs 50 crores with the District Magistrate, Vishakhapatnam. The NGT had taken suo motu cognizance of the deadly gas leak in a factory owned by LG Polymers at Vishakhapatnam.

By the instant order, the NGT gave further directions which are summarised herein:

Directions

(i) The amount of Rs. 50 crores deposited by LG Polymers with the DM, Vishakhapatnam, will stand appropriated towards part liability and interim compensation to be spent for restoration of the environment and compensation for victims in accordance with the restoration plan to be prepared.

(ii) Restoration plan may be prepared by a Committee comprising 2 representatives each of Ministry of Environment, Forest and Climate Change (“MoEF”) and Central Pollution Control Board (“CPCB”) and 3 representatives of the State Government to be named by the Chief Secretary, including the DM, Vishakhapatnam, within 2 months.

(iii) Final quantification of compensation may be assessed by a Committee comprising representatives of MoEF, CPCB and NEERI (National Environmental Engineering Research Institute). The said Committee will be at liberty to associate/co-opt any other expert institution or individual. The Secretary, MoEF may ensure constitution of such Committee within 2 weeks. The Committee may give its report within 2 months thereafter.

(iv) The Chief Secretary, Andhra Pradesh, may identify and take appropriate action against persons responsible for failure of law in permitting the Company to operate without statutory clearances within 2 months and give a report to the NGT.

(v) In view of the stand of the State Pollution Control Board and LG Polymers that it will not recommence its operation without requisite statutory clearances, NGT directed that if any such statutory clearances are granted and LG Polymers proposes to recommence, this aspect must be brought to the notice of the NGT so that compliance of law is ensured.

(vi) The MoEF may also constitute an Expert Committee to suggest ways and means to revamp monitoring mechanism to check and prevent violation of environmental norms and preventing any such recurrence in future in any of the establishments dealing with hazardous chemicals. A special drive may be initiated in this regard. An action taken report may be furnished within 3 months.

(vii) This order will not prejudice any criminal or other statutory proceedings in accordance with law.     

Timeline

The incident around which this whole issue revolves occurred in the wee hours of 7th May 2020 when reports started coming in that Styrene – a hazardous gas – has leaked from a chemical factory in R.R. Venkatpuram Village, Pendurthy Mandal, Vishakhapatnam. This resulted in the death of 11 persons (now 12) and hospitalisation of more than 100 people. More than 1000 people were reported sick. There was also damage to environment and habitat. The factory from which the gas leaked belonged to LG Polymers.

On 8th May 2020, the very next day, the National Green Tribunal initiated suo motu proceedings in the matter, and having regard to the prima facie material as to the loss of lives, public health and environment and liability of the Company engaged in inherently hazardous activity, directed the Company to forthwith deposit an initial amount of Rs 50 crores with the District Magistrate, Vishakhapatnam. BY this order, the NGT also constituted a 6-member Committee to visit the site of the incident and submit its report. 

Notably, as soon as the incident occurred, the Andhra Pradesh High Court too took suo motu cognizance of the matter and directed the State Government to constitute of committee of appropriate officers not below the rank of Principal Secretaries.

On 14th May 2020, LG Polymers approached the Supreme Court against the above order passed by the NGT. Senior Advocate Mukul Rohatgi, who appeared for LG Polymers before the Supreme Court, challenged the constitution of the 6-member Committee by NGT. According to him, there was no occasion for NGT to appoint this further Committee when the High Court has already directed appointing of the Committee while taking suo motu cognizance. He also referred to some orders passed by the Supreme Court where the question whether the NGT could take suo motu cognizance of any matter was squarely in issue. While posting the matter for 8th June 2020, the Supreme Court gave liberty to LG Polymers to raise their contentions before the NGT.

Discussion

A. Suo motu jurisdiction

Rejecting the objection raised by LG Polymers to the taking of suo motu cognizance, the NGT noted that it has the purpose and power to provide relief and compensation to victims of environment damage, restitution of property, and restoration of environment. To effectuate this purpose, NGT has wide powers to devise its own procedure. In appropriate circumstances, this power includes the power to institute suo motu proceedings and not keep its hands tied in the face of drastic environmental damage and serious violation of right to life, public health and damage to property. This is especially so when the victims are marginalised and/or by reason of poverty or disability or socially or economically disadvantaged position cannot approach the NGT. The power is coupled with duty to exercise such powers for achieving the enumerated objects. Failure to exercise suo motu jurisdiction in such circumstances would render these victims without remedy, causing irretrievable injustice and breakdown of Rule of Law.

It was stated:

If NGT were powerless to institute suo motu proceedings where so warranted, as in the present case, it would be robbed of all its efficacy, because then the situation would be that if environmental damage causes loss of life, public health and property, the court can grant relief only if the victims found the means to approach it first. Such limitation, to a large extent, would emasculate NGT’s raison d’etre, and render it nugatory and futile.

