Sunday, May 4, 2014

[aaykarbhavan] Business standard legal digest and updates



India's young workforce adopts new forms of protest


AMAN SETHI

Pathredi, 4 May

The negotiating power of workers, Mahesh Kumar Sharma explains under a tent pitched in an open field in the Pathredi Industrial Area on the HaryanaRajasthan border, varies inversely with distance from the site of production.

"It is the most in the factory but no one listens to you when you reach Jantar Mantar." So, when workers at Shriram Pistons and Rings Ltd wanted the management to reinstate Sharma and 21 others suspended since January this year, over 1,000 of them downed tools and occupied the plant for 12 days.

Last Saturday, 200 policemen, armed with tear gas, water canons, batons and live ammunition, descended on the plant and evicted the workers. Seventy- nine were hospitalised and 26 are now in jail. The rest sit 500 metres from the company wall, awaiting a fresh round of negotiations with the management.

Shriram's management declined to comment on the issue in a telephone interview and did not reply to a list of emailed questions.

The events at the Shriram factory are the latest iteration of a trend first seen in 2011 at Maruti Suzuki's Manesar automobile plant. Young and technologicallysavvy workers are avoiding older institutional forms of protest, such as notified strikes, demand letters and negotiations. Their inclination is more towards dispersed, "wildcat" ( sudden) occupations organised through quiet conversations between shifts, cellphones and mobile messenger services like WhatsApp.

Of late, workers of several companies like Napino Auto and Electronics, Autofit India, Asti Electronics and Baxter India have organised sudden work stoppages that have sometimes turned into prolonged occupations. This March, workers at Napino coordinated a10- day worker occupation across three separate plants.

Officials at Napino and at the labour department in Gurgaon confirmed there was an occupation but declined to go into details. "The management shut down the canteen at Napino," says a worker, asking not to be named for fear of disciplinary action by the management. " But the women workers smuggled food into the plant for everyone." "Management has changed its tactics," explains a worker who participated in the occupation at Baxter India, a subsidiary of Baxter Healthcare, an American medical equipment manufacturer.

"If you sit on dharna, the company declares a lockout, brings in contract workers and continues production."

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Organises plant occupations via messenger services like WhatsApp as lockouts fall in cat- and- mouse game LABOUR'S LOST?

Work days* lost in a year Distribution of workers by employment status (%)

*Lost work day: Total number of workers involved multiplied by total number of days (equivalent) when work could not take place


Self- employed
 Regular wage employees
 Casual workers

Source: National Sample Survey Office, India Labour & Employment Report, 2014, by the Institute of Human Development

29.0 13.5 57.5 32.0 28.9 14.2 17.9 56.9 29.9 52.2 13.3 54.7

 


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Click: Article continued from…India's young workforce adopts new forms of protest


India's young workforce...


By occupying the plant, workers can halt production and force management to the negotiating table. Statistics bear out his surmise: In 2002, there were 295 strikes and 284 lockouts, according to data gathered by the Labour Bureau. The year 2011 saw 183 strikes versus 185 lockouts.

In 2013, there were 134 strikes and only 15 lockouts. A majority of these strikes in 2013, workers and trade unionist say, began as wildcat occupations. Given the paucity of union membership data ( a verified survey in 2008 estimated membership at 24.8 million as of 2002), it is difficult to quantify how these new struggles are engaging with the union movement. " Unionisation is increasingly forming the backdrop for conflict between capital and labour," says Rakhi Sehgal of the New Trade Union Initiative. " It is important to understand why capital is resisting union formation and why a generation with no exposure to political struggles and union history is adamant on forming unions." At Shriram, much like at Maruti in 2011, workers put forward a 17- point charter of demands, which made no mention of forming a union but sought a pay hike, a newspaper allowance, a medical allowance, an education allowance, marriage loans, better canteen food with larger servings of milk and jaggery, and a one- time grant of 51,000 to marry off a daughter. Yet, when interviewed by this correspondent, workers insisted their central demand was that the company allow them to form a union.

