[No.202]

Supreme Court

• Bongaigaon Refinery and P.C. Ltd. and Ors.Vs. Girish Chandra Sarmah

The respondent while working for petitioner refinery was alleged to have committed serious misconduct while working on a land deal for petitioner refinery and was charge-sheeted. After inquiry as all charges against respondent were found to be true, Disciplinary Authority after giving respondent an opportunity for hearing passed the impugned order reverting respondent to a lower post. Aggrieved against this order the respondent filed a writ petition before the High Court. Learned Single Judge dismissed the writ petition. Aggrieved against that order the respondent preferred a writ appeal before the Division Bench and Division Bench allowed the writ appeal of the respondent. Hence, present appeal by petitioner. Petitioner submitted that the Division Bench sat over the matter as an appellate authority and reversed the finding of the learned Single Judge as well as the inquiry officer on re-appreciation of evidence. The Division Bench cannot sit as a court of appeal in the matter of domestic enquiries and re-appreciate the evidence. Held, with regard to appreciation of evidence is concerned, there is no quarrel that the Courts cannot sit as appellate authority over the domestic enquiries but in the present case what appears is that the respondent has become a scapegoat in order to make someone responsible for no fault of his. If the finding recorded by the Inquiring Officer is not sound and it relates to perversity then the appellate court in writ appeal cannot estop the counsel from raising the same. More so, the Division Bench after considering the matter has found that the whole approach was perverse because the respondent alone has been made a scapegoat. When the decision of all the three committees in which respondent was member with regard to the deal was unanimous, then to take one and put the entire blame on him is definitely perverse approach and the Court cannot stand to the technicalities so as to defeat the ends of justice. Thus, the submission of learned Additional Solicitor General has no merit. Appeal is dismissed.

• Sonia Vs.Oriental Insurance Co. Ltd. and Ors.

The appellant who is a Scheduled Caste by birth has been working as Assistant with respondent Insurance Company. Applications were invited from eligible and desirous employees for appointment to higher post in terms of the promotional policy of the respondents. In the said promotional policy, pre-examination training to Scheduled Caste/Scheduled Tribes/Other Backward Classes candidates who are eligible to appear in the aforesaid test was allowed. Also as per the policy if no eligible candidate is available in a particular category, an exchange of vacancy between Scheduled Caste and Scheduled Tribes categories can be allowed to the extent of non-availability of eligible candidates in a particular category. Appellant applied for the post and was permitted to appear for the competitive examination against the vacancy reserved for candidates belonging to Scheduled Tribes category. The name of the appellant appeared in the list of successful candidates. Since her name had appeared in the list of successful candidates, the appellant claimed that she was entitled to be called for interview and considered for selection. Thereafter, respondents by notice stated that no exchange of vacancies between Scheduled Caste and Scheduled Tribes categories could be allowed even if no eligible candidate was available under either of the two categories in view of a government order. Appellant then filed writ petition before High Court against same but was dismissed with the observation that no legal right of the appellant had been infringed for not empanelling her as a successful candidate to appear before the Interview Board set up by the respondents. Hence, present appeal. Held, an Office Memorandum could not have retrospective effect and the appellant would be governed or covered by the date on which applications were invited to fill up the post. In N.T. Devin Katti v. Karnataka Public Service Commission this Court has held that where selection process has been initiated by issuing an advertisement inviting applications, selection should normally be regulated by the rule or order then prevalent and also when advertisement expressly states that the appointment shall be made in accordance with the existing rule or order, subsequent amendment in the existing rule or order will not affect the pending selection process unless contrary intention is expressly or impliedly indicated. In the present case, admittedly, while inviting applications, respondents advertised the number of vacancies required to be filled under various categories. Notice inviting application also mentioned that if under a particular category an eligible candidate was not available, exchange of vacancies between the two categories was permitted. The appellant acted on the basis of the aforesaid advertisement which permitted her to apply for the post and in fact she was permitted to sit in the examination and was subsequently also found to be a successful candidate in the said examination. Therefore, in view of the aforesaid decision in the case of N.T. Devin Katti v. Karnataka Public Service Commission Office Memorandum cannot have any retrospective effect and the date on which the applications were invited should be the relevant date for consideration whether exchange of Scheduled Caste and Scheduled Tribes candidates was permissible. Therefore, appeal allowed.

