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Examining Electricity (Amendment) Bill, 2020

Recently, the Central government has proposed a new bill that seeks to promote green power and takes a step further in pushing ease-of-doing business and enhancing the sustainability of the power sector. In addition to that, this amendment bill will change various provisions of the Electricity Act, 2003 and further address critical issues on the same line. The Act had been the statutory standards which administer the laws regarding the generation, distribution, and trading of the produced electricity.

Arush Agarwal & Bhavya Gupta

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Electricity is one of the most critical components which is essential for the growth of the economy and social development of a nation. All the laws relating to electricity in India are dealt primarily with by the Electricity Act, 2003. On the date of April 17, 2020, the Ministry of Power (MoP) introduced the Electricity (Amendment) Bill, 2020 with some policy modifications to The Electricity Act of 2003. The other amendments that were previously proposed to be made in the year 2014 & 2018, but neither of them was passed in the parliament and thus, failed to become the law.

Recently, the central government has proposed a new bill in the house that seeks to promote green power and takes a step further in promoting ease of doing business and enhancing the sustainability of the power sector. In addition to that, this amendment bill will change various provisions of the Electricity Act, 2003 and further address critical issues on the same line.

The Act had been the statutory standards which administer the laws regarding the generation, distribution, and trading of the produced electricity. This Act also aimed to license the distribution of electricity distribution in rural areas and bring in a licensing regime for urban areas. In order to address some recurring issues, and to promote further commercial incentive for private players to enter the market in the generation, distribution and transmission of electricity, with some policy modifications, this Bill is introduced.

The bill is termed as progressive in nature as it aims to touch on the issue of the environment by better electricity production and filling the various gaps in the mechanism.

A detailed analysis of this bill will require us to go through each and every aspect of the key features and the same is done in this article.

Understanding the rationale behind the Electricity (Amendment) Bill, 2020

First, there were certain ambiguities in the Electricity Act, 2003 that needed attention. Secondly, the rationale behind the amendment stands on two pillars that are: a) the Issues relating to the weakening commercial and investment activities in relation to the electricity sector, b) Transparency and accountability in respect to the interest of consumers. In respect to the commercial and investment activities, there are major structural issues like the inefficiencies both financial and operational in relation to the generation of power, political intervention and low customer participation. The amendment seeks to rectify all problems under one umbrella.

Analysing the key features of the Bill

An interesting development that the new bill has brought is the proposal to set up a National Selection Committee. Although, the central government may be looking in another direction with the old Selection committee that is constituted for each state. The change they are looking to bring is to reorganize these state selection committees into national selection committees. In addition to that, with the new change, it would be presided over by the new CJI of the High Court of the specific state.

Direct Benefit Transfer

Direct benefit transfer is a mechanism that will ensure a change in subsidy mechanism where the subsidy is provided to those who are in need directly. The records for the same are maintained by the state government. This will benefit in a two-fold way wherein the state government has the transparency in the direct benefit transfer and the distribution companies by ensuring the amount received as to the beneficiaries.

Cost Reflective Tariff

The main reason that this is added is because of the sheer futile attempts of the commissions in establishing the tariffs that were determined. This further resulted in the problem of cost escalation. By the virtue of this new amendment, this problem is solved. Under this amendment, a 60 day period is adopted in order for the determination of tariff. In case this deadline is exceeded, such failure would lead to automatic acceptance of tariff.

National Renewable Energy Policy

As of 2016 India has ratified the Paris Agreement and is actively working towards the benefit of the environment. The same effort is taken under this new amendment as a means to the promotion of electricity through renewable sources. This amendment specifies a bar which needs to be followed to generate electricity from renewable sources especially hydropower. This initiative signifies the progressive nature of the amendment and a visionary view that is going to prosper the environmental sphere and also contribute towards the Nationally Determined Contributions(NDCs).

Establishment of Electricity Contract Enforcement Authority (ECEA)

Under the new amendment, an establishment of a new authority can be observed which would be headed by a retired judge of the High Court. The main purpose of this authority is to deal with the very specific performance of contracts that are related to sale or purchase of power. The need for this authority was because the other two authorities namely the: Central Electricity Regulatory Commission and Electricity Regulatory Commissions, cannot enforce decrees. For the establishment of the Electricity Contract Enforcement Authority a new Chapter – XA containing Sections 109 A to 109 N was inserted.

Security Mechanism for Payment

The 2003 Act doesn’t have any security instrument for dispatch of power which has been a critical issue as it has generated a ton of unpaid dues causing an atmosphere of insecurity in the industry. For this very purpose, the new amendment has taken it upon itself to deal with the security mechanism by providing an adequate framework. This provides a secure nexus between the generation and transmission stage in the electric sector. A reference to this can be found in the text of the bill as: ‘no electricity shall be scheduled or dispatched under such contract unless adequate security of payment as agreed upon by the parties to the contract, has been provided’.

