In our previous trend, we focused on the features of markets in the digital world with respect to high returns to scale and network externalities which went handin-hand with the rise in provision of free services. The exponential growth of this market is underscored by the fact that digital advertising has prevailed over traditional channels such as print and television advertising in many countries, to become the largest medium of advertisements. Targeted advertising is made possible only because of profiling of consumers based on search habits and insights gained from their data.
This data is an essential facet of advertising on the digital medium, as advertisers can choose to target advertisements based on based on browsing behaviour and interests (behavioural targeting), the theme and context of a website (contextual targeting); geographical location of an individual (geographical targeting); social, demographic and economic characteristics such as age, gender, income (sociodemographic targeting) or even based on time, day or week (time targeting). This wide array of options are available to advertisers because consumers increasingly rely on “free” services, such as maps, general search services, etc. in their daily lives, generating vast swathes of data in the process of doing so which allows for a rich development of targeting factors.
Digital Advertising: Establishing the trend
Since user data presents valuable behavioural insights, advertisers increasingly find spending on Digital Advertising gives higher returns on investments. While currently advertising revenues through traditional channels such as print and television advertising is still higher than digital advertising, market studies show that Digital Advertising revenues will eventually surpass print advertising revenues.
If one must name a single enterprise that has revolutionised the internet, it must be Google. We cannot imagine a life without Google, and for this tech boom throughout the world, we all must thank Google. In 1995, Google began as a project of Larry Page who was later joined by Sergey Brin. While initially, it was only a search engine, Google family was to become much more than that in just two decades. Google has brought several innovations that has changed the world, such as Search Engine that has brought all the information on the fingertip of user, Android OS that eased access of smartphones to majority of population and making YouTube the streaming service that gave opportunity to creators to expand their reach globally.
Presently, Google is engaged in provision of number of product and services including Maps, YouTube, Chrome, Android, Play Store, Gmail, online advertisement services etc. which creates an ecosystem of Google around us. In fact, creating an ecosystem is one of the defining features of business model of Google, where integrating several services providers better consumer experience and that eventually eases expansion of the company. Google has established itself as the undisputed market leader in general search, as the global market share of the top 5 search engines across the last 10 years shows.
One of the factors that played a role in establishing Google as a market leader is their acquisition strategy. If one looks at the acquisition history of Google, Google has made close to USD 30 billion on its major acquisitions. Some of these acquisitions have converted into a huge success, such as Android, YouTube, Advertisement acquisitions and Waze for maps. Android has turned out to be cothe cheapest yet the most successful deal for Google. Consequently, such killer acquisitions also gives a strong market power to Google in several markets. Considering the same, there have been several competition law investigations against Google across multiple jurisdictions (EU, US, Turkey, Australia etc).
Google’s Story in India
Google started its operation in India in 2004 with five employees but now has become one of the largest Google office outside USA. Seeing the potential that Indian market has in terms of population, Google has customised its services for Indian population, like providing search services in regional languages, answering queries over phones (in collaboration with Vodafone) etc, thus pioneering and championing the role of innovation in India’s growth story. Additionally, it has also contributed to increase the reach of internet in India by providing free public WiFi (more than 400 stations), Google is already a success in India and with increase in internet penetration, India is likely to become one of the biggest market for Google. There is absolutely no doubt that Google’s contribution to the tech boom in India is paramount and cannot be denied and we must all be thankful to Google for ushering it this boom which has benefited all of us.
Google Advertising business model
Google’s story brings several competition concerns. However, herein, we bring our focus only to Google’s conduct in online advertisement industry. Google acquired Double Click and AdMob at early stage to grow their revenue in advertisement industry. It can be noticed that most of the services offered by Google are for free, therefore business model of Google is such that advertisement revenue is primary revenue source for them.
Difference between Search and Display Advertising
Search advertising and display advertising are two major forms of online advertising. While search advertising is used by advertisers to target consumers who have made a general decision about what they are looking for, display advertising is usually intended to be used for increasing brand awareness. Participants also highlighted that while display advertising is associated with demand generation for a product, search advertising leads to more conversions in terms of actual sales. On other parameters such as creativity in advertising, stakeholders submitted that search advertising being text-based, display advertising provided more avenues in terms of innovative ads that may capture user attention.
