Page 24 - Banking Finance September 2019

LEGAL UPDATE

LEGAL

CASES
CASES
CASES
CASES
CASES

Business slump no excuse for rent default
Right to wage till re-
A slump in the business cannot justify default in payment of the lease rent; the
trenched Supreme Court observed that in the judgment in
An employer cannot dispute his liabil- Chandigarh Administration vs Hari Ram. In this case
ity to pay a 99-year lease was given to Hari Ram for a com-
wages be- mercial space in 1996. After a few installments, he
cause of the defaulted on paying the dues. The Chandigarh Ad-
sickness of ministration gave 26 opportunities to clear the dues,
the unit or but still, the payment was not made. So it invoked the Public Premises (Eviction
pendency of of Unauthorised Occupants) Act and tried to evict him. However, the Punjab &
a BIFR rehabilitation scheme. The Haryana High Court stopped the action holding that the cancellation of allot-
proceeding for the recovery of wages ment would cause hardship to the lessee and one more opportunity must be
under the UP Timely Payment of given to him to pay the outstanding dues. The Chandigarh Administration ap-
Wages Act cannot be stopped on pealed to the Supreme Court. It allowed six months to the lessee to clear ar-
those pleas. The Allahabad High rears amounting to Rs. 10.25 lakh, which he can be evicted.
Court stated so in its judgment, Modi
Rubber vs State. The company was Bank to pay for losing bounced cheque
not functioning after a strike in 2001.
Later, there were two settlements The National Consumer Commission has directed Bank of Baroda to pay Rs. 3.6
with one group of workers. lakh to a customer whose cheque the bank had lost.
The customer had received a cheque from another
The labour commissioner issued a re- person and he deposited it in the bank. But it bounced.
covery order in favour of workers. Therefore, he wanted to initiate proceedings under the
The company challenged it in the Negotiable Instruments Act against the drawer. The
high court, arguing that it was before customer, Chitrodaya Babuji, asked the bank to return the invalid cheque, along
BIFR. Dismissing the petition, the with the memo to pursue his case. But the bank had lost the cheque and memo,
court stated that "the employer can- disabling Babuji from pursuing the criminal case. He moved the district forum,
not dispute its liability because of the which granted him only a meagre, compensation. He moved the Gujarat state
sickness of the unit. The relationship consumer commission, which asked the bank to pay the full cheque amount to
between master and servant contin- Babuji. The bank came in appeal, and the National Commission upheld the state
ues until employee is retrenched or commission order. "The bank has failed to return the cheque and so Babuji was
terminated. The workers who are deprived of his legal right to file a case against the account holder. Thus; he
not signatories to the settlements had to suffer a loss off Rs. 360,000. When the cheque had been lost by the bank,
can enforce recovery." it is its responsibility to compensate the loss," the judgment said.

24 | 2019 | SEPTEMBER | BANKING FINANCE