Open Access

Under the old act, the fundamental problem was open access. It was granted to the consumers however two charges namely charges for intra-state transmission and interstate transmission of power were not accounted under it. The new amendment act aims to change that, additionally, a reference can be made to the point that this amendment also reduces open access surcharge and cross-subsidies.

Cross-Border Trade

A new and dynamic change in the policy is introduced by the amendment as the power to facilitate and allow cross border trade of electricity is now provided to the hands of the central government. The government’s attitude towards a trade surplus or deficit is unknown as a clear stand is not provided on this. However, predictions are made that there would be more purchases of electricity from the cross border in the coming years.

National Load Despatch Centre (NLDC)

The Electricity Act, 2003 provides for the load dispatch centres at central, state and regional level. Their function is of optimum scheduling and dispatch of electricity in their areas or jurisdictions. Under the same, the Central Government is responsible for prescribing the functions of NLDC. Through this amendment bill, the centre includes few new functions in the list which are: (1) Monitoring of Grid Operations, (2) exercising the supervision and control over the inter-regional and interstate transmission network, (3) carrying out real-time operations of the national grid.

This Bill also gives the power to the NLDC to issue directions for ensuring the stability of grid operations and the security of the National Grid. These directions so made by the NLDC will be binding on the entities involved in it which are, generators, regional & state dispatch centres.

Penalties

In order to ensure strict compliance of the provisions of the Electricity Act and orders of the Commissions, section 142 and section 146 of the Electricity Act are proposed to be amended to provide for higher penalties.

Previously, under Section 142, Penalty for non-compliance with the directions of the Appropriate Commission was upto Rs. 1,00,00 which was to be increased under this bill to Rs. 1,00,00,000 and for Additional per day penalty in case of continuing non-compliance was to be increased from Rs. 6000 to Rs. 1,00,000. Similarly, under Section 146 the penalty for non-compliance of orders or directions under the Electricity Act was increased from upto Rs. 1,00,000 to upto Rs. 1,00,00,000 and Additional per day penalty in case of continuing non-compliance was increased from Rs. 5000 to Rs. 1,00,000.

Distribution of sub-licence and franchise

The Amendment Bill proposes that distribution licensees, with the permission of the relevant State Commission, can recognise and authorise a person as “distribution sub-licensee”  which is different from the “franchisee” model already available under the Electricity Act to distribute electricity on its behalf in a particular area within its area. However, the original distribution licensee will remain the licensee and will ultimately be held responsible for ensuring the quality of the distribution of electricity in its area of supply. It is also proposed that such distribution of sub-licensee is not required to obtain a separate license under Section 14 of the Act.

The enabling provisions also have been made under the bill to address the situations to deal with the issues in sections 126, 135, and 164 under the Electricity Act, 2003, when a distribution licensee proposes to undertake distribution of electricity for a specific area within his area of supply through another person. By the amendment of this system, the distribution companies will give the franchise to private companies to sell electricity to consumers as a way to increase private participation.

Penalty for failure to comply with the Renewable Purchase Obligation

Under the Amendment, the penalty for failure to comply with the RPO is increased. The Bill proposes a penalty of Rs. 0.50/kWh for the shortfall in purchase in the first year of default, and if such default continues for the second successive year, then the penalty is proposed to be increased to Rs. 1 /kWh and consecutively thereafter Rs. 2/kWh.

Enhancement of Powers of the Appellate Tribunals for Electricity

Appellate Tribunals for Electricity (herein referred as APTEL) is proposed in the amendment to have the powers similar to that of the High Court to deal with the willful disobedience of persons and entities under the Contempt of Courts Act, 1971. The numbers of the members at the APTEL have also been proposed to be increased by the Amendment. It is proposed that the Appeal against the orders of Electricity Contract Enforcement Authority shall be appealable before the APTEL.

Critique

Here, we must analyse article 109 A(2) as follows:

‘109 A (2): Notwithstanding anything contained in this Act or any other law in force, the Electricity Contract Enforcement Authority shall have the sole authority and jurisdiction to adjudicate upon matters regarding performance of obligations under a contract related to sale, purchase or transmission of electricity, provided that it shall not have any jurisdiction over any matter related to regulation or determination of tariff or any dispute involving tariff.’

One important observation must be made here that the amendment proposed does not distance itself from the Electricity Regulatory Commissions that are currently working in lieu of the act. Even now we can see that there is no relevant shift in the power of these ERCs (Electricity Regulatory Commissions) as the matters relating to tariff, adjudication of disputes still fall in their ambit. A plain and simple reference to this was made above which is the premise of the argument. This can in turn lead to the overlap of jurisdiction cause confusion and havoc which should be prevented at all costs.

The Principle Act has primacy over the state action and the Act cannot infringe on institutional and policy making decisions of any of the state government. The institutional structure which is prevailing should not be rearranged as the initiatives made by the state to ensure the growth of the local and regional development of electricity will be obstructed. With the central government banking on making use of a pool of central generating stations and electricity resources, the development which is done at the state level will take a backseat as the state will not be able to take initiatives  to promote renewable energy resources.