High Courts

Madras

• N. Kumar V. M.O. Roy, Assistant Director, Serious Fraud Investigation office, Ministry of Company Affairs, Government of India, New Delhi

Respondent filed complaint against petitioner, director of company alleging that the company failed to distribute the dividends declared by it within the stipulated time. Petitioner challenged same on ground that said complaint is barred by limitation and further that petitioner cannot be fastened with vicarious liability of offence as he had resigned from said company even prior to the date of declaration of dividend and therefore he is not to be liable to be prosecuted. Hence, present petition. Whether the offence under Section 207 of the Act has been validly taken cognizance before the expiry of the period of limitation? Held, since the offence alleged under Section 207 of the Act is punishable with simple imprisonment for a term, which may extend to 7 days and shall also be liable to fine, the period or limitation for taking cognizance of the offence will be one year. There is absolutely no provision available under the Companies Act contemplating prior sanction for initiating prosecution for the offence under Section 207 of the Act. The contention to the effect that the Central Government had the knowledge about the commission of the offence only on the basis of the report of investigation dated 1st December, 2005 and thereafter, the complaint was filed after obtaining sanction Order from the Ministry of Company Affairs dated 1st May, 2006 is unacceptable. It is relevant to note that as early as on 23rd October, 2003 itself the Government passed an Order to investigate into the affairs of the company. Therefore, the Government could have had the knowledge even as early as in the year 2003 itself about the alleged commission of the offence by the said company under Section 207 of the Act. The Inspector commenced his investigation as per the Order dated 23rd October, 2003 and ultimately, submitted the report only on 1st December, 2005 and therefore, it is crystal clear that the Respondent/ Complainant must have had the knowledge of the commission of the offence as early as in the year 2003 itself and therefore, the complaint is clearly barred by limitation.

Godrej Sara Lee Ltd., Pondicherry, rep. by its General Manager-Legal B.S. Virkar v. Commissioner of Central Excise, Joint Commissioner of Central Excise, Deputy Commissioner of Central Excise (Drawbacks) Office of the Commissioner of Central Excise and Assistant Commissioner of Customs (Drawback) Custom House, Chennai

Second Respondent-defendant, Joint Commissioner of Central Excise, passed an order that the diffuser which has been fixed in the mosquito repellant machines manufactured by the petitioner-appellant is not eligible for availing drawback claim as per Section 75 of the Customs Act, 1962. Three days prior to issuance of the impugned order by second respondent, 4th respondent Assistant Commissioner of Customs (Drawback) issued a demand notice wherein the 4th respondent called for any representation from petitioner giving petitioner an opportunity for personal hearing on said issue. Petitioner challenged impugned order by second respondent on ground that the demand notice which preceded the impugned order, even though is in the nature of show cause notice, the respondents have made up their mind to deny petitioner duty drawback claim as the second respondent had passed the impugned order only after 3 days from the date of issue of demand notice and so same would amount to prejudging of issue without giving petitioner adequate time for proper representation. Learned Single Judge held that impugned order of second respondent can be kept at abeyance by petitioner and petitioner can make a proper representation. Hence, present appeal. Held, Even though it is true that the learned Judge has directed that the Impugned order is to be kept in abeyance till the proceedings initiated by the 4th Respondent by notice is completed, the said Order cannot stand the test of law, since it would amount to prejudging the issue. Therefore, impugned order by second respondent is set aside.

Bombay

• Karnataka Bank Ltd. V. Sunita B. Vatsaraj

Respondent joined services of Appellant Bank and was promoted as an officer. Thereafter, a power of attorney was executed by the Appellant in favour of the Respondent conferring upon her managerial and administrative powers. Thereafter, respondent was terminated from services of appellant bank on ground that respondent made serious lapses in her duty. Said matter was challenged before Industrial Tribunal and Tribunal held that respondent was an officer employed in the managerial and administrative capacity and was also supervising the work of the subordinates and was not a workman within the meaning of Section 2(s) of the Act and, therefore, the reference was not maintainable. Aggrieved Respondent challenged the decision of the Tribunal by filing a writ petition and learned Single Judge held that mere designation of the Respondent as an officer was not conclusive whether she was performing managerial or administrative functions and was employed in a supervisory capacity and therefore, reversed the finding of the Tribunal. Hence, present appeal. Whether respondent is a workman within the meaning of Section 2(s) of Industrial Disputes Act? Held, in a given case, it is possible that a manager who is employed in a managerial and administrative capacity is also required to supervise the work of several other subordinates working under him. In that case he would fall both under Clauses (iii) and (iv) of Section 2(s) of the Act and as such would not be a workman. An officer who falls under either Clause (iii) or (iv) of Section 2(s) would also be excluded and not a workman. In the present case, the respondent was employed both in the supervisory as well as in the managerial capacity. The Power of Attorney conferred on the Respondent power to open accounts with different Banks. It authorised her to collect interest, dividends as well as pledge mortgage and dispose of government securities. It authorised her to make, draw, sign and endorse cheques, hundies and bills of exchanges and to demand, collect and receive and give discharge in the name of and/or on behalf of the bank of all debts, advances and claims due to the Bank. Exercise of these powers involved exercise of managerial skills and taking of managerial decisions. These cannot be regarded as routine powers conferred on sub-ordinate employees or clerks. This aspect of the matter viz. that the Respondent was employed mainly in a managerial capacity was overlooked by the learned Single Judge. Therefore, appeal allowed.

