DCDRC
Case BriefsTribunals/Commissions/Regulatory Bodies

   

Additional District Consumer Disputes Redressal Commission, Thane: In a significant decision delivered in August over a complaint alleging deficiency of service on part of Uber India Systems, the Bench of R.P. Nagre (President-in-Charge), G.M. Kapse and S.A. Petkar (Members) held that Uber India is liable for providing deficient services on behalf of the cab driver in the instant case, whose negligence caused the complainant to miss her flight to Chennai. It was further held that Uber India’s liability was caused as the driver was acting as an agent of the Company while receiving the consideration i.e., the cab fare.

Facts of the Case: The complainant, who is an advocate by profession, needs to travel frequently out of Mumbai. On 12-06-2018, the complainant had to fly from Mumbai to Chennai to attend an important meeting; so, in order to get to the airport, she booked a cab via Uber Apps. The Flight was to depart at 5:50 pm and the cab was booked around 3:29 pm. The distance between the complainant’s house and the airport was about 36 Kms and it would have taken at least 1 hour to reach the destination considering the traffic.

The booking was confirmed and a cab was allotted for the trip. However, the complainant started facing difficulties as the cab driver arrived with a considerable delay; the driver did not pay any heed to start the car towards the airport and he only started the car after finishing a telephonic conversation, thereby delaying the trip. Furthermore, the cab driver took a different route than the one shown in the GPS and took the cab in a remote locality to fill the CNG and thus wasted 15-20 minutes. Finally, the complainant reached the airport at 5:23 pm, but she unfortunately missed her scheduled flight and had to take the next available flight at her own expenses. Furthermore, the billing fare of Rs. 709 was higher as compared to the estimated fare of Rs. 563 as shown at the time of booking.

After returning from Chennai, the complainant raised her grievance from her Twitter ID with no response from Uber. However, later on Uber upon admitting its negligence, refunded the fare differences from the actual fare which was estimated to Rs. 139, and the same was transferred to the complainant’s Uber account.

Contentions of the Complainant: The complainant stated that due to the cab driver’s unprofessional conduct and deliberated negligence, she missed her flight and suffered a great deal of mental agony, monetary loss, harassment. She also contended that the entire ordeal has affected her profession adversely, which is why Uber is liable to pay her monetary compensation and tender an unconditional apology.

It was further pointed out that the Uber app showed the distance between the complainant’s house and the airport to be of 46 Kms, when in reality the distance is 36 kms. It was alleged that Uber’s non-transparent functions and its driver had caused a great deal of loss to the complainant.

The complainant relied on Uber BV v. Aslam, [2021] UKSC 5, wherein the Supreme Court of United Kingdom had held that transportation service performed by drivers and offered to passengers through the Uber app is very tightly defined and controlled by Uber.

Contentions by Uber: Per contra, Uber argued that Uber India acts as an aggregator for transportation services, therefore, they are not responsible for the default of the driver, as Uber’s role is restricted to only facilitating between the driver-partner and the customer. They also contended that drivers using Uber App also work as independent third-party contractors, and thus it is the drivers who are responsible for any default and not Uber.

Uber further argued their terms and conditions were agreed upon by the complainant at the time of signing up with Uber Apps and the same constitutes an electronic form of contract recognised under Information and Technology Act, 2000. It was also pointed out that Uber had already resolved the complainant’s grievance by refunding Rs. 139.

Observations: The Bench upon perusing the facts and contentions, made the following observations—

  • It was observed Uber has control over the App which is used by consumers to book transportation for their needs.

  • It was further observed that when a passenger sends their request, Uber arranges, schedules transportation and logistics services with independent third-party providers. It was also noted that opposite party reserves rights to make supplementary terms in connection with services. Uber also facilitates payments and the applicable charges are collected by the driver on behalf of Uber India as an agent.

Decision:

  • The Commission noted that the afore-stated observations make it clear that Uber India manages and controls transactions and services provided by Uber App. Since the complainant had taken the services of Uber India by using the Uber App and paid the consideration as charged by Uber App and not to the driver who in turn was appointed by Uber India to provide service; therefore, the it was proved that the driver was appointed and managed by Uber India, which also makes the complainant Uber India’s consumer with the driver acting as an agent and receiving the consideration (cab fare). Thus, Uber India is liable for deficient services and compensation.

  • Considering the mental agony faced by the complainant due to the delay caused by the driver’s negligence, the Commission directed Uber India to pay compensation of Rs. 10,000 and the expenses of complainant which also amounts to Rs. 10,000.

[Kavita S. Sharma v. Uber India Systems Pvt. Ltd., Consumer Complaint No. 61, decided on 25-08-2022]


Advocates who appeared in this case :

Complainant- Ashish Verma and Vaibhav Yelmane, Advocates;

Opposite Party- Peeush Sharma, Shaurya Tomar and Tushar Bendale.


*Sucheta Sarkar, Editorial Assistant has prepared this brief.

