Case BriefsHigh Courts

Allahabad High Court: The Division Bench of Dr Kaushal Jayendra Thaker and Ajit Singh, JJ., addressed an interesting question as to whether the tribunal could due to the prolonged litigation re-decide compensation already awarded in an accident claim or it was to confine itself to the objection raised by the owner of the vehicle, which was a liability to pay compensation.

Background

The facts of the instant case were such that the original claimant who was going on his vehicle at 7.45 a.m and was hit by bus bearing No. DL IP 6567 which was being driven by driver rashly and negligently. The injured was rushed to the hospital where he was treated for injuries received due to an accident. On petition being filed for the claim of compensation, summons were issued to the owner of the bus (owner), namely, Manoj Kumar. The insurance company was permitted to contest the petition under Section 170 of the Motor Vehicles Act, 1988. However, due to the non-appearance of the owner, the matter proceeded ex parte and since the insurance of the vehicle was not proved, an award was passed in the favour of the injured on 27-09-2010.

Subsequent Award granted by the Tribunal

Subsequently, during the execution petition, the owner claimed that his vehicle was insured and the insurer would be liable to satisfy the decree. It was further contended by the owner that the summons never reached him, therefore, ex-parte order against him was liable to be set aside in per Order 9, Rule 13 of CPC. Meanwhile, the injured died out of the injuries sustained due to the accident and medical evidence was also filed by his legal representatives (claimant).

The Tribunal permitted owner to produce documents so as to prove that the vehicle was insured and went to decided the matter afresh. The Tribunal on re-appreciation of evidence opined that the deceased died due to kidney failure and disallowed majority of the claim amount under the head of medical expenses on the ground that the documents were not proved and granted paltry sum of Rs. 1,19,000/- as medical expenses as against more than twenty lacs spent by the claimant by the time award dated 27-09-2010 was pronounced. However, regarding the question of liability to pay compensation, the Tribunal had fastened the insurer with the liability.

Earlier, the Tribunal while deciding the claim petition on 27-09-2010, granted medical expenses which came to Rs. 20,84,750, which was rounded up to Rs. 20,16,500/- and loss of five months’ salary for(163 days), which came to Rs. 63,250/- and Rs. 5,000/- for pain shocks and sufferings.

Whether the tribunal was justified in re-deciding the compensation already awarded?

The Tribunal, in subsequent proceedings, went on to hold that the death was due to dialysis which did not had any causal connection with the accident and reduced the compensation on that ground. This finding could not withstand the judicial scrutiny as it was not within the purview of the tribunal to decide how the claimant died while deciding issue relating to negligence and was beyond the purview of the said issue.

It is settled position of law that the award of the Claims Tribunal shall be paid by owner or driver of the vehicle in the accident and they would be indemnified by insurer. The Tribunal committed a mistake rather irregularity by setting aside the award. The Tribunal further committed an error by re-deciding the compensation. The decree could have been set aside in part namely qua issue of liability as it was a award which could be set aside in part there was definitely severable decree. The Bench opined that, one way for the Tribunal to resolve the controversy and avoid prolonged litigation was to direct the owner to pay the compensation and later on have it indemnified by the insurer, or what could have been done was the Tribunal to decide the matter of liability alone rather that re-fixing the compensation as the Tribunal was not even asked to reconsider the question of quantum and interest.

Do personal right of action abate with the death of the person?

Citing the decision in Madhuben Maheshbhai Patel v. Joseph Francis Mewan, 2014 LawSuit (Guj) 2214, the Bench dealt with the issue of applicability of the maxim “actio personalis moritur cum persona”  which translates to on the death of original claimant, personal right of action abates”, The Bench opined that the said maxim could not be imported to defeat the purpose and object of a social welfare legislation like Motor Vehicles Act.

“Once the status of claimants as legal heirs or legal representatives is conceded and acknowledged, to deny benefit of compensation to them on the ground that injury was personal to the claimant, it will be giving a premium to the wrong doer and it would defeat the very purpose and object of beneficial piece legislation.”

Hence, even after death of injured, claim petition does not abate and the right to sue survives to his heirs and legal representatives.

Verdict of the Court

In case of motor accidents, the endeavour is to put the dependents/ claimants in the pre-accidental position. Considering that the injured which was 38 years at the time of the accident,  suffered 40% permanent disability and was in permanent government service earning a sum of Rs. 11500/- per month and that 15 years had already elapsed and 9 years had elapsed after the death of the claimant, the Bench held his medical expenses as granted by the Tribunal in its order dated 27-09-2010 should be maintained entirely. The additional amount of five months’ salary as actual loss to the estate granted by the Tribunal was also maintained.

