salary

Madhya Pradesh High Court
Case BriefsHigh Courts

Madhya Pradesh High Court: The Division Bench of Ravi Malimath, CJ. and Vishal Mishra, J. allowed a writ petition and issued several directions setting aside the compulsory retirement of the petitioner from judicial services.

Petitioner had joined Madhya Pradesh Judicial Services as a Civil Judge Class-II on 25-10-1985. He was promoted to the Higher Judicial Services on 09-06-1997 and was designated as permanent on 03-01-2002. He was appointed to the Junior Administrative Grade on 09-06-2002. On 13-02-2003, a memorandum of charges was served on the petitioner while he was posted as an Additional District and Sessions Judge, Begumganj, District Raisen. High Court of Madhya Pradesh (Respondent 2) proposed to hold a departmental enquiry against him under Rule 14 (IV) of the Madhya Pradesh Civil Services (Classification, Control and Appeal) Rules, 1966. The charges against the petitioner were related to certain judicial orders passed by him between 21-06-2001 to 12-08-2002 when he was posted as an Additional District and Sessions Judge at Guna.

The Enquiring Officer submitted his detailed report to the Disciplinary Authority exonerating the petitioner from all the charges. On 18-11-2005, a show cause notice was issued to the petitioner by the High Court indicating that the High Court disagrees with the findings of the Enquiring Officer. Later, an impugned order was issued to the petitioner compulsorily retiring him from service. Thus, instant writ petition was filed.

Counsel for the petitioner contended that the act of the respondents was erroneous and liable to be interfered with. That even though, the Enquiring Officer held that the charges have not been proved, the Disciplinary Authority reversed the same. It was also contended that even after making a request there was no grant of opportunity of a personal hearing to the writ petitioner.

The Court failed to appreciate the findings of the Disciplinary Authority. The Court opined that even according to the Disciplinary Authority, the grant of bail is in violation of the mandatory provisions, the same may reflect upon the competency of the Judge in understanding the law. It cannot lead to a conclusion that he is either corrupt or the order has been passed for extraneous consideration.

There may be a possibility that the concerned Judge has either misread the evidence or has applied it wrongly. At the most it only reflects upon his judicial competency and not that he is either corrupt or the order has been passed for extraneous consideration.

The Court further noted that the Enquiring Officer came to the conclusion that the writ petitioner may have been lenient in the grant of adjournments. The Court failed to understand as to how the Disciplinary Authority comes to a conclusion that the leniency shown by the Judges to the Bar requires to be ascertained in a microscopic examination.

One really does not know as to what happens when an adjournment is sought for. It is not proper to come to a conclusion that only because an adjournment has been granted, the integrity of a Judge has to be doubted.

The Court was unable to find any noting by any authority regarding his integrity, consequently the Court held that there wasn’t any valid reason for the Disciplinary Authority to reverse the findings of the Enquiring Officer and that the Disciplinary Authority committed a gross error in reversing the findings of the Enquiry Officer. The Court issued the following directions while allowing the petition:

(i) The order passed by the Disciplinary Authority dated 18.11.2005 (Annexure P/4) and the impugned order dated 12.05.2006 (Annexure P/10) compulsorily retiring the petitioner from services are hereby set aside;

(ii) The petitioner shall be entitled to 25% of the arrears of pay from the date of dismissal namely compulsory retirement w.e.f. 12.05.2006 upto the age of superannuation;

(iii) The respondents to rework his salary, his entitlements and all his retiral benefits accordingly;

(iv) He is entitled for re-fixation of his pay, pension and all related issues as a consequence of this order;

(v) The same shall be paid to the petitioner within a period of four months from the date of receipt of a copy of this order.

[K.C. Rajwani v. State of Madhya Pradesh Law & Legislative Affairs, 2022 SCC OnLine MP 1550, decided on 23-06-2022]

Advocates who appeared in this case :

Mr Brian Da’Silva assisted by Mr Abhishek Dilraj, Advocates, for the Petitioner;

Mr Suyash Thakur, Advocate, for the Respondent 1;

Mr Ashish Shroti, Advocate, for the Respondent 2.

*Suchita Shukla, Editorial Assistant has reported this brief.

Orissa High Court
Case BriefsHigh Courts

Orissa High Court: S. K Panigrahi, J. directed the State to pay simple interest computed at the rate of 6% per annum on account of deferred salaries within a period of 30 days from today.

The facts of the case are such that the petitioner joined service as the Headmaster in a government school and was rendering his services as a Government servant till his superannuation in year 2001. The Petitioner, being a 74-year-old man, was made to run from pillar to post to get his legitimate dues but owing to administrative latches, the same couldn’t materialize. The instant petition was filed as insofar as payment of arrears is concerned, has already been redressed but the interest component of the amount which has been held up for the last twenty-one years, is required to be paid.

Counsel for petitioner submitted that the redressal of grievance of the Petitioner will remain incomplete if he were to be denied of the interest component that is payable to him as a result of delay.

The Court observed that that salaries and pensions are due as a matter of right to employees, and, as the case maybe, to former employees who have served the State. Since, the petitioner rendered his services till superannuation as a government servant; his entitlement to the payment of salary is intrinsic to the right to life under Article 21 and to right to property which is recognized by Article 300A of the Constitution.

The Court further noted that the late decision taken by the opposite party is attributable to administrative latches across different levels and the same cannot be the reason to withhold the payment to the employees who admittedly worked at the relevant time. The employees, had the payment received within time and/or on due dates, could have utilized the same for various purposes.

The Court relied on judgment SK Dua v State of Haryana, (2008) 3 SCC 44 and observed that in the present case there is a delay of about 21 years in settling the salary arrears payable to the petitioner due to administrative latches is not acceptable. The present case is a clear example of inexcusable departmental delay. Even if it is assumed that the representations made by the petitioner were actively catered to, this cannot be an excuse for lethargy of the department because rules/instructions provide for initiation of process much before retirement. The exercise which was to be completed much before retirement was in fact started long after petitioner’s retirement.

The Court held the relief sought at the rate of 18% per annum be suitably scaled down”[Sovakur Guru v. State of Odisha, WPC (OA) No. 1553 of 2017, decided on 27-05-2022]

*Arunima Bose, Editorial Assistant has reported this brief.

National Company Law Tribunal
Case BriefsTribunals/Commissions/Regulatory Bodies

National Company Law Tribunal, Mumbai Bench (NCLT): The Coram of H.V. Subba Rao, Judicial Member and Chandra Bhan Singh, Technical Member deliberated on what amounts to a pre-existing dispute.

The company petition was filed by the Operational Creditor seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor by invoking the provisions of Section 9 Insolvency and Bankruptcy Code for a resolution of Operational Debt of Rs 22,41,735.

Issue to be decided

Whether the notice of termination of the employment of the Operational Creditor three months or one month? And whether it would amount to a pre-existing dispute between the parties?

Analysis and Decision

Firstly, the Bench noted that there was no dispute between the parties regarding employment nor the salary and perquisites of the Operational Creditor. Similarly, there was no dispute with regard to receipt of one month notice period salary by the Operational Creditor through a cheque issued by the Corporate Debtor.

