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Delhi High Court Upholds Commercial Court’s Decision: Defendant’s Contradictory Claims Rejected, ₹5.91 Lakh Awarded to Plaintiff with 18% Pre-Suit Interest

CASE TITLE – Casa 2 Stays Pvt. Ltd. v. Comfia Ecom Private Ltd.

CASE NUMBER – RFA(COMM) 187/2023 &CAV 445/2023

DATED ON – 13.05.2024

QUORUM – Justice Vibhu Bakhru & Justice Tara Vitasta Ganju

FACTS OF THE CASE

This appeal at the Delhi High Court originated after a judgement (hereafter referred to as the Impugned order) passed by the learned Commercial Court in favour of the Respondent (the Plaintiff in the suit first filed – hereafter referred to as ‘the Plaintiff’), where the Appellant was and (hereafter referred to as ‘the Defendant’). The Plaintiff claims that it runs an online apparel store by the name of Poptailor Corporate Apparel and manufactures customized clothing as per the requirements of its clients. The defendant operates a chain of hotels in India and had placed orders for a supply of apparel to be delivered to different locations in the country. The Plaintiff filed the above-mentioned suit inter alia claiming that the Defendant had placed an order dated 30.06.2018 for manufacture and delivery of 2500 T-shirts of various sizes customized as per its requirement. The total value for the said Purchase Order was ₹5,70,725/-, which was payable on delivery of the goods. The plaintiff claims that it had made clear to the defendant that the goods once sold were not returnable and that the plaintiff being an establishment, under the MSMED Act, would be entitled to an interest at the rate of 18% per annum after 45 days of the delivery of the goods. The plaintiff claimed that it had delivered 2500 T-shirts against the afore-mentioned purchase order, which was duly received and acknowledged by the defendant. However, the defendant had not made the payment against the said delivery. The Plaintiff served a legal notice dated 27.07.2019 calling upon the defendant to pay a sum of ₹6,73,455.5 payable as of 27.07.2019. The said amount included ₹5,70,725/- towards the principal amount and ₹1,02,730.5 towards interest. However, the defendant did not clear the said dues. The plaintiff claimed that as on 30.05.2019, an amount of ₹8,49,385/- including the outstanding balance of ₹5,91,906/- towards the principal amount and an amount of ₹2,57,479/- towards interest at the rate of 18% per annum was payable.

 

ISSUES

  1. Whether plaintiff is entitled to the recovery of Rs.5,91,906/- towards balance amount for supply of goods to the defendant?
  2. Whether plaintiff is entitled to interest claimed @ 18%per annum w.e.f. July, 2019 till the filing of the suit, amounting to Rs.2,57,479/- from the defendant?

LEGAL PROVISIONS

Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act)

CONTENTIONS BY THE APPELLANT

The defendant filed it’s statement of defence disputing the claim made by the plaintiff. The defendant denied that the plaintiff had supplied the goods in question, 2500 T-shirts. It also denied that the goods were received and acknowledged by the defendant. But on the other hand, It claimed that the goods were never delivered on time and the goods so delivered were always of a bad quality. The defendant also claimed that the goods delivered by the plaintiff did not conform to the agreed design and quality and that the plaintiff had changed the design of the T-shirts as per their whims and fancies, and due to this fact, were returned. Therefore, the amount as claimed by the plaintiff was not payable. In addition, the defendant claims that the learned Commercial Court had erred in allowing pre-suit interest at the rate of 18% per annum on the basis that the plaintiff was covered under the Micro, Small and Medium Enterprises Development Act, 2006 (hereafter MSMED Act). However, no such averment was made in the plaint. It claimed that the defendant had paid all the legitimate dues to the plaintiff. The next entry in the ledger account was a debit entry of ₹5,70,725, leaving a credit balance of ₹1,58,677/-. The learned counsel for the defendant earnestly contended that this clearly reflected that the payments were made in advance and therefore, the invoice in question was paid in advance. He submitted that the plaintiff’s suit was thus, required to be dismissed.