"By law, companies cannot stop the creation of a union. So, managements respond by suspending the workers who put their names on the union application," says Rajbir Chahail, a union activist with the All- India Trade Union Congress. " The suspensions create a fresh round of demands and dharnas." The charter of demands, therefore, offers workers and managements a fig leaf to begin aset of seemingly surreal negotiations, where a demand for reinstatement of workers is a proxy to a discussion on union formation.

And, a threat of forming a union is leveraged to improve wages and working conditions.

"The basic point is that it is impossible to survive on a factory salary. These companies eat away at your youth," says Mahesh Kumar, a 31- year- old trainee at Shriram Piston who claims he gets 6,000 a month in hand. " You join as a trainee, they say you will become permanent in six months, then one year, then two... and then, one day, you are too old and must remain a contract worker for life." The opacity of the shadow negotiations between management and workers can lead to tragic consequences as seen in the death of a Maruti manager at the Manesar plant in 2012.

In 2011, Maruti Suzuki agreed to the creation of an independent union at its Manesar plant but dismissed Sonu Gujjar, the movement's charismatic leader. Gujjar took his severance package, a union was formed, and production resumed.

In November that year, a worker broadsheet published an anonymous critique: " In these last few months, a handful of workers had risen to the position where they could control the workers... By dismissing precisely those men, the management has thrown away a valuable tool." Six months later, a general manager was killed in a violent confrontation between the workers and management at the Manesar plant.

"It is time for top management to look at labour relations as a strategic business process and get it on to their radar screen for regular review," says Rajeev Dubey, president of the Employers Federation of India, and group human resource president at Mahindra & Mahindra Ltd. " We need to think about young people and their aspirations.

Here, a mature union has a key role to play in matching aspirations to reality." Yet the unrest in India's industrial estates suggests young workers are in search of a new reality they can call their own.

 

BRIEF CASE


Fresh tender alright to fetch better price

A public authority can cancel a tender process and call for fresh bid in larger public interest to receive higher revenue. " When competing claims are private interest versus public interest, in the case of disposal of public property, the question would be property in a public auction is to be preferred over the right of the public in ensuring that valuable public assets are not disposed of except for a fair price and in a transparent manner," the Supreme Court has stated in the judgment, Rishi Kiran Logistics Ltd vs Kandla Port Trust. In this case, the firm was given a letter of intent in 2005 for a few plots for construction of liquid storage tanks. But it was subject to clearance under Coastal Regulation Zone (CRZ) regulations. It was not obtained till 2010. By then the price of the property had taken a quantum jump, 612 per sq mtr to more than 8,000. The port trust went in for a fresh tender. This was challenged by the allottees. The Gujarat High Court dismissed the petitions. One firm appealed to the Supreme Court. It held that " in matters of disposal of valuable assets by the state, it can seek to explore the possibility of getting a higher price." It also ruled that issuing a letter of intent did not always mean that the contract had been concluded.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Open offer cannot be withdrawn

The Supreme Court has ruled that an open offer voluntarily made through a public announcement for purchase of shares of the target company cannot be withdrawn when the offer becomes uneconomical to be performed. Allowing the appeal of the Securities & Exchange Board of India ( Sebi) against the order of the Securities Appellate Tribunal ( SAT) in the case of Akshya Infrastructure Ltd, the court said permitting such withdrawal " would give a field day to unscrupulous elements in the securities market to make public announcements for acquiring shares in the target company, knowing perfectly well that they can pull out when the prices of shares have been inflated due to the public offer". It added that such speculative practices have been sought to be prevented by Regulation 27 of the Take- over Regulations. The court further stated that SAT had gone wrong in invoking the Issue of Capital and Disclosure Requirement Regulations 2009 in this context.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> ONGCclaim for dues rejected

The Supreme Court has dismissed the appeal of Oil and Natural Gas Corporation ( ONGC) claiming preferential right to recover dues from the official liquidator of Ambica Mills Ltd. The company was wound up in 1997 by the Gujarat High Court. When a plot of land belonging to the company was sold, public sector ONGC claimed its dues for supplying natural gas to the mills. The high court rejected the claim.