Referring to various provisions of the National Green Tribunal Act, 2010 and several decision of the Supreme Court including State of Meghalaya v. All Dimasa Students Union, (2019) 8 SCC 177; Bhopal Gas Peedith Mahila Udyog v. Union of India, (2012) 8 SCC 326 and M.C. Mehta v. Union of India, (1987) 1 SCC 395, the NGT observed:

If this Tribunal is prevented from instituting suo-motu proceedings, these issues and violations [serious issues of environment, including air, water, soil, and other life-threatening pollution] would remain unaddressed, citizens’ inalienable right to life and other rights will stand jeopardized, and the serious and irreversible environment damage would continue unchecked.

B. Pendency of proceedings before the High Court

As regards pendency of proceedings in the High Court and other fora, and the Committees appointed by the various fora, the NGT noted that there is no conflict on the core issue being considered by it, a specialised Tribunal, as per mandate of law in judgements of the Supreme Court. The NGT stated:

The fact remains that the specialised statutory jurisdiction to award compensation is conferred on this Tribunal, which also has all and wide powers, procedure and mechanisms to resolve and award appropriate relief and remedies. Our attention has not been drawn to any other committee or court going in to the issue of compensation and restitution to the victims to the environment. Only this Tribunal has required deposit of an amount to be used for compensation, to be disbursed under orders of this Tribunal. Even the Company has deposited the amount and cannot object to abide by further orders in this regard. Thus, without prejudice to any other proceedings, the Tribunal can perform and exercise its statutory jurisdiction.

C. Strict and absolute liability of LG Polymers

Considering all the material, the NGT found that LG Polymers has strict and absolute liability for the environmental damage and consequential loss including to life and public health in this case. The stand of MoEF and the State PCB is unequivocal that LG Polymers did not have the requisite Environment Clearance (“EC”). There is also clear violation of the Manufacture, Storage and Import of Hazardous Chemical Rules, 1989. Liability of LG Polymers is strict and absolute in the circumstances. The report of the Joint Committee constituted by the NGT filed on 28th May 2020 found LG Polymers liable. It opined that LG Polymers did not take proper care of the storage tank resulting in auto polymerization of styrene releasing excess heat which escaped from the goose-neck and dip hatch in the form of vapour. It is also mentioned that the unit was operating without the requisite EC. The State PCB had no clarity in the matter while granting the statutory consents without EC. This report is supported by clinching material consistent with the stand of the MoEF and State PCB.

D. Failure of Authorities and need for remedial measures

The NGT was of the view that further remedial action needs to be taken in the matter of bringing to justice erring officers of authorities in the State of Andhra and liability of the State or officers being further gone into. There is also need for rehabilitation plan utilising the interim and further compensation. Lastly, regulatory framework needs to be reviewed and strengthened, apart from identifying steps to ensure compliance of laid down safety norms and laying down further norms and procedure to avoid recurrence of such failures in future. The NGT said:

Safety of citizens and environment are of prime concern. Any economic or industrial activity, however necessary, has to be consistent with the safety of human beings and the environment. The damage to human life, human health and environment has to be restored by applying the ‘Sustainable Development’ principle, of which ‘Precautionary’ and ‘Polluter Pays’ principles are part. In this regard, significant role has to be played by the statutory authorities constituted under the Water (Prevention and Control of Pollution) Act, 1974, Air (Prevention and Control of Pollution) Act, 1981 and the Environment (Protection) Act, 1986.

In view of such discussion and findings, the NGT issued the further directions as mentioned hereinabove. The matter is directed to be listed for further consideration on 3rd November 2020. [Gas Leak at LG Polymers Chemical Plant in Vishakhapatnam, In re, 2020 SCC OnLine NGT 129 , decided on 1-6-2020]

Case BriefsHigh Courts

Delhi High Court: Navin Chawla, J., while addressing a petition with regard to an accident caused due to the non-illuminated and unmanned police barricades held that,

“While the respondents claims and it is accepted that placing of the barricades at various places in the city is for public good, at the same time, it casts a duty on the respondent 2 to ensure that they do not become a cause for accidents.”

Petitioner 1 a student of Delhi University had suffered a road accident as informed by a police constable to Petitioner 2.

An FIR was registered against petitioner 1 by respondent 2 under Sections 279 and 337 of Penal Code, 1860 for rash and negligent driving.

Though it is disputed that petitioner 1 suffered an accident after colliding with barricades . These barricades were chained to cordon off the road/street completely.

Petitioner 1 had tried to slip through the gap in between the barriers and owing to the speed at which the vehicle was travelling, he was unable to spot the chain linking the barricades.

It is further asserted that as no helmet or any protective gear of any sort was found at the site of the accident, the petitioner 1 was in violation of the provisions of Section 129 of the Motor Vehicles Act, 1988.

It is thus asserted that the accident occurred due to contributory negligence of petitioner 1.

Disputing the above stated, photographs of the site were placed on record from which it could be seen that the barricades were placed at a spot that they could not be visible from afar.

Bench Analysis and Decision

Clause 6 of the Standing Order for “Procurement, Maintenance, Repairs and Operational Usage of Delhi Police Mobile Barricades? mandates that all barricades must have necessary fluorescent paint as well as blinkers so that they are visible from a long distance.