AAR GST
Case BriefsTribunals/Commissions/Regulatory Bodies

Tamil Nadu Authority for Advance Ruling: T.G. Venkatesh, Additional Commissioner, and K. Latha, Joint Commissioner held that concerning vessel support services provided to foreign vessels, the service provided falls under export of services as per provisions of the Integrated Goods and Services Tax Act, 2017 (IGST Act) as the place of supply is outside India.

Facts of the case

The applicant is engaged in providing support services related to vessel management to its group company, New Shipping Kaisha Ltd. (Japan).

An application was filed by the applicant, under Section 97 of the Central Goods and Services Tax Act, 2017 before the Tamil Nadu Authority for Advance Ruling to seek an Advance Ruling on the following:

  • Whether the vessel support services provided by the applicant to its group company outside India qualify as “Export of Services” under GST?

Analysis and Decision

The Bench stated that supply of services under Section 2(6) of the IGST Act includes the supply of any service which is provided outside India, the payment received by the supplier is in foreign currency, and the supplier and recipient are not merely the establishment of a distinct person. Therefore, the Bench opined that to determine whether the supply amounts to the export of service, the place of supply is to be determined.

Further, on a joint reading of Sections 13(3) and 13(6) of the IGST Act, the Bench observed that the statutes prescribe the location in the taxable territory where any support services requiring the physical availability of the vessel under management is supplied, then the place of supply is the location in the taxable territory in respect of that voyage of the vessel.

Therefore, the Bench held the following:

  • The vessel support services provided about foreign vessels sailing to other countries outside India, fall under export of services as per Section 2(6) of the IGST Act, as the place of supply in such cases is entirely outside India.
  • Vessels calling out at Port of India, then the place of supply in respect of that vessel is in India as per Section 13(6) of the IGST Act and the services rendered are not export of services.

[NSK Ship Management Pvt Ltd, 2022 SCC OnLine TN AAR-GST 7, decided on 30.06.2022]

Financial Creditor
Case BriefsTribunals/Commissions/Regulatory Bodies

   

National Company Law Tribunal, New Delhi: The Bench of Ashok Bhushan J., Chairperson, Rakesh Kumar Jain and Rakesh Kumar, JJ, Judicial Members, and Barun Mitra and Naresh Salecha, Technical Members, have held that lease rentals for business purposes fall under the definition of ‘Operational Debt' as per Section 5(21) of the Insolvency and Bankruptcy Code, 2016 (IBC).

Background of the case

The Appellant, corporate creditor entered into a license agreement with the Respondent, corporate debtor for five years. As per the agreement the appellant granted a license to the respondent to use a building for business purposes with a total super area measuring 31000 sq. ft. The license fee was agreed to be Rs 4,00,000/- plus government taxes on monthly basis.

The respondent made payment to the appellant through two cheques of amount Rs 20,00,000/- each dated 07-05-2018 and 08-10-2018 respectively. Both the cheques were dishonored. On 03-05-2019, the Appellant sent a demand notice under Section 8 of IBC, to which no reply was given by the respondent. Hence, on 09-05-2019, the appellant filed an application for initiation of the Corporate Insolvency Resolution Process against the respondent under Section 9 of IBC.

The Adjudicating Authority dismissed the application under Section 9 of IBC stating that the claim arising out of a grant of license to use the immovable property does not fall in the category of goods or services, thus, the amount claimed in Section 9 Application is not an unpaid operational debt. Therefore, the appellant filed a company appeal before a larger bench.

The issue before the bench

  • Whether the claim of the Licensor for payment of License Fee for use and occupation of immovable premises for commercial purposes is a claim of ‘Operational Debt' within the meaning of Section 5(21) of the Code.”?

Observation and Analysis

The coram made the following observations: –

  • The definition of ‘operational debt' as contained in Section 5 (21) IBC, the definition clause provides that ‘operational debt' means a claim in respect of the provision of goods or services.

  • Definition under Section 5(21) IBC uses the expression ‘services' which is not defined under the IBC. When an expression used in the statute is not defined, the Court has to explain the meaning of the undefined expression under the well-established rules of statutory interpretation.

  • The term operation is derived from “operate” and “operating cost” is an expense incurred in the conduct of the principal activities of the enterprise therefore, operational debt is also a debt that is incurred in the conduct of the principal activities of the enterprise.

  • Further, Coram stated that Bankruptcy Law Reforms Committee Report can be treated as an aid for interpretation for IBC which explicitly provides that a lessor can be treated as an operational creditor.

  • As the ‘operational debt' as defined in Section 5(21) IBC has a meaning much wider than the essential goods and services. Essential goods and services are entirely different concepts and the protection under Section 14(2) IBC as provided for is an entirely different context.

  • The observations made in the case of M. Ravindranath Reddy v. Mr. G. Kishan, 2020 SCC OnLine NCLAT 84 that there has to be nexus to the direct input or output produced or supplied by the Corporate Debtor, is a much wider observation not supported by the scheme of the IBC. Therefore, the case does not consider the extent and expanse of the expression ‘service' used in Section 5(21) of the IBC and does not lay down the correct law.