Therefore, the present Company Petition was being pressed by the Operational Creditor only in respect of salary for the remaining two months’ notice period.

The genuineness of the appointment letter relied on Corporate Debtor is at a stake in the present case and that ipso facto was a dispute.

Coram stated that the petition was for the resolution of salary of two months purported notice period which amounted to specific performance of the appointment letter, which does not fall within the definition of “Operational Debt” as it was not for the salary for the actual work done by the Operation Creditor.

Hence, Bench opined that the remedy of the Operational Creditor was to initiate necessary legal proceedings for recovery before the appropriate legal forum and through the route of IBC.

Therefore, the Bench was of the view that there was no merit in the application and hence the same was liable to be dismissed. [Sandesh Naik v. MT Educare Ltd., CP (IB)—678 (MB)/2020, decided on 12-5-2022]

Advocates before the Tribunal:

For the Applicant: Adv. Pooja Batia

For the Respondent: Adv. Nausher Kohli

Case BriefsTribunals/Commissions/Regulatory Bodies

National Company Law Appellate Tribunal, New Delhi (NCLAT): The Coram of Justice Ashok Bhushan (Chairperson) and Shreesha Merla (Technical Member) held that it is not within the domain of Insolvency and Bankruptcy Code for fixation of salary of the MD.

Aggrieved by the impugned order passed by the National Company Law Tribunal, New Delhi.

Facts of the Case

The Operational Creditor/Managing Director had filed an application under Section 9 of the Insolvency and Bankruptcy Code on the ground that he was entitled to Rs 3 lakhs/per month as remuneration, which was revised to Rs 4 lakhs, but the payment was short of the agreed sum.

Further, it was stated that the salary of the MD would be paid when the financial position of the company would improve. In May, 2019 the MD was removed by the Corporate Debtor without clearing his salary dues.

Analysis, Law and Decision

Firstly, the tribunal addressed the issue whether the ‘Claims’ in the application filed under Section 9 of the Code, is ‘barred by limitation’?

Bench while referring to Section 18 of the Limitation Act, addressed whether there was any ‘acknowledgment of debt’/ ‘salary dues’ to fall within the ambit of the stated Section.

Further, it was noted that there was no specific approval either of the payment of arrears or any fixation of the MD’s remuneration or increase of his salary/perks.

“There is no crystallised quantum of amount which can be claimed as salary/remuneration fixed by the Board of Directors as contemplated under Section 196 of the Companies Act, 2013.”

 Article 40 of the Articles of Association of the appellant Company stipulates that the remuneration of the MD would be fixed by the Board of Directors from time to time.

Tribunal was of the view that the Section 9 Application filed was ‘barred by limitation’ as the claims of Rs 96,92,000 and Rs 18,00,000 pertained to the period prior to 31/3/2016 and more than three years had lapsed since.

Pre-Existing Dispute

From the record, the Coram noted that the remuneration of the MD was a ‘disputed question of fact’ and not within the Tribunal’s domain under IBC to ‘decide the issue of the fixation of the salary of the MD., but to ascertain is if here is any dispute regarding the issue.

Hence, the matter was concluded stating that the Adjudicating Authority had not addressed either the question of claims having been time-barred or to the issue of the existence of a ‘Pre-Existing Dispute’ between the parties. [Omega Laser Products B.V. v. Anil Agrawal, 2022 SCC OnLine NCLAT 294, decided on 10-5-2022]

Advocates before the Tribunal:

For Appellant:

Mr. Arun Kathpalia, Sr. Advocate with Sarojanand Jha, Mr. Karan Sharma, Mr. Suraj Malik, Mr. Vineet Dwivedi, Advocates.

For Respondent 1:

Mr. Rohit Sharma, Mr. Arju Chaudhary, Mr. Rounak Nayak, Advocates for R-1.

Company Appeal (AT) (Insolvency) No. 195 of 2022

For Appellant:

Mr. Ritin Rai, Sr. Advocate with Kavita Sarin, Sarika Raichur, Mr. Nishant Menon, Mr. Rajat Gava, Advocates.

For Respondent No. 1:

Mr. Rohit Sharma, Mr. Arju Chaudhary, Mr. Rounak Nayak, Advocates for R-1.

Uttarakhand High Court
Case BriefsHigh Courts

Uttaranchal High Court: Sudhanshu Dhulia J. dismissed the petition being devoid of merits.

The facts of the case are such that the petitioner, the wife, is a teacher in a Government Primary School in Udham Singh Nagar and was married to respondent 8, the husband but later their relation got strained and therefore she started living separately due to alleged cruelty, torture and demand of dowry at the hand of her husband and in-laws. The case of the petitioner before the Court was that her husband (respondent 8) was seeking personal information of the petitioner under Right to Information Act, 2005 (in short “RTI Act”), and these information are being given to him by the concerned authority. The information sought was as to how many teachers are working, the salary being given to the petitioner etc. Hence the instant petition.

Respondent 8 contended that this information does not appear to be private in nature in any manner nor are they exempted under the RTI Act.

Under the RTI Act, the ‘information’ has been defined under Section 2(f) of the RTI Act, which reads as under:

‘information’ means any material in any form, including records, documents, memos, e-mails, opinions, advices, press releases, circulars, orders, logbooks, contracts, reports, papers, samples, models, data material held in any electronic form and information relating to any private body which can be accessed by a public authority under any other law for the time being in force.”

A bare perusal of the aforesaid definition shows that the ‘information’ has been widely defined. On a request these information have to be supplied to the persons seeking such information by a public authority.

The ‘public authority’ has also defined under Section 2(h) of the RTI Act, which reads as under:

“‘public authority’ means any authority or body or institution of self-government

established or constituted:

(a) by or under the Constitution;

(b) by any other law made by Parliament;

(c) by any other law made by State Legislature;

(d) by notification issued or order made by the appropriate Government, and includes any-

(i) body owned, controlled or substantially financed;

(ii) non-Government Organisation substantially financed, directly or indirectly by funds provided by the appropriate Government.”

The Court observed that it cannot be any anybody’s case that a Government authority being Government school does not come under the definition of ‘public authority’. The only exception as to the information given under the Act under Section 8 of the RTI Act, is an exemption from disclosure of information. It further observed that the nature of information sought by respondent 8 is not covered under any of the exemption given under Section 8 of the RTI Act.

The Court held “no interference can be made in the present writ petition. The writ petition is totally misconceived and is hereby dismissed.”

[Jasmeet Kaur v. State of Uttarakhand, 2016 SCC OnLine Utt 2276, decided on 07-09-2016]

Arunima Bose, Editorial Assistant has reported this brief.

Appearances:

For petitioner: Mr. Mani Kumar

For State: Mr. P.C. Bisht

Case BriefsSupreme Court

Supreme Court: The Division Bench of L. Nageswara Rao and Hrishikesh Roy, JJ., held that,

“…doctors, both under AYUSH and CHS, render service to patients and on this core aspect, there is nothing to distinguish them.” 