Clause 10 of the Standing Order further mandates that the barricades, under no circumstances, should be left unmanned.

Bench observed that from the photographs placed in record that place where the barricades were kept was not properly lighted. It is not shown that the barricades had adequate reflectors or blinkers so as to make them visible from a long distance. They were also unmanned.

Further the bench added that, merely because no helmet was shown to have been recovered from the site, cannot lead to a conclusion that the petitioner 1 was not wearing a helmet at the time of the accident or was driving his motorcycle at a high speed or rashly.

Thus, petitioners are held entitled to claim damages for negligence and failure of respondent 2 in discharging its duty.

A total compensation of Rs 75 lacs is found just and payable to the petitioners by the respondent 2. [Dheeraj Kumar v. Union of India, WP(C) No. 10799 of 2016, decided on 18-05-2020]

Hot Off The PressNews

Supreme Court: Bench of UU Lalit, MM Shantanagoudar, and Vineet Saran, JJ., refused to interfere with the Order passed by National Green Tribunal with regard to the Vizag Gas Leak incident.

The petition was filed by LG Polymers challenging the NGT Order wherein LG Polymers was directed to pay a compensation of Rs 50 Crores and a five-member fact-finding committee to inquire into the incident was constituted.

Tribunal had issued notice to Andhra Pradesh State PCB, District Magistrate, Vishakhapatnam, Central Pollution Control Board (CPCB), Ministry of Environment, Forests & Climate Change (MoEF&CC) and LG Polymers India Private Limited.

A 5-Member committee was also constituted by the tribunal to seek detailed report on the incident.

Further, LG Polymers India Private Limited is directed to deposit an initial amount of Rs 50 Crore with District Magistrate, Visakhapatnam.

Thus, the Court ordered the appellant to raise the concerns before the Tribunal and refused to stay its Order.


Also Read:

[Breaking] Vizag Gas Leak Incident | NGT |Leakage of hazardous gas at such a scale affects public health & environment, attracts principle of ‘Strict Liability’ against enterprise; LG Polymers directed to deposit Rs 50 Crore

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): A Division Bench of Dr S.M. Kantikar (Presiding Member) and Dinesh Singh (Member) while addressing the present first appeal held that,

“Releasing a dead body by a hospital to an unrelated third person unquestionably constitutes ‘deficiency in service’ within the meaning of Section 2(1)(g) & (o) of Consumer Protection Act, 1986.”

The present first appeal was filed challenging the compensation amount granted by Kerala State Commission for alleged negligence and deficiency in service from Ernakulam Medical Centre (OP-1) that issued wrong dead body of a patient to some other claimant.

Facts pertinent to the case are that, deceased’s body was kept in the mortuary of the hospital, when deceased’s grandson along with his father came for the release of the same, it came as a surprise that the dead body was not of the deceased. Further, it came to light that, V.K. Ramesh (Pubic Relations Officer) of OP-1 had already released the body to immediate relatives of Lt. Col. A.P. Kanthi who had died a day after the deceased and the body released was cremated with religious rites. Relatives of Lt. Col. A.P. Kanthi admitted their mistake and sought apology and thereafter handed over the ashes of the deceased.

It was alleged that that such callous attitude of OPs in wrongly releasing the dead body of the father of the complainants deprived their right to decent cremation of deceased. Aggrieved with the stated a complaint was filed before Kerala State Commission.

OPs contended that it was neither unfair trade practice nor negligence nor deficiency of service on their part. Complaint cannot be maintainable as the claim raised by complainants was beyond the scope of Consumer Protection Act, 1986.

Further the State Commission partly allowed the complaint by awarding Rs 25 lakhs as compensation. Aggrieved with the same, OPs filed the first appeal.

Commission in the above view held that, it was negligence and failure of duty of care by the PRO who without proper identification wrongly released the dead body of deceased. 

Commission also observed that,

“complaint is totally misconceived as 2 of the 4 children of the deceased person have attempted to make a fortune out of the mistake committed by a stranger who bonafidely claimed the body of their deceased father. The State Commission ought to have appreciated that it is trite law that awarding of compensation should be on the basis of cogent grounds.”

Concurring with State Commission’s view, bench stated that the point made by the complainants stands proved, i.e. release of the dead body of the complainants’ father to some other person, and thereby depriving the complainants of the last rites and cremation and final journey of the deceased, is decidedly deficiency in service within the meaning of Section 2(1)(g) & (o) of the Act 1986.

Thus, the compensation of Rs 5 lakh to the complainants would be just and equitable, and would meet the ends of justice. [Ernakulam Medical Centre v. Dr P.R. Jayasree, First Appeal No. 273 of 2017, decided on 12-03-2020]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Redressal Commission (NCDRC): C. Vishwanath (Presiding Member) dismissed the revision petition filed by Tata Motors Limited against the West Bengal State Consumer Disputes Redressal Commission, Kolkata.

Case of the complainant was that he was allured by advertisement issued by petitioner to purchase a model of Tata Indigo-CS Car. In the advertisement issues by Tata Motors and Tata Motor Finance that the vehicle would give a mileage of 25 kmpl. Complainant brought to the notice of OPs the shortfall in mileage being given by the car.