  • The observation made in the case of Promila Taneja v. Surendri Design Pvt. Ltd. – 2020 SCC OnLine NCLAT 1105 in respect definition of “service” as mentioned under the Consumer Protection Act, 2019 and the Goods and Services Act, 2017 (CGST Act) cannot be referred to for interpretation of the term “Operational Debt” as these acts are not mentioned under Section 3(37) of the IBC. It reiterated the law laid down in the M. Ravindranath Reddy case and hence, the judgment cannot be followed.

In the light of the above observations made, the Bench opined that in the present case, where the agreement itself contemplates payment of GST for the services under the agreement, the definition of ‘service' under the CGST Act can be referred. Hence, the expression ‘service' in Section 5(21) of the IBC includes license payments. Therefore, the claim of the Licensor for payment of license fee for use of Demised Premises for business purposes is an ‘operational debt' within the meaning of Section 5(21) of the IBC.

[Jaipur Trade Expocentre Pvt Ltd versus Metro Jet Airways Pvt Ltd, Company Appeal (AT) (Insolvency) No. 423 of 2021, decided on- 05-07-2022]


Advocates who appeared in this case :

Ms. Sanjana Saddy, Mr. Sanyat Lodha & Ms. Harshita Singhal, Advocate, for the Appellant;

Mr. Vikrant Arora & Mr. Manish Verma, Advocates, for the Respondent.

Case BriefsTribunals/Commissions/Regulatory Bodies

Customs, Excise & Service Tax Appellate Tribunal, New Delhi (CESTAT): The Coram of Dilip Gupta (President) and P.V. Subba Rao (Technical Member), expressed that, service tax can be levied on services rendered by the club to its members.

Factual Matrix


Rajasthan Cooperative Dairy Federation Limited – Appellant was registered under the Rajasthan Co-operative Societies Act, 2001 for implementation of ‘Operation Milk Flood’ in the State and the District Milk Cooperative Societies and milk unions were all members of the appellant.

The Appellant charged an amount @ 1.25% of the annual turnover of milk unions to manage their finances and other services and the said amount was called by the appellant as Rajasthan Cooperative Dairy Federation Cess.

As per the audit report, it was noted that the appellant had started paying service tax on RCDF Cess but had not paid service tax before and that it was liable to pay service tax on RCDF cess before June 2012 under the category of ‘business support services’ under Section 65(104c) of the Finance Act, 1994.

The appellant had paid service tax from July 2012 but had not paid service tax on the RCDF cess for the period prior to this date. Hence, a show-cause notice was issued to the appellant demanding service tax with interest and proposing to impose penalties upon the appellant. The Commissioner passed the impugned order confirming service tax demand of Rs 6,55,25,588 along with interest and penalties were imposed.

In view of the above, the present appeal was filed.

Question for Consideration


Whether the services provided by the appellant to its own members (who are also separate legal entities) can be considered as services provided by one entity to another?

Analysis, Law and Decision

Tribunal found that the Constitution Bench of the Supreme Court in State of W.B. v. Calcutta Club Ltd., (2017) 5 SCC 356, discussed at length the doctrine of mutuality under Article 366 (29A) (e) of the Constitution and held that doctrine of mutuality continues to be applicable to incorporated and unincorporated members’ clubs after the 46th Amendment to the Constitution and, therefore, no sales tax is payable to the State by the Calcutta Club.

Further, it was held that the above-stated logic would apply to service tax levied on members’ clubs.

The law laid down in the above-stated case was that a club and its members are one and the same, therefore any amount paid by the members to the club and the services rendered by the club to its members were self-service and cannot be taxed.

Coram stated that, the fact that the club was incorporated as a separate legal entity made no difference, further it was added that the same principle won’t be applied.

Further, it was expressed that,

“…the nature of the relationship between the appellant and the milk unions continues to that of club to its members.”

Hence, no service tax was payable on the services rendered by the appellant to the milk unions.

Lastly, the Tribunal held that the demand and penalties imposed needed to be set aside. [Rajasthan Co-operative Dairy Federation Ltd. v. Commr., Central Excise, Service Tax Appeal No. 53009 of 2016, decided on 9-5-2022]


Advocates before the Tribunal:

Shri Narendra Singhvi, Advocate for the Appellant

Shri Ravi Kapoor, Authorised Representative for the Respondent

Case BriefsSupreme Court

Supreme Court: In an interesting case where the Division Bench of Sanjay Kishan Kaul* and M.M. Sundresh, JJ., was to answer whether pending criminal appeal, and with the sentence being suspended, could the DCRG be directed to be released on the construction of the applicable rules, the Bench resolved the issue against the employees and held there was not statutory mandate that DCRG should be released to the respondents pending consideration of the criminal appeal.

The moot question before the full Bench of the Kerala High Court was whether on conviction in a criminal case for violation of integrity norms in performance of official duties and an appeal pending before the High Court, is the employee still entitled to the release of his Death-cum-Retirement Gratuity (DCRG). The High Court, by the impugned judgment had ruled in favour of the employees and had held that the recovery under Rule 3 of Kerala Services Rules could only be against pension and not DCRG, and Rule 3A insofar as it permitted DCRG to be withheld was struck down.