SEBI

• SEBI Withdraws Recognition Granted to Saurashtra Kutch Stock Exchange Ltd.

Press Release No. 215/2007 Dated 09.07.2007: SEBI has passed an Order on July 6, 2007 withdrawing the recognition of Saurashtra Kutch Stock Exchange Ltd. (SKSE). The Order inter-alia directs that funds in the Investor Protection Fund and Investor Services Fund of SKSE shall be transferred to SEBI Investor Protection and Education Fund; the exchange shall set aside sufficient funds to provide for settlement of any claims; companies exclusively listed on the exchange may consider seeking listing at other stock exchanges or provide for exit option to the shareholders; certificate of registration of trading members granted by SEBI shall stand automatically cancelled. The Order further restrains SKSE from transferring or alienating any movable or immovable property of the exchange including Bank Accounts in any manner till further directions by SEBI in this regard. The said order was based on an inspection conducted by SEBI of SKSE in June 2006. Thereafter, SEBI advised SKSE to rectify all the deficiencies pointed out in the inspection report. Further, SKSE was also advised to submit a weekly report regarding the same. However, on perusal of the compliance report, it was noted that there were deficiencies that were yet to be rectified by SKSE including failure to set up the Settlement Guarantee Fund, failure to appoint the Executive Director for its exchange, inadequate infrastructure, non recovery of dues from members and listed companies, failure to appoint the Chief Executive Officer for its subsidiary, wilful violation of SEBI's directives, allowing broker directors to exercise financial powers, not providing adequate financial powers to the Executive Director and convening a press conference and discussing SEBI inspection report, etc. Hence, such order was passed by SEBI.

• SEBI Amends Clause 41 of the Listing Agreement

Press Release No. 216/2007 Dated 10.07.2007: Securities and Exchange Board of India (SEBI) vide Circular dated July 10, 2007, has directed all stock exchanges to replace the existing Clause 41 of the Equity Listing Agreement with a revised clause which aims to rationalize and modify the process and formats for submission of financial results to the stock exchanges. The revised clause also contains other modifications aimed at improving the presentation of the sub-clauses. Among the modifications, the revised clause requires listed companies to furnish either unaudited or audited quarterly and year to date financial results to the Stock Exchange within one month from the end of each quarter. Where unaudited results are furnished, the same are required to be followed with a Limited Review Report. This is with a view to enable investors to know the performance of listed companies as early as possible. The revised clause has also simplified provision for explanation in variation between items of unaudited and audited quarterly/ year to date / annual results. The revised clause requires that explanation for variation be furnished in respect of Net Profit or Loss After Tax and for exceptional / extraordinary items. The percentage of variation for the purpose is revised from "20% or more" to "10% or Rs.10 Lakhs, whichever is higher". As regards the publication of financial results, companies having subsidiaries who file both stand-alone and consolidated results to the stock exchange will now have an option to publish stand-alone or consolidated results, subject to the condition that a choice once exercised cannot be changed during the year. In case the company changes its option in any subsequent financial year, it would be required to furnish comparative figures for the previous financial year in accordance with the option exercised for the current year.

Press Information Bureau

• Government Approves Amendment to Aircraft Act, 1934

PIB Dated 02.08.2007: The Government has approved a number of proposed amendments to the Aircraft Act, 1934. Accordingly, the government will acquire necessary powers to exercise supervisory control on the standards of airport and Communication, Navigation and Surveillance (CNS)/ Air Traffic Management (ATM) facilities; license personnel engaged in ATC; and make rules to ensure civil aviation security. Further, the amendments would ensure that the safety oversight functions are performed effectively by the DGCA. The enhancement in the quantum of penalties for violation of the Aircraft Act is likely to have the desired deterrent effect and hence would go a long in raising the compliance level. The Aircraft Act 1934 will get updated in general.