Hence in the above view, the complaint was filed with District Forum.

Petitioner had denied all the allegations made by the complainant, apart from questioning the maintainability of the complaint, that there was no expert opinion, the ARAI certified mileage of 25 kmpl was not for the vehicle concerned and that the complainant was not the owner of the vehicle, as the same was hypothecated to the bank.

OP 2 had denied all the allegations and stated that the Complainant had bought the vehicle after a test drive and satisfying himself about the car. The shortfall in mileage was attributed to the rough handling of the car and the bad condition of the road.

District Forum directed OPs to refund the cost of vehicle, compensation and cost to the Complainant. Complainant was also directed to pay all the bank dues and make arrangements to return the vehicle.

Aggrieved by district forum’s order, OP-Tata Motors Ltd., filed an appeal before the State Commission and State Commission partly allowed the appeal. OPs were jointly and severally directed to pay punitive damages for taking recourse to deceptive trade practice by way of misleading advertisement.

Decision

Commission stated that both the fora below came to a concurrent finding that the OPs resorted to deceptive trade practice by alluring customers and promoting the sale of their cars. Advertisement also had not mentioned whether the mileage shown was for diesel or petrol car.

Thus, the Commission did not find any infirmity or illegality in the order passed by the fora below.

Jurisdiction of NCDRC under Section 21(b) was also found to be very limited. The commission in its opinion was not required to reassess or re-appreciate the evidence and substitute its opinion to the concurrent findings of fact by the fora below.

Relying on the Supreme Court’s decision in, Lourdes Society Snehanjali Girls Hostel v. H & R Johnson (India) Ltd., (2016) 8 SCC 286, wherein it was held that,

“The National Commission has to exercise the jurisdiction vested in it only if the State Commission or the District Forum has failed to exercise their jurisdiction or exercised when the same was not vested in their or exceeded their jurisdiction by acting illegally or with material irregularity. In the instant case, the National Commission has certainly exceeded its jurisdiction by setting aside the concurrent finding of fact recorded in the order passed by the State Commission which is based upon valid and cogent reasons.”

Therefore, in the above view, petitioner failed to point out any miscarriage of justice or that the findings were perverse. [Tata Motors Ltd. v. Pradipta Kundu, Revision Petition No. 2133 of 2015, decided on 02-03-2020]

Case BriefsHigh Courts

Patna High Court: Ahsanuddin Amanullah, J, disposed the petition directing the respondents to pay the simple interest at the rate 9% per annum as provided under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 for three years delay in the amount being paid to the petitioner.

The facts of the case are that a person whose land has been taken in the year 2011, receives the full compensation only in the year 2020, wherein the additional demand of Rs 19,30,03,159 was raised before the respondents on 12-09-2015. However, the said amount was sanctioned by the Ministry of Home Affairs on 09-08-2018 and thereafter sent on 16-08-2018. There was no justification for the non-release of funds for a full three years.

The Court observed that the part of the delay can be understood in a way that a new Act came into force and thereafter things were re-worked. However, once the amount was quantified and demands rose by the District authorities on 12-09-2015, thereafter, the late sanctioning and sending the money after three years cannot be said to be bona fide. The Court, thus, opined that the petitioner is entitled to simple interest at 9% per annum, as has been provided in the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 itself, for three years delay in the amount being paid to the petitioner. [Surendra Das v. State of Bihar, 2020 SCC OnLine Pat 268, decided on 22-01-2020]

Case BriefsHigh Courts

Jammu & Kashmir High Court: Sanjeev Kumar, J., closed a contempt petition seeking to initiate proceedings against respondents for non-compliance with the orders of the Court.

The present petition has been filed seeking initiation of contempt proceedings against the respondents for willful disobedience and non-compliance. The previous Bench had stated that the petitioner had chosen the wrong forum to adjudicate the matter and directed that due “…to the nature of controversy the writ petition was taken up for final disposal at its threshold and is disposed of by providing that writ petitioner shall approach the concerned authority with a representation which shall be considered and decided by the said Authority within a period of one month”

 The Senior Additional Advocate General representing the respondent, N. H. Shah had filed a response to the contempt petition and took the stand that the representation filed by the petitioner had been considered and the petitioner had not been found entitled to any compensation on the ground that house damaged is a non-residential house which is not covered by the policy.

The advocate representing the petitioner, G. Murtaza Dar, contended that the issue of whether the compensation is payable for the non-residential house had already been decided in affirmative by the Division Bench of the present court and since the respondents had not abided by the stated order of the Division Bench, they are in contempt.

The Court upon perusal of the facts and records stated that respondents had fully complied with the order of the Division Bench. The Court also observed the view of the Division Bench and stated that the writ court had not given any finding with regard to the entitlement of compensation to the petitioner and had categorically stated that the petitioner had chosen a wrong forum for adjudication. [Farooq Ahmad Bhat v. Syed Abid Rashid Shah, 2020 SCC OnLine J&K 122, decided on 19-02-2020]

Case BriefsHigh Courts

Tripura High Court: Akil Kureshi, CJ., dismissed an appeal filed aggrieved by the order of the Motor Accident Claims Tribunal by the insurance company.