Further, an award of a lump-sum amount of two lacs of rupees in addition to the compensation as loss to estate and mental harassment to the legal heirs for protracted litigation was also awarded. Since, the injured had passed away, his family was awarded a further sum of two lacs and fifty thousand for loss to estate and additional sum of Rs 50000 for mental trauma and incidental expenses for looking after the deceased after he suffered the injuries. Conclusively, total compensation for a sum of Rs.24,00,000 was granted to the claimant which was to be paid by the insured. As far as issue of rate of interest was concerned, it was held to be 7.5% in view of the latest decision of the Supreme Court in National Insurance Co. Ltd. v. Mannat Johat, 2019 (2) T.A.C.705 (S.C.) from the date of the filing of the claim petition till the date of actual deposit.[Satish Chand Sharma v. Manoj Kumar, FAFO No. 3160 of 2018, decided on 26-03-2021]


Kamini Sharma, Editorial Assistant has reported the brief.


Appearance before the Court by:

Counsel for Appellant: Abhishek, Umesh Kumar Singh
Counsel for Respondent: Nishant Mehrotra

Case BriefsSupreme Court

Supreme Court: Taking note of an important legal question raised by the High Court of Kerala while hearing a Motor Vehicle Accident claim case, the 3-judge bench of NV Ramana, Surya Kant and Aniruddha Bose, JJ has agreed to decide the following question:

“Whether in the matter of awarding costs, the procedure and rules framed under the Constitution, CPC and the Rules made thereunder, for `Courts’, could be resorted to by the Claims Tribunal which is apparently, not a `Court.”

The petitioner in the Special Leave petition, challenged the Kerala High Court’s judgment whereby the High Court upheld the compensation granted by the Motor Accident Claims Tribunal, Kottayam in favour of the injured respondent. It was argued that

“the Tribunal does not possess any authority to award any costs as incidental to its power over the parties or the subject matter of the litigation, and the Tribunal being constituted under a special enactment is to be governed solely by the provisions of the Motor Vehicles Act, 1988.”

The Court, hence, allowed the special leave petition to the limited extent of examining the legal issue raised by the petitioner.

Advocate N.Vijayaraghavan will be assisting the Court as  amicus curiae.

[ICICI Lombard General Insurance Company v. MD Davasia,  2021 SCC OnLine SC 79, order dated 11.02.2021]


Appearance before the Court by

For Petitioner:  Rana Mukherjee, Sr.Adv., Nagesh, Adv., Daisy Hannah, Adv. and Shekhar Kumar, AOR.

Case BriefsSupreme Court

[Note: This report is a detailed analysis of Supreme Court’s judgment in Madras Bar Association v. Union of India[1]. To read the guidelines and directions issued by the Court, click here.]

Supreme Court: The 3-judge bench of L. Nageswara Rao*, Hemant Gupta and S. Ravindra Bhat has issued extensive directions in relating to selection, appointment, tenure, conditions of service, etc. relating to various tribunals, 19 in number, thereby calling for certain modifications to the Tribunal, Appellate Tribunal and other Authorities [Qualification, Experience and Other Conditions of Service of Members] Rules, 2020

The Supreme Court was once again, within the span of a year, called upon to decide the issue at hand. Last year, the Constitution Bench in Rojer Mathew v. South Indian Bank Ltd., (2020) 6 SCC 1 had held that the Tribunal, Appellate Tribunal and Other Authorities (Qualifications, Experience and Other Conditions of Service of Members) Rules, 2017, as a whole was ultra vires.

“That the judicial system and this Court in particular has to live these déjà vu moments, time and again (exemplified by no less than four constitution bench judgments) in the last 8 years, speaks profound volumes about the constancy of other branches of governance, in their insistence regarding these issues.”

Here is the explainer on the directions issued by the Court:

NATIONAL TRIBUNALS COMMISSION

“We have noticed a disturbing trend of the Government not implementing the directions issued by this Court. To ensure that the Tribunals should not function as another department under the control of the executive, repeated directions have been issued which have gone unheeded forcing the Petitioner to approach this Court time and again. It is high time that we put an end to this practice.”

Noticing that the Tribunals are not free from the Executive control and that they are not perceived to be independent judicial bodies, the Court said that there was an imperative need to ensure that the Tribunals discharge the judicial functions without any interference of the Executive whether directly or indirectly.

Hence,

“An independent body headed by a retired Judge of the Supreme Court supervising the appointments and the functioning of the Tribunals apart from being in control of any disciplinary proceedings against the Members would not only improve the functioning of the Tribunals but would also be in accordance with the principles of judicial independence.”

To stop the dependence of the Tribunals on their parent Departments for routing their requirements and to ensure speedy administrative decision making, as an interregnum measure, it was hence directed that there should be a separate “tribunals wing” established in the Ministry of Finance, Government of India to take up, deal with and finalize requirements of all the Tribunals till the National Tribunals Commission is established.

