Bank fraud not just a civil dispute: SC

Written by Indu Bhan | Indu Bhan | Updated: Nov 28 2013, 11:14am hrs
SC bench disagrees over workers issue

The two judges of a Supreme Court bench have differed over the status of workers employed by Air India but not regularised by keeping them temporary for long periods by using unfair labour practice. The issue will be now decided by a larger bench.

The workers of Chef Air, a unit of the Hotel Corporation of India which runs the Air India canteens, had approached the Central Government Industrial Tribunal. They alleged that Air Indias contracts with the Corporation circumvented many provisions of the Contract Labour (Regulation and Abolition) Act, 1970. According to them, they were performing duties of a permanent and perennial nature but were being paid less than the regular employees.

The tribunal concluded that the Corporation was a 100% subsidiary of Air India and the workers were deemed employees of Air India. It also directed the airline to reinstate workers who had been terminated with 50% back wages. Air India challenged the order before the Delhi High Court, which set it aside saying the Corporation was not a part of Air India.

However, the SC judges differedJustice CK Prasad endorsed the HC while Justice V Gopala Gowda agreed with the findings of the tribunal and directed Air India to absorb all the workers as permanent ones with consequential benefits like back wages.

Bank fraud not a civil dispute

Setting aside the Madras High Court judgment in the case Tamil Nadu Mercantile Bank Ltd vs State, the Supreme Court has directed the trial court to go ahead with the prosecution of former directors of the bank who colluded with the managers of five firms to commit fraud against the bank.

The managers of the firms, maintaining current accounts with the bank since 2000, colluded with the branch manager and other accused and siphoned of around Rs 2.51 crore. The fraud was discovered in June 2003. The modus operandi was as follows: The accused encashed cheques at the Tiruppur branch of the bank knowing well that the drawers accounts did not have the amount (because the cheques were drawn by parties known to them). The branch manager, using the Local Bill Discounting provisions, credited the accounts of the accused before the cheques were sent to the drawee bank for clearance. The amounts were withdrawn immediately after. Later when the cheques bounced, the accused deposited similar cheques for even higher amounts to clear the debt. The accused had moved the HC for quashing of criminal charges against them. The HC felt that the dispute between the bank and the accused was of a civil nature and the former could move the debt recovery tribunal to recover money and could also initiate proceedings under Section 138 of the Negotiable Instruments Act.

However, the apex court quashed the HC order holding that it was not merely breach of contractual terms, but smacked of criminality and reiterated that criminal proceedings can continue.

SC slams Maharashtra govt

The Supreme Court has indicted the Maharashtra government for terminating the employees of its irrigation project after it was transferred to a sugar factory.

Around 256 workers of the Irrigation Development Corporation of Maharashtra Ltd were retrenched when the lift irrigation scheme they were working on was transferred to a sugar factory. Though Maharashtra claimed that the workers were casual and temporary, many of them had put in about 10 years of service.

The labour court partly allowed the claim saying that workers were employed on a temporary basis and, therefore, directed that there would not be any reinstatement, but the workers will be given the retrenchment compensation.

On appeal, the Bombay High Court held that the workers were entitled to reinstatement with continuity of service and awarded 25% backwages to the workers.

The state government appealed to the SC, which asked the government to give the workers 25% back wages and continuity of service, though they would not be reinstated. this case the government did not appear to make any effort to absorb them in other activities of the department or insist on the sugar factory to absorb them, it stated.