CONTENTIONS BY THE RESPONDENT

The plaintiff had filed the said suit [CS (COMM) 83/22] for recovery, alleging that it had supplied goods to the defendant. However, the amounts payable in terms of the invoices raised were not fully discharged. It claimed that the dispute between the parties, essentially, related to the supply of 2500 T-shirts, which were covered under an invoice dated 30.06.2018 (Ex.PW-1/2A) for an amount of ₹5,70,725/-. The plaintiff had also produced the ledger account of the defendant as maintained in its books of account for the period 01.04.2018 to 22.08.2020, which reflected the outstanding amount of ₹5,91,906/-. The plaintiff claimed that it had delivered 2500 number of Tshirts against the afore-mentioned purchase order, which was duly received and acknowledged by the defendant. However, the defendant had not made the payment against the said delivery. The plaintiff claimed that since there was an already running business relationship between the parties, it did not raise any immediate objection towards non-clearance of the dues of ₹5,70,725/- but it made several efforts thereafter through formal and informal channels for clearance of the said dues. The plaintiff also claims that the defendant had cleared various amounts in respect of various other completed transactions; however, the invoice dated 30.06.2018 in respect of the 2500 number T-shirts remained unpaid.

COURT ANALYSIS AND JUDGEMENT

The Hon’ble High Court viewed that the learned Commercial Court evaluated the evidence led by the parties and considered the issues. The learned Commercial Court observed that the pleadings were not drafted properly, however, the Court is required to not only consider the pleadings but evaluate the documents and evidence brought on record as well. The Hon’ble High Court noticed that the written statement filed by the defendant is contradictory. Where, the defendant had denied receiving the supply of goods of 2500 number of T-Shirts. However, it also claimed that goods supplied were not of good quality. The said claims were mutually inconsistent. If the defendant did not receive the goods, there is no question of it objecting to the quality of the goods. There was also no communication from the defendant claiming that it had not received the goods in question goods covered under an invoice. Even one of the evidence that was cross-examined, confirmed that the defendant had not returned the defective goods. It was clear from the evidence led by the parties that the goods in question were supplied to the defendant but the same were never returned to the plaintiff. An e-mail between the employees of the parties dated 10.07.2018, claimed that the said products were from the batch of 2500 T-Shirts and were found to be defective. However, he acknowledged that the goods were never returned. He was specifically asked as to the whereabouts of the said T-Shirts. To which he responded that they were in different locations. Although, the defendant has relied on the e-mail dated 10.07.2018, and has suggested that the entire lot was defective there is no correspondence on record to indicate that the entire lot was found to be defective. And as noted above, admittedly, the defendant had not taken any steps to return the goods in question. The High Court then accepted and were able to concur with the decision of the Commercial Court that the plaintiff was entitled to a sum of ₹5,91,906/- as reflected in the ledger account maintained by the plaintiff. And the question as to whether the Plaintiff were entitled to the a pre-suit interest at the rate of 18% per annum, they noticed that the Defendant did not contest about whether the Plaintiff was an establishment under the MSMED Act, and the fact, that the Defendant had notice of the interest that claimed by the Plaintiff much prior to the institution of the suit, which included the principal amount and the interest on it, also allowed the High Court to concur with the Commercial Court to accept the plaintiff’s claim for pre-suit interest at the rate of 18% per annum.

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Judgement Reviewed by – Gnaneswarran Beemarao

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Delhi High Court Rejects Exporter’s Appeal Due to Failure to Meet Notification Conditions for Banned Non-Basmati White Rice

CASE TITLE – VI Exports India Private Limited v. Union of India

CASE NUMBER – LPA 147/2024 & CM APPLs.10786-88/2024

DATED ON – 30.04.2024

QUORUM – Hon’ble the Acting Chief Justice / Hon’ble Ms. Justice Manmeet Pritam Singh Arora