In terms of strategies employed by advertisers, the study also found that advertisers were not likely to substitute display advertising with search advertising, and vice-versa. This was also substantiated by the fact that budget allocation for the two types of advertising were kept distinct. However, it was also revealed that depending on what the advertisement campaign objective are, the two methods of digital advertising could often be used in complement to each other. For instance, display advertising may make the consumer aware of the product offering, nudging him/ her towards searching for the product and encountering search advertisements.
Following chart (based on CMA Report) would help in understanding online advertising;
Google works in both segments of digital advertising, a) search advertising and b) display advertising. In this trend, we focus on how Google’s search advertising works.
Google’s Search advertising
‘Google Ads’ is advertising system where advertisers bid on certain keywords for which clickable ads appear on every search and google is paid per click by advertisers. However, this does not work like a usual auction and position of advertiser depends on two factors, viz. advertiser’s bid and ad quality. Herein, ad quality is an important factor because Google as a search engine is determined to provide the most accurate result, which is defining feature of Google. Ad quality is determined through quality core which takes into consideration Google’s expected clock through rate, past performance, quality and relevance of keywords, landing page and Ad text. On basis of these two factors, Google ranks ads on the page of search result.
Why Google does not face competitive constraints
Google provides its general search service free of cost to consumers as monetization of the service occurs through targeted advertisements. The ability to target advertisements towards a group of users come from insights which can be gleaned from consumer data generated from the search service. The attractiveness of a platform, for advertisers, therefore, lies in the reach that the platform commands in terms of number of users to whom the advertisements can be displayed. Therefore, in order to attract advertisers to the platform and compete effectively, it is imperative for the search service provider to acquire a sufficiently large consumer base which uses its search service.
Consumers place a very high value on the relevancy / quality of search results while opting for a search service. Therefore, the ability of a search engine to provide relevant search results and improve the relevancy of search results is a vital factor for competing against Google.
A survey conducted by DuckDuckGo of factors based on which users would switch search engines.
This brings us to the first reason why Google does not face any meaningful competitive pressure for other search service providers:
Significant Barriers to Entry
The key inputs for achieving relevant results include (i) access to necessary data in order to improve the algorithm or framework that returns search results (the “click-and-query data), and (ii) an extensive and updated index of the world wide web. Both these inputs are highly subject to scale-effects.
Firstly, as Google’s market share in general search services above pointed out, Google gets search queries which are orders of magnitude higher than its closest rivals. Google, therefore, benefits from a self-reinforcing process where it receives so many more queries (which are an essential input for making potential improvements in the search algorithm) because it is able to return increasingly relevant search results to its users, who in turn return to google for their general search queries. Secondly, the maintenance of an updated index requires prohibitively high investments because of which even large incumbents in the space had to give way to Google.
It is worth noting that large incumbents such as Yahoo! and Ask.com have found it economically unfeasible to maintain independent search services. Yahoo had stopped investing in its general search technology, in 2009 and now relies on search service of Bing. Similarly, Ask.com also terminated investments in its general search technology in November 2010 and chose instead to adopt Google’s general search technology to power its search service.
Significant Barriers to Expansion
The second reason why Google does not face competitive threat is because of the significant barriers to expansion faced by its competitors in accessing customers and building into stronger competitors over time. This barrier to expansion comes from the default position Google has been able to secure on mobile devices. Mobile manufacturers choose Google as the default search application based on a mix of consumers’ perceived quality of service as well as the level of compensation that Google is able to pay due to its revenues generated from search advertising. This, coupled with the fact that consumers show very strong preference for defaults, especially in mobile devices, acts as a very significant barrier to expansion for existing rivals.
