Case BriefsHigh Courts

Allahabad High Court: Dr Yogendra Kumar Srivastava, J. dismissed a writ petition challenging the order passed by the Employees Compensation Commissioner/Assistant Labour Commissioner, U.P. Gorakhpur, and the Bench highlighted a very significant point that,

“Employees Compensation Act, 1923 is a piece of social security and welfare legislation with its dominant purpose to protect the employees, the provisions of the Act have to be interpreted so as to subserve the object of the legislation which is to make the employer responsible for the loss caused to the employee by injuries or death arising out of and in the course of employment.”

The present petition was filed to challenge the order passed by the Employees Compensation Commissioner.

Counsel for the petitioner submitted that the orders passed in proceedings which were ex parte the same ought to have been recalled by the Employees Compensation Commissioner and rejection of recall application in the said circumstances is erroneous.

Standing Counsel for the State respondents submitted that upon registration of the claim petition a registered notice was duly sent to the petitioner and it was only thereafter that an order was passed for proceeding ex parte. Prior to the filing of the claim petition the claimant had duly served a registered notice upon the petitioner under Section 10 of the Employee’s Compensation Act, 1923.

Further, it has been submitted that the petitioner was fully aware of the proceedings and despite due notice it deliberately allowed the case to proceed ex parte and as such there was no sufficient reason made out for the orders to be recalled.

Relevant statutory provisions of the EC Act were noted,

“Section 3 provides for the employer’s liability for compensation in a case if personal injury is caused to an employee by accident arising out of and in the course of his employment. The amount of compensation is to be assessed as per the terms of Section 4. Furthermore, in terms of Section 4-A it has been provided that compensation under Section 4 is to be paid as soon as it falls due and even in cases where the employer does not accept the liability for compensation to the extent claimed, he shall be bound to make provisional payment based on the extent of liability which he accepts and such payment is to be deposited with the Commissioner or made to the employee.

Sub-section (3) of Section 4-A mandates that where any employer is in default in paying the compensation due under this Act within one month from the date it fell due, the Commissioner shall direct that the employer shall, in addition to the amount of the arrears, pay simple interest thereon at the rate of twelve per cent per annum or at such higher rate not exceeding the maximum of the lending rates of any scheduled bank as may be specified by the Central Government, by notification in the Official Gazette, on the amount due and if in his opinion there is no justification for the delay, direct that the employer shall, in addition to the amount of the arrears and interest thereon, pay a further sum not exceeding fifty per cent of such amount by way of penalty.”

Applying the rule of beneficent construction, the provisions of the E.C. Act, 1923 are to be interpreted so as to give them a wide meaning rather than a restrictive meaning which may negate the very object of the enactment.

Mode of interpretation of a social welfare legislation, in the context of the provisions of the Industrial Employment (Standing Orders) Act, 1946, came up for consideration in the case of B.D. Shetty v. CEAT Ltd., (2002) 1 SCC 193, wherein it was held that,

“…a beneficial piece of legislation has to be understood and construed in its proper and correct perspective so as to advance the legislative intention underlying its enactment rather than abolish it. Assuming two views are possible, the one, which is in tune with the legislative intention and furthers the same, should be preferred to the one which would frustrate it.”

Principle of applying a liberal construction to beneficial legislation having a social welfare purpose was reiterated in the context of the Payment of Gratuity Act, 1972 in the case of Allahabad Bank v. All India Allahabad Bank Retired Employees Association, (2010) 2 SCC 44.

Further reference was made to the case of Bharat Singh v. Management of New Delhi Tuberculosis Centre, (1986) 2 SCC 614 wherein it was held that “purposive interpretation safeguarding the rights of have-nots was preferred to a literal construction in interpreting welfare legislation.”

Thus, in the instant matter, the Employees Compensation Commissioner had duly taken note that before filing of the claim petition the requisite notice of claim under Section 10 had duly been served upon the petitioner-employer and upon registration of the claim also a registered notice has been sent to the petitioner and only thereafter the order was passed directing the case to proceed ex parte.