“…no rational justification is seen for having different dates for bestowing the benefit of extended age of superannuation to these two categories of doctors.”

Background

Instant appeals were filed directing against the judgment and order passed by the Delhi High Court whereby the Court upheld the decision of the Central Administrative Tribunal and dismissed the petitions filed by the North Delhi Municipal Corporation.

What did CAT declare?

CAT held that the applicants who were ayurvedic doctors covered under AYUSH were also entitled to the benefit of enhanced superannuation age of 65 years (raised from 60 years), just like the allopathic doctors.

Issue in Consideration

Entitlement of respondents to continue in service upto 65 years and receive due remuneration for the same.

Aggrieved by the decision of CAT, the appellant NDMC preferred writ petitions before the Delhi High Court. During the pendency of the petition, the AYUSH Ministry issued an order whereby it was stated that the superannuation age of AYUSH doctors was also enhanced to 65 years w.e.f. 27-09-2017. Though it was directed that the doctors shall hold administrative positions only until the age of 62 years and thereafter, their service shall be placed in non-administrative positions.

The writ petitions challenging the Tribunal’s order were heard analogously and were dismissed affirming the Tribunal’s conclusion in favour of the ayurvedic doctors. The Tribunal noted in its order that although initially the benefit of policy decision of the government to enhance the retirement age was confined to allopathic doctors but subsequently the policy decision was made applicable to other category doctors.

Significantly, while the NDMC had adopted the Ministry’s decision but those ayurvedic doctors of the NDMC who fell in the window between 31-5-2016 and 26-9-2017, were deprived of getting the benefit of the enhanced retirement age.

Contention

It was contended that while the respondents were permitted to continue in service beyond 60 years, they were disentitled to claim any equitable relief by way of arrear of salary on account of the fact that they remained in service under interim orders of the court.

Further, it was also contended that the appellants should not be burdened with the liability to disburse the unpaid arrear salary to the respondents.

Respondent’s counsel argued that there can be no separate service condition in so far as the superannuation age was concerned between the allopathic and other category doctors, particularly when the AYUSH Ministry itself enhanced the retirement age for the non-allopathic doctors in tune with Ministry’s order dated 31-5-2016.

Analysis, Law and Decision

Bench noted that it is undisputed that respondent doctors have continuously served in hospitals till attaining the enhanced age of superannuation and by virtue of interim order of High Court.

Bearing in mind the legal principle ‘Actus Curiae Neminem Gravabit’ the interim order of Delhi High Court dated 26-9-2017 cannot be the basis to deny salary and arrear benefits to respondents.

Court decided that the basic benefit of salary cannot be denied to the doctors who worked and served patients.

In the Supreme Court decision of Central Electricity Supply Utility of Odisha v. Dhobet Sahoo, (2014) 1 SCC 161, stated that:

“51…Till the declaration is made, the incumbent renders service and when he has rendered service he cannot be deprived of his salary. Denial of pay for the service rendered tantamounts to forced labour which is impermissible. When an appointment is admitted and the incumbent functions in the post and neither suspended nor removed from service, he is entitled to get salary, for it is his legal right and it is the duty of the employer to pay it as per the terms and conditions of the appointment….”

Supreme Court in view of the ratio laid down above correctly sets out the employers’ responsibility to pay the wages for the productive employees serving under them.

Elaborating more, the Court noted that for almost 5 years, the respondent doctors had been providing service to countless patients, without remuneration or benefits. Their services have been utilized by the employer in Government establishments without demur.

Further, the Court remarked that,

The principle of ‘No Work, No Pay’ protects employers from paying their employees if they don’t receive service from them.

‘No work should go unpaid’ should be the appropriate doctrine to be followed in these cases where the service rendered by the respondent doctors have been productive both for the patients and also the employer.

Hence, the Bench held that it is quite clear that the respondents must be paid their lawful remuneration-arrears and current, as the case may be and State cannot be allowed to plead financial burden to deny salary for the legally serving doctors. Otherwise, it would violate their rights under Articles 14, 21 and 23 of the Constitution.

Bench declined the contention of the appellants that the classification of AYUSH doctors and doctors under CHS in different categories is reasonable and permissible in law, stating that the same was discriminatory and unreasonable since doctors under both segments were performing the same function of treating and healing their patients.

Court opined that the mode of treatment by itself under the prevalent scheme of things does not qualify as an intelligible differentia.

Therefore, Supreme Court held that the Order of the AYUSH Ministry must be retrospectively applied to all concerned respondent-doctors in the present appeals.

The appellant’s actions in not paying the respondent doctors their due salary and benefits, while their counterparts in CHS system received salary and benefits in full, must be seen as discriminatory.

Conclusion

Respondent doctors were entitled to their full salary arrears and the same was ordered to be disbursed, within 8 weeks. [North Delhi Municipal Corporation v. Dr Ram Naresh Sharma, 2021 SCC OnLine SC 540, decided on 3-08-2021]

Jammu and Kashmir and Ladakh High Court
Case BriefsHigh Courts

Jammu and Kashmir High Court: Sanjeev Kumar, J., heard the instant petition challenging the validity of circular No. CEO/K/Monitoring/20/14887-967 dated 21-11-2020, whereby all Teaching officials were directed not to indulge in the private practice of giving luxury education at private coaching institutions. The Bench stated,

“Teachers these days are paid hefty salary by the Government and there is no pressing necessity for them to engage in private tuitions that, too, on many occasions at the cost of their students in the government institutions.”

The impugned circular was purported to have been issued under Section 28 of the Right of Children to Free and Compulsory Education Act, 2009, which had become applicable to the Union Territory of Jammu & Kashmir in terms of the Jammu & Kashmir Reorganization Act, 2019.

Noticeably, on 11-08-2005 a circular was issued debarring the teaching officials from undertaking any activity/assignment including teaching in private tuition/coaching centres unless permission was obtained from the competent authority providing further that no such permission would be available two hours before the opening of the school and two hours after school gets closed. The said circular was declared invalid by a Division Bench of this Court in Vichar Kranti Manch International v. State of J&K, WP (PIL) No. 06 of 2011.

Pursuant to which the department of school education issued another circular No. Edu/L/J/Misc/131/2017 dated 25-09-2017, which was in supersession of all previous circulars issued on the subject. It was submitted that in terms of the circular dated 25.09.2017 issued by the Secretary to Government, School Education Department, no member of teaching faculty can engage in teaching occupation in private tuition/coaching centres without prior permission of the competent authority.

Analysis by the Court

Noticing that the Chief Education Officer had purportedly derived the power to issue such circular under Section 28 of Right of Children to Free and Compulsory Education Act, 2009 to issue the impugned circular, the Bench stated, government teachers imparting education to the higher classes other than elementary education do not fall within the purview of the Act of 2009. The teachers serving in the institutions where classes higher than the eighth class were taught did not fall within the purview of the Act of 2009. Thus, the impugned circular was valid only in respect of teachers who are employed for imparting elementary education in the schools up to the eighth standard.