Limited Competitive Constraints from Specialised Search (like Amazon) & other Competition law concerns
Results from the CMA’s market study have confirmed that a major proportion of specialised search providers rely on Google as a point of entry. The difference between general search and specialised search services had been considered by the EC in the Google Search (Shopping) decision, wherein it was noted that the two types of search services operated as complements rather than substitutes. Analysis of traffic data by the CMA in its report has also confirmed that a substantial number of consumers access specialised search portals via general search rather than accessing them independently.
The finding of complementarity in these markets suggest that specialised search, rather than being a competitor to general search, is in fact in a vertical relationship with general search providers like Google. This can be better understood by way of taking an example of how Google acts as a “gatekeeper” to specialised search service providers in majority of the cases.
As a part of our research, we undertook an exercise in India which also shows vertical agreement between Amazon and Google. Take the example of a consumer who is in the (virtual) market for speakers. For the purpose of this illustration, we consider this consumer to fall in the majority category of consumers who use general search services to move towards a specialised search service, such as Amazon, eBay, etc. Since the market for speakers is highly fragmented with a large number of sellers offering various kinds of speakers at diverse price ranges, the consumer enters a search query appropriate to his needs.
The top results that a consumer gets from his search query therefore points him to specialised search providers like Flipkart, Reliance Digital, Amazon, etc. These special search service providers, thus, rely on Google, which acts as a gatekeeper for most of the traffic to their own portals. Since most users do a general search and are then directed to special search services like Amazon, etc., from this page, the user clicks on the speaker that interests him.
Apart from this, users may also choose to use the comparison services that Google offers. Therefore, after entering the query, i.e., speaker, the user can compare the different speakers of offer. Clicking on one of the results on the shopping tab, once again takes user to Amazon’s page, as shown above.
This demonstrates that Google, as a dominant search service provider, becomes a necessary trading partner even for large platforms like Amazon, which are in a vertical relationship with Google and rely on it for majority of the traffic to their platforms and thus, a case may be there to look at their conduct under Section 3(4) of the Act, which deals with analysis of vertical agreements.
Below, we lay down some competition concerns that have already been observed or may come up in the future owing to the way the market is functioning.
Excessive Pricing- Google, being dominant in search advertisements, is in position to overcharge the advertisers. Since advertisement has been the primary source of revenue for Google, it gives it an incentive to increase its profit by charging more from advertisers. This is clubbed with Google’s market power, which is directly linked to access of consumer data, creates high entry barriers for competitors. The closest competitor Google is Bing, , average cost per click on Google is 30-40% more than that of Bing. Similarly, monthly average cost per click for mobile and desktop and average price bid ratio for top ad for Google is more than Bing.
Exclusionary practices-Google can engage in exclusionary practices by restricting its consumer base to engage with any other platform for advertisements. For example, there is always a possibility that Google may impose restrictive clauses in agreements with advertisers prohibiting them to engage with Microsoft Bing. This would, in turn, lead to denial of market access for competitors of Google.
Leveraging dominant position in search advertisement– Further, Google can leverage its dominant position in search advertisement market to expand their market power in open display advertising. Using strong customer base of search advertisements, Google can provide incentive to use Google’s services in another market of display advertisement. Further, as noted in CMA report, huge data collected by Google in search advertisement market may be used in open display advertisements to provide better targeted advertisements.
It may be another concern as Google puts itself in a position where it can always promote its own vertical product and services. There are several services of Google that may be promoted through advertisements, such as Google Pay, Google Meet or YouTube. This may affect the quality of organic search also.
Similarly, there may be products of Google in other markets for which there may be competitors like; in fintech services (Google Pay; competitors being PhonePe, PayTM, MobiKwik); social network (Google +, competitors being Twitter and FB); maps and navigation (Google Maps, competitors being Map Quest, Waze, Bing Maps, HereweGo, Maps.me etc), emailing (Gmail, competitors being Outlook, Zoho, Apple Mail etc.), calendar (Google Calendar; competitors being Outlook, iCal, Spike etc) and other products of Google for which there are competitors in the market. It must be seen as to whether Google is using their dominant position in the search advertising market to enter into or protect their position in the other market.