The Rules in Question

The Rule 3 of Kerala Services Rules reads as:

“withholding or withdrawing a pension or any part of it, whether permanently or for a specified period, and the right of ordering the recovery from a pension of the whole or part of any pecuniary loss caused to government if in a departmental or judicial proceeding, the pensioner is found guilty of grave misconduct or negligence during the period of his service, including service rendered upon re-employment after retirement…”

Whereas, Rule 3A provides that:

“3-A. (a) Where any departmental or judicial proceedings is instituted under Rule 3 or where a departmental proceeding is continued under clause (a) of the proviso thereto, against an employee who has retired on attaining the age of compulsory retirement or otherwise he shall be paid during the period commencing from the date of his retirement to the date on which, upon conclusion of such proceeding final orders are passed, a provisional pension not exceeding the maximum pension which would have been admissible on the basis of his qualifying service up to the date of retirement, or if he was under suspension on the date of retirement up to the date immediately preceding the date on which he was placed under suspension, but no gratuity or death-cum-retirement gratuity shall be paid to him until the conclusion of such proceeding and the issue of final orders thereon.”

Noticeably, Rule 3 in the KSR deems continuation of service in the case of a delinquent servant even after superannuation if any departmental or judicial proceedings are initiated, for the limited purpose of their finalisation. In the event of an order of dismissal being passed, even after retirement, the Government servant would have to forfeit his pension and DCRG.

Impugned Judgment

The High Court read the Rule 3 of the KSR as empowering the Government to punish the delinquent employee by withholding, withdrawing or reducing, for a specified period or permanently, the pension payable or to order recovery for any  pecuniary loss, but again only from the pension. The Court opined that the same could not be done from the DCRG. While, Rule 3A of the KSR was opined to be only tailored towards the effective implementation of Rule 3 and could not have any separate or distinct consequences.

Noting that the Rule 3A has two parts, the Court observed that the first part dealt with certain conditions on the disbursal of pension in the cases of a continuing proceeding while the second part allowed DCRG or gratuity to be withheld until the conclusion of the proceedings. By the impugned judgment, the second part was held to have an unnecessary penalising effect on an employee while proceedings are pending and would have onerous consequences if the proceedings ended in exoneration since the provision did not contemplate any modality for re-compensation if the DCRG is paid after a long period of time.

Further, observing that Note 2 to Rule 3 provided that the word ‘pension’ did not include DCRG and, that that liabilities could be recovered from DCRG only after giving the employee a reasonable opportunity to explain, the Court held that the recovery under Rule 3 could only be against pension and not DCRG, and Rule 3A insofar as it permitted DCRG to be withheld was struck down.

Analysis and Interpretation by the Court

Noticeably, the State in its wisdom had preferred to await the outcome of criminal proceedings in the instant case and had not initiated any separate departmental proceedings. Rule 3 of the KSR provides that Government reserves to themselves the right to withhold or withdraw a pension or any part of it, whether permanently or for a specified period, and all its ramifications. Further, the word pension is clarified by Note 2, as it would not include DCRG. Thus, DCRG and pension have been dealt with as separate aspects.

However, on the further reading of Note 2, which provides that the liabilities fixed against an employee or a pensioner can be recovered from DCRG without the departmental/judicial proceedings but after giving an employee or pensioner concerned a reasonable opportunity to explain, the Bench opined,

“If any part of DCRG was not supposed to be available for recovery of amounts, there would be no reason of inclusion of this aspect of DCRG in Note 2 and a view to the contrary would make the latter part of Note 2 otiose.”

The Bench observed that Note 2 is further clarified by Ruling 3, which stipulates that Note 2 does not mean that the employee’s or pensioner’s consent should be obtained for recovering the liabilities from DCRG. What has been contemplated is only a communication of such liabilities to him so as to enable him to submit his explanation. Thus, this Ruling No.3 also deals with the DCRG. Therefore, the important aspect before the Bench was whether Rule 3A is to be construed in the context of Rule 3 or should be read independently of itself. The High Court had sought to take a view that Rule 3A is in a sense assisting Rule 3 and does not have any independent existence. The Bench stated,

“The High Court, in our view, has introduced a new legislation by undertaking the exercise of reading down. We do believe that there is absolutely no need to do so when the language of the rule is so clear conveying its intended meaning without any ambiguity.”

Holding that it was a very restrictive view to disburse DCRG on account of the proceedings against a pensioner coming to an end, even where a conviction had arisen, specially where the convicted person has availed of the remedy of appeal, the Bench reiterated that an appeal is a continuation of the proceedings in trial and would be, thus, a continuation of judicial proceedings.  Therefore, pendency of the appeal cannot disentitle the State from withholding the DCRG, considering that it is a hiatus period within which certain arrangements have to be made which would be dependent on the outcome of the appeal.

