Page 17 - Banking Finance June 2022

LEGAL UPDATE

Legal

News

Employee needn't return SC wants special courts in utilise the services of retired judicial
officers for this purpose. This scheme
increment wrongly given: five States for cheque could be tested on a pilot basis in five
SC bounce cases states with the highest pendency."
In a relief to victims in cheque-bounce The amici curiae had reported on May
Can increments granted to an em-
cases, the Supreme Court ordered set- 1 that there has been an increase in
ployee can be recovered from him af-
ting up of special courts headed by pendency of 737,124 cheque dishonour
ter his retirement on the ground that
retired judges in the five states with cases in just five months. Pending cases
they were granted erroneously? The
the most number of pending cases. increased from 2,607,166 in November
Supreme Court said it cannot be done
The three-judge Bench of Justice L last year to 3,344,290 as of April 13,
if there was no misrepresentation made
Nageswara Rao, Justice B R Gavai, and 2022.
or fraud committed by the employee.
Justice S Ravindra Bhat in this suo The states with the highest pendency
A bench of Justices S Abdul Nazeer and
motu case said the special courts
of cases are Rajasthan (479,774),
Vikram Nath came to the rescue of a
would be set up from September 1 in
Gujarat (437,979), Delhi (408,992), and
government teacher from Kerala
Delhi, Gujarat, Maharashtra, Uttar Pradesh (266,777).
against whom recovery proceedings Rajasthan, and Uttar Pradesh, to hear
were initiated by the state for wrongly such cases under Section 138 of the SC stay on guarantee invo-
granting him increments. The SC Negotiable Instruments Act (cheque
brought to an end his legal battle of 20 dishonour). cation may delay personal
years during which he had lost the case insolvencies
"We have incorporated the sugges-
in the Kerala High Court. A recent Supreme Court stay on a per-
tions of the amicus curiae (friend of the
"This court in a catena of decisions has court) concerning the setting up of the sonal guarantor case is likely to be
used across the country in all personal
consistently held that if the excess pilot courts in the five districts in each
guarantee cases pending before vari-
amount was not paid on account of any of the five states and we have given
ous national company law tribunals,
misrepresentation or fraud of the em- the timelines also," the bench said.
legal experts said.
ployee or if such excess payment was
The court directed its secretary-gen-
made by the employer by applying a In the matter, Gurmeet Sodhi, a per-
eral to communicate the order to the
wrong principle for calculating the pay/ sonal guarantor, filed a petition before
registrar general of the High Courts of
allowance or on the basis of a particu- the five states and directed them to the Supreme Court, raising a constitu-
lar interpretation of rule/order which file an affidavit on compliance by July tional challenge to the personal insol-
is subsequently found to be erroneous, 21, 2022. The next hearing on the vency provision under the Insolvency
and Bankruptcy Code (IBC).
such excess payment of emoluments or matter has been slated for July 26. The
allowances are not recoverable," the report submitted by Amicus read, "It The case will be key for personal guar-
bench said. is suggested that the high courts must antors as it will require the court to
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