Tie-in agreement with manufacturers – It has bene noticed that Google has agreements with device manufactures that are exclusionary in nature. In order to make Google Chrome as default browser of such phones, Google offers some revenue share from search advertising. Thus, competitors of Google Chrome like Mozilla Firefox, Safari etc. may be foreclosed from entry and it has been seen that once a default setting has been adopted, consumers rarely change the same. Therefore, technically, Google uses its dominant position in search advertising to ensure that their browser remains a default in mobile devices.
Ad Ranking- It has been observed that Google essentially operates its ranking system in a “black-box” and does not completely disclose the way its algorithm operates. As noted earlier, ad ranking is completely dependent on the quality score of advertisers, the process which is substantially hidden. Therefore, it provides immense opportunity to Google to interfere with the Ad ranking list, and therefore, raising concerns for violation of Section 4(2)(a) (i) for advertisers.
In addition to the above, another concern of general import is the fact that Google’s super-dominance in search advertising presents a risk whereby Google may choose to start investing in creating barriers to entry and expansion rather than on innovating new and better products. In case of search advertisement, this may happen when excessive reliance on Google for advertising revenues comes to a point where Google may even impact the organic search results to the detriment of search quality where user may interact more with ads. This is important to consider because Google’s current position makes it immune to any competitive constraints. As a result of lack of effective competitors in the market., there would be no one to inflict competitive pressure on Google which may keep it on the path of innovation.
Adv. Abir Roy is Partner, Sarvada Legal.
The Daily Guardian is now on Telegram. Click here to join our channel (@thedailyguardian) and stay updated with the latest headlines.
For the latest news Download The Daily Guardian App.
Electricity connection cannot be denied only because dispute regarding ownership of land is pending: Gujarat High Court
The bench of Justice Supehia noted that the Petitioners were owners of the concerned agricultural land for which electricity was sought. However, it was observed that the electricity was denied on the ground that the Petitioners were illegally occupying Government land.
The Gujarat High Court in the case Yogesh Lakhmanbhai Chovatiya v/s PGVCL Through the Deputy Manager observed and has clarified that occupiers of a land cannot be denied electricity connection only because a dispute regarding ownership of the land is pending.
The bench comprising of Justice AS Supehia observed and referred to a division bench judgment stating that right and title and ownership or right of occupancy has no nexus with grant of electrical connection to a consumer.
In the present case, the petitioner current occupiers of the land and submitted that they were denied an electricity connection only because the land that they were occupying was in the name of the Government. However, the proceedings were initiated by the Mamlatdar against them u/s 61 of the Gujarat Land Revenue Code for removal of encroachment. Further, to bolster their contention, it was relied by the petitioner on an order of the High Court and Sec 43 of the Electricity Act, 2003 which mandates the supply of electricity to any occupier or owner of premises.
The Petitioners could be said to be ‘occupier’ of the land in question and the connection could not be denied by the Respondent.
The bench of Justice Supehia noted that the Petitioners were owners of the concerned agricultural land for which electricity was sought. However, it was observed that the electricity was denied on the ground that the Petitioners were illegally occupying Government land.
Further, the bench of Justice Supehia concluded while perusing Sec 43 that the provision stipulated that the licensee shall supply electricity to those premises where the application had been filed by the owner or the occupier. Consequently, a reference was made to the order of the Division Bench of the High Court in LPA No. 91/2010 wherein it was observed:
The Court stated that such power being not vested under the law with the company and as the company cannot decide the disputed question of right and title and this court is of the view that ownership or right of occupancy has no nexus with grant of electrical connection to a consumer.
While keeping in view of the aforesaid provisions, it was directed by Justice Supehia that the Respondent-Company to supply electricity connection to the Petitioners in the premises of the property at the earliest in accordance with the list maintained by the name containing the names of the Petitioners in the list.
ANALYSIANG SECTION 194R OF THE INCOME TAX ACT
Recently, Section 194 R was inserted by the Finance Act 2022, which came into effect on July 1st, 2022. CBDT made certain recommendations via Circular 12 from the day of the addition of this section, it has become highly debatable. Before touching the issues of this section, we need to understand the legal provision of section 194 R.
