Dealership, promotion and contract labour

Written by Indu Bhan | Indu Bhan | Updated: Apr 25 2013, 05:57am hrs
SC holds BPCLs dealership termination order illegal

Rejecting the BPCLs appeal, the Supreme Court held that the state-owned oil firm cannot terminate any dealership without strictly following the procedure laid down in the Petroleum Act 1934.

In the case of BPCL vs M/s Jagannath & Co, certain regularities/variations were found in samples of various petroleum products collected from the firms retail outlet. The sale was then suspended and the dispensing units and tanks were sealed. The Quality Control Laboratory had confirmed that the samples failed to meet the required specifications. During the pendency of the dealers plea for resumption of supply of petro products in the trial court, BPCL in 2006 terminated the dealership of Jagannath & Co, which was operating for 37 years without complaint, and handed over the outlet to another firm.

However, the Allahabad HC in 2009 quashed the termination order and directed restoration the dealership. BPCL then appealed to the Supreme Court, which dismissed its plea.

Alleging mala fides, senior counsel Shanti Bhushan, on behalf of Jagannath & Co, argued that BPCL failed to follow the principles of natural justice which was contrary to the Act and the Marketing Discipline Guidelines 2005. However, senior counsel Sudhir Chandra, appearing for the PSU, contended that the provision in the 1934 Act was not applicable in the case and the parties were bound by the dealership agreement.

Rural banks and promotions

The Supreme Court has dismissed the stand of various regional rural banks (RRBs) that debarring its employees, who have not done well in their annual performance report or have faced misconduct charge in the five preceding years, from promotions was necessary to weed out the unfit at the initial stages. The apex court in a batch of cases lead by Rani Laxmibai Kshetriya Gramin Bank upheld the Allahabad High Courts 2010 order that set aside the November 2009 and July 2010 circulars, which debarred the officers from promotion.

Affected officers had filed 13 petitions before the HC on the ground that the circulars debarred from promotion officers against whom disciplinary action were pending or contemplated as well as those who had been reprimanded or had obtained a D rating in their annual performance reports in the preceding five years before the selection process commences.

During the pendency of the cases, the Punjab National Bank and Bank of Baroda, and even the Sarva UP Gramin Bank issued impugned clarificatory circulars on service rules. Both the circulars were quashed by the HC. The banks approached the Supreme Court, which dismissed their appeals, observing that the officers concerned may be considered for promotion.

Senior counsel Dhruv Mehta, appearing for the banks, submitted that the employee only has a right to be considered for promotion and does not have an absolute right to be promoted only on the basis of seniority. On the other hand, the affected employees argued that the blanket debarment will have the effect of giving an unbridled/untrampled power in the hands of the superiors of an employee. Such power can be abused and misused to give/deny promotion to a particular employee/officer due to personal reasons and likes and dislikes of a particular officer, they argued.

Setback to Kolkata Port Trust

Ruling in favour of contract labourers in the case of Baleshwar Rajabanshi vs Board of Trustees for Port Trust of Calcutta & Ors, the Supreme Court quashed the contrary view taken by the Calcutta High Court, saying the judgment was written in a highly casual and off-hand manner. Carving out an exception in favour of the Port Trust from a notification under the Contract Labour (Regulation and Abolition) Act 1970 prohibiting employment of contract labour in the works of railway tracks in the port trust, the HC had held that the notification would not affect the work handed over to RITES, another central government organisation.

After the issuance of the notification, the contract labourers, who were working for two decades without permanent status, had approached the HC seeking a direction to the Port Trust to abolish the contract labour system. The Port Trust had also questioned the validity of the notification.

While the single judge bench of the HC upheld the validity of the notification in 2007, the division bench held that the notification would not affect the work handed over to RITES. The workers appealed to the Supreme Court, which said that the HC exceeded its jurisdiction in passing the impugned order.