• External Commercial Borrowing Policy Modified to Modulate the Capital Inflows

PIB Dated 07.08.2007: The External Commercial Borrowing (ECB) policy was reviewed by the Government in consultation with Reserve Bank of India (RBI) to keep it in tune with the evolving macroeconomic situation, changing market conditions, sectoral requirements, the external sector and the lessons of experience. Based on such review, it has been decided to modulate the capital inflows through ECB by modifying some aspects of the policy. Henceforth, ECB more than USD 20 million per borrowing company would be permitted only for foreign currency expenditure for permissible end-uses of ECB. Accordingly, borrowers raising ECB more than USD 20 million shall park the ECB proceeds overseas for use as foreign currency expenditure for permissible end-uses. The above modifications would be applicable to ECB exceeding USD 20 million per financial year both under the Automatic Route and under the Approval Route. ECB up to USD 20 million per borrowing company would be permitted for foreign currency expenditure for permissible end-uses under the Automatic Route and these funds shall be parked overseas and not remitted to India. Borrowers proposing to avail ECB up to USD 20 million for rupee expenditure for permissible end-uses would require prior approval of the Reserve Bank under the Approval Route. However, such funds shall be continued to be parked overseas until actual requirement in India. All other aspects of ECB policy such as USD 500 million limit per company per year under the Automatic Route, eligible borrower, recognised lender, average maturity period, all-in-cost-ceiling, prepayment, refinancing of existing ECB and reporting arrangements remain unchanged.

Telecom Regulatory Authority of India (TRAI)

• Extends the Last Date for Receiving the Comments on Recommendations- 'the Best Way Forward for Implementation of CAS in cable TV network'

Press Release No. 68/2007 Dated 27.07.2007: A Group consisting of members from TRAI, Ministry of Information and Broadcasting, Prasar Bharti, Broadcasters, MSOs, DTH operators, Cable Operator/Distributor associations and consumer organizations was constituted to deliberate on the issues relating to digitalization and introduction of voluntary CAS. The Group after extensive deliberations submitted its recommendations to the Authority on 12th June 2007, on "the best way forward for implementation of CAS in cable TV network".

Cases

• Heart of Adoptions, Inc. Vs. J.A.

Respondent, biological father of the child alleged that he became aware of the mother's pregnancy approximately three months prior to the birth of Baby and approximately two weeks prior to the birth, the plaintiff adoption agency sent respondent a certified letter confirming a conversation between respondent and an adoption social worker employed by plaintiff adoption agency during which respondent was informed that the birth mother had contacted the agency and planned to place the baby for adoption and had indicated that respondent was the possible biological father of the baby. The letter informed respondent that if he decided to cooperate with the birth mother's adoption plans, she would like to involve him in the process. However, the letter did not inform respondent that in order to preserve his right to notice of and consent to the adoption, he must timely file a claim of paternity with the Florida Putative Father Registry (Registry). Respondent filed a petition to determine paternity and for related relief in the Fifth Judicial Circuit Court in Citrus County and requested that the court "stop the mother from allowing the child to be adopted." However, three days after the birth and three days after the petition to determine paternity had been filed, plaintiff agency HOA filed a petition for termination of parental rights against respondent and repeated the birth mother's statements in her affidavit that respondent had not provided or attempted to provide the child or the mother with support during her pregnancy. The trial court found that respondent's consent to the termination of his parental rights or to the adoption was not required because he did not file a claim of paternity with the Registry or execute the affidavit stating, among other things, that he was able and willing to take responsibility for the child. The trial court also determined that respondent's pending paternity action did not affect the trial court's ability to terminate his parental rights without his consent. Hence, present appeal. Held, rights of an unmarried biological father in relation to the child, who is known or identified by the mother as the potential father and who is locatable by diligent search, may be terminated based on his failure to file a claim with the Florida Putative Father Registry only if the father was served with notice under section 63.062(3)(a), Florida Statutes (2005), and he fails to comply with the requirements of that subsection within the thirty-day period.

• Amarjit Singh, Dripinder Singh and Manjit Kaur V. Alberto Gonzales, Attorney General of the United States of America