Read the directions here

SEARCH-CUM-SELECTION COMMITTEE

After it was brought to Court’s notice that the constitution of the Search-cum-Selection Committees as per 2020 Rules does not ensure judicial dominance, the Court made the following directions:

  • a casting vote will be given to the Chief Justice of India or his nominee as the Chairperson of the Search-cum-Selection Committee.
  • normally the Chairperson of the Tribunal would be a retired Judge of the Supreme Court or the Chief Justice of a High Court. However, there are certain Tribunals in which the Chairperson may not be a judicial member. In such Tribunals, the Search-cum-Selection Committee should have a retired Judge of the Supreme Court or a retired Chief Justice of a High Court nominated by the Chief Justice of India in place of the Chairperson of the Tribunal.
  • the 2020 Rules would be amended to reflect that whenever the re-appointment of the Chairman or Chairperson or President of a Tribunal is considered by the Search-cum-Selection Committee, the Chairman or Chairperson or President of the Tribunal shall be replaced by a retired Judge of the Supreme Court or a retired Chief Justice of a High Court nominated by the Chief Justice of India.
  • Secretary to the sponsoring or parent Department shall serve as the Member-Secretary/Convener to the Search-cum-Selection Committee and shall function in the Search-cum-Selection Committee without a vote.
  • Rule 4 (2) of the Rules that postulates that a panel of two or three persons shall be recommended by the Search-cum-Selection Committee from which the appointments to the posts of Chairperson or members of the Tribunal shall be made by the Central Government, shall be amended and till so amended, that it be read as empowering the Search-cum-Selection Committee to recommend the name of only one person for each post. Taking note of the requirement of the reports of the selected candidates from the Intelligence Bureau, another suitable person can be selected by the Search-cum-Selection Committee and placed in the waiting list.

Read the directions here

TERM OF OFFICE

At present Rule 9(1) permits a Chairman, Chairperson or President of the Tribunal to continue till 70 years which is in conformity with Parliamentary mandate in Section 184 of the Finance Act. However, Rule 9(2) provides that Vice Chairman and other members shall hold office till they attain 65 years.

Accepting Amicus Curiae’s submission that under the 2020 Rules, the Vice Chairman, Vice-Chairperson or Vice-President or members in almost all the Tribunals will have only a short tenure of less than three years if the maximum age is 65 years, the Court directed the Government to amend Rule 9 (1) of the 2020 Rules by making the term of Chairman, Chairperson or President as five years or till they attain 70 years, whichever is earlier and other members dealt with in Rule 9(2) as five years or till they attain 67 years, whichever is earlier.

Section 184 of the Finance Act, 2017 provides for reappointment of Chairpersons, Vice-Chairpersons and members of the Tribunals on completion of their tenure. There is no mention of reappointment in the 2020 Rules. Hence, Reappointment for at least one term shall be provided to the persons who are appointed to the Tribunals at a young age by giving preference to the service rendered by them.

Read the directions here

HOUSE RENT ALLOWANCE

Noticing that lack of housing in Delhi has been one of the reasons for retired Judges of the High Courts and the Supreme Court to not accept appointments to Tribunals, the Court directed the Government of India to make serious efforts to provide suitable housing to the Chairperson and the members of the Tribunals and in case providing housing is not possible, to enhance the house rent allowance to Rs.1,25,000/- for members of Tribunals and Rs.1,50,000/- for the Chairman or Chairperson or President and Vice Chairman or Vice Chairperson or Vice President of Tribunals.

“… an option should be given to the Chairperson and the members of the Tribunals to either apply for housing accommodation to be provided by the Government of India as per the existing rules or to accept the enhanced house rent allowance. This direction shall be effective from 01.01.2021.”

Read the directions here

ADVOCATES AS JUDICIAL MEMBERS

While the Attorney General suggested that an advocate who has 25 years of experience should be considered for appointment as a Judicial member, the Amicus Curiae suggested that it should be 15 years.

Considering both the suggestions, the Court said,

“As the qualification for an advocate of a High Court for appointment as a Judge of a High Court is only 10 years, we are of the opinion that the experience at the bar should be on the same lines for being considered for appointment as a judicial member of a Tribunal.”

However, it is left open to the Search-cum-Selection Committee to take into account in the experience of the Advocates at the bar and the specialization of the Advocates in the relevant branch of law while considering them for appointment as judicial members.

Read the directions here

ELIGIBILITY OF MEMBERS OF INDIAN LEGAL SERVICE

The Court directed that the members of Indian Legal Service shall be entitled to be considered for appointment as a judicial member subject to their fulfilling the other criteria which advocates are subjected to. In addition, the nature of work done by the members of the Indian Legal Service and their specialization in the relevant branches of law shall be considered by the Search-cum-Selection Committee while evaluating their candidature.

Read the directions here

IMPORTANCE OF APPOINTMENT OF COMPETENT AND YOUNG LAWYERS AND TECHNICAL MEMBERS

Tribunals discharge a judicial role, and with respect to matters entrusted to them, the jurisdiction of civil courts is usually barred. Therefore, wherever legal expertise in the particular domain is implicated, it would be natural that advocates with experience in the same, or ancillary field would provide the “catchment” for consideration for membership. This is also the case with selection of technical members, who would have expertise in the scientific or technical, or wherever required, policy background.

Younger advocates who are around 45 years old bring in fresh perspectives. Many states induct lawyers just after 7 years of practice directly as District Judges.

“If the justice delivery system by tribunals is to be independent and vibrant, absorbing technological changes and rapid advances, it is essential that those practitioners with a certain vitality, energy and enthusiasm are inducted.”

25 years of practice even with a five-year degree holder, would mean that the minimum age of induction would be 48 years: it may be more, given the time taken to process recommendations. Therefore, a tenure without assured re-engagements would not be feasible. A younger lawyer, who may not be suitable to continue after one tenure (or is reluctant to continue), can still return, to the bar, than an older one, who may not be able to piece her life together again.

Read the directions here

REMOVAL OF MEMBERS

Rule 8 of the 2020 Rules provides the procedure for inquiry of misbehavior or incapacity of a member. According to the said Rule, the preliminary scrutiny of the complaint is done by the Central Government. If the Central Government finds that there are reasonable grounds for conducting an inquiry into the allegations made against a member in the complaint, it shall make a reference to the Search-cum-Selection Committee which shall conduct an inquiry and submit the report to the Central Government.

However, Amicus Curiae argued that there is no clarity in the Rules as to whether the reports submitted by the Search-cum-Selection Committee are binding on the Central Government. The Attorney General submitted that the preliminary scrutiny done by the Central Government, according to Rule 8 (1) is only for the purpose of weeding out frivolous complaints and that the recommendations made by the Search-cum-Selection Committee shall be implemented by the Central Government. The Court accepted the submissions of the learned Attorney General.

Read the directions here

TIME LIMIT FOR APPOINTMENT

“The very reason for constituting Tribunals is to supplement the functions of the High Courts and the other Courts and to ensure that the consumer of justice gets speedy redressal to his grievances. This would be defeated if the Tribunals do not function effectively.”

It was brought to Court’s notice that there are a large number of unfilled vacancies hampering the progress of the functioning of the Tribunals. The pendency of cases in the Tribunals is increasing mainly due to the lack of personnel in the Tribunals which is due to the delay in filling up the vacancies as and when they arise due to the retirement of the members.

The Court, hence, directed that the Government of India shall make the appointments to the Tribunals within three months after the Search-cum-Selection Committee completes the selection and makes its recommendations.

Read the directions here

RETROSPECTIVITY OF THE 2020 RULES

The Court rejected the submission of learned Attorney General that the 2020 Rules which replaced the Tribunal, Appellate Tribunal and other Authorities (Qualification, Experience and Other Conditions of Service of Members) Rules, 2017 shall come into force with effect from 26.05.2017 which was the appointed day in accordance with the 2017 Rules and said,

“It is true that the 2017 Rules were brought into force from 26.05.2017 and Section 183 of the Finance Act provides for any appointment made after the appointed day shall be in accordance with the Rules made under Section 184 of the Finance Act, 2017. 2017 Rules which have come into force with effect from 26.05.2017 in accordance with Section 183 have been struck down by this Court. The 2020 Rules which came into force from the date of their publication in the Official Gazette, i.e. 12.02.2020, cannot be given retrospective effect.”

Further, the intention of Government of India to make the 2020 Rules prospective is very clear from the notification dated 12.02.2020. In any event, subordinate legislation cannot be given retrospective effect unless the parent statute specifically provides for the same.

The Court, however, clarified that all appointments made prior to the 2020 Rules which came into force on 12.02.2020 shall be governed by the parent Acts and Rules. Any appointment made after the 2020 Rules have come into force shall be in accordance with the 2020 Rules subject to the modifications directed in this judgment.

Read the directions here

In the petition that was filed by Madras Bar Association, the Court directed the Government to strictly adhere to the directions and not force the Petitioner-Madras Bar Association, which has been relentless in its efforts to ensure judicial independence of the Tribunals, to knock the doors of this Court again.

[Madras Bar Association v. Union of India, 2020 SCC OnLine SC 962, decided on 27.11.2020]


*Justice L. Nageswara Rao has penned this judgment.

[1] Writ Petition (C) No.804 of 2020, decided on 27.11.2020

Counsels heard:

Senior Advocate Arvind Datar, amicus curiae

Attorney General for India K.K. Venugopal,

Additional Solicitor General Balbir Singh and S.V. Raju,

Senior Advocates Mukul Rohtagi, C.A. Sundaram, Vikas Singh,. Anitha Shenoy, R. Balasubramanium, A.S. Chandhiok, Virender Ganda, M.S. Ganesh, Sidharth Luthra, C.S. Vaidyanathan, Guru Krishnakumar, Rakesh Kumar Khanna, Gautam Misra, P.S. Narasimha.

Case BriefsHigh Courts

Karnataka High Court: H. T. Narendra Prasad J. allowed the appeal stating that the Motor Accident Claim Tribunal has ample powers under Section 165 of the Evidence Act to summon a court witness and this power must be exercised proactively.

The facts of the case are such that the claimant who is student studying in Government Polytechnic College and while returning boarded a bus and when she was about to get down from the bus and while her one step was down the driver without any signal moved the bus and the girl fell down sustaining multiple and grievous injuries and was hospitalized thereafter for treatment. A claim petition was filed before the Tribunal and compensation was granted of Rs. 50,000. Being aggrieved by the meagre amount of compensation, instant appeal was filed.

Counsel for the appellants submitted that the claimant was about 18 years of age at the time of the accident and was studying in Govt. Polytechnic College but due to the accident, has sustained fractures and various other body injuries. It was further submitted that merely because the doctor was not examined the Tribunal has not granted any compensation under the ‘loss of future income’ and hence it is not justified in granting meagre compensation of Rs. 50,000 and therefore the appeal should be allowed.

Counsel for the respondents submitted that the claimant has not examined the treating doctor for assessment of disability and therefore the Tribunal on the basis of the materials available on record and wound certificate has granted just and reasonable compensation.

The Court relied on the judgment Shri Iqbalahmed v. Patel Integrated Logistics Ltd., ILR 2017 KAR 3045 wherein it was held that in cases where the claimants are unable to examine the treating doctor as witness, the Presiding Officer of the Tribunal shall play a pro-active role in ensuring the presence of the doctors by invoking the power under Section 165 of The Evidence Act.

The Court thus observed that the Motor Vehicles Act is a social beneficial piece of legislation which caters to the need of the claimants. The very scope and object of the Act while dealing with the claim, is to protect and promote the interest pf the claimants. The Act, tries to monetarily compensate the injured and the dependents of the deceased who find themselves in a difficult situation after suffering an accident.

The Court thus held that the matter be remanded back to the Tribunal with a direction to the Presiding Officer of the Tribunal to summon the treating doctor and in case the treating doctor is not available, the matter should be referred to the Medical Board for assessment of disability.

In view of the above, the appeal was allowed.[Kumari H.P. Shobha v. Managing Director, MFA No. 3668 of 2015, decided on 17-01-2020]


Arunima Bose, Editorial Assistant has put this story together

Case BriefsSupreme Court

Supreme Court: The 3-judge bench of L. Nageswara Rao*, Hemant Gupta and S. Ravindra Bhat has issued extensive directions in relating to selection, appointment, tenure, conditions of service, etc. relating to various tribunals, 19 in number, thereby calling for certain modifications to the Tribunal, Appellate Tribunal and other Authorities [Qualification, Experience and Other Conditions of Service of Members] Rules, 2020.

While the bench has upheld the validity of Tribunal Rules, 2020, here are the modifications and directions issued by the Court:

(i) The Union of India shall constitute a National Tribunals Commission which shall act as an independent body to supervise the appointments and functioning of Tribunals, as well as to conduct disciplinary proceedings against members of Tribunals and to take care of administrative and infrastructural needs of the Tribunals, in an appropriate manner.

Till the National Tribunals Commission is constituted, a separate wing in the Ministry of Finance, Government of India shall be established to cater to the requirements of the Tribunals.

(ii) Instead of the four-member Search-cum-Selection Committees comprising of the Chief Justice of India or his nominee, outgoing or sitting Chairman or Chairperson or President of the Tribunal and two Secretaries to the Government of India, the Search-cum-Selection Committees should comprise of the following members:

(a) The Chief Justice of India or his nominee—Chairperson (with a casting vote).

(b) The outgoing Chairman or Chairperson or President of the Tribunal in case of appointment of the Chairman or Chairperson or President of the Tribunal (or) the sitting Chairman or Chairperson or President of the Tribunal in case of appointment of other members of the Tribunal (or) a retired Judge of the Supreme Court of India or a retired Chief Justice of a High Court in case the Chairman or Chairperson or President of the Tribunal is not a Judicial member or if the Chairman or Chairperson or President of the Tribunal is seeking re-appointment—member;

(c) Secretary to the Ministry of Law and Justice, Government of India—member;

(d) Secretary to the Government of India from a department other than the parent or sponsoring department, nominated by the Cabinet Secretary—member;

(e) Secretary to the sponsoring or parent Ministry or Department—Member Secretary/Convener (without a vote).