Conclusion

In the light of the above, the Bench concluded that Rule 3A could not be read in isolation nor the latter part of it struck down as done by the High Court. Rule 3, Note 2, Ruling 3, and Rule 3A have to be read in conjunction as they provide for the treatment of the DCRG in case of disciplinary or judicial proceedings pending at the stage of retirement.

Accordingly, the impugned judgment was set aside holding that it could not be opined that the DCRG would have to be released to the respondents pending consideration of the criminal appeal.

[Local Self Government Department v. K. Chandran, 2022 SCC OnLine SC 318, decided on 15-03-2022]

*Judgment by: Justice Sanjay Kishan Kaul


Kamini Sharma, Editorial Assistant has put this report together 

Case BriefsHigh Courts

Bombay High Court: Holding that mere repeal of the Consumer Protection Act, 1986 by the 2019 Act, without anything more, would not result in the exclusion of ‘health care’ services rendered by doctors to patients from the definition of service, the Division Bench of Dipankar Datta CJ and G.S. Kulkarni, J., expressed that present matter is,

“…a thoroughly misconceived Public Interest Litigation and we have no doubt that it deserves outright dismissal.”

In the instant matter, the Trust sought declaration from this Court that services performed by healthcare service providers are not included within the purview of the Consumer Protection Act, 2019 as well as for mandamus directing all consumer fora within the territorial jurisdiction of this Court not to accept complaints filed under 2019 Act against healthcare service providers.

Further, the petitioning Trust submitted that the 2019 Act having been brought into force upon the repeal of the Consumer Protection Act, 1986, registration of complaints, which were filed against doctors, by the consumer fora in the State of Maharashtra was illegal and shall be declared as such.

Analysis, Law and Decision

In High Court’s opinion, there was no material difference between the definition of service in Section 2(1)(o) of the 1986 Act and in Section 2(42) of the 2019 Act, except for inclusion of ‘telecom’ in Section 2(42) of the 2019 Act, the terms of the definition were identical.

Another significant point noted by the Bench was that Section 2(1)(o) of the 1986 Act did not include services rendered by doctors within the term “service”, but such definition was considered by the Supreme Court in its decision in Indian Medical Association v. V. P. Shantha, (1995) 6 SCC 651.

In view of the above, High Court upheld the decision of NCDRC.

Definition of “service” in both the enactments (repealed and new) are more or less similar and what has been said of “service” as defined in section 2(1)(o) of the 1986 Act would apply ex proprio vigore to the definition of the terms “service” in Section 2(42) of the 2019 Act.

 Hence, services rendered by doctors in lieu of fees/charges therefor were not beyond the purview of the 2019 Act.

In view of the above petition was dismissed petitioning Trust was directed to pay Rs 50,000. [Medicos Legal Action Group v. Union of India, 2021 SCC OnLine Bom 3696, decided on 25-10-2021]


Advocates before the Court:

Mr. Ashish S. Chavan a/w Mr. Adithya Iye a/w Mr. Kunal Shinde for petitioner.

Mr. Anil C. Singh, Addl. Solicitor General a/w Mr. Aditya Thakkar a/w Mr. D. P. Singh for respondent-UOI

National Consumer Disputes Redressal Commission
Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): A Division Bench of R.K. Agrawal (President) and Dr S.M. Kantikar (Member), held that

“…for detrmining the pecuniary jurisdiction of the District Commission, State Commission or National Commission the value of goods or services paid as consideration alone has to be taken and not the value of the goods or services purchased.”

Complainant approached the Commission with regard to a complaint against National Insurance Company Limited, Kolkata.

Further, it was stated that the complainant had taken Insurance coverage from National Insurance Company Limited, Kolkata under its Standard Fire and Special Perils Policy initially for a total sum of Rupees Twenty eight crores and twenty thousand only by paying a premium of Rupees Three lac twenty thousand five hundred and twenty-five only.

An additional security coverage of Rupees Thirteen crores only on 25-08-2020 by paying a premium of Rupees One lac twenty-three thousand and thirty-seven only.

Due to heavy rainfall and flood water, factory premises of the Complainant got tilted and partial collapse of the building was caused with several other losses due to damage in the building.

Complainant informed the National Insurance Company Limited, Kolkata on 05-09-2020 about the loss sufferred and making the payment of the loss suffered by estimating it.

After exchange of correspondence and personal interaction the National Insurance Company Limited – OP-1 repudiated the claim of the Complainant.

Maintainability of the present complaint

In the present case a preliminary point arises as to how this Consumer Complaint is maintainable before the National Consumer Disputes Redressal Commission because the value of the consideration paid in the present case i.e. premium paid for taking the Insurance Policies was only Rs 3,20,525 and Rs 1,23,037 the total of which comes to Rs 4,43,562 (Rupees Four Lac forty three thousand five hundred and sixty two only), which is less than the consideration paid of more than Rs 10,00,00,000 (Rupees Ten crores) as provided under Section 58 (1) (a) (i) of the Act of 2019.