FACTS OF THE CASE

The Appellant in this case, is an exporter of rice and other agricultural products. The case is brought before the High Court to contest the issue of the exporter not being allowed to export 11,000 MT of rice to an overseas buyer, due to a Notification issued by the Department of Commerce, Government of India, dated 20th July, 2023, which came into effect at 21:57:01 hours. The said Notification was further amended vide Notification dated 29th August, 2023, wherein the time by when the details had to be entered into the Customs system was mentioned. Further, an additional category for exemption was also introduced wherein if the custom duty is paid before 21:57:01 hrs on 20 th July, 2023, then the consignment could be permitted for export. The Appellant was ready to ship 28,000 MT of rice at the start, in between 10th July, 2023 and 20th July, 2023 till around 12:07 hrs., the Appellant filed its 28 shipping bills on the Customs portal i.e., ICEGATE, which was set to be exported from the Kandla Port. The Appellant, therefore, made an application before the port authority at Kandla seeking permission to store 28,000 MT of rice. It is stated that, however, due to lack of space at the port, the authority granted permission for storage only to the extent of 11,000 MT of rice. And the remaining quantity i.e., 17,000 MT of rice, was stored at various private warehouses at Kandla itself. The Appellant had paid export duty for 17 shipping bills out of 28 within the stipulated time i.e., before 21:57:01 hrs on 20th  July, 2023, the Appellant was permitted to export 17,000 MT of rice, covered under the said 17 bills. However, the export of the remaining 11,000 MT was not allowed as the customs duty had not been paid, though the bills had been duly submitted on the ICEGATE portal of the Customs. The Appellant at the time being distressed by the inability to export the remaining 11,000 MT of rice, filed a writ petition pleading that he had taken all steps within its control before the cut-off date and, therefore, invoking the doctrine of substantial compliance with the exemption conditions mentioned in the Notification has sought permission to export the said consignment; this request was then declined and the writ petition dismissed by the learned Single Judge vide impugned judgment.

CONTENTIONS BY THE APPELLANT

The Appellant stated that concerning to condition no. (ii) set out in the Notification, all the shipping bills were filed prior to issuance of the Notification, and the rotation number for the vessel was allotted on 18th July, 2023.However, the vessel had not berthed or arrived and anchored before the issuance of the Notification. It is stated after the issuance of the said rotation number on 18th July, 2023, the vessel could have anchored at the port only when permission was granted by the port authority, which is beyond the Appellant’s control. He stated that with respect to condition no. (iii) of the Notification, the consignment had to be handed over to the Customs before 21:57:01 hrs on 20th July, 2023, which he had fulfilled when the Appellant had applied to Customs for entrance and storage of the entire quantity of 28,000 MT on 15th July, 2023.But, due to lack of space at the port, permission was given to store only 10,525 MT of rice, and the Appellant was constrained to store the remaining quantity at private warehouses near the port. The Appellant further pleaded, that since they had done everything in it’s power, as per the doctrine of substantial compliance, the Appellant ought to be permitted to export the 11,000 MT of rice and should not be penalized for the situation beyond its control.

CONTENTIONS BY THE RESPONDENT

The Respondent stated that due to the global price hike of rice, there was also the increasing export of rice from India, which causes concern regarding the food security. Which then forced the issuance of the Notification. The Respondent further stated that Trade Notice issued by the Directorate General of Foreign Trade (DGFT) dated 18th August, 2023, it mentioned that the exemption conditions are independent of each other, and the export can be performed if they fill even any one of the said conditions. Which was not possible by the Appellant in this case, and due to which he also cannot rely upon the Doctrine of Substantial Compliance. He also stated that since there was no contention by the Appellant regarding the vires of the Notification, and also no infringement of Fundamental Rights of him, he cannot claim any Writ Petitions.

COURT ANALYSIS AND JUDGEMENT

Notification No. 20/2023, dated 26th July, 2023 (as modified by Notification dated 28th August, 2023)

The two exemptions that the Appellant is pleading that he comes under are (ii) and (iii).