The original claimant had been travelling on a motorcycle as a pillion rider when the vehicle collided with a four-wheeler of TATA ACE make coming from the opposite direction and the claimant suffered serious bodily injuries. The doctors had opined that he had suffered permanent partial disability of 45% of the body as a whole and he would be seriously restricted in his movement and work. The Claims Tribunal had awarded total compensation of Rs 25,55,520 under various heads including the pain, shock and suffering, medical treatment, etc considering the fact that he was a private doorstep banking officer drawing a salary of Rs 12,592. The insurance company had mainly contested the computation of compensation for future loss of income and questioned him about the employment in the said bank. The Member Secretary-cum Locomotor Specialist at the District Disability Medical Board certified that claimant was suffering from locomotor disability in the right leg resulting into permanent disability of 45% and it was a non-progressive injury which meant that the patient would not be able to perform any physical activity standing up without any exterior support for the rest of his life.

The Court while dismissing the appeal and agreed with the view of the Tribunal that such disability had resulted into at least 50% reduction in the earning capacity of the claimant and his job was private one and did not have any security and his potential for reemployment had also come down thus the Tribunal had rightly applied the formula for future rise and multiplier as suggested by the Supreme Court the in case of Sarla Verma v. DTC, (2009) 6 SCC 121. [National Insurance Company Ltd. v. Chittu Das, 2020 SCC OnLine Tri 93, decided on 14-02-2020]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Redressal Commission (NCDRC): Dinesh Singh (Presiding Member) while dismissing the revision petition filed by ICIC Bank Ltd. upheld the decision of District Forum and State Commission with regard to compensation and reconstruction of lost/misplaced original sales deed of the ‘Complainants’.

The pertinent facts of the case were that the complainants had taken a home loan from the Bank and deposited the original sale-deed of their flat with the Bank. Later, the bank informed the complainants that the originally registered sale deed of their flat was misplaced/lost by them.

On being aware of the above circumstances, complainants filed a complaint at the District Forum alleging ‘deficiency of service’ on the bank’s part.

District Forum allowed the Complaint and directed the OPs — to reconstruct the sale deed by registering a complaint in the Police Station concerned regarding eth original sale deed. The same should be published in a National Newspaper, Daily Newspaper of Rajasthan and Alwar and procure a certified copy of the sale deed and notify in the copy itself that the Original Document lost due to fault of the OPs. On preparing such documents, they should be handed over to the complainant and the copy of the same should be included in the records of the OPs, which will be equivalent to the original document.

Further, Bank filed an appeal under Section 15 of the Act before the State Commission, but was dismissed.

State Commission while dismissing the appeal stated that,

According to the settled principles of the National Commission, the non-returning of original documents depicts deficiency of services and is an unfair trade practice.

 Commission’s Decision

The Bench stated that the two forums had returned concurrent findings. No palpable or crucial error in appreciating the evidence by the two foras was visible.

In the given specificities and fact of the matter, the order made by the District Forum was just and equitable.

Commission also noted that, an original registered sale deed is an important document, its loss adversely affects the property. Even if the document is reconstructed, a question still obtains on the property, and continues in perpetuity.

Bank’s position cannot be appreciated.

“When, by its own admission, it lost/misplaced the original document of the Complainants, it should have, on its own, in the normal won’t of its functioning, got the document reconstructed, handed over the reconstructed document to the Complainants, with courtesy and apology, as also conducted an internal inquiry to fix responsibility as well as undertaken systemic improvements for future.”

Thus, the revision petition being patently ill-conceived and totally bereft of merit, was dismissed with stern advice of caution to the Bank and direction with regard to timely compliance of the order was given. [ICICI Bank Ltd. v. Rajesh Khandelwal, 2020 SCC OnLine NCDRC 12, decided on 12-02-2020]

Case BriefsSupreme Court

Supreme Court: In a case involving an accident that left a bright young girl with 100% disability i.e. a very low I.Q. and severe weakness in all her four limbs, severe hysteria and severe urinary incontinence, the bench of L. Nageswara Rao and Deepak Gupta, JJ awarded a compensation of around Rs. 63, 00, 000 but showed dismay over the life that lies ahead for the girl and said,

“How does one assess compensation in such a case? No amount of money can compensate this child for the injuries suffered by her. She can never be put back in the same position.”

The girl was travelling on a tractor with her parents and the tractor was hit by a truck which was driven rashly. As per the assessment, the accident has left her with an I.Q. less than 20% of a child of her age and her social age is only of a 9-month-old child. This means that she, while lying on the bed will grow up to be an adult with all the physical and biological attributes which a woman would get on attaining adulthood, including menstruation etc., but her mind will remain of a 9-month-old child. Basically, she will not understand what is happening all around her.

The Court said that the amount awarded by it was more than the amount claimed, however, in motor accident claim petitions, the Court must award just compensation and, in case, the just compensation is more than the amount claimed, that must be awarded especially where the claimant is a minor.