In simple terms, the new section mandates a person who is responsible for providing any benefit or perquisite to a resident to deduct tax at source at 10% of the value or aggregate value of such benefit or perquisite before providing such benefit or perquisite. The benefit or perquisite may or may not be convertible into money, but it must result from such resident’s business or professional activities. As per this section, tax will be deducted by business or profession on any benefits or perquisites of a person who is residing in India. The benefit or perquisite can be in the form of cash or kind, or partially in cash and partially in kind. Tax deduction will be 10 percent if the aggregate value doesn’t exceed INR 20,000. In such a case, tax will not be deducted. Such conditions will not be applicable in If the turnover of business doesn’t exceed INR One Crore, If the turnover of the profession doesn’t exceed INR fifty lakhs, For instance, if a person is a sales agent and he exceeds the target allotted by the company and receives a new car worth INR 5, 00,000/-the value of INR 5,00,000 will be taxed under the head of Profit.
The intention of this section is to expand the scope of deducting tax on benefits or perquisites and to increase transparency in the reporting of benefits and perquisites received by an individual. Because this particular incentive is in kind rather than cash, recipients of such kinds of transactions do not include it in their income tax return. As a result, inaccurate income information is provided. Such an incentive or bonus in kind ought to ideally be reported as income under the 1961 Income-tax Act (ITA). Also, according to Section 28(iv) of the ITA, any benefit or perk received from a business or profession, whether convertible into money or not, must be reported as business income in the hands of the receiver. Now Section 194(R) gives the right to the payee to deduct the amount, whether in cash or kind, arising out of business promotion.
The terms “benefits and perquisites” are not defined under the IT act. If they receive any such perquisites or incentives, whether in cash or in kind, they must deduct TDS. In cases where the benefit is wholly in kind, the person providing such a benefit or perquisite is required to pay TDS on the value of such benefit or perquisite out of his own pocket. In this case, benefits and perquisites are determined as per the value of the purchased price and manufactured price. However, no taxes to be deducted u/s 194R on sales discount, cash discount, or rebate are allowed to customers.
In the matter of ACIT Vs Solvay Pharma India Ltd, the court held that free samples provided by the pharmaceutical company for promotion purposes would be taxable income. As such, free samples cannot be treated as a freebie. The complimentary sample of medication serves solely to demonstrate its effectiveness and to win the doctors’ confidence in the high quality of the pharmaceuticals. Again, this cannot be regarded as gifts given to doctors as they are intended to promote the company’s goods. The pharmaceutical corporation, which manufactures and markets pharmaceutical products, can only increase sales and brand recognition by hosting seminars and conferences and educating medical professionals about recent advances in therapeutics and other medical fields. Since there are daily advancements in the fields of medicine and therapy taking place throughout the globe, it is crucial for doctors to stay current in order to give accurate patient diagnosis and treatment. The main goal of these conferences and seminars is to keep doctors up to date on the most recent advancements in medicine, which is advantageous for both the pharmaceutical industry and the doctors treating patients. Free medication samples provided to doctors by pharmaceutical corporations cannot be considered freebies in light of the aforementioned value.
Hence, under such circumstances, for such a sales effort, the pharmaceutical company may deduct its expenses. The promotion would, however, be taxable income in the hands of the receiver, and the pharmaceutical company would need to deduct TDS on it.
Another question that pops up is that in the case of gifts and perks received on special occasions like birthdays, marriages, and festivals, under such circumstances, Section 194R will only be applied if they arise out of business or profession.