(ii) where the shipping bill is filed and vessels have already berthed or arrived and anchored in Indian ports and their rotation number has been allocated before this Notification; The approval of loading in such vessels will be issued only after confirmation by the concerned Port Authorities regarding anchoring/berthing of the ship for loading of Non-basmati rice prior to the Notification. (iii) where Non-basmati rice consignment has been handed over to the Customs before 21:57:01 on 20.07.2023 and is registered in Customs system or where Non-basmati rice consignment has entered the Customs Station for exportation before 21:57:01 hours on 20.07.2023 and is registered in the electronic systems of the concerned Custodian of the Customs Station with verifiable evidence of date and time stamping of these commodities having entered the Customs Station prior to 21:57:01 hours on 20.07.2023. The period of export shall be upto 31.10.2023. It is admitted that the Appellant has neither challenged the validity of the Notifications dated 20th July, 2023 and 29th August, 2023, nor the constitutional vires of the said Notifications on the ground of it being violative of any fundamental rights of the Appellant. It is also admitted that the Appellant does not satisfy any independent condition of exemption in its entirety. It is stated that Respondent is obliged to enforce the said Notification uniformly on all the exporters so as to ensure that there is no allegation of arbitrariness or bias. The Appellant admits that the vessel had not been able to berth and anchor at the Port. The Appellant has not challenged the distinction carved out by the Respondent between (i) the vessels, which have anchored and berthed/arrived at the port; and (ii) vessels, which may have arrived in Indian waters, but are awaiting berthing and anchoring. Similarly, with respect to compliance of condition no. (iii) the Appellant has fairly admitted that it was unable to handover the consignment of 11,000 MT to the Customs before the appointed time nor the consignment had entered the Customs station for exportation before the appointed time. Each of the five independent exemptions have essential requirements which the applicant exporter must comply with for completing the export. The Appellant fails to comply with the essential conditions in each of the exceptions Due to the facts mentioned above, the High Court had stated that it was unable to find any merit in the appeal, because of which, the same was dismissed.

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Judgement Reviewed by – Gnaneswarran Beemarao

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Legal Precedent Upheld: Himachal Pradesh High Court Condemns Petitioner’s Attempt to Shift Blame onto Government for Notice Issuance Error

Case Name: State of H.P. & anr v. M/s Jagson International Ltd. 

Case No.: OMP(M) No. 89 of 2024 

Dated: April 30, 2024 

Quorum: Justice Satyen Vaidya 

 

FACTS OF THE CASE: 

The instant application for a pardon of delay was filed with the allegations that no decision could be made regarding a challenge to the contested award until after general elections were conducted by the Election Commission on November 11, 2022, and the majority of senior officers were on election duty until December 8, 2022.  

Furthermore, it has been claimed that even after 8.12.2023, the government took a long time to form. Again, for this reason, it was not possible to decide whether to dispute the award, and as a result, the petition’s filing was delayed by 30 days.  

The respondent has objected to the prayer for a pardon of the delay. It has been argued that 120 days is the maximum amount of time that an application under Section 34 of the Act may be filed, according to the Act. Based on calculations made by the respondent, the petitioners’ Section 34 Act application was deemed unmaintainable since it was filed 122 days after it was submitted.  

It has also been claimed that even after 8.12.2023, the government took a long time to form, and once more, as a result, no decision could be made to contest the award. As a result, the filing of the petition was delayed by thirty days throughout this process. 

 

LEGAL PROVISIONS: 

  • Section 34 of the Arbitration and Conciliation Act. If a request was made under section 33, the request may be set aside only after three months have passed from the date the party making the request received the arbitral award or the date the arbitral tribunal decided to proceed with the request. The applicant may file an extension of thirty days for the Court to consider the application, but only if the Court determines that the applicant was prevented from filing within the allotted three months due to substantial reason.  

 

CONTENTIONS OF THE APPELLANTS: 

According to the petitioners, the decision to file the application could not be made since there would be elections until December 8, 2022, and then there would be a delay in the formation of the government. From my perspective, the petitioners’ given cause is extremely ambiguous.  

The petitioners contended that because the majority of senior officers were assigned to election duty until December 8, 2022, and because general elections were scheduled by the Election Commission on November 11, 2022, no decision could be made regarding a challenge to the contested award until after that date. This was the basis for their instant application for a pardon of delay. 

It has also been claimed that even after 8.12.2023, the government took a long time to form, and once more, as a result, no decision could be made to contest the award. As a result, the filing of the petition was delayed by 30 days throughout this process.  

The petitioners argued that In response to the explanation provided by the petitioners for the delay in filing the application, it has been stated that the decision to file the application could not be made because of elections through December 8, 2022, and the subsequent delay in the formation of the Government. 