The court ruled that ONGC was entitled to recover dues only on par with other secured creditors and workers under the Companies Act. There was no security created specially in its favour. The Supreme Court upheld that view.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Damages denied for shortdelivery

The Supreme Court has dismissed the claim of a firm, which sought compensation on account of short delivery of 264 tonnes of charcoal, sent by it from Madurai in Tamil Nadu to Indian Metals and Ferro Alloys Ltd at Therubali in Odisha by rail. The consignor firm, Shri Ramji Enterprises, moved the Tamil Nadu consumer commission more than a year after the delivery, following a dispute with the consignee. The commission allowed the complaint but the railway appealed to the national consumer commission, which dismissed it on the ground that consumer courts had no jurisdiction to deal with such complaint. Then the firm moved the railway claims tribunal. It dismissed the complaint stating that the complaint was filed too late and the consignee did not file any complaint about short delivery. The firm moved the Madras High Court without success. Its appeal was dismissed by the Supreme Court, citing the above reasons.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Hospital to pay for gross negligence

In a medical negligence case, the Supreme Court declined to interfere in the finding of facts arrived at by the Delhi High Court and upheld the compensation of 11 lakh to a bank employee who lost his job prospects. He was admitted to the hospital for fever and when he had a delirium, he jumped out of bed from the third floor and got severely injured. He sued the hospital for gross negligence in leaving him without precautions. The hospital argued that his sister was with him. However, the high court examined the facts of the

case and found that " the facts speak for itself" ( res ipsa

loquitur principle). According to this doctrine, it is the burden of the hospital to prove that it was not negligent. It could not do it. Both parties appealed to the Supreme Court against the award of damages — the injured person for higher damages and the hospital for rejecting the claim. In the judgment, Ashish Mazumdar vs Aish Ram Batra Hospital, the Supreme Court dismissed both appeals and confirmed the award given by the high court. The litigation took 23 years.

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Restraint on three medicine trademarks

The Delhi High Court has passed injunctions in three medicinal trade mark cases. In the case, Glaxo Group Ltd vs United Biotech Ltd, the court restrained the latter from using the name ' Heprotec' for treatment of hepatitis as Glaxo had registered 'Hepitec' in 1998, and used it since 2000. In contrast, United Biotech's similar sounding name was used only in 2000. In another order, the high court allowed the application of Abbott Healthcare Ltd for restraint on the use of the name Amaforten by an Indian company while Abbot's product was named Anafortan. The name and packing were similar and tended to mislead the customer. On similar grounds, the high court restrained Remed Healthcare Ltd from using the name Mericobal for its product because it was deceptively similar to that of a medicine manufactured and marketed by Wockhardt Ltd. The latter claimed that it was the first user of the name and under an agreement later with a foreign partner, Swiss Garnier Life Sciences, it added asuffix which in full read as ' Mericobal Viva'.

A weekly selection of key court orders

 

 

 

Don't panic if documents are lost


PRIYA NAIR

Last month, Congress chief Sonia Gandhi lost tax- free bonds of Indian Railway Finance Corporation ( IRFC) worth 10 lakh. She informed IRFC about and requested it for duplicate bond certificates. Also, a public announcement was placed in newspapers, informing the public about the loss.

This is the procedure if one misplaces important documents such as bond or share certificates, life insurance policies, property papers and tax papers. While saving documents in a bank locker or digitising these is advisable, these processes aren't followed by many.