Parliament, while enacting the Act of 2019 was conscious of this fact and to ensure that Consumer should approach the appropriate Consumer Disputes Redressal Commission whether it is District, State or National only the value of the consideration paid should be taken into consideration while determining the pecuniary jurisdiction and not value of the goods or services and compensation, and that is why a specific provision has been made in Sections 34 (1), 47 (1) (a) (i) and 58 (1) (a) (i) providing for the pecuniary jurisdiction of the District Consumer Disputes Redressal Commission, State Consumer Disputes Redressal Commission and the National Commission respectively.

Hence, the bench stated that Sections 34 (1), 47 (1) (a) (i) and 58 (1) (a) (i) of the Act of 2019 make it clear that for detrmining the pecuniary jurisdiction of the District Commission, State Commission or National Commission the value of goods or services paid as consideration alone has to be taken and not the value of the goods or services purchased.

Therefore, we are of the view that the provision of Section 58 (1)(a)(i) of the Act 2019 are very clear and does not call for any two interpretations.

As the value of consideration paid by the Complainant is only Rs 4,43,562 (Rupees four lac forty three thousand five hundred and sixty two only), which is not above Rs 10,00,00,000 (Rupees Ten crore), the National Commission has no jurisdiction to entertain the present Consumer Complaint. [Pyaridevi Chabiraj Steels (P) Ltd. v. National Insurance Company Ltd., Consumer Case No. 833 of 2020, decided on 28-08-2020]

Jammu and Kashmir and Ladakh High Court
Case BriefsHigh Courts

Jammu & Kashmir High Court: Ali Mohammad Magrey, J. disposed of the writ petition on the grounds that a similar matter was already ruled in favor of the petitioners and thus the same orders were to be followed verbatim.

The petitioner by way of the instant application was seeking the release of his legitimately earned wages in his favor for the services rendered or to be rendered by him in the respondent Department since the petitioner was to be included in the final list of casual laborers on the basis of the report submitted by respondent 3, and also consider the claim of the petitioner for regularization as and when such policy is framed.

 The petitioner was working as a Casual Labor in the respondent Department since the year 2009. The respondents framed a list of Casual Labors, 645 in number, including the petitioner herein, in terms whereof the case of these Casual Labors was submitted to the higher authorities for regularization of their services in the respondent Department. The case of the petitioner was withheld on account of authentication/ verification and not included in the final list framed by the respondents. It was argued that the petitioner had approached the respondents for enlisting him in the final list but the respondent.3, while forwarding the list of left out need-based Casual Labors to the respondent 2, intimated to the said authority that the verification/ authentication has been done by the concerned Committee with regard to other left out Casual Labors, including the petitioner. The respondent 2, in turn, had advised the respondent 3 that the said recommendation needed to be verified by all the members of the Committee concerned. In response to the said communication, the respondent 3, submitted the list of left out need-based Casual Labors whose authentication/ verification was done by the members of the Committee.

The petitioner contended that despite the recommendations of the respondent 3 to the respondent 2 intimating therein that the verification/ authentication had been duly done by all the members of the Committee concerned with regard to the case of the left out need-based Casual Labors, including the petitioner, the respondent 2 did not include the petitioner in the final list and also did not release the legitimately earned wages in favor of the petitioner, constraining the petitioner to file the instant writ petition.

The respondents argued that the petitioner did not present himself and remained unavailable before the Empowered Committee at the time of screening of the Casual Labors undertaken by the Department, as such, could not be enlisted in the final list of Casual Labors.

The High Court took into consideration earlier litigation on similar lines where 15 out of the 21 Casual Labors who were left out from the final list of Casual Labors, were included in the final list of Casual Labors on the basis of the report submitted by the respondent 3. The only practical difficulty faced by the respondents was the factum that the petitioner failed to appear before the Screening Committee which was constituted for the said purpose. It was, thus, clear that the case of the petitioner herein was similarly situated to that of the other 15 Casual Labors, and thus the instant petition was disposed of by directing the respondent 2 to include the petitioner in the final list of Casual Labors on the basis of the report submitted by the respondent 3. The respondents were also ordered to release the legitimately earned wages in favor of the petitioner for the services rendered or to be rendered by him in the respondent Department, as are being paid to the other similarly situated enlisted Casual Labors. [Bilal Ahmad Shah v. State of J&K, 2019 SCC OnLine J&K 825, decided on 23-09-2019]

Case BriefsTribunals/Commissions/Regulatory Bodies

Authority for Advance Ruling, Chhattisgarh: The Members comprising of Kalpana Tiwari, Joint Commissioner of State Tax and Rajesh Kumar Singh, Additional Commissioner of CGST and Central Excise, held that a supplier is required to charge GST upon service recipient on the total amount including cost of diesel provided by recipient company for transportation of its goods.

Applicant herein (supplier) had an agreement for transporting cement of a company named Shree Raipur Cement (service recipient). It was agreed that the diesel required for said transportation would be provided by the service recipient. The applicant sought clarification as to whether the supply of diesel by the service recipient would be included or excluded while charging GST on freight amount to be charged by the applicant.