 

CONTENTIONS OF THE RESPONDENTS: 

 The learned counsel representing the respondents argued that the respondent has objected to the prayer for a pardon of the delay. It has been argued that 120 days is the maximum amount of time that an application under Section 34 of the Act may be filed, according to the Act. The petitioners’ application under Section 34 of the Act was deemed preferable by the respondent after 122 days, indicating that the application was not maintainable. 

It has also been claimed that the Act’s Section 34(3) allows for a maximum extension of 30 days during the period beyond three months, provided the court is satisfied that the applicant was prevented from filing the application within the three months allotted by justifiable cause.  

The respondent claims that the petitioners seeking an extension of time past three months have not established any cause at all, let alone adequate cause. At the application hearing, the respondent also presented the argument that the statute of limitations of 30 days beyond a period of three months had run out on November 3, 2023—a public holiday known as Second Saturday. The public holiday continued into the following day, 12.3.2023.  

The repondents argued that the petitioners had given notice under Section 34(5) of the Act on 7.2.2023 indicating their intention to file the application under Section 34 of the Act, according to the respondent’s specific submission. The application, which can be found on page 206 of the paper book, has a copy of the notice that the petitioners sent to the respondent in accordance with Section 34(5) of the Act attached as Annexure P-5. 

 

COURT’S ANALYSIS AND JUDGMENT: 

The respondent’s argument that the petitioners filed the application 122 days later seems to be based on an incorrect computation. Instead of using the three months that are specified in sub-Section (3) of Section 34 of the Act, the respondent has computed a period of 90 days, which is not an accurate calculating method. Since three months would equate to the conclusion of three calendar months, the three months in this instance had ended on 11.2.2023. 

The petitioners have therefore requested a 30-day period of condonation. Under this interpretation, there is no reason not to evaluate the merits of an immediate application for a pardon of tardiness. 

The petitioners were expected to disclose their bona fides together with a reasonable explanation for their failure to file the application within the allotted time, as required by the proviso to Section 34(3) of the Act, as the court observed. The petitioners have utterly failed to provide any justification at all, much less a compelling one. 

Even the nebulous claims regarding the obstruction of decision-making caused by the elections and the subsequent formation of the government are refuted by the fact that on 7.2.2023, the petitioners themselves issued a notice under Section 34(5) of the Act, indicating that a decision had already been made by 7.2.2023 to file the application under Section 34 of the Act. However, the application was not filed until 13.3.2023 and there is no explanation provided as to why it was not filed immediately after 7.2.2023.  

Based on the presented facts and legal explanation, the court determined that the petitioners have not demonstrated a valid reason, much less a sufficient one, for their failure to file their Section 34 Act application within the allotted three months. Consequently, the application is rejected as it is deemed unsuccessful. 

  

 

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Judgment reviewed by Riddhi S Bhora. 

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Minor legal heir eligible for compassionate apportionment; but appointment upon attaining majority-Chennai High Court (Madurai Bench).

Case title: State of Tamil Nadu v. C. Arnold

Case no: W.A(MD)No.479 of 2024 and C.M.P(MD)No.3875 of 2024

Dated on: 01st April 2024

Quorum: Hon’ble Mr. Justice R. Suresh Kumar and Hon’ble Mr. Justice G. Arul Murugan.

Facts of the case:

This Writ Appeal filed, under Clause 15 of Letters Patent, is to set aside the order dated 16.11.2023 made in W.P(MD)No.27247 of 2023 and W.M.P(MD)No.23395 of 2023 seeking Compassionate appointment. The Respondent/Writ Petitioner and father, working as a B.T Assistant in a Government High School, passed away on 03.01.2016, while in service. At the time of his father’s death, the Writ Petitioner was 15 years and 6 months old. On his behalf, his mother made an application dated 02.01.2018, before the Chief Educational Officer, seeking compassionate appointment which was rejected vide Order dated 31.05.2023 on the ground that on the date when the application was made, the respondent/writ petitioner was a minor. That rejection order was challenged before the High Court. The learned Judge, who heard the Writ Petition, took note of the fact that the Rule issued by the Tamil Nadu Government, in the Tamil Nadu Civil Services (Appointment on Compassionate Grounds) Rules, 2023 was notified on 08.03.2023 and at the time of consideration of the application submitted by the respondent/writ petitioner the said Rule was already in force and despite which it was rejected in May 2023 ie., by order, dated 31.05.2023. Hence, it was an erroneous approach on the part of the Appellant employer.