Employees Compensation Commissioner upon taking into consideration the facts of the case and the evidence on record had proceeded to allow the claim petition of the claimant respondent.

Employees Compensation Commissioner has accordingly drawn an inference that the petitioner deliberately wanted to linger the proceedings and in the facts of the case where the claimant had suffered 100% disability and was not in a position to contest the proceedings further, taking into considering the larger interest of justice the recall application has been rejected.

Therefore, the order passed by the Employees Compensation Commissioner cannot be faulted with for the reason that EC Act, 1923 is a piece of social security legislation providing for speedy and efficient machinery for determination and payment of compensation to the employees.

Hence the Counsel appearing for the petitioner failed to point out any material error or irregularity in the order passed by the Employees Commissioner/Assistant Labour Commissioner U.P. Gorakhpur. [Vasu Infrastructure Private Ltd. v. State of U.P., 2019 SCC OnLine All 3535, decided on 23-09-2019]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Company Law Appellate Tribunal (NCLAT): Justice S.J. Mukhopadhaya, Chairperson and Justice A.I.S. Cheema, Member (Judicial) and Kanthi Narahari, Member (Technical), dismissed an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 against “Sahara Q Shop Unique Products Range Limited”.

Gurumoorthi filed an application under Section 9 of I&B Code against “Sahara Q Shop Unique Products Range Limited” which was admitted by the impugned order dated 15-12-2017 passed by NCLT, Mumbai. Romi Datta, Shareholder of “Sahara Q Shop Unique Products Range Limited” challenged the impugned order.

Appellant was represented by Saurab Jain, Neha Gupta, Mustafa Alam, Simranjeet Singh and Siddharth Jain, Advocates. Whereas, the Respondents were represented by Advocates Divyanshu Sahay and Shradha Narayan.

Appellant’s counsel submitted that the impugned order was passed ex-parte and suffers various infirmities.

In the appellant’s view, the Supreme court of India has prohibited ‘Sahara Group of Companies’ to pay any amount to any person. Also in an ongoing contempt petition titled as ‘SEBI v. SIRECL’ and ‘SEBI v. SHICL’ respectively, ‘Sahara Group of Companies’ had sought permission to clear the unpaid salaries of employees. Order of the Supreme Court disposed of the said applications. Therefore, according to counsel for the appellant, “Sahara Q Shop Unique Products Range Limited”—(Corporate Debtor) cannot pay any amount even to Respondent 1– Operational Creditor and therefore no default can be alleged.

Further, counsel for Respondent 1 submitted that orders relied upon by the counsel for the appellant, have no implication on the ‘Corporate Debtor’ at hand because even after passing of the said orders, the ‘Corporate Debtor’ has paid salary until it voluntarily stopped paying. Besides, ‘Sahara Group Companies’ have even settled claims relating to ‘Operational Debt’ amounting to Rs 20 crores as recently as 30-04-2019.

Tribunal on hearing the submissions of the parties and on perusal of the record, found that except vague statements by the appellant, there is nothing on record to suggest that Supreme Court passed a specific order prohibiting Sahara Q Shop Unique Products Range Limited” to release or pay any amount.

Also, Tribunal found that, on order passed by Adjudicating Authority (NCLT, Mumbai), it appeared that “Sahara Hospitality Limited” has settled the claim of “Delta Electro-Mechanical Private Limited” (Operational Creditor) amounting to Rs 20 crores.