However, the Bench observed that the teaching faculty of the school education department as well as higher education department like other government employees are governed by the Jammu & Kashmir Government Employees (Conduct) Rules, 1971. Rule 10 of which makes it clear that, no government employee, which would include teaching faculty of the school and higher education department shall engage directly or indirectly in any trade or business or undertake any other employment except with previous sanction of the government. The Proviso added to Rule 10(1) exempts a government employee from seeking prior sanction in a case where he undertakes honorary work of a social or charitable nature or occasional work of a literary, artistic or scientific character except in organizations or associations with which a Government employee is strictly debarred from the association.

“Instead of concentrating on their pious job and contribute to the nation building, the God has chosen for them, for, they (teachers), moved by their insatiable greed, engage in activity of private tuition either at their residence or in private coaching centres. Many times, they skip their classes in the government schools so as to show up in the private coaching centres.”

Thus, the Chief Education Officer or the administrative department of school education was held to be within the power to debar teaching officials from engaging directly or indirectly in any trade or business without previous sanction of the Government under Rule 10. The Bench clarified that the circular dated 11-08-2005 was set aside by a Division Bench of this Court on the ground that it had granted blanket permission to all teachers to engage themselves by way of self-employment in private tuition centres two hours before opening of the schools and two hours after closing of the schools. The Court found the grant of general permission to the teaching faculty to engage in private coaching bad in the eye of law. The Bench expressed,

“It is pity that the standard of education in the government institutions has gone down drastically, though the best teaching faculty is available in the government-run institutions.”

In the light of the above the instant petition was disposed of with the following observations:

i) Imparting private tuition at residence or at some other premises including coaching/tuition centres is necessarily an engagement in the trade or business and, therefore, prohibited under Rule 10 of the Employees Conduct Rules, if undertaken without previous sanction of the government.

ii) The government employee is, however, entitled to undertake honorary work of a social or charitable nature or occasional work of a literary, artistic or scientific character even without such sanction.

iii) Neither Rule 10 of the Employees Conduct Rules nor any other provision of any Act or Rules debars the government from issuing circular, guidelines or instructions for enforcing Rule 10 of the Employees Conduct Rules. There is nothing that prevents the government from taking a policy decision in the matter of teaching faculty of the government that there shall be no sanction/grant for engagement directly or indirectly in private tuition in private coaching/tuition centres during and after the duty hours.

iv) The Zonal Education Officers at the zonal level and Chief Education Officers at the district level shall be the nodal officers, who will ensure the implementation of Rule 10.

v) The Government should do well to create and provide toll free telephone number in each District where complaint(s) against the banned activity of the teaching faculty could be made. The government may also create a web portal/grievance cell for receiving and redressal of the complaint(s).

vi) Government would adopt a proactive approach to eradicate the menace of government teaching faculty engaging in private tuitions at the cost of students studying in the government institutions.

The Bench was of the view that this would not only discipline the teaching faculty but would also help in raising the standard of education in government-run educational institutions. [Farooq Ahmed v. UT of J&K, 2021 SCC OnLine J&K 226, decided on 31-03-2021]

Kamini Sharma, Editorial Assistant has reported this brief.

Appearance before the Court by:

For the Petitioner: Adv. F.S.Butt

For the Respondents: GA Suneel Malhotra

Case BriefsForeign Courts

United Kingdom Supreme Court: The Bench of Lord Kerr, Lord Wilson, Lord Carnwath, Lady Arden and Lord Kitchin dismissed the appeals and overruled the decision of the Court of Appeal in British Nursing.

Background

The facts of the case are such that Mrs Tomlinson-Blake was a highly qualified care support worker who provided care to two vulnerable adults at their own home. When she worked at night, she was permitted to sleep but had to remain at her place of work. She had no duties to perform except to “keep a listening ear out” while asleep and to attend to emergencies, which were infrequent. For each night shift, she was paid an allowance plus one hour’s pay at the National Minimum Wage i.e. NMW rate. Mrs Tomlinson-Blake’s case was that of time work wherein each of the hours of the sleep-in shift should be included in the calculation of her entitlement to the NMW based on NMW 2015 Regulations, 2015 (hereinafter referred as 2015 Regulations). She brought proceedings to recover arrears of wages on the basis that she was entitled to be paid the NMW for each hour of her sleep-in shift. The employment tribunal (i.e. ET) held that during the sleep-in shift she was performing time work whether she was awake or not. On appeal to the Employment Appeal Tribunal (i.e. EAT) held that Mrs Tomlinson-Blake was working throughout the entire shift as she was constantly on call and on that basis it was not necessary to consider the sleep-in exception.

Mr Shannon was an on-call night care assistant at a residential care home. He was provided with free accommodation at the care home and paid a fixed amount per week. He was required to be present in the accommodation from 10 pm to 7 am. He was permitted to sleep during that period, but had to assist if the night care worker on duty required his assistance during those hours. In practice he was rarely called upon. He relied on NMW Regulations, 1999 (hereinafter referred as 1999 Regulations) and brought proceedings to recover arrears of salary on the basis that he was entitled to be paid the NMW for each hour that he was required to be on-call. Mr Shannon’s work was salaried hours work. The ET held that Mr Shannon was not working throughout his shift and simply provided support to the night care worker if required to do so hence the claim failed as his accommodation constituted his “home”. On appeal to the EAT appeal was dismissed holding that Mr Shannon could not claim the NMW because of the home and sleep-in exceptions.

On a further appeal in both cases, the Court of Appeal allowed the appeal in relation to Mrs Tomlinson-Blake and dismissed it in relation to Mr Shannon.

Relevant Brief Introduction of NMW

 It was introduced by the National Minimum Wage Act 1998 (“the NMWA 1998”). It is a single hourly rate (with a lower rate or rates for certain workers) fixed by a government minister following a report from the LPC. The crucial question for an employer to whom the NMWA 1998 applies is whether the remuneration he is paying to his workers is at least equal to the NMW because, if it is not, he is liable to pay arrears and to financial and criminal penalties. In order to ascertain whether an employer is paying the NMW, there has to be a calculation of the worker’s hourly pay, and so there are detailed rules as to what payments or benefits may be taken into account and what deductions may be made

What is Time Work and Salaried Hours Work

If the employer pays the worker a salary calculated on an annual basis for an ascertainable number of hours, it is salaried hours work as per Regulation 4 of the 1999 regulations and regulation 21 of the 2015 regulations; if he pays the worker by reference to a set number of hours, and not by way of salary, it is time work as per regulation 3 of the 1999 regulations and regulation 30 of the 2015 regulations. In the case of the NMW, there are exceptions to the hours that may be counted. In the case of time work and salaried hours work, there is a “home” exception. A worker, if not actually working but who is available for work, may not count time when he is available if he is at home. For the same two types of work, there is also the “sleep in” provision now contained in, , regulation 32 and regulation 27 of the 2015 regulations respectively.

Analysis and Observations

The Court in terms of statutory interpretation observed that it is that if at a particular time an employee is subject to the employer’s instructions, he is necessarily entitled to a wage. There are many situations when a worker has to act for the benefit of his employer which do not count for time work purposes, for example when he travels between home and work. The objectives of the NMW as a social and economic measure helps to redress the law of supply and demand where there may be market failure, and the worker is not able to obtain basic recompense for his labour, but there are no doubt other policy objectives which it serves.