Petitioners are natives and citizens of India who practice the Sikh faith. They entered the United States in October 1996 on visitor visas and thereafter, applied for asylum for themselves on the ground that he and his family will be persecuted by the Indian Authorities for his political beliefs as he was a member of the All-India Sikh Students Federation (AISSF) which supported the separation of Punjab from the Indian Union. However, Immigration Judge held that concluded that the petitioners did not qualify for asylum as the explanations offered by the petitioners were not credible and that they had failed to satisfy their burden of proof and persuasion for their claims. On appeal, Board of Immigration confirmed the ruling of the Immigration Judge. Petitioners challenged said review relying on decision of Prokopenko v. Ashcroft, 372 F.3d 941, 944 (8th Cir. 2004) wherein it was held that the Attorney General may grant asylum to an alien who is unwilling to return to his home country because of a persecution or a well-founded fear of persecution on account of race, religion, nationality, membership in a particular social group, or political opinion. Hence, present review. Held, § 1252(b)(4)(B) embodies the substantial evidence standard in immigration cases. The applicable statute thus tells us how "cogent" the IJ's reasons must be to withstand judicial review. They must be convincing enough that a reasonable adjudicator would not be compelled to reach the contrary conclusion. There is no requirement that the Immigration Judge's reasons reach a level of cogency that exceeds the standard set by Congress in § 1252(b)(4)(B). Applying these standards, the IJ offered an adequate explanation for her findings that petitioners and that the record does not compel a contrary finding. Therefore, petition review denied.

News

• Bosnia War Crimes Court Enters Not Guilty Plea for Bosnian Serb Defendant on Hunger Strike

The War Crimes Chamber of the Court of Bosnia and Herzegovina entered a plea of not guilty for Bosnian Serb Milrod Trbic because Trbic failed to appear in court after starting a hunger strike. Trbic has been charged with genocide for allegedly "knowingly participated in the forcible transfer of the Bosniak population from the Srebrenica enclave, as well as in the summary executions and burial of able-bodied Bosniak men from Srebrenica." Trbic is also accused of shooting up to 20 Bosnian Muslims outside of a school. The International Criminal Tribunal for the former Yugoslavia transferred Trbic in June to the Bosnian court, which was established in March 2005 to ease the backlog of the ICTY.

• Massachusetts Charges Epoxy Supplier in 'Big Dig' Ceiling Collapse

The Office of the Massachusetts Attorney General announced the indictment of anchoring and fastening product manufacturer Power Fasteners on one count of involuntary manslaughter for the July 10, 2006, ceiling panel collapse in Boston's Big Dig tunnel project that killed one person. Massachusetts authorities allege that Powers was aware that the wrong kind of its epoxy product was being used to anchor three-ton cement ceiling tiles, "and when provided with the opportunity, failed to differentiate to project managers between its Fast Set and Standard Set products." Powers is also accused of failing to disclose the information "in either its marketing material, or when it was specifically asked." If convicted, Powers faces a maximum fine of $1,000. Officials say that Massachusetts has also filed civil suits against Powers and construction contractors.

In July, the National Transportation Safety Board concluded that ceiling collapse was most likely caused by the "inappropriate use of an epoxy anchor adhesive" by construction contractors. The "Big Dig" project, which began construction in 1991, is the most expensive highway project in the United States and has cost approximately $15 billion. The charge against Power Fasteners is the first criminal action taken in connection with the collapse.

• Indonesia Court Orders Settlement talks in Civil Corruption Lawsuit Against Suharto

An Indonesian court ordered lawyers for the government and former Indonesian President Haji Mohammad Suharto to attempt mediation for 30 days to settle the government's civil lawsuit against Suharto for allegedly embezzling $440 million between 1974 and 1998 from the Yayasan Supersemar, a state-funded academic scholar fund. Indonesian law requires that parties try mediation to resolve civil disputes before courts may proceed with a case. The lawsuit, which seeks to recover the $440 million and an additional $1.1 billion in damages, represents the latest effort by the Indonesian government to hold Suharto accountable for his 32-year reign, which ended in 1998 after public discontent amid the Asian financial crisis erupted into violent protests.

• Mauritania Legislature Criminalizes Slavery

The Mauritanian National Assembly formally criminalized slave ownership unanimously adopting legislation that makes slavery punishable by a maximum sentence of 10 years in prison. The law also criminalizes the promotion or defense of slavery, which will be punishable by up to two years in prison. Slavery, which was officially banned by presidential decree in 1981, persists in certain regions of Mauritania and has never been criminalized.

• Judge Orders North Carolina to Revisit Execution Protocol

A North Carolina judge ruled that the North Carolina Council of State improperly approved new execution protocols as a part of their effort to resume executions. Senior Administrative Law Judge ordered the council to revisit the protocols as the state panel approved the protocols without hearing from lawyers for death row inmates and therefore, due process was violated.

The ruling is the latest setback for North Carolina state officials' efforts to resume executions. In January, a state judge issued an injunction blocking executions until new protocols are issued for capital punishment. The protocols became necessary after the North Carolina Medical Board (NCMB) altered their capital punishment policy and threatened to sanction doctors who participate in the procedure. In June, a Republican-sponsored amendment to a bill aimed at allowing executions to resume failed after state Democrats struck down language that would have prohibited the NCMB from disciplining doctors for participating in executions.