Follow the right procedure

If you lose a document, first file a police complaint. Second, place announcements in an English newspaper and a vernacular one circulated in the state where the document has been lost. Third, approach the authority concerned and apply for a duplicate copy. You will also have to execute an indemnity bond and get it affirmed before a notary, undertaking to protect and indemnify the company in case a claim is made by any other person.

In some cases, you might have to pay a fee for a duplicate, as well as stamp fee. These vary from state to state.

Though the cost of placing a newspaper announcement might, at times, exceed the value of the security, this is a technical requirement, says consumer activist Jehangir Gai, adding unless this is done, one might not be able to secure a duplicate.

After the public announcement, if anyone has any claim to the document, it should be conveyed to the issuer within 15 days. In some cases, banks or housing finance companies misplace the documents of those who take loans from them. The borrower discovers this only after the loan has been repaid and the lender has to release the documents.

Though misuse of these documents isn't common, as most documents have individual names, without original documents, it is difficult to claim proceeds when the investment matures or for nominees to claim proceeds in case of insurance policies.

Approach the right authority

If you lose share certificates, you have to approach the company's registered office, even if it is in a different city or location. If you lose property documents, you have to approach the sub- registrar of that city. If a Kisan Vikas Patra is misplaced, one has to approach the local post office. And, if your insurance policy or bank fixed deposit certificate is lost, you have to approach the branch servicing your policy or in which you have a fixed deposit.

Sumeet Vaid of Ffreedom Financial Planners says while most people file police complaints and place newspaper announcements, they don't follow up with issuers to secure a duplicate, a reason behind the substantial unclaimed money in bank fixed deposits and insurance policies.

If a bank has misplaced your papers, you also have the right to seek compensation for deficiency of service and harassment, says V N Kulkarni, debt counsellor, Abhay.

In 2011, after a bank had misplaced property documents, the banking ombudsman had stated it had to issue a duplicate copy and bear all the costs required, including those for placing announcements in newspapers. The bank was also asked to pay 25,000 as compensation to the complainant. In case property papers are misplaced by a bank, the borrower should also approach the registrar of co- operative societies and give it in writing. This will ensure there is no forgery in future. In such cases, the complainant can also approach the consumer court. Protecting your

documents Many of us keep important documents in safe deposit lockers.

But this means every time we need the documents, we have to visit the bank branch concerned. A safer and easier way to protect documents is to digitise these. Record management companies offer facilities to store both physical and digital documents for 200- 2,000. Such companies create separate accounts for each customer, with a login ID and password. Storage spaces vary, depending on the package. Customers can also ask for physical documents to be delivered to them. Some banks, too, offer this service, albeit for select customers. The biggest advantage of digitising documents is you need not worry about carrying copies of these with you. With most having access to the internet through smartphones and tablets, we can access the documents anywhere, anytime.

And, since these files are encrypted, they are secure. Many of us laminate important documents to protect them from physical damage. " When you submit a photocopy, it is always verified against the original. In some cases if the original is laminated, the authority might refuse to accept it," says consumer activist Jehangir Gai.

File a complaint, place newspaper announcements and approach the authority concerned for a duplicate

Maximum governance = rule of law?


Narendra Modi is widely expected to be the country's next prime minister.

If this happens, business people uniformly expect " good governance" —except good governance is an undefined term; it means different things to different people.

For some, clearing files that may contain gold- plated capital expenditures or lucrative coal blocks is good governance. For others, it could be allowing or not allowing foreign direct investment in the retail sector.

For the vast majority of the population – especially the middle class, the poor and small- business people –good governance possibly means sensible laws and the implementation of such laws without favour: in other words, a regime of the " rule of law". This, when combined with a reasonable degree of freedom, allows people everywhere to do wonders all by themselves.

Unfortunately, many of the existing laws that govern business – and our lives – have been inherited from the British and are defunct or absurd. Some serve only one purpose now: that is, regular extortion by government officials.

