Page 20 - Banking Finance July 2019

LEGAL UPDATE

Make-in-India cloud over Place of trial in cheque cases
The Delhi High Court has ruled that the amended Section 142(2) of the Nego-
shipping industry
tiable Instruments Act made it clear that in cheque
Shipping companies have taken to
bounce cases, the place where a cheque is delivered
court a notifi-
for collection i.e. the branch of the bank of the
cation and a
payee or holder in due course, where he maintains
circular issued
an account, would be the place of trail for the of-
under the
fence. It further clarified that the provisions of the code of Criminal Procedure
M e r c h a n t
on territorial jurisdiction have to give way to the provisions of the Act.
Shipping Act implementing “Make in
The court stated so in its judgment in Somani Worsted vs Aez Infratech. Three
India” scheme. They have obtained
petitions in this case were ordered to be transferred from Delhi to Meerut as
a stay from the Delhi High Court
the cheques were presented there.
against the implementation.
In the lead petition, Great Eastern
Time limit: Justice above strict rules
Shipping Co vs Union of India, the ar-
gued that the circular issued on The Supreme Court has stated that a technical fault like delay in filing a counter
March 21 brought in a completely affidavit should not lead to dismissal of a consumer
complaint. “We have been repeatedly observing that
alien concept of an "India built ship",
marginal delays are not being condoned by the Na-
which got commercial rights higher
tional Consumer Commission on the ground that the
than an Indian flag vessel. It de-
Consumer Protection Act stipulates a period within
stroyed any statutory recognition
which a consumer complaint has to be disposed of.
and preference available to an India
Though the Act stipulates a period for disposing of a consumer complaint, it is
flag vessel over foreign flag vessels.
also a sobering reflection that complaints cannot be disposed of due to non-
The Merchant Shipping Act did not
availability of resources and infrastructure. In this background, it is harsh to
concern itself with the place where
penalise a bona fide litigant for marginal delays that may occur in the judicial
the ship was built. It dealt only with
process. The consumer forums should bear this in mind so that the ends of jus-
the ownership and registration of the
tice are not defeated," the judgment observed in the case, Vibha Bakshi vs
ship. If the ownership is wholly In-
Gruhashilp Constructions. In this case, the commission dismissed the complaint
dian, it becomes an Indian ship, oth-
of a flat buyer as he failed to file his regoinder for a month.
erwise, it is a foreign ship. The new
concept brought several anomalies.
Burden of proof in regularisation
For instance, shipping companies
Daily wage workers who claim regularisation after 240 days of continuous work
pointed out that a ship that was origi-
have to produce evidence to show that they had worked for
nally built in India but may be owned
that period. Only when that initial burden is discharged by
by a foreigner will get the first pref-
the workers, the burden to disprove it can be shifted upon
erence in Indian business. A shipping
the employers.
company cannot change its entire
fleet overnight and convert it into This principle was reiterated by the Supreme Court in its judgment in Superin-
India built ships as shipbuilding is a tending Engineer vs M Natesan. In this case, daily wagers in the Rural Water
time-consuming exercise. Further, In- Supply Board of Tamil Nadu were employed between 1986 and 1989 and they
dian ships, which number 1,384 now, were terminated in 1990.
will lose the right of first refusal in the They moved to the labour court, which in 2000 ordered reinstatement with 50%
business. The government countered back wages. In the appeal before the Madras High Court, the board could not
these arguments and asserted that produce any attendance record. The workers also did not have any place of
the policy was in public interest. The evidence to assert their claim. The high court, however, dismissed the board's
court passed an absolute stay against
appeal. On further appeal, the Supreme Court set down a compromise formula
the notification and circular.
to benefit both parties, while holding that the high court orders were wrong.
20 | 2019 | JULY | BANKING FINANCE