Page 23 - Banking Finance December 2019

LEGAL UPDATE

Plight of sub-contractors Hotel liable for vehicle theft from parking area, rules SC
in 'stuck' projects A hotel cannot take the cover of ‘owner’s risk’ clause on parking tokens to deny
compensation to its guests for theft or damage to
The plight of sub-contractors in infra- their vehicles once keys are handed over to the va-
structure let, the Supreme Court has ruled.
projects
was high- A bench of Justices M M Shantanagoudar and Ajay
Rastogi upheld the order of National Consumer Dis-
lighted putes Redressal Commission directing Taj Mahal Ho-
by the
tel in New Delhi to pay compensation of Rs 2.8 lakh to a person whose Maruti
Delhi
Zen car was stolen in 1998 from its parking area and held that there was neg-
High ligence on the part of the hotel management.
Court in its recent judgment in Apco-
Titan (Jv) vs National Highways & In- It said when the hotel actively undertakes to park the vehicle for the owner,
frastructure Development Corpora- keep it in safe custody and return it upon presentation of a parking slip, it would
be liable to return the vehicle in the condition in which it was given.
tion. If the main contractor is facing
insolvency proceedings before the The court said it is immaterial that parking is provided free of cost as these
National Company Law Tribunal, as services are covered by the exorbitant rates charged for renting of rooms, food,
IL&FS in this case, the construction entry fee to lounges and clubs and so on.
work will be labelled “stuck projects” The court brushed aside the contention of Taj Hotel that it was not liable as park-
and there is little relief for sub-con- ing tag given to the guest clearly stated that it would be at the guest’s ‘own risk’.
tractors. “Where the hotel or its servants have actively connived against or acted negli-
In this case, Apco was a sub-contrac- gently in safeguarding the vehicles delivered for valet parking, ‘owner’s risk’ clauses
tor and an IL&FS subsidiary was the in the parking token will not come to their rescue,” the bench said.
main contractor. Since they are be-
fore the tribunal, there is a stay on Supreme Court opens itself: Office of Chief Justice
all payments. The project-part of the under RTI Act
highway and tunnel on NH-1 in The Supreme Court ruled that the office of the Chief Justice of India was a “pub-
Jammu & Kashmir - is stuck due to lic authority” under the Right to Information Act but
insolvency. The court observed that with the rider that “when the public interest demands
there are a large number of sub-con- the disclosure of information, judicial independence has
tractors who may be awaiting pay- to be kept in mind while deciding the question of ex-
ments in such contractual "quag- ercise of discretion”.
mire".
A Constitution bench of Chief Justice of India Ranjan
The governments is ought to evolve Gogoi and Justices N V Ramana, D Y Chandrachud, Deepak Gupta and Sanjiv
a mechanism for making payments Khanna upheld the January 2010 Delhi High Court judgment which said that the
on a case-to-case basis, especially in apex court and the office of the CJI would fall within the ambit of the 2005 RTI
those cases where the contractor is Act. The court dismissed three appeals filed by its Central Public Information
in financial difficulty or is undergoing Officer and Secretary General challenging the order.
insolvency proceedings. The court While the CJI and Justices Gupta and Khanna rendered one judgement, Justices
added that "are-think is required to Ramana and Chandrachud delivered two separate concurring judgments.
address such situations in order to
Writing the main judgement, Justice Khanna said the court while stressing the
resolve disputes between contrac-
need for balancing transparency and accountability with judicial independence
tors and sub-contractors, if the inten-
“should not be understood to mean that the independence of the judiciary can
tion is to ensure that infrastructure
be achieved only by denial of access to information.” He added that the “inde-
projects are not impeded and are pendence in a given case may well demand openness and transparency by fur-
smoothly implemented."
nishing the information.”
BANKING FINANCE | DECEMBER | 2019 | 23