“We must remember that this little girl is severely suffering from incontinence meaning that she does not have control over her bodily functions like passing urine and faeces. As she grows older, she will not be able to handle her periods. She requires an attendant virtually 24 hours a day. She requires an attendant who though may not be medically trained but must be capable of handling a child who is bed ridden. She would require an attendant who would ensure that she does not suffer from bed sores.”

Another factor that the Court took note of was that while assessing the compensation in a case like the present one is that the claim can be awarded only once. The claimant cannot come back to court for enhancement of award at a later stage praying that something extra has been spent. Therefore, the courts or the tribunals assessing the compensation in a case of 100% disability, especially where there is mental disability also, should take a liberal view of the matter when awarding compensation.

The Court noticed,

“This girl will miss out playing with her friends. She cannot communicate; she cannot enjoy the pleasures of life; she cannot even be amused by watching cartoons or films; she will miss out the fun of childhood, the excitement of youth; the pleasures of a marital life; she cannot have children who she can love let alone grandchildren. She will have no pleasure. Her’s is a vegetable existence.”

The Court, hence, directed that

  • the insurance company shall deposit the enhanced amount before the MACT in terms of the judgment after deducting the amount already paid by the insurance company within a period of 3 months.
  • The MACT shall keep the entire amount in a fixed deposit in a nationalised bank, for a period of 5 years, giving highest rate of interest. The interest payable on this amount shall be released on quarterly basis to the father of the child.This amount shall be spent for paying the attendants and for the care of the child alone.
  • Even after 5 years since this child for all intents and purpose shall remain a person under a disability, the MACT shall keep renewing the amount on these terms.
  • In case the parents or the guardian moves an application for release of some amount to meet some special medical expenses, then MACT may consider release of the same.

[Kajal v. Jagdish Chand, 2020 SCC OnLine SC 127, decided on 05.02.2020]

Case BriefsForeign Courts

Court of Appeal of the Democratic Socialist Republic of Sri Lanka: A Division Bench of Yasantha Kodagoda and Arjuna Obeyesekere, JJ., dismissed an appeal which was filed after being dissatisfied with the decision of the Board.

The Petitioner owned one half of land in extent of 2.25P situated in Mahabuthgamuwa and that he had been carrying on a business of manufacturing rubber bushes, beadings and packing under the name of ‘Sarath Rubber Industries’ at the said premises. The petitioner also stated that proceedings in terms of the Land Acquisition Act to acquire the said land for the purpose of road expansion and development work had commenced in 2012 and that the Minister had made an Order to take over immediate possession of the said land, the petitioner did not have any objection to the said acquisition even though he had to relocate his business premises. The Petitioner had accordingly submitted a claim for compensation. The Petitioner stated that the Acquiring Officer had published his award but failed to take into consideration his loss of earnings from his business and consequently had filed an appeal with the Board of Review which is pending and the instant appeal had been filed in terms of Section 28 as legislature has provided a person dissatisfied with the decision of the Board of Review with a further right of appeal on a question of law. 

The Counsel for the Respondents, Avanti Weerakoon, submitted that the land of the Petitioner with several other lands, was required for the Ambathale Road widening Project, which was funded by the Organisation of Petrol Exporting Countries (OPEC) and further submitted that other lands were acquired and only petitioner’s land remained for the takeover and the project was due to be completed by December end thus it was required urgently.

The Court while dismissing the appeal held that the Respondent was entitled to take possession of the Petitioner’s land; any time after an Order is made in terms of proviso (a) of Section 38 and directed the respondents to compensate the petitioner within a period of eight weeks. [Wanniarachchi Kankanamge Sarath v. Road Development Authority, CA (Writ) Application No: 401 of 2019, decided on 13-01-2020]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): R.K. Agrawal (President) while deciding the present consumer case held that,

“Wherever the Builder commits a particular date or time frame for completion of the construction and offering possession to the Buyer, they must necessarily honour the commitment made by them.”

In the present matter, Consumer Complaints, under Section 21 read with Section 12(1)(a) of the Consumer Protection Act, 1986  have been filed by the Complainants, the Allottees of Residential Flats/Apartments in a Project, namely, “Mahagun Mezzaria” to be developed and constructed by the Opposite Party, seeking possession of their respective booked Flats or refund of the amount paid with interest and compensation for the losses suffered by them on account of Unfair and Restrictive Trade Practices adopted and the deficient services rendered by the Opposite Party in not handing over the possession of the allotted Flats/Apartments within the stipulated time.

Complainant stated that despite paying the entire sale consideration for the booked flat, the possession of the same, which was to be delivered has not materialized till date, penalty promised in the Allotment Letter for the delay in construction has also not been paid, layout plan of the project has been got amended twice making various changes to the Project including addition of commercial shops open to general public raising various concerns including safety and security, that the Complainants have to pay enhanced Samp duty due to delay in handing over of possession and that the OP has levied the maintenance charges that would be enhanced @15% annually.

Analysis & Decision

Counsel for OP’s contention that Complainants are not ‘Consumers’ and have booked the Flat for earning high speculative gains is not supported by any documentary evidence. Court also noted that Complainants are ‘Consumer’ as defined under Section 2(1) (d) of the Consumer Protection Act, 1986.