Therefore, in the above view, Tribunal denied interfering with the impugned order dated 15-12-2017 and dismissed the appeal. [Romi Dutta v. S. Gurumoorthy, 2019 SCC OnLine NCLAT 448, decided on 14-08-2019]

Case BriefsTribunals/Commissions/Regulatory Bodies

Securities Appellate Tribunal (SAT): Coram of Justice Tarun Agarwala (Presiding Officer), Dr C.K.G. Nair (Member), and Justice M.T. Joshi (Judicial Member) set aside the impugned order in this case. The appellant challenged an ex-parte order passed against him alleging that he was not served properly and therefore the impugned order was against the principles of natural justice as under Article 14 of the Constitution. The appellant, being the Managing Director of Sigrun Holdings Ltd. (SHL) sold 45,000 shares of the company on 24-05-2010, while having knowledge/possession of the adverse quarterly result of SHL based on sensitive information which had not yet been made public, without the authorization of the board.  The adjudicating officer imposed heavy penalties on the appellant in an order citing the various SEBI regulations which had been violated.

The appellant, being aggrieved by the said order, filed an appeal on the ground that the impugned order is an ex-parte order and that he had no knowledge of the proceedings initiated by the Adjudicating Officer. The Appellant has alleged that he did not receive the show cause notice for the proceedings by the Adjudicating Officer and the proper procedure for service of the same has not been followed as under Rule 7 of the Securities and Exchange Board of India (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995.

The Court held that the respondent was in violation of Rule 7 as stated above as they had not tried to personally serve the appellant at the place where he carried on business or had worked for gain and had instead directly moved on to affixation which does not comply with the procedure laid down in Rule 7. The Court further said that “mode of service prescribed under Rule 7 is not exhaustive and other modes of service was always available in addition to the modes of service prescribed under Rule 7 i.e. for example publication of the notice in an appropriate newspaper or service through email.”

Thus, the Court set aside the impugned order in the interest of natural justice and in violation of the principles of natural justice as embodied under Article 14 of the Constitution of India and ordered the Adjudicating Officer to comply with the proper procedure.[C.R. Rajesh Nair v. Securities & Exchange Board of India, 2019 SCC OnLine SAT 71, decided on 18-07-2019]

Case BriefsHigh Courts

Tripura High Court: A Bench of Sanjay Karol, CJ and Arindam Lodh, J. allowed an appeal filed by the appellant-wife against the judgment passed by the Family Judge whereby she was directed to return to her matrimonial home.

The respondent-husband had filed a suit for restitution of conjugal rights under Section 281 of the Mohammedan Law. He stated that the parties got married according to Islamic rites and customs. It was alleged that after a few days, the wife started quarrelling with him and always preferred to live with her parents. It was alleged that she left the matrimonial home in 15-9-2017 without any reason and information and also took away her articles. Efforts were made to bring her back, but she did not return. Hence, he instituted the suit for restitution of conjugal rights. The family court passed the ex-parte impugned order whereby the wife was directed to return to the house of her husband.

R. Purakayastha, Advocate appeared for the wife. According to the memo of appeal, the wife was a very poor lady. After filing her written statement, she prayed for appointing a legal aid counsel. But unfortunately, she prayed for appointing a legal aid counsel. But unfortunately, the Family Judge neither allowed nor rejected her prayer. It was submitted that since she was a lady of little learning she could not take any step with the case.

The High Court observed it as well settled that “justice is not only to be done, but it is manifest to be done.” The wife being a poor woman sought for a legal aid counsel. According to the Court, the Family Judge ought to have afforded all opportunities to he so she could take part in the proceedings before the family court. The Court held it to be a fit case to remand the matter back to the family court for the fair trial of the case. Accordingly, the appeal. was allowed and the impugned judgment was set aside. [Salma Begam v. Saiful Ali, 2019 SCC OnLine Tri 77, decided on 05-03-2019]

Case BriefsHigh Courts

Madras High Court: The Bench of T. Ravindran, J. set aside the order of Deputy Commissioner of Labour whereby he had set aside the earlier order for compensation passed ex-parte in favour of the petitioner herein.