There is no dearth of people who have researched this area thoroughly. They can regale Narendra Modi with something like the East Punjab Agricultural Pests, Diseases and Noxious Weeds Act of 1949, which applies to Delhi. According to Bibek Debroy, who has written entertainingly and extensively about Indian legal absurdities, under this act, " if Delhi is invaded by locusts, the collector can call upon all adult males to help in destroying locusts and it is a crime to refuse. You will be notified about locusts through beating of drums".

Mr Debroy gives many such examples, the fruits of his extensive research in the late 1990s. The Bengal Bonded Warehouse Association Act, 1838, stipulates that only residents of the Presidency of Fort William in Bengal can be its directors and the association can sell its property only to the East India Company. The 162- year- old " association" has not yet been dissolved. India's central bank is atemporary institution under the Reserve Bank of India Act, 1934.

Apart from such irrelevant central laws, we have tens of thousands of state laws. Then there are rules enacted by the government under legislation; such rules outnumber the laws by 20 times. To this, you can add notifications and circulars. Then there are decisions and individual interpretations by judges.

A brush with any of these could be depressing and debilitating. At our office in Mumbai, we are blessed with occasional visits by petty officials of the municipal corporation who may ask to see a Lime Wash Register. Yes, you need one, according to them. An architect told us that partitions of any kind are illegal because the law says you need to allow free flow of air across the office. This law was enacted by the British for public health well before room air conditioners came into use. Municipal inspectors smile and tell you that " you will not be able to comply with the rules we have".

The Centre and states together have almost 31,000 laws. Many new central laws are added every year. The " socialist" regimes of the Nehrus and Indira Gandhi, the " rights- based" regime of Sonia Gandhi, and the concerted action by militant non- governmental organisations ( NGOs) have created many new laws with draconian provisions. There are old laws that hinder free movement of goods and services in an era when there is a " broad consensus about economic reforms among all the parties", as intellectuals like to parrot.

Well, the Essential Commodities Act of 1955 and the Agriculture Produce Marketing Committee Act do not permit free movement of agricultural produce. Politicians and officials rarely talk of removing such restrictions mainly because they are breeding grounds for corruption — with the officials lying in wait to trap unsuspecting citizens. I have not even gone into the huge delays in delivering justice through the existing legal system.

A bigger issue is the implementation of laws without favour. In India today, the rich and powerful can get away with sidestepping laws that harshly penalise others. Defaulting on depositing provident fund dues or tax deducted at source can attract penalties, including imprisonment; some businessmen escape this treatment. If you haven't repaid your loan, banks will take away your assets; Vijay Mallya, however, is most likely to escape the well- established rule of law. This is not an isolated case. Indeed, the most glaring example of the breakdown of the rule of law is a dramatic increase in non- performing assets 10 years after the government enacted the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

This law was enacted specifically to deal with rampant bad loans in the late 1990s that bankrupted governmentowned banks. These banks then needed to be recapitalised by drawing upon thousands of crores of taxpayers' money. The law was specifically meant to plug this problem forever. And it was easy to do so. Lending laws can be among the simplest. Banks are supposed to lend against security and, at the same time, keep a margin, backed by a strong law that the government gave them. There was no scope for banks to end up with large bad loans again. So, how have we landed up exactly in the same situation 10 years later? Taxpayers' money worth 14,000 crore had to be pumped into government banks last year to save these institutions. Why are successive finance ministers and finance secretaries not responsible for this? To my mind, there cannot be a more open- and- shut case of misgovernance, a more glaring example of the failure to implement even a new law.

Rahul Gandhi said last year that we seemed to be looking for " the man who comes in on a horse, the sun in the background, and he is going to fix everything". If Narendra Modi becomes prime minister and can deliver governance through the rule of law, he may end up looking like that man, at least for some time. This is because there is just too much to be done, and plenty of it is quite easy to fix.

The writer is the editor of www. moneylife. in

editor@ moneylife. in

IRRATIONAL CHOICE

DEBASHIS BASU

 

 


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