Issues:

Whether it was correct on the part of the Respondent to reject the Compassionate appointment on 31.05.2023 based on G.O.Ms.No.155 Labour and Employment (Ku1) Department, dated 10.12.2014 when Tamil Nadu Civil Services (Appointment on Compassionate Grounds) Rules, 2023 was already notified on 08.03.2023?

Legal provisions:

Writ Appeal filed, under Clause 15 of Letters Patent- lays down that any appeal can be made to the High Court provided it is not a sentence or order passed or made in the exercise of criminal jurisdiction.

Tamil Nadu Civil Services (Appointment on Compassionate Grounds) Rules, 2023- These rules govern the appointment of individuals on compassionate grounds within the Tamil Nadu Civil Services.  

Contentions of the appellant:

At the time of making the application seeking compassionate appointment, the respondent/writ petitioner, was only a minor who has completed only 15 years and 6 months. Therefore, at the time when he attained majority, three years period was over from the date of death of the employee ie., his father. Therefore, beyond three years period, compassionate appointment would not be considered. This rejection was based on Rule, dated 10.12.2014, of G.O.Ms.No.155, Labour and Employment Department and therefore, the said order of rejection ought not to have been interfered by the Writ Court.

Contentions of the respondent:

The Government of Tamil Nadu had framed rules for appointment on compassionate grounds under Tamil Nadu Civil Services (Appointment on Compassionate Grounds) Rules, 2023. The said rule was notified on 08.03.2023 and as per the said Rule 6, there is no minimum age limit for making an application. However, an appointment order could be issued only on completion of 18 years of age. These Rules were prevailing on the date of consideration of the application. Hence, the action of the 3 rd Respondent in relying upon G.O.Ms.No.155 Labour and Employment (Ku1) Department, dated 10.12.2014 was not right.  

Court analysis and judgement: 

Compassionate appointments are made to bail out the families of the employee, whose sudden demise would push the family to penury. Compassionate appointment is made depending upon the education and other qualifications of the dependent of the deceased employee and further no person can be employed in any organization, unless he attains majority ie., above 18 years. In most cases, when such an employee dies, the son or daughter or the dependents other than the spouse would be minor and therefore, it will take some years for them to reach the majority by which period the three years period from the date of death of the employee would be over. Under such circumstances, though the dependent or legal heirs would become eligible to seek for compassionate appointment but by then the period of three years would be over. These difficulties were considered by the State Government, and they bought Rule 6, the same is briefly mentioned herein. On the date of application for appointment. –  the spouse or medically invalidated Government servant or parent of the deceased servant, must have completed fifty years of age; and the son, daughter, brother or sister of the deceased or medically invalidated Government servant must not have completed forty years of age. There shall be no minimum age limit for the applicant on the date of application for appointment, provided appointment shall not be provided unless the applicant completes eighteen years of age.” Hence, under Rule 6, the maximum age has been prescribed, but minimum age limit was not prescribed. It was made clear that the appointment shall not be provided unless the applicant completes eighteen years of age Therefore, the intention of the Rule making authority is clear, that under no circumstances compassionate appointment should be denied to a family for want of attaining the majority of the legal heir/dependent of the deceased employee’s family. If compassionate appointment could not be given immediately, the employer can consider such application and grant/extend the benefit of compassionate appointment to the dependent/legal heir upon his attaining majority. When the intention of the Government was made very clear and as the Rule was effective from 08.03.2023, the Rule should have been applied by the employer. It is due to this reason that the learned Judge interfered with the said order and given direction for extending the benefit of compassionate appointment.  Writ Appeal is accordingly disposed with no costs. The appellants to consider the application, within a period of two months from the date of receipt of a copy of this order. When such consideration is made, if any similarly placed persons are there seniority is to be followed. In the name of following the seniority, the plea of the respondent/writ petitioner cannot be deferred or rejected and if in case there is no vacancy available, where he has sought, then as per the existing procedure, the request of the respondent/writ petitioner be forwarded, where similar vacancy is available and necessary orders to be passed. 


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Judgement reviewed by- Parvathