From arbitration award to power arrears, here’re the key court orders | Business Standard News

Clipped from: https://www.business-standard.com

An international arbitration wound its way through four courts in India, and two times in the Supreme Court, lasting two decades before ending last week at the apex court

The Supreme Court has ruled an employer has the right to withhold the gratuity of an employee during the pendency of the disciplinary action even if he has retired.

Long road to enforce arbitration award

An international arbitration wound its way through four courts in India, and two times in the Supreme Court, lasting two decades before ending last week at the apex court. The story indicated the alternative “speedy” route could be little better than civil litigation. Involved in this long saga were American corporation Centrotrade Minerals & Metals and state-run Hindustan Copper (HCL). The foreign company sold copper concentrate to the Indian company but disputes arose over the quantity of deadweight. The executability and jurisdiction of the award were argued in the district court of Khetri in Rajasthan, the state high court, later before a single-judge Bench of the Calcutta High Court, the Division Bench of the same high court, and in between twice in the Supreme Court. In Supreme Court itself, two judges differed on the questions raised by the arbitration award and now a three-judge Bench put an end to the row with the PSU losing all its arguments, inviting a mild judicial rap. Though the arbitration in India had favoured HCL, the US firm took the case to London arbitration and won on all points. Then started another round of litigation questioning the validity of two-tier arbitration, one in India and another in London, the issue whether it was a domestic or foreign arbitration, and the alleged denial of opportunity to HCL to present its full case. The judgment remarked that “the conduct of HCL leaves much to be called for”.

Buyer liable to clear power arrears

The liability to pay electricity dues of the previous owner falls on the auction purchaser if the terms of the sale recites “as is where is, what is there is and without any recourse basis”, according to the Security Interest (Enforcement) Rules. This interpretation was given to the phrase by the Supreme Court last week while setting aside the judgment of the high court in Telangana Power Distribution Co vs Srigdhaa Beverages. A unit of a mineral water bottling company was sold through auction by invoking the Securitisation Act (“Sarfaesi”) as the owner could not repay a loan given by Syndicate Bank. The distribution company demanded the dues of the defaulting company from the new buyer, leading to the litigation. The terms of the sale deed and the licensing clauses contained several legal terms which were interpreted by the high court and the Supreme Court in different ways, ultimately in favour of the supply company.

Retirement doesn’t stop disciplinary steps

The Supreme Court has ruled an employer has the right to withhold the gratuity of an employee during the pendency of the disciplinary action even if he has retired. Further, the employer has powers to impose the penalty of dismissal even if he has attained the age of superannuation. In this judgment, Mahanadi Coalfields vs Rabindranath, the chief general manager was suspended after disciplinary proceedings for alleged irregularities causing a loss of Rs 31 crore to the government company. While the proceedings were pending, he retired. The company refused to release gratuity, leading to the two questions above. The Orissa High Court directed the company to release gratuity, against which it successfully appealed to the Supreme Court. The majority allowed the appeal but there was a minority dissent on the question of dismissal.

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