The Court further observed in terms of calculation of hours that  as per regulation 17, the hours of work in the pay reference period are the hours worked or treated as worked by the worker as determined in that period “… (b) for time work, in accordance with Chapter 3”. The use of the word “treated” in regulation 17 of the 2015 regulations underscores that there will be occasions when hours are not treated as hours worked for the purpose of the regulations even though a different number of hours might have been determined to be worked in the absence of that provision. 

The Court observed that the purpose of regulation 32(2) of 2015 regulations, which like its predecessors is to implement the LPC recommendation about sleep-in shifts ie. sleep-in workers should receive an allowance and not the NMW unless they are awake for the purposes of working, and that recommendation was repeated in later reports of the LPC, the contemplation of the regulations in relation to time work is that a sleep-in worker cannot actually be working for NMW purposes if the arrangement is that he is to be present and sleep on the premises during his hours of work subject only to emergency calls. Accordingly, regulation 32(2) should be treated as applying to all such workers doing time work.

It was also observed that the expression “awake for the purpose of working” is a single phrase. The word “awake” is not to be read on its own. Thus, there are separate regulations which have to be read together so that the rules produce a harmonious whole.

It was observed that the meaning of the sleep-in provisions in the 1999 regulations and the 2015 regulations is that, if the worker is permitted to sleep during the shift and is only required to respond to emergencies, the hours in question are not included in the NMW tcalculation for time work or salaried hours work unless the worker is awake for the purpose of working.

The Court observed that judgments Burrow Down Support Services Ltd v. Rossiter [2008] ICR 1172, British Nursing Association v. Inland Revenue [2002] EWCA Civ 494 (“British Nursing”) and Scottbridge Construction Ltd v. Wright [2003] IRLR 21 were wrongly decided and should be overruled.

The Court observed that when performing a night shift, she i.e Tomlinson Blake slept-in by arrangement at her place of work and was provided with suitable facilities for doing so. She was expected to intervene when necessary but the need to do so was infrequent. The Court of Appeal was right to hold that, as a sleep-in worker, Mrs Tomlinson-Blake was only carrying out time work when she was required to be awake for the purpose of working. So too, Mr Shannon’s appeal must be dismissed. He was a salaried hours worker who was required to be on-call at night to assist a night care worker when necessary. He was provided with accommodation and was very rarely asked to assist. Regulation 16(1) and (1A) of the 1999 Regulations, as amended in 2000, applied to him, and he was only carrying out salaried hours work when he was actually called on.

The Court observed that, in the case of each appeal, the time when by arrangement Mrs Tomlinson-Blake and Mr Shannon were permitted to sleep should only be taken into account for the purpose of calculating whether they were paid the NMW to the extent that they were awake for the purposes of working and the entire shift did not fall to be taken into account for this purpose

Judgment

The Court held that in view of the above,

it is enough to dispose of Mrs Tomlinson-Blake’s appeal to this court. When performing a night shift, she slept-in by arrangement at her place of work and was provided with suitable facilities for doing so. She was expected to intervene when necessary but the need to do so was infrequent. The Court of Appeal was right to hold that, as a sleep-in worker, Mrs Tomlinson-Blake was only carrying out time work when she was required to be awake for the purpose of working. So too, Mr Shannon’s appeal must be dismissed. He was a salaried hours worker who was required to be on-call at night to assist a night care worker when necessary. He was provided with accommodation and was very rarely asked to assist. Regulation 16(1) and (1A) of the 1999 Regulations, as amended in 2000, applied to him, and he was only carrying out salaried hours work when he was actually called on.

Lord Carnwath, Lord Wilson and Lord Kitchin agrees with Lord Arden that the appeals should be dismissed and that British Nursing[supra] should no longer be regarded as authoritative.[Royal Mencap Society v. Tomlinson Blake, on appeal from: [2018] EWCA Civ 1641, decided on 19-03-2021]

Arunima Bose, Editorial Assistant has reported this brief.

Case BriefsTribunals/Commissions/Regulatory Bodies

National Company Law Tribunal (NCAT): A Coram of Justice A.I.S. Cheema (Judicial member) and Dr Alok Srivastava (Technical member) dismissed an appeal on the grounds of it being repetitive.

In the instant case, the appellant was aggrieved by non-payment of his salary and illegal actions by the Resolution Professional. The appellant had approached the NCLT for addressing his grievance for payment of his salary or for the inclusion of his salary expenses as CIRP cost in the Resolution Plan. Later an appeal was filed before the NCLAT, which had directed the adjudicating authority to provide an opportunity to the Appellant before taking a decision regarding the Resolution Plan.

Now, the Appellant contended, that the impugned order, the authority did record as intervener but the grievances and detailed arguments/written-submissions advanced by the Appellant before the Adjudicating Authority were not addressed, admitted nor discussed.  Whereas the counsel for the respondent submitted that legitimate grievances of the Appellant were included in the Resolution Plan and also have been duly paid. Further, it was submitted that the present appeal was nothing but a reproduction of the claims made earlier in the appeal.

Therefore, the Coram was of the opining that, “what appears is that the Appellant is reagitating what is already recorded in the order dated 17.02.2021 and only because the liberty was given, the present Appeal is filed”. On the same ground, the appeal stood dismissed.[Sundeep Thakar v. Raj Ralhan, Company Appeal (AT) (Insolvency) No. 170 of 2021, decided on 08-03-2021]

Case BriefsHigh Courts

Delhi High Court: Subramonium Prasad, J., while addressing the present revision petition expressed that:

“A court in revision considers the material only to satisfy itself about the legality and propriety of the findings, sentence and order and refrains from substituting its own conclusion on an elaborate consideration of the evidence.”

The instant revision petition was filed under Section 397/401 CrPC against the Order passed by Additional Sessions Judge. Further, the petitioner has also challenged the Order passed by Metropolitan Magistrate in an application for claiming interim maintenance under Section 23 of the Domestic Violence Act.

Facts leading to the present revision petition:

After marriage, Respondent/wife was inducted as a whole-time Director in the company run by the petitioner/husband. Later, the respondent-wife started living separately claiming that she was deserted by the petitioner after which she filed an application under Section 23 of the protection of Women from Domestic Violence Act, 2005 for seeking interim maintenance.

Since the respondent was continuing as the Director in the said company of the husband she wasn’t able to take up any other job and was not even getting any salary from the husband’s company which all lead to her not being able to maintain herself.

Initially, she was granted interim maintenance of Rs 1,00,000 but it was rejected by the lower court.

Respondent also approached the Company Law Board for a direction that she should be paid salary during the period she served as the Director of the Company to which the Company Law directed the above-stated company to pay the salary to the respondent.

When the petitioner moved an application under Section 25 of the Domestic Violence Act for the modification in the maintenance order since now the respondent was getting a salary from the Company, the said request was rejected.