As we know, we are heading towards digitalisation. There are many social media influencers who are playing a crucial role in marketing strategy. Income received by an influencer is calculated by deducting expenditure incurred on their business. Filming costs, such as cameras, microphones, and other equipment; subscription and software licencing fees; internet and communication costs; home office costs, such as rent and utilities; office supplies; business costs, such as travel or transportation costs; and others are examples of what can be written off as a social media influencer. To illustrate how Section 194 R will be applicable in such a situation, let’s consider Nandini is a social media influencer. She received an offer from a company for product promotion in another city. She charged her fee of Rs 88,000 and the travel expense incurred by her was Rs 25,000. Here, the company will reimburse her travel expenses. So, the travel expenditure incurred by the company is covered under the benefits and perquisites provided to Nandini. Hence, TDS is to be deducted under section 194R at the rate of 10%, i.e., Rs 2500 is deductible from the fees payable to Nandini.
There is no further requirement to check whether the amount is taxable in the hands of the recipient or under which section it is taxable. The Supreme Court took the same view in the case of PILCOM vs. CIT in reference to the deduction of tax under Section 194E. It was held by the Hon’ble Supreme Court that tax is to be deducted under section 194E at a specific rate indicated therein, and there is no need to see the taxability under DTAA or the rate of taxability in the hands of the non-resident.
In the matter of ACIT Vs Solvay Pharma India Ltd, the court held that free samples provided by the pharmaceutical company for promotion purposes would be taxable income. As such, free samples cannot be treated as a freebie. The complimentary sample of medication serves solely to demonstrate its effectiveness and to win the doctors’ confidence in the high quality of the pharmaceuticals. Again, this cannot be regarded as gifts given to doctors as they are intended to promote the company’s goods. The pharmaceutical corporation, which manufactures and markets pharmaceutical products, can only increase sales and brand recognition by hosting seminars and conferences and educating medical professionals about recent advances in therapeutics and other medical fields. Since there are daily advancements in the fields of medicine and therapy taking place throughout the globe, it is crucial for doctors to stay current in order to give accurate patient diagnosis and treatment.
GUJARAT HIGH COURT: WRIT PETITION FILED AGAINST PRIVATE UNIVERSITY NOT MAINTAINABLE, REMEDY FOR ALLEGED ARBITRARY TERMINATION LIES UNDER CIVIL LAW.
The Gujarat High Court in the case Shambhavi Kumari v/s Sabarmati University & 3 other(s) observed and has declined to intervene in a writ petition seeking reinstatement with full back wages and benefits filed by an Assistant Professor against a private university, Sabarmati University.
The bench comprising of Justice Bhargav Karia observed and has clarified that the dispute regarding termination was ‘in the realm of a private contract’ and therefore, held that if on the part of the respondent, there is an alleged arbitrary action, the same would give cause to the petitioner to initiate civil action before the Civil Court but in the facts of the present case, the writ petition would not be maintainable against the private educational institution governed by the Gujarat Private Universities Act, 2009.
In the present case, the petitioner was given a three months’ notice starting August 2013, allegedly without any reason. Consequently. Earlier, an application was filled by the petitioner before the Gujarat Affiliated Colleges Service Tribunal and thereafter, withdrew the application to file the writ before the High Court.
It was contested by the respondents that the petition was not maintainable on the ground that the University was a private University and did not fall within the term ‘State’ under Article 12 of the Constitution of India. Therefore, the employment conditions of the Petitioner would not bring her services within the realm of ‘duty or public function.’
It was observed that the petitioner, per contra, insisted that the University was established under the Gujarat Private Universities Act, 2009. However, Universities were established to provide quality and industry relevant higher education and for related matters and hence, it could not be said that the Universities were not performing public duty. It was directed by the State Government and pervasive control over the functioning of it as was mentioned in Sec 31-35 of Chapter VI of the Act. Reliance was placed on Janet Jeyapaul vs. SRM University and ors. where the Top Court had held that the writ petition was maintainable against the deemed university and whose functions were governed by the UGC Act, 1956.
The bench of Justice Karia, while taking stock of the contentions referred to Mukesh Bhavarlal Bhandari and ors vs. Dr. Nagesh Bhandari and ors where the Coordinate Bench of the High Court in similar circumstances had reiterated that merely because the activity of the said research institute ensures to the benefit of the Indian public, it cannot be a guiding factor to determine the character of the Institute and bring the same within the sweep of ‘public duty or public function.