Till amendments are carried out, the 2020 Rules shall be read in the manner indicated.

(iii) Rule 4(2) of the 2020 Rules shall be amended to provide that the Search-cum-Selection Committee shall recommend the name of one person for appointment to each post instead of a panel of two or three persons for appointment to each post. Another name may be recommended to be included in the waiting list.

(iv) The Chairpersons, Vice-Chairpersons and the members of the Tribunal shall hold office for a term of five years and shall be eligible for reappointment. Rule 9(2) of the 2020 Rules shall be amended to provide that the Vice-Chairman, Vice-Chairperson and Vice President and other members shall hold office till they attain the age of sixty-seven years.

(v) The Union of India shall make serious efforts to provide suitable housing to the Chairman or Chairperson or President and other members of the Tribunals. If providing housing is not possible, the Chairman or Chairperson or President and Vice-Chairman, Vice-Chairperson, Vice President of the Tribunals shall be paid Rs. 1,50,000/- per month as house rent allowance and Rs. 1,25,000/- per month for other members of the Tribunals from 01.01.2021.

(vi) Advocates with an experience of at least 10 years should be eligible for appointment as judicial members in the Tribunals. The experience of the Advocate at the bar and their specialization in the relevant branches of law is to be considered. They shall be entitled for reappointment for at least one term by giving preference to the service rendered by them for the Tribunals.

(vii) The members of the Indian Legal Service shall be eligible for appointment as judicial members in the Tribunals, provided that they fulfil the criteria applicable to advocates subject to suitability to be assessed by the Search-cum-Selection Committee on the basis of their experience and knowledge in the specialized branch of law.

(viii) Rule 8 of the 2020 Rules shall be amended to reflect that the recommendations of the Search-cum-Selection Committee in matters of disciplinary actions shall be final and shall be implemented by the Central Government.

(ix) The Union of India shall make appointments to Tribunals within three months from the date on which the Search-cum-Selection Committee completes the selection process and makes its recommendations.

(x) The 2020 Rules shall have prospective effect and will be applicable from 12.02.2020, as per Rule 1(2) of the 2020 Rules.

(xi) Appointments made prior to the 2017 Rules are governed by the parent Acts and Rules which established the concerned Tribunals. Any appointments that were made after the 2020 Rules came into force i.e. on or after 12.02.2020 shall be governed by the 2020 Rules subject to the modifications as directed in this judgment.

(xii) Appointments made under the 2020 Rules till the date of this judgment, shall not be considered invalid, insofar as they conformed to the recommendations of the Search-cum-Selection Committees in terms of the 2020 Rules, as they stood before the modifications directed in this judgment. They are, in other words, saved and shall not be questioned.

(xiii) In case the Search-cum-Selection Committees have made recommendations after conducting selections in accordance with the 2020 Rules, appointments shall be made within three months from today and shall not be subject matter of challenge on the ground that they are not in accord with this judgment.

(xiv) The terms and conditions relating to salary, benefits, allowances, house rent allowance etc. shall be in accordance with the terms indicated in and directed by this judgment.

(xv) The Chairpersons, Vice Chairpersons and members of the Tribunals appointed prior to 12.02.2020 shall be governed by the parent statutes and Rules as per which they were appointed. The 2020 Rules shall be applicable with the modifications as directed to those who were appointed after 12.02.2020.

The Court has clarified that all appointments made prior to the 2020 Rules which came into force on 12.02.2020 shall be governed by the parent Acts and Rules. Any appointment made after the 2020 Rules have come into force shall be in accordance with the 2020 Rules subject to the modifications as directed.

In the petition that was filed by Madras Bar Association, the Court directed the Government to strictly adhere to the directions given above and not force the Petitioner-Madras Bar Association, which has been relentless in its efforts to ensure judicial independence of the Tribunals, to knock the doors of this Court again.

[Madras Bar Association v. Union of India, 2020 SCC OnLine SC 962, decided on 27.11.2020]


*Justice L. Nageswara Rao has penned this judgment 

Case BriefsTribunals/Commissions/Regulatory Bodies

Appellate Tribunal for Electricity (APTEL): A Coram of Manjula Chellur, J. (Chairperson) and S.D. Dubey (Technical Member), allowed an appeal which was filed under Section 111 of the Electricity Act, 2003 against order passed by the Uttar Pradesh Electricity Regulatory Commission (State Commission) whereby the State Commission had rejected the petition of the Appellant seeking loss of fixed charges on account of the lower plant availability of 54.78% only, during the year 2017-18, which was directly due to the Appellant being not able to declare capacity to the full extent wholly and exclusively due to the persistent non-payment of the bills in accordance with the terms of Power Purchase Agreement (PPA) by the Respondent No. 2, Uttar Pradesh Power Corporation Limited (UPPCL) for the Electricity generated and supplied by the Appellant.