Tribunal further stated that the only question for consideration in the present case is, as to whether the Complainants are entitled to any compensation for the delay on the part of the OP in offering possession to them and if so, what should be the quantum of compensation that OP needs to pay to them.

With respect to delay in completion of the construction, the tribunal stated that unless prevented by reasons beyond it control, the OP was under a contractual obligation to complete the construction and handover possession of the apartments within 38 months from the date of completion of raft or on or before 31-12-2012.

The reasons for the delay as stated by the Developer amounted to demonetization and implementation of GST, which ultimately resulted to cause delay on account of the shortage of cash for payment to the labour, shortage of labour and material, no documents were placed on record by the OP. Therefore the said contention cannot be accepted.

OP is ready and willing to hand over possession of the allotted flats with compensation to the Complainants, but some Complainants are not interested in the same due to delay of more than 4 years in delivering the possession change in layout plan and there being no committed date in the near future of completion of the Project. Therefore, they have sought a refund of the amount along with interest and compensation.

Tribunal in view of the stated that, Complainants cannot be made to wait indefinitely for the delivery of the possession when they had already paid almost entire consideration. In such circumstances, it is well within the Complainant’s right to seek for refund of the principal amount with interest and compensation.

In the present case, Tribunal in favour of the Complainants also stated that, Complainants cannot be made to wait indefinitely as the possession of the Unit has not been handed over to them so far and the Opposite Party is enjoying the benefits of their hard-earning money deposited with it.

“If the Builder fails to comply with the contractual obligation and at the same time, is unable to show that the delay in completion of the Flat and offering its possession to the Consumer is on account of circumstances beyond his control, this would constitute deficiency on the part of the Builder/Service Provider in rendering services to the Consumer.”

Hence, Complainants cannot be made to wait for such a long period, they are entitled to refund of the deposited amount along with compensation @12%. [Anil Kumar Jain v. Nexgen Infracon (P) Ltd., 2019 SCC OnLine NCDRC 716, decided on 23-12-2019]

Case BriefsHigh Courts

Karnataka High Court: Krishna S. Dixit, J. allowed a writ petition praying for quashing of a circular whereby overtime dues were denied to employees of the respondent.

The petitioner herein was not granted an allowance for the overtime job done by him, and aggrieved thereby he filed the present writ petition under Articles 226 and 227 of the Constitution of India praying to quash the impugned circular.

The respondent resisted the writ petition banking upon the impugned circular.

The Court opined that the impugned circular contained a strange reason for variability for denying the overtime allowance. Thus, it did not have the force of law, nor justification. It was held that a legal claim of an employee cannot be negated by quoting such a circular.

The Court further opined that withholding the amount payable amounted to acquiring property sans compensation, therefore, the same is violative of Article 300-A of the Constitution of India.

Reliance was placed on the case of State of Gujarat v. High Court of Gujarat, (1998) 7 SCC 392, where the right of sentence serving prisoners to wages for the work done in prison was recognized and denial of overtime allowance was held to be an infringement of Article 23 of the Constitution of India.

In view of the above, the writ petition was allowed and the impugned circular was quashed; holding that the amount payable for the overtime is ascertainable and variability spoken of by the circular offends law, reason and logic.

The Court directed the respondent to consider and grant the allowance to the petitioner within a period of eight weeks and held that any delay in payment of the allowance would amount to an additional payment of Rs 20,000 by the respondent to the petitioner.[G.M. Poovaiah v. KSRTC, WP No. 2463 of 2015, decided on 28-11-2019]

Case BriefsHigh Courts

Allahabad High Court: A Division Bench of Pradeep Singh Baghel and Piyush Agarwal, JJ. was hearing a PIL inviting the attention of the court to the casual approach of State functionaries with the menace of dengue fever.

The petitioner, who was also the counsel, in this case, wrote a letter and requested the court to be treated as Public Interest Litigation. Petitioner’s son was bought to Swaroop Rani (S.R.N) Medical College, Allahabad where he was diagnosed with viral fever. The diagnosis was made after doing a medical test which clearly showed the symptoms of dengue fever. Without studying the medical report treatment of patient began. This clearly showed the gross medical negligence from the side of doctors. When the condition of patient became critical he was shifted to S.G.P.G.I Lucknow where unfortunately the patient died and the cause of death was dengue.

In enquiry report, it was mentioned that the patient was hemodynamically unstable but from the medical report, it was shown that the wrong diagnosis was made on the part of local doctor and from S.R.N Medical College. 

The Court, in this case, considered medical negligence was on part of doctor of S.R.N Medical College and the circumstances in which the petitioner lost his young son. Petitioner was compensated with 25 lakhs from District Magistrate. In the same manner, the Court also ordered the State Government to release sufficient funds for Government Hospitals to provide sufficient dialysis units. Apart from this court ordered strict implementation of the Uttar Pradesh Preventive and Control of Malaria, Dengue, Kala-azar and Vector Borne Disease Regulations, 2016 and also separate blood units to be set for dengue patients. The Chief Medical Officer was directed to ensure the implementation of directions issued by court.