It was observed that the High Court also rejected the reference to Janet Jeyapaul since in the instant case and held that in the realm of a private contract, the Petitioner termination was to be decided.
Further, it was observed that it is not necessary to go into the merits of the case with regard to the issue of show-cause notice for providing an opportunity of hearing resulting into breach of principle of natural justice and weather the action of the respondent University is unfair or not because all such disputes essentially are in the realm of private contract.
Accordingly, the bench dismissed the petition.
Gujarat HC Quashes Reinstatement Order: Industrial Dispute Act| Person Working In The Capacity Of ‘Consultant’ Cannot Be Deemed ‘Workman’
The Gujarat High Court In the case Santram Spinners Limited v/s Babubhai Magandas Patel observed and has struck down the order of the Labour Court which had held that the Respondent-workman was entitled to reinstatement along with 20% back wages in the Petitioner-institute. Thus, the High Court, after perusing, Form No. 16A which pertains to Tax Deducted at Source, concluded that the Respondent was being paid consultant fees and not a salary and the same had been ignored by the Labour Court.
The bench comprising of Justice Sandeep Bhatt noted that the Respondent had raised an industrial dispute, inter alia, claiming that he was working in the company of the Petitioner as a Technical Maintenance In-Charge while the respondent earning a salary of INR 9,000 per month. Thereafter, it was alleged by him that he was terminated orally in 1997. Consequently, the Labour Court ruled in his favour and ordered reinstatement and back wages.
It was submitted by the petitioner that the Respondent did not fall within the definition of the term ‘workman’ in Sec 2(s) since he was employed as a Maintenance Consultant, receiving consultant fees and not a salary and the respondent had failed to produce any documentary evidence such as TDS statement, appointment letter, bills to bolster his contention.
Further, it was also averred by the petitioner that the relevant documentary evidence was absent. It was stated that Form 16A was produced to show that if the Respondent was a consultant, then there was no need to deduct TDS. It was observed that the Form No. 26K was disagreed by the Labour Court, which was produced by the Company to show that the tax was deducted from fees for technical or professional services.
The bench comprising of Justice Bhatt firstly observed that the Respondent had admitted that he had no evidence with him to prove that he was working as a ‘workman’ in the Company of the Petitioner that his salary was fixed at INR 9,000 per month. It was stated by the Manager of the Company that the Respondent was rendering services as a consultant raising his Vouchers/bills regularly and being paid through cheque. As per the Bench, there was ‘ample evidence’ to prove that that the Respondent was employed as a technical consultant.
Justice Bhatt stated that it is pertinent to note that the learned Labour Court has committed gross error in holding that those documents are complicated and thus, the learned Labour Court has also erred in giving findings that since TDS is deducted by the petitioner company and therefore, the respondent is workman, who is serving in the petitioner institute and in my opinion, this finding of the learned Labour Court is against the settled proposition of law and is highly erroneous.
Therefore, the High Court affirmed that there was no evidence that the Respondent had been working for more than 240 days during the year preceding termination.
Accordingly, the High Court struck down the award of the Labour Court.
GUJARAT HIGH COURT QUASHES REINSTATEMENT ORDER: PERSON WORKING IN SUPERVISORY CAPACITY CANNOT RISE “INDUSTRAIL DISPUTE”
The Gujarat High Court in the case Gujarat Insecticides Ltd. & 1 other(s) v/s Presiding Officer & 2 others observed and has reiterated that a person working in “supervisory” capacity cannot raise an industrial dispute under the Industrial Disputes Act, 1947.
The bench comprising of Justice AY Kogje observed and further made it clear that while deciding whether such person is a workman or not, the Labour Court ought to carefully consider the evidence placed on record and there is no exhaustive list of work to differentiate between the management employee and the Workman.
In the present case, the Petitioner Company averred that the Respondent was working in the non-workman category and engaged in the ‘supervisory category’ and was drawing salary of more than INR 1600. Therefore, the dispute was not an industrial dispute within Section 2(s) of the Act, 1947.