Facts:

The Appellant is a generating company within the meaning of Section 2(28) of the Electricity Act, 2003 having established a 3 x 660 MW power plant in villages, existing under the provisions of the Companies Act, 2013 in the State of Uttar Pradesh. The Respondent 1 – State Commission is the Electricity Regulatory Commission for the State of Uttar Pradesh exercising powers and discharging its functions under the provisions of the Electricity Act, 2003, it determined the tariff for the supply of electricity and also exercises the powers to adjudicate and decide on any disputes that arise between the Appellant and UPPCL. The Respondent 2 UPPCL is the Apex Body in the State of Uttar Pradesh which is overseeing the distribution and supply of electricity for and on behalf of the Distribution Companies (Respondents 3-6). They have authorized UPPCL to execute/sign the Power Purchase Agreements and also to carry out all necessary actions on their behalf in relation to the power purchase and supply. For the establishment of the generating station of the appellant, a Memorandum of Understanding (MoU) dated 22-04-2010 was entered into between the Government of Uttar Pradesh (GoUP) and a consortium of companies led by Bajaj Hindusthan Sugar Limited (BHSL) under a Special Purpose Vehicle (SPV), the Appellant which had already been incorporated by Respondent 2. The Appellant and UPPCL had entered into a PPA. The State Commission had allowed provisional tariff of Rs 1.88 towards fixed cost and Rs 2.95 as variable charge computed on capital expenditure of Rs 12,868 crores incurred. The said provisional tariff of fixed charges was further revised to Rs 2.24 with effect from 07-03-2018. The final tariff of the Appellant was pending determination from the date of commercial operation. The Appellant had been supplying the entire capacity of the generating station to UPPCL in terms of the PPA however UPPCL had been making substantial delays in making payment of the Appellant’s invoices as per the provisions of the PPA and not been providing and maintaining the payment security mechanism as per PPA. The Appellant had filed a petition before the State Commission seeking directions for payments of the outstanding dues. The State Commission had dismissed the petition based on the undertaking of UPPCL to clear all the dues forthwith and that the escrow mechanism would be created at the earliest. during the year for the purchase of coal and the Appellant was left with only a sum of Rs 2,833 crore out of which the Appellant had to meet its debt service obligations, working capital cost and O&M Charges including salary payment as essential and inevitable cash outgo prior to incurring any amount on procurement of coal. The Appellant kept on financing the coal purchase during the period from working capital facilities to the extent best possible and finally consumed the entire working capital facilities limits as available from time to time. Due to non-payment by UPPCL and the Appellant became a defaulter of its lenders with respect to working capital facilities also in addition to the default of payment of interest and installments of its term loans. This forced the Appellant in a financially stressed situation and the lenders started adjusting the entire money they received towards their dues, owing to which there was no or very little money available with the Appellant.

Arguments:

The Counsel for the appellant, submitted that due to default on the part of UPPCL the appellant has suffered financial misery and was required to pay the coal companies 100% of the cost of coal and also pay 100% of the railway freight in advance, for which the Appellant is required to be paid in time to ensure adequate working capital. The UPPCL have not disputed the fact that it has continuously defaulted in payment of the monthly bills of the Appellant for continuously 10 months in a row. The only defense of UPPCL was that the Appellant was compensated by Late Payment Surcharge (LPSC).

Issues:

  1. Whether the Appellant has changed its prayers during the course of the proceedings in the matter and if so, should the change of prayer be allowed?
  2. Whether Second Respondent has paid the outstanding amounts to the Appellant in accordance with the terms of the PPA and the Regulations specifically in light of the contention of UPPCL that the average payment made during the period was never more than 90 days;
  3. If not, whether the Appellant has actually suffered losses solely due to the non-payment of its outstanding dues in time;
  4. Whether the Regulations can be relaxed to allow the Appellant to recover its full fixed cost for the impugned period and as a consequence, can the PAF of Appellant be reduced to 54.78% from 85%;
  5. Whether late payment surcharge as envisaged in the Regulations and PPA are adequate to compensate the loss;
  6. Whether in facts and circumstances of the case, the Appellant is entitled to carrying cost?

Findings:

The Tribunal while setting aside the order of the State Commission allowed the appeal explaining all the issues at length. The Court relied on the principle founded in 1848 in Robinson v. Harman which supported innocent parties in the event of breach of contract. The Court further answered the issues at length as follows:

Issue No. 1: that the Appellant has not changed its prayer during the course of the proceedings either through its short Rejoinder Note or in Final Written submissions, as alleged by the Second Respondent.