Analysis and Decision

Bench opined that the scope of interference in a revision petition is extremely narrow.

Section 397 CrPC gives the High Courts or the Sessions Courts jurisdiction to consider the correctness, legality or propriety of any finding inter se an order and as to the regularity of the proceedings of any inferior court. It is also well settled that while considering the legality, propriety or correctness of a finding or a conclusion, normally the revising court does not dwell at length upon the facts and evidence of the case.

 Court noted that the findings of the Metropolitan Magistrate as upheld by the Sessions Court was that the petitioner was not providing adequate maintenance to the respondent and since the said maintenance was not being paid, petitioner was directed to pay a sum of Rs 1,00,000 towards maintenance.

Further, the Company which was being run by the petitioner did not release her salary. The respondent had to move the Court and fight for getting her legitimate salary.

To the above, Bench stated that even though the company is distinct from the petitioner but the company is being run by the petitioner and it can be assumed that the salary was not being paid to the respondent only at the instance of the petitioner.

While concluding, the Court held that it is open for the petitioner to raise all the contentions in the matrimonial proceedings pending between the husband and wife while deciding the issue of grant of alimony under Section 25 of the Hindu Marriage Act. [Taron Mohan v. State, 2021 SCC OnLine Del 312, decided on 25-01-2021]

Advocates for the parties:

Petitioner: Vishesh Wadhwa, Advocate

Respondents: Hirein Sharma, APP for the State

Joel, Advocate for the respondent 2.

Uttarakhand High Court
Case BriefsHigh Courts

Uttaranchal High Court: Lok Pal Singh, J., disposed off a writ petition while allowing it which was filed seeking to issue a writ in the nature of mandamus directing the respondent 3 to forthwith release the salary of the petitioner for the month of July, 2017 to December, 2017 and onwards, along with the interest on the delayed payment.

The petitioner was appointed as Clerk in the respondent department and was given promotion from time to time. It was contended that due to ill health, he proceeded on medical leave with effect from 22-06-2017. Thereafter, the petitioner had submitted his application for earned leave from 15-07-2017 to 08-10-2017. The petitioner resumed his duties on 09-10-2017 in the office respondent department-respondent. Thereafter, the petitioner had appeared before the Medical Board on 16-10-2017 and submitted all the medical documents to the concerned Medical Board. The petitioner stated that respondent department had not released the salary of the petitioner for the month of July to December, 2017. The respondent 3 stated that the petitioner remained absent from duties for which he availed medical leave but the medical board with regard to the application of medical leave of the petitioner, he was directed to remain present before the Medical Board, initially he did not appear before the Medical Board but subsequently, when he appeared before the Board on 16-10-2017, it was found that the disease which is mentioned in the medical certificate, no medical tests relating to the same had been done. The petitioner however denied the averments made in the counter affidavit.

The Court perused the records and found that due to illness petitioner applied for medical leave w.e.f. 22-06-2017 to 14-07-2017 but as he could not recover from such illness and could not join his duties on 15-07-2017, he applied for earned leave for 15-07-2017 to 08-10-2017. He resumed his duties on 09-10-2017 and thereafter he submitted a representation before the District Magistrate, whereby he had requested that the medical leave taken by him be also treated as earned leave and prayed to grant him earned leave of 109 days. Such request was not accepted and the salary of the petitioner for the said period was withheld.

The Court while allowing the petition explained that “It may be time that the petitioner has acted as per his own whims and fancies and as has been alleged by the respondent authority but the fact remains that salary is a property under Article 300-A of the Constitution of India which cannot be taken away except by authority of law.”

It further directed to treat the leave taken by the petitioner July, 2017 to December, 2017 as earned leave and to pay the salary for the aforesaid period to the petitioner within a period of two months.[Harish Rautela v. State of Uttarakhand, 2020 SCC OnLine Utt 902, decided on 22-12-2020]

Suchita Shukla, Editorial Assistant has put this story together

Gauhati High Court
Case BriefsHigh Courts

Gauhati High Court: Achintya Malla Bujor Barua J., while reiterating the principle laid down by Supreme Court, with respect to calculation and payment of the retirement benefits, issued necessary directions to the respondent authorities.

Background

The petitioner working as an Assistant Teacher in Lower Muolhoi School in the district Dima Hasao, Assam, retired from service on 31-03-2018. After his retirement, when the matter was processed for payment of his pensionary benefits, the communication dated 05-06-2020 of the Finance and Accounts Officer in the office of the Directorate of Pension, Assam was made addressed to the District Primary Education Officer, Haflong, Assam, by which, it was provided that during his service tenure, the petitioner was paid a salary higher than his actual scale. Accordingly, by the said communication, the District Primary Education Officer, Haflong, Assam was required to do the needful. The said communication has been assailed in the present writ petition on the ground that as per the law laid down by the Supreme Court, recovery from the pensionary benefits cannot be made in respect of any salary that was paid to an employee during his service period for no fault of his own.

Observation

The Court observed, “The law in this respect has been settled by the Supreme Court in Shyam Babu Verma v. Union of India, (1994) 2 SCC 521 and State of Punjab v. Rafiq Masih, (2015) 4 SCC 334, wherein it had been held that in the event an excess salary is paid to an employee during his/her service tenure because of no fault of his/her, such excess payment cannot be recovered from the retirement benefits.”  Further, it was said, “(…) the ends of justice would be met if the authorities in the Pension Department make an assessment as to whether there was any contribution on the part of the petitioner in receiving such excess salary during his service tenure. In the event, if it is found that there was no such contribution from the petitioner leading to such excess payment, the authorities shall not insist upon the recovery in view of the law laid down by the Hon’ble Supreme Court as indicated above.”

Decision

Allowing the present petition, the Court stated the correct payment of the petitioner according to which the pension was to be calculated and not the higher pay which he derived during his service. Moreover, directions were given to conduct the assessment within a period of two months so to effectuate the entire process.[Hrangthalien Tamhrang v. State of Assam, 2020 SCC OnLine Gau 4499, decided on 24-11 2020]

Sakshi Shukla, Editorial Assistant has put this story together

Legislation UpdatesStatutes/Bills/Ordinances

The Salary, Allowances and Pension of Members of Parliament (Amendment) Bill, 2020 received Presidential Assent on 24-09-2020.

Salary, Allowances and Pension of Members of Parliament (Amendment) Bill, 2020

Which Act will the said Bill amend?

A Bill further to amend the Salary, Allowances and Pension of Members of Parliament Act, 1954.

Which Section will be amended with the passing of this Bill?

Amendment of Section 3

In the Salary, Allowances and Pension of Members of Parliament Act, 1954, in section 3, after sub-section (1), the following sub-section shall be inserted, namely:—

“(1A) Notwithstanding anything contained in sub-section (1), the salary payable to Members of Parliament under sub-section (1) shall be reduced by thirty per cent for a period of one year commencing from the 1st April, 2020, to meet the exigencies arising out of Corona Virus (COVID-19) pandemic.“

Hence the said bill reduces the salary by 30% for a year.