The Organisation ECEA as per us does not fit into the governance structure as it goes against the Concurrent jurisdiction. Secondly, it will render the SERC useless and disempower them.

As this Amendment defines two entities, that is, (i) Distribution  sub-licensee and (ii) franchisee. The Amendment Bill does not provide for any distinction between the roles of these two and its area of operation. It appears that this provision is left open for interpretation. As the Rules between these two are not defined, the proposed model may result in failure.

The determination of the Tariff should meet the social policy objectives and should not result in tariff shock. Further, the Proposed Amendment delinks (State Electricity Regulatory Commissions) SERCs discretion to change the Tariff setting for customers on the basis of load, consumption, voltage etc. The State governments should be mandated under the Bill to transfer the subsidy amount directly to the DISCOMs  so that the consumers would be able to receive their bills post deduction of the subsidy amount. A monitoring and enforcement mechanism should be in place to ensure timely transfer of subsidy into the accounts of the consumers. The Implementation of the Direct Benefit Transfer (DBTs) can be highly challenging for the government as the electricity unlike LPG is not always consumed by the consumer under whom the connection is registered.

The role of the states’ in the consultative framework of the Act should be strengthened to ensure that RPO (Renewable Purchase Obligation) for every state is determined based on its energy portfolio and ability to add Renewable Energy capacity. Given the limitations of hydro as an energy source, policy measures and guidelines should be outlined for Hydro Purchase Obligations instead of giving them only the statutory status.

Opposition to the bill

Many of the prominent stakeholders are raising their voice in opposition to this bill and it is quintessential to understand why this is happening. At the front are the farmer unions and the consumer groups followed by employees and engineers. We can see a wave of opposition from various states like Tamil Nadu, Andhra Pradesh, Bihar etc. The reason for this opposition is quite simple, they view it as an attempt to move towards privatization. The state governments are against it as they are losing their long retained autonomy. Employee unions are not satisfied due to the privatisation of DISCOMs and the gaping holes in the  payment-security mechanisms.

The long argument that has been running for years is that it seeks to empower the ‘haves’ and take away from the ‘have nots’ This has caused a huge discomfort to the consumers and the farmers as public monopolies are replaced. Moreover, due to COVID-19, it has also been argued that this is the worst time that this bill could have come into light as there is no time for a proper scrutiny of the same. This agenda cannot and must not be pushed in a time of crisis without proper debate.

One other major issue that must be highlighted here is that nature and the spirit of the subject matter which should not be ignored at any cost. Electricity is a concurrent subject and this amendment can cause a series of tussles between the union and the state. In addition to that, it goes against the spirit of what the constitution makers have laid down for us. There is a fundamental reason that we must understand why electricity needs to be in the concurrent list. We must consider that each state has its specific resources and to categorise it as one nation would hinder the whole process.

Conclusion              

The amendment bill brings the needed changes and adapts to the ongoing time. The whole outlook of electricity laws will be relooked and the gaping whole will be filled in. Now, it is for the union to pass the bill and embark upon the new and ravishing journey of implementing the changes proposed. The amendments that are proposed hold a concrete long term nature which are destined to have a good impact on both the economy and the environment as the tariff and subsidies will help support the financial crunch and the green power will benefit the environment.

The view taken by the legislators has indeed moved in a direction to fulfill the current needs. However, the critiques mentioned in this article should also be taken into account to further avoid any jurisdictional problems at the most. The confusion of jurisdiction is one that would cause huge problems in implementation and make the process tedious. However, the bill shows a progressive nature and further moves in a positive direction.

Under the new amendment, an establishment of a new authority can be observed which would be headed by a retired judge of the High Court. The main purpose of this authority is to deal with the very specific performance of contracts that are related to sale or purchase of power.

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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.

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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.

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ANALYSIANG SECTION 194R OF THE INCOME TAX ACT

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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.

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GUJARAT HIGH COURT: WRIT PETITION FILED AGAINST PRIVATE UNIVERSITY NOT MAINTAINABLE, REMEDY FOR ALLEGED ARBITRARY TERMINATION LIES UNDER CIVIL LAW.

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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.

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Gujarat HC Quashes Reinstatement Order: Industrial Dispute Act| Person Working In The Capacity Of ‘Consultant’ Cannot Be Deemed ‘Workman’

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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.

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GUJARAT HIGH COURT QUASHES REINSTATEMENT ORDER: PERSON WORKING IN SUPERVISORY CAPACITY CANNOT RISE “INDUSTRAIL DISPUTE”

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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.

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COURT CALLS FOR SENSITIZATION OF POLICE: DELHI RIOTS SITE PLANS PREPARED CASUALLY, S.65B CERTIFICATE NOT FILLED FOR DIGITALLY SOURCED EVIDENCE

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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.

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