Issue No. 2: that the second Respondent (UPPCL) has not paid the outstanding amounts to the Appellant in accordance with the terms of the PPA and the Regulations. We dismiss the concept of average payments introduced by R2 to justify its default of non-payment. We further observe that the outstanding of the Appellant remained substantial during most of the period in financial year 2017-18. Further, Respondent UPPCL has failed to establish Escrow/ Payment Security Mechanism as yet despite repeated categorical directions by the State Commission in its various orders.

Issue No. 3: Having established a clear correlation between delayed payments and coal shortage, we hold that the Appellant has actually suffered losses solely due to the non-payment of its outstanding dues in time by R-2. As a result, the applicant was not able to procure sufficient coal to declare full Capacity in spite of its generating units being technically available.

Issue No. 4: Having regard to various rulings of his Tribunal and the Hon’ble Apex Court, we are of the view that the instant case is a fit case to relax the Norms to allow the Appellant to recover its full fixed cost for the impugned period at actual PAF of 54.78% instead of normative 85% in the interest of justice and equity.

Issue No. 5: that in view of the facts& circumstances of the matter, late payment surcharge as envisaged in the Regulations and PPA is not meant for or otherwise, adequate to compensate the consequential loss suffered by the Appellant in full. Hence, it is entitled to further relief over and above LPSC.

Issue No. 6: that as per the settled principles of law, the Appellant is entitled to restitution and thus, to carrying cost from the date of capacity lost to date of actual payment at the prevailing rate of interest in accordance with UPERC Regulations.

[Lalitpur Power Generation Co. Ltd. v. Uttar Pradesh Electricity Regulatory Commission, 2020 SCC OnLine APTEL 82, decided on 28-09-2020]


Suchita Shukla, Editorial Assitant has put this story together

Case BriefsCOVID 19Tribunals/Commissions/Regulatory Bodies

Central Information Commission (CIC): Bimal Julka, Chief Information Commissioner, noted that the RTI application seeking very pertinent information with regard to COVID-19 pandemic was shuttled between one public authority to another and held that the Ministry of Health and Family Welfare shall collate all the information and furnish the same to complainant and on its’ website.

Complainant sought records by way of his RTI application on the following points:

  • Date when the Government of India first received information on the coronavirus/Wuhan virus/ virus affecting China.
  • Whether any communication was received by the Government of India about a possible pandemic like situation in India between the period of November 2019 to March, 2020?
  • Copy of the minutes of meeting that took place into the possibility of declaring coronavirus a health emergency or not between the period of March 5th to March 14th, 2020.
  • Whether the Government of India/any of its ministries or departments had received warnings/alerts/communication from the World Health Organisation on the possibility of coronavirus affecting India?
  • Whether any internal reports on a possibility of a pandemic like situation arising in India was communicated within the Ministry or its departments?
  • Any intelligence information on the coronavirus diseases originating from China possibly affecting India in future?
  • Whether the Government of India/this Ministry or its various departments sought China’s assistance in getting the sample of Virus?
  • Was China requested to share virus genetic sequence?
  • On which date did ministry of health first communicated the information of Virus possibly affecting India to PMO?
  • When was the issue of inadequate PPE discussed in the Ministry?
  • Whether additional funds were sought to fight against the virus. If so the date on which the first request and subsequent requests were made and to whom be furnished?
  • Whether the Ministry proposed a ban on incoming Chinese citizens to India?
  • Whether the ICMR received any reports/communications/internal warnings/memos/internal reports during the period of November 2019 to March 2020 about the possibility of a pandemic like situation in India due to the virus: To this ICMR responded that all the information pertaining to circulars, notifications, etc, is available on the ICMR website.
  • Whether the Government of India/this Ministry or its various departments was monitoring the situation in China and its possible effects on India?

To almost all the above queries, ICMR responded with a standard response — Not pertains to ICMR.

Complainant remained dissatisfied with the respondent’s response.

RTI Act

Commission observed that a voluntary disclosure of all information that ought to be displayed in the public domain should be the rule and members of public who having to seek information should be an exception.

Another significant observation was that, an open government, which is the cherished objective of the RTI Act, can be realised only if all public offices comply with proactive disclosure norms.

Accountability

Several decisions are being made by the Governments involving huge interventions in the healthcare impacting daily lives of billions of people, hence it is essential that the decisions are thoroughly documented in order for the Government to remain accountable.

Information pertaining to COVID-19

Complainant sought very pertinent information with regard to COVID-19 situation, which could not be made available by the Ministry of Health and Family Welfare.

Commission held that authentic, verified and cogent reply based on factual information needs to be furnished to the complainant as also disclose on the Public Authority website for the benefit of public at large.

Secretary, Health & Family Welfare was advised to have this matter examined at an appropriate level and the Nodal Authority so notified should furnish all the details sought by the Complainant in a clear, cogent and precise manner within a period of 30 days.

In view of the above complaints were disposed of. [Saurav Das v. CPIO, 2020 SCC OnLine CIC 626, decided on 23-07-2020]