The Authority noted that in the instant case, the service recipient, i.e., cement company was providing diesel to the vehicles used by the applicant for transporting cement/clinker in the course of business of cement by the service recipient. Diesel so provided by it to the applicant, was an important and integral component of this business process, without which the process of supply of cement could not be materialised.

It was opined that as per Sections 7(1) and 15(2)(b) of the Central Goods and Services Tax Act, 2017 which define ‘supply’ and ‘value of supply’ respectively, any amount that the supplier is liable to pay in respect of supply but which has been incurred by the recipient of supply and not included in the price actually paid or payable for the goods or services or both, is includible in value of supply of goods/ services.

Thus, the applicant was required to charge GST upon Shree Raipur Cement on the total amount including the cost of diesel, i.e., on the total freight amount inclusive of the cost of diesel so provided by the service recipient.[Advance Ruling No. STC/AAR/10 A/2018, In an application filed by M/s Shri Navodit Agarwal, Order dated 26-03-2019]

Legislation UpdatesNotifications

S.O. 1614(E) — Whereas the Central Government is satisfied that public interest so requires that the services engaged in the Banking industry, which is covered under item 2 of the First Schedule to the Industrial Disputes Act, 1947 (14 of 1947), to be a public utility service for the purposes of the said Act;

And whereas the Central Government has lastly declared the said industry to be public utility service for the purposes of the said Act for a period of six months from the 21-10-2018 vide notification of the Government of India in the Ministry of Labour and Employment number S.O.5326(E), dated 18-10-2018 published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (ii), dated the 18-10-2018;

And whereas the Central Government is of the opinion that public interest requires the extension of the public utility service status to the said industry for a further period of six months;

Now, therefore, in exercise of the powers conferred by the proviso to sub-clause (vi) of clause (n) of Section 2 of the Industrial Disputes Act, 1947 (14 of 1947), the Central Government hereby declares the services engaged in the Banking industry to be a public utility service for the purposes of the said Act for a period of six months with effect from the 21-04-2019.


[Notification dt. : 18-04-2019]

Ministry of Labour and Employment

Uttarakhand High Court
Case BriefsHigh Courts

Uttaranchal High Court: The Bench of Ramesh Ranganathan, CJ and Ramesh Chandra Khulbe, J. dismissed a petition for it being raised for the first time in an intra-court appeal.

The appellant has filed the said writ petition questioning the “Science & Technology Entrepreneurship Park” (STEP) in terminating their services. The counsel has contended that STEP was initially established and funded by the respondent and consequently “STEP” would fall within the ambit of Article 12 of the Constitution of India. On the other hand, the respondent pressed upon the fact that STEP is a self-financing body whose funds were initially granted by the Government of India to establish the above plus there was no allocation of funds towards the same for more than 15 years now. Also, STEP was a society registered under the Societies Registration Act which further corroborates their submission. The case of Pradeep Kumar Biswas v. Indian Institute of Chemical Biology, (2002) 5 SCC 111 was referred to wherein it was stated that to prove instrumentality it has to be proved that financially, functionally and administratively there existed governmental control but if the control was found to be regulatory then body was not a “State” within the meaning of Article 12 of the Constitution of India.

Now the question that arose before the Court was whether termination of the services of the petitioners under the Indian Contract Act necessitates examination in writ proceedings under Article 226 of the Constitution of India. Here the Court said that the scope of interference in an intra-court appeal was extremely limited so accordingly the question cannot be decided here that too after permitting the parties to amend their respective pleadings.

Hence appeal was disposed of with a liberty to file a fresh appeal. [Hasibur Rahmaan v. Union of India, 2019 SCC OnLine Utt 28, Order dated 03-01-2019]

National Consumer Disputes Redressal Commission
Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): A Single Judge Bench of V.K. Jain, J., allowed a revision petition filed against the order of the State Commission, whereby the petitioner was directed to reconstruct the tomb in the cemetery of the Cathedral at their own expenses and also pay a sum of Rs.25,000/- as compensation to the complainant.

The complainant/respondent had paid Rs. 1001/- to the opposite party/petitioner for granting permission to construct a family tomb in the cemetery of the said Cathedral. The permission was granted and the family tomb was constructed but later on, it was demolished by the petitioner and hence the respondent approached the appropriate fora claiming deficiency in services on the part of petitioner.

The main issue that arose before the Commission was whether the respondent would fall under the definition of consumer and whether the respondent can be said to have hired or availed the services of the Cathedral or its Trustees.

The Commission observed that as per the definition of the consumer under Section 2(1) (d) of the Consumer Protection Act (COPRA), a consumer is a person who either purchases goods or avails service for a consideration. The Commission then referred to the definition of service as given under Section 2(1)(o) of the COPRA.