It was insisted by the Respondent that he had worked with the company as a Maintenance Engineer and the duties assigned to him were of the nature of a workman’s duties as per the ID Act. The respondent was wrongly terminated by way of termination and without any procedure established by law and as such, was entitled back wages.
It was observed that the high court took into consideration the Respondent’s appointment letter and witness depositions regarding the nature of work performed by him to conclude that the Respondent in Grade-9 was indeed discharging duty of Maintenance Engineer. It was also specified by the depositions that the hierarchical grading in the petitioner-company as per which, the employees above Grade-7 were of the Management Cadre.
The High Court observed that the Labour Court has completely disregarded this evidence, which according to this Court is most relevant for the purpose of deciding the status of workman and the Labour Court has proceeded that the petitioner-company ought to have produced evidence in the nature of whether the respondent-workman has sanctioned any leave, sanctioned any overtime or prepared any gate passes for employees to go home or has made any ordered or Appointment dismissal. Thus, when the Labour Court, instead of referring to this evidence already on record to establish the nature of work of the respondent and has decided to chase the evidence which is not on record and then on the basis that such evidence not being on record, it was concluded that in the definition of workman, the workman will be covered, this is where, in the opinion of the Court, perversity has crept in.
Accordingly, the bench quashed the impugned order. Therefore, seeing the passage of time, it was held by the High Court that the allowances paid u/s 17B of the Act should not be recovered by the Petitioner company.
COURT CALLS FOR SENSITIZATION OF POLICE: DELHI RIOTS SITE PLANS PREPARED CASUALLY, S.65B CERTIFICATE NOT FILLED FOR DIGITALLY SOURCED EVIDENCE
The Court while dealing with a case related to 2020 Delhi riots, a city Court has called for sensitisation of investigating officers (IOs) on making the photos obtained from digital sources as admissible in evidence by filing a certificate under section 65B of Indian Evidence Act, 1872.
The bench comprising of Additional Sessions Judge Pulastya Pramachala observed and thus ordered that whenever, photographs are filed from digital sources it is needless to say that a certificate under Section 65-B of I.E. Act, is must to make those photographs admissible for the purpose of evidence. However, all the IOs are required to be sensitized this respect as well and it is high time to control the casual and callous approach of any IO.
It was also observed that court expressed displeasure over “casually prepared site plans” by stating that preparation of the same were not even expected in cases triable by the Metropolitan Magistrates.
Adding to it, the Judge stated that unfortunately this kind of site plan has been filed in such a serious case involving session triable case. Moreover, from the documents filed on the record, the court find that certain photographs have been placed, but without any certificate under Section 65-B of Indian Evidence Act.
In the present case, the court was dealing with an FIR registered on the complaint of one Salim Khan wherein it was stated by him that his spare parts and barber shop shop was looted and was put on fire during riots.
It was admitted by one of the accused Dharmender that his involvement in the matter and he, with other co-accused was seen carrying the carton of Rooh Afzah from the warehouse of a complainant in another FIR.
The Court stated that a serious re-look over the quality of evidence/documents place on the record in the case, is required by senior officer with all serious attention.
Further, the court added that in this case the ld. DCP (North East) is requested to go through the records and to submit his report, if the prosecution is to be carried on, on the basis of other materials and same site plan as placed on the record.
As in future, the Special Public Prosecutor undertook to be much careful.
Accordingly, the Court listed the matter for further hearing on August 17.
Opinion2 years ago
South Block’s mistakes will now be corrected by Army
Sports2 years ago
When a bodybuilder breaks Shoaib’s record
News2 years ago
PM Modi must take governance back from babus
Spiritually Speaking2 years ago
Spiritual beings having a human experience
News2 years ago
Chinese general ordered attack on Indian troops: US intel report
Legally Speaking2 years ago
Law relating to grant, rejection and cancellation of bail
Royally Speaking2 years ago
The young royal dedicated to the heritage of Jaipur
Sports2 years ago
West Indies avoid follow-on, England increase lead to 219