With this direction, public interest litigation is disposed of. [B.P Mishra v. State of U.P, PIL No 53904 of 2016, decided on 14-11-2019]

Case BriefsForeign Courts

Supreme Court of United Kingdom: Full Bench of Lady Hale (President), Lord Reed (Deputy President), Lord Hodge, Lady Black and Lord Kitchin, JJ., examined the considerations to be taken into account when deciding whether it is appropriate to award compensation to an employee for an invention made during employment. The instant appeal was filed by Professor Ian Shank (appellant) for compensation under Section 40 of Patents Act, 1977 for an invention made by him in 1982 that was granted patent and which provided benefit to his employer Unilever UK Central Resource Ltd. (3rd respondent/ CRL).

Appellant was the inventor of technology used in glucose testing for diabetics while he was employed at CRL, a wholly-owned subsidiary of Unilever Plc. In October 1982, Shank built the first prototype and was known as ECFD. Appellant accepted that right of his invention belonged to CRL from Section 39(1) of Patents Act, 1977 later these rights were given to Universal Plc. Universal Plc filed for the patents application for both ECFD and FCFD technologies. Since Universal was not interested in developing business so they did little to develop ECFD. Appellant left Unilever in October 1986.

The appellant represented by Patrick Green submitted that court didn’t consider that CRL was appellant employer and the entire Unilever Group can’t be considered as CRL undertaking. The argument was made it is impossible for an employee to establish benefits from the patent of a business and it will also be unjust to employ employee inventors.

The respondent represented by Daniel Alexander submitted that CRL should not be considered as undertaking because it never generated any material revenue and was neither the beneficiary of royalties in question. It was merely a service company for Unilever Group.

The exact amount of the compensation is to be determined in accordance with Section 41 of the Patents Act, which requires that the employee is awarded a “fair share” of the benefit which the employer has derived (or may reasonably be expected to derive) from the invention and/or the patent. To determine what constitutes a “fair share”, Section 41(4) of the Act provides a number of matters that must be taken into account, including the nature of the employee’s duties and remuneration, the effort and skill which the employee has devoted to making the invention, the contribution of other employees (be they joint inventors or not) and the contribution of the employer to the making, developing and working of the invention by the provision of advice, facilities and other assistance, opportunities, and managerial and commercial skill.

The Court analysed overall profit and turnover of Unilever Group and found there was an extreme disparity in numerical terms between the amount that Unilever received and the salary that the appellant was paid. It opined that the correct approach is to determine the part played by the size and success of the employer’s business as a whole in securing the benefit from the invention. Shank patent had produced a very high rate of return and Unilever made a small effort to commercialise it. Unilever had generated benefits from Shank’s patent.

The appeal of Professor Shank was allowed and it was held that Universal and CRL had an outstanding benefit from the patents of Shank and fair share was not given to appellant. Professor Shanks was awarded £2m compensation, roughly a 5 per cent share of the £24m benefit derived by Unilever from the invention, uplifted from 1999 at an average inflation rate of 2.8 per cent. [Shanks v. Unilever Plc, [2019] 1 WLR 5997, decided on 23-10-2019]

Case BriefsHigh Courts

Karnataka High Court: The Division Bench of Alok Aradhe and P.G.M. Patil, JJ. while allowing the appeal set aside the award of the Commissioner as he committed an error of law in applying the provisions of the Act, which was already repealed.

In the instant case, the appeal under Section 30 of the Workmen’s Compensation Act, 2009 was filed to assail the validity of the award of the Commissioner for Workmen’s Compensation. The commissioner had allowed the claim in part and awarded compensation to the tune of Rs 8,61,120.

Prashant (deceased) was working as an Assistant Manager in a factory when at on 02.08.2011 he fell inside the water pit and sustained injuries and thereafter died of it in the hospital. The deceased was 26 and was drawing a salary of Rs 41,062 per month.

Counsel for the appellant, Sangram S. Kulkarni submitted that the Commissioner erred in assessing the compensation as per the provisions of Workmen’s Compensation Act, which was already repealed.

The substantial question of law before the Court was that whether Commissioner committed an error of law in deciding the claim of the appellant in view of the fact that the provisions of Employee’s Compensation Act, 1923, came into force with effect from 18.01.2010 and the accident took place on 02.08.2011.

The Court after considering the facts and circumstances of the case observed that provisions of Employees Compensation Act, 1923, came into force with effect from 18.01.2010 and the accident took place on 02.08.2011. Therefore, the computation of compensation has to be made under the Employee’s Compensation Act, 1923 not under Workmen’s Compensation Act, which was already repealed.

Taking half of the net salary payable to the deceased which comes to Rs 16, 463 and after applying the factor of 215.28, the amount of compensation comes to Rs 35,44,154. The enhanced amount shall carry interest at the rate of 12% per annum from the date of death, till its realization. [B. Basappa v. J.S.W. Steel Ltd., 2019 SCC OnLine Kar 2185, decided on 06-11-2019]