Petitioner suffered injuries at his workplace and sought compensation from the respondent. The Deputy Commissioner, by an ex-parte order, awarded him a compensation of Rs 2,39,380. The respondent contended that it was not able to appear before the Authority due to communication gap and wrong noting of dates of hearing. The Deputy Commissioner allowed the application of respondent ad set aside it earlier order. Aggrieved thereby, the petitioner filed the present civil revision petition.

After perusing the entire record, the High Court found that the Deputy Commissioner did not properly appreciate petitioner’s submission that the earlier order was not an ex-parte order but was one passed on merits. Furthermore, the respondent did not place nay evidence to substantiate the cause of non-appearance pleaded by it. The very basis of the cause projected by the respondent was not established in any manner. The Court held that in such case, the Deputy Commissioner should not have entertained the respondent’s application. In such and other view of the matter, the petition was allowed and the impugned order was set aside. [S. Dhanasekaran v. Sree Nithyakalyani Textile Ltd., 2018 SCC OnLine Mad 4910, Order dated 18-12-2018]

Case BriefsForeign Courts

Court of Appeal of the Democratic Socialist Republic of SriLanka: A Single Judge Bench comprising of M.M.A. Gafoor, J. dismissed an appeal against the order of the district court filed under Section 754 of the Civil Procedure Code.

Appellant filed a petition to set aside the ex-parte judgment entered against him followed with evidence regarding his absence from the court which were not only inconsistent but he also failed to prove the same consequently questioning their credibility.

The High Court was of the view that a party who relies on Section 86 (2) of the Civil Procedure Code to vacate an ex-parte decree should establish a reasonable ground for default. Considering the decision in Sanicoch Group of Company v. Kala Traders (P) Ltd., 2015 SCC OnLine SL SC 52, which held that inquiry on application to set aside an ex-parte decree is not regulated by any specific provision of the CPC but such inquiries must be conducted consistent with rules of natural justice and the requirement of fairness, the court stated that the appellant cannot be relied upon as he failed to satisfy the court on the reasons for his default. [Howpe Liyanage Edmund Edirisinghe v. Ahangama Vithanage Sumanadasa, C.A. No. 1394/99(F), order dated 01-08-2018]

Case BriefsHigh Courts

Bombay High Court: A Single Judge Bench comprising of A.M. Dhavale, J. allowed an appeal filed by the appellant-wife challenging an ex-parte order passed by a District Judge under Section 25 of the Guardians and Wards Act, 1890.

Vide the order impugned, custody of the minor girl aged 7 years was ordered to be handed over to the respondent-husband. The grievance of the appellant was that there was no proper service of summons on her and still the trial Judge proceeded ex-parte. As per the record of the trial court, summons were issued against the appellant in the present matter relating to the custody of the minor child. The bailiff visited her house. The appellant was out of station, the summons returned unserved. Trial Judge observed that summons were sent to the appellant but it returned with an endorsement as unserved. Therefore, he proceeded ex-parte against the appellant. Aggrieved by the said order, the appellant filed the instant appeal.

The High Court reiterated that the rule of fair trial is that nobody should be condemned unheard. It was observed that the present was not a case of proper service and the trial judge had no discretion to proceed ex-parte only on the basis of a  finding that notice was returned unserved.The envelope that was returned nowhere showed that the summons were refused by the appellant. The Court also referred to Order V CPC which deals with issue and service of summons. The Court was of the view that this was a child custody matter and the trial Judge was expected to be sensitive to the rights of the parties. The Court further observed, even it is assumed that the envelope returned with an endorsement as not claimed, still it does not mean that it is an endorsement of refusal to accept the service. Furthermore, even if there would have been a refusal to accept the service as per Order V Rule 17 CPC, service by affixing the copy of summons + plaint on the outer door or some other conspicuous part of the house. It was held that as there was no service of summons, the ex-parte order is not tenable and deserved to be set aside. [Jayshri Gajendra Mahajan v. Gajendra Pandit Mahajan,2018 SCC OnLine Bom 2233, dated 07-08-2018]