Please read the Act here: ACT

Ministry of Law and Justice

Kerala High Court
Case BriefsHigh Courts

Kerala High Court: A Division Bench of S. Manikumar ,CJ and Shaji P. Chaly, J. dismissed a writ petition on account of maintenance expenditure incurred by school even during lockdown.

The petitioners in the present case are students of Sree Buddha Central School who filed the instant petition seeking to direct the State Government to issue directions to the School for providing quality online/virtual class using modern video conferencing techniques along with charging only monthly tuition fees and to ensure that no student is denied the same on the reason of failure to pay fees.

The counsel of the petitioners Manu Ramchandran and Sameer M. Nair submitted while referring to Rule 29 of the Kerala Education Rules, 1959 that respondent school is a recognized school and, therefore, cannot charge fees more than the prescribed as schools can only charge fees to the extent of the expenses for running it and the levy of fees is to be without any profit motive.  He further submitted that during the lockdown from March to May, 2020, schools were closed and online classes commenced only from June 2020. Students have been asked to pay tuition fees for the above said period also wherein such digital classes were in the form of poor quality education as it was given through voice notes on whatsapp instead of proper and quality based online classes.

The counsels for the respondents were Surin George IPE, S. Nirmal, R.T. Pradeep, M. Bindudas and K.C. Harish. It was submitted by the respondent school that the school is only levying the fees charged on the former year without enhancing a single pie. It was further submitted that teaching, non teaching staff and IT professionals who were engaged in training teachers about online classes have to be paid their monthly salary, no matter whether there was lock down or not.

The Court, on hearing both sides observed that no separate annual fee was demanded by the respondent school whereas the fees charged for the previous year and the current year is same and there is no change in the same. Hence, the Court further accepting the argument that monthly salaries for the teaching and non-teaching staff has to be paid, found no irregularity or illegality in the actions of the respondents.

In view of the above facts and arguments, the petition was dismissed. [Sreelekshmi S. v. State of Kerala, 2020 SCC OnLine Ker 2494 , decided on 30-06-2020]

Case BriefsCOVID 19High Courts

Karnataka High Court: A Division Bench of Abhay Shreeniwas Oka, CJ and P. Krishna Bhat, J. asked the State Government to consider a manner in which help can be extended to ‘Archaks’ who are not being paid regular salary as there is no income to temples in the present lockdown situation due to COVID-19.

Additional Advocate General placed the memo dated 26th may, 2020 enclosing therewith the State Government’s Order dated 20th May, 2020. Further he added that temple in ‘C’ category are entitled to yearly grant of Rs 48,000 and the first installment had been ordered for release by the 20th May, 2020 Order.

Bench stated that, State Government will have to consider in what manner help can be extended to Archaks who cannot be paid regular salary as there is no income to the temples of ‘C’ category in the present situation.

For which petitioners counsel submitted that in some areas, ration in the form if Archak Kits have been distributed. Additional Advocate General to this stated that 14,000 Archak Kits had been distributed.

Bench asked the State Government to make a statement on whether Archak Kits can be supplied to all Archaks working in category ‘C’ temples.

Petition is listed on 3rd June, 2020. [Shreehari Kutsa v. State of Karnataka, WP No. 6932 of 2020, decided on 27-05-2020]

COVID 19Hot Off The PressNews

In a letter written to all Heads/Managers of private unaided recognised schools, Binay Bhushan, Director of Education, NCT of Delhi, reminded them that in accordance with provisions of Delhi School Education Act and Rules, 1973, they are under direct control of Charitable Society/Trusts. Being Charitable Societies/Trusts, they are supposed to indulge in charity, especially when they are engaged in the noble field of providing education to the society ? without indulging in profiteering. Accordingly, they are also supposed to extend their maxim support (to those parents who are in financial distress at this time and unable to pay the school fee) by providing learning material online to all students without any discrimination and hindrance and also by not charging any increased tuition fee or any other fee by creating any new head.        

The Director of Education has written a letter to all Heads/Managers of private unaided recognised schools and gave them various directions regarding charging of and/or increase in fee from students, access to online education facilities for students, as well as payment of salary to teaching and non-teaching staff.

The letter stated that it has been noticed that some private unaided schools have been violating the provisions of Delhi School Education Act and Rules, 1973 and other guidelines issued by Department of Education, as also the provisions of Disaster Management Act, 2005 and Delhi Epidemic Diseases, COVID-19 Regulations, 2020 under the Epidemic Diseases Act, 1897 for prevention and containment o fCOVID-19 presently in force.

It was noticed that some schools have increased the fee in academic session 2020-2021; some schools are charging fee under new heads; some schools are indulging in malpractices while making available online courses/material; some schools are not paying salary to teaching and non-teaching staff.

In view of the above, the Director of Education directed all Heads/Managers of private unaided recognised schools as follows:

(i) No fee, except Tuition fee, shall be charged from the parents, till further orders.

(ii) Heads of schools shall not demand and collect the Tuition fee from the parents/students on quarterly basis. The fee shall be collected on monthly basis only.

(iii) Not to increase any fee in the academic session 2020-2021 till further directions irrespective of the fact whether or not the school is running on private land or the land allotted by DDA/other Government land owning agencies.

(iv) Schools running on the land allotted by DDA/other Government land owning agencies with the condition to seek approval of Director (Education) before any fee increase, shall collect the Tuition fee on the basis of last fee structure approved by Director (Education) or as per fee statement filed by them under Section 17(3) of DSEAR, 1973 during academic session 2015-2016.

(v) Shall ensure to provide thee access of online education/material/classes to all students, without any discrimination, by providing them ID and password immediately to get them online education facility.

(vi) Heads of schools shall, in no case, deny ID and password to those students/parents for getting online access of education facilities/classes/materials, etc., to those students who are unable to pay the school fee due to financial crises arising out of closure of business activities in the ongoing lockdown condition.

(vii) Managing Committee of the schools/Heads of the schools shall not put extra financial burden by creating any new head of fee.

(viii) Shall neither stop payment of monthly salary nor reduce the existing total emolument to the teaching and non-teaching staff of their schools in the name of non-availability of funds and arrange the funds in case of any shortfalls from the Society/Trust running the school.

It was also made clear that failure to comply with the above directions shall incite action under Delhi School Education Act and Rules, 1973 and Penal Code, 1860 as also punishment of imprisonment and/or fine under Section 51(b) of the Disaster Management Act, 2005.

Directorate of Education

Govt. of NCT of Delhi

[F.No. PS/DE/2020/54]

[Order dt. 17-04-2020]

Case BriefsHigh Courts

Karnataka High Court: A Division Bench of Abhay S. Oka, CJ. and Mohammad Nawaz, J. directed the state government to refund the amount already deducted from the salaries of judicial officers by the end of February 2020.

The New Defined Contributory Pension Scheme was made operational to the State Government employees from 01.04.2010. This was made applicable to those employees who joined the services on or after 01.04.2006. The scheme provided for employees’ contribution of 10% of the basic pay and dearness allowance (DA) with the matching contribution from the State Government. The first petitioner is an association of the Judicial Officers in the State. The first relief claimed was for issuing a writ of mandamus seeking a direction against the respondents to clarify whether the New Pension Scheme is applicable to Judicial Officers. A writ of mandamus was also sought for directing the State of Karnataka to continue with the old pension scheme.