The Commission held that from a perusal of Section 2(1)(o) of the COPRA, it becomes clear that granting permission in for construction of a family tomb in lieu of a certain sum of money does not amount to rendering services under the COPRA. At best it can be seen as permission granted to one of the devotees by a religious organization. Further, the Commission also held that a person who is granted such a permission would not fall under the ambit of consumer for the purpose of Section 2(1)(d) of the COPRA. Resultantly, the review petition was allowed and the order of State Commission was set aside. [Jacobite Syrian Cathedral v. Jippu Varkey, Revision Petition No. 2695-2696 of 2018, order dated 25-10-2018]

Case BriefsHigh Courts

Bombay High Court: The Single Judge Bench of S.C. Gupta, J. has held that a co­operative housing society cannot be termed as an industry within the meaning of Section 2 (j) of the Industrial Disputes Act if it carries on some commercial activity, not as its predominant activity, but as an adjunct to its main activity.

The petitioner was a Cooperative Housing Society which had engaged Respondent 1 as a watchman. Upon the latter’s completion of 60 years of age, his services were terminated with effect from 1 November 2000. Petitioner’s case was that the termination was with mutual consent and with payment of retirement benefit. This was a matter of dispute as Respondent 1 thereafter raised a demand for reinstatement. The Labour Court held against petitioner and rejected its claim of non-maintainability of reference.

The Court referred to Supreme Court’s judgment in Bangalore Water Supply and Sewerage Board v. A. Rajappa, (1978) 2 SCC 213 where the Apex Court held that when there are multiple activities carried on by an establishment, what is to be considered is the dominant function. The Court held that merely because the society charged some extra charges from a few of its members for display of neon signs, the society cannot be treated as an industry carrying on business of hiring out of neon signs or allowing display of advertisements. The Court set aside the order of the Labour Court. [Arihant Siddhi Co.Op. Hg. Soc. Ltd. v. Pushpa Vishnu More, Writ Petition No. 787 OF 2007, order dated 22-06-2018]

Case BriefsSupreme Court

Supreme Court: Reviewing its judgment dated 9-1-2015, the Division Bench of Chelameswar and Dr. A.K. Sikri, JJ has held that there is no provision for reservation in public sector banks for  SC/ST categories in promotion of  officers  from one grade/scale to the next, when such promotions are to be made on selection basis i.e. on merits.

The Court however, observed that it is open to the State and the banks to consider whether it is feasible to provide such reservation in the officers’ category and if so up to what level.

 The Court had to decide upon the validity of the Madras High Court’s judgment in the batch of appeals, which had decided that in the matter of promotions in the officer grades, a reservation in favour of SC/ST officers was provided for in the Office Memorandum dated August 13, 1997. The Banks contended that there was no rule of reservation for promotion in Class A (Class I) to the post/scales having a basic salary of more than Rs 5700 per month and the OM at best only provided a concession. The Supreme Court had upheld the Banks’ contention observing that  there was no reservation in respect of promotion by selection within only those Group A  posts carrying ultimate salary of  Rs 5700. However, based on other memoranda, it observed  that reservation existed only in respect of those posts carrying basic pay of up to Rs 5700 per month and with the implementation of the Fifth Pay Commission  Report, It would follow that such reservation was applicable to the post carrying pay scale of Rs 18,300. On that basis, it was held that since pay scale of the posts up to Scale VI was Rs 18,300 reservation is to be provided.  This aspect of the judgment was under review.

The Attorney General Mr Mukul Rohatgi submitted that a fundamental error, apparent on the face of the record had crept in para 34 of the judgment wherein the Court had observed that “reservation is provided in promotion by selection qua those posts which carry an ultimate salary of less than Rs 5700 (pre-revised)” while observing in the earlier portion of the same paragraph that “there is no reservation in promotion by selection in Group A posts which carry an ultimate salary of Rs 5700 per month. In such cases it is only the concession that applies”. In spite of deciding the main issue against the respondents, because of the aforesaid error in the judgment, the said benefit was still bestowed by giving reservations to officers belonging to SC/ST category from Scale I to Scale VI. The Court agreed that it was in conflict not only with the earlier portion of para 34 but the  entire conclusion discussed in the judgment. It is clearly an error on the face of record as no such consequence follows. Consequently, the Court allowed the review petitions  by deleting paras 33 to 36 of the judgment, the directions contained therein as well as the directions contained in para 37 . It was to be replaced with

“33. Result of the aforesaid discussion would be to allow these appeals and set aside the judgment of the High Court. While doing so, we reiterate that it is for the State to take stock of the ground realities and take a decision as to whether it is necessary to make a provision for reservation in promotions from Scale I to Scale II and upward, and if so, up to which post. The contempt petition also stands disposed of.”

Guided by the principle of ex debito justitae as discussed in A.R. Antulay v. R.S. Nayak,(1988) 2 SCC 602 and S.Nagaraj v. State of Karnataka, 1993 Supp (4) SCC 595, the Court observed “when an error is pointed out and the Court also finds that there is an error apparent on the face of the record, it would not shy away from correcting that error”. [Chairman  & Managing Director, Central  Bank of India v. Central  Bank of  India SC/ST Employees Welfare Association2016 SCC OnLine SC 19 , decided on  8-1-2016]