In a connected writ, the State Government based its submission on the Karnataka Judicial Services (Recruitment) Rules, 2004.Karnataka Civil Services Rules which are deemed to have been made under the Karnataka Civil Services Act, 1978, govern the pension payable to the government servants. It was submitted that except to the extent of the recommendations of the first and second Judicial Pay Commissions, the Judicial Officers are government servants. Karnataka Judicial Services (Recruitment) Rules, 2004 were made under Article 309 read with 233, 234 and 235 of the Constitution of India and therefore, all the Judicial Officers are civil servants.  Therefore, no merit remains in the writ petition.

Counsel for the petitioners, Shashi Kiran Shetty submitted that separate pay Commissions, the First National Judicial Pay Commission (popularly known as Justice Shetty Commission) as well as the recommendations made by the Second National Judicial Pay Commission (popularly known as Justice Padmanabhan Commission) were established to consider and recommend the pay and allowances payable to the Judicial Officers and the recommendations made by both the Commissions were accepted by the Supreme Court by issuing necessary directions to all the State Governments to implement the same. The submission, in short, was that the pay of the Judicial Officers is governed by the Orders of the Apex Court accepting both the reports with modifications and therefore, the act of applying the new pension scheme which requires 10% deduction from the salary of the Judicial Officers is completely in gross violation of the directions issued by the Supreme Court.

Additional Advocate General, R. Subramanya submitted that as the payment of pension is concerned, the Judicial Officers are equivalent to the Government Servants except to an extent of certain modifications made by the first and second National Judicial Pay Commissions. He submitted that in the above mentioned Rules 2004, the word ‘service’ has been defined as ‘Karnataka State Judicial Services’ and, therefore, all the rules regulating conditions of service of the members of the State Civil Service are applicable to the Judicial Officers as well. He further submitted that in All India Judges’ Association v. Union of India, (2002) 4 SCC 274, Supreme Court appointed Second Judicial Commission headed by Justice Padmanabhan. It had recommended for continuation of the pension fixed by the First National Judicial Pay Commission at the rate of 50% of the average emoluments drawn during the 10 months preceding the age of superannuation. 

In view of the above, the Court observed that State Government, without seeking permission of the Supreme Court, has no power to tinkle with the quantum of the salaries and pension payable to the Judicial Officers. As noted earlier, the new pension scheme contemplates contribution of 10% of the basic salary and dearness allowance by the Judicial Officers and the said amount will be deducted from the salary of the Judicial Officers. Thus, looking from any angle, the act of the State Government in applying the new pension scheme to the Judicial Officers of the State appointed after 1st April 2010 and consequential act of making 10% deductions from their salary is not only completely against the recommendations of the two National Judicial Pay Commissions Report but also in breach and gross violation of the directions issued by the Supreme Court and hence, the same is illegal. 

In a similar case of Vihar Durve v. State of Maharashtra, 2017 SCC Online Bom 7560, deduction of 10% of the basic salary of the Judicial Officers was challenged before a Division Bench of the Bombay High Court and the said challenge was upheld by the Bombay High Court. 

Therefore, Government Order bearing No. FD (SPL) 04 PET 2005, of 31st March 2006 (Annexure-A in Writ Petition No.44240 of 2013) is not applicable to the Judicial Officers of the Karnataka cadre.[Vijayakumar Rai v. State of Karnataka, 2019 SCC OnLine Kar 2186, decided on 28-11-2019]

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]

Legislation UpdatesRules & Regulations

G.S.R. 682(E).— In exercise of the powers conferred by sub-section (1) and sub-section (2) of Section 469 of the Companies Act, 2013(18 of 2013), the Central Government hereby makes the following rules further to amend the National Company Law Tribunal (Salary, Allowances and other Terms and Conditions of Service of President and other Members) Rules, 2015 namely :—

1. (1) These rules may be called the National Company Law Tribunal (Salary, Allowances and other Terms and Conditions of Service of President and other Members) Amendment Rules, 2019.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the National Company Law Tribunal (Salary, Allowances and other terms and conditions of service of President and other Members) Rules, 2015, after Rule 15, the following rule shall be inserted, namely:—

“15 A. Posting and transfer of Members — (1) Initial posting of a Member shall be done by the Central Government in consultation with the President.

(2) Subsequent transfers to different Benches shall be done by the President having regard ordinarily to the following:—

(a) the capacity or otherwise of the Member for the purpose of his posting, including his efficiency, disposal and other relevant factors;

     (b) a Member save and except for sufficient and cogent reasons shall not be posted at a place where he had earlier been practising as an Advocate or a Chartered Accountant, Company Secretary or Cost Accountant, as the case may be;

(c) a Member may not be posted at a place where any of his parents, spouse or other close relation is practising as an Advocate or a Chartered Accountant, Company Secretary or Cost Accountant in Company Law matters;

(d) save and except for sufficient and cogent reasons, the Member shall not be posted at a place for a period exceeding three years, and ordinarily, a Member may not be posted at a place where he was earlier posted unless a period of two years has elapsed;

(e) ordinarily, a Member shall not be transferred before completion of three years at a station except on administrative grounds or on a personal request basis.

(3) Transfer on personal request basis shall include considerations such as serious medical grounds, serious dislocation in children’s education, unavoidable family responsibilities; however, consideration of transfer on personal request shall be subject to consideration of factors enumerated in sub-rule (2).

(4) Transfer on administrative grounds shall be made only in consultation with the Central Government.”

Ministry of Corporate Affairs

[Notification dt. 23-09-2019]

Gauhati High Court
Case BriefsHigh Courts

Gauhati High Court: A Division Bench of Ajai Lamba, C.J. and Achintya Malla Bujor Barua, J., ordered the Customs department to speed up the process of testing the seized consignment and costs to be deducted from the salary of the concerned persons if the process of the Court was delayed any further.

The Customs Authority was ordered to ascertain whether the biosecurity requirement of the Country had been satisfied in respect of the seized areca nuts, and a report was to be submitted by them. For this purpose, it was directed that the Customs authorities/DRI Guwahati shall take possession of some samples of the areca nuts which were with the Police authorities of Assam.

The Customs Authorities/DRI, Guwahati were required to comply with the aforementioned order, however, their response was absolutely lukewarm towards the direction issued by the Court. Since the Customs Department had been enjoined with the duty of complying with the order, the needful was required to be done at all costs.

Considering the conduct of the respondents, the Court by order notified the Customs Department that in case active steps were not taken; and representative samples were not collected from all the 26 trucks and not forwarded to the Laboratory, cost in the sum of Rs 20,000 would be deducted from the salary of the Additional Director General, Customs, Guwahati for delaying the process of the Court. This direction was issued considering that the recovered articles were perishable in nature. [Ali Trading v. State of Assam, 2019 SCC OnLine Gau 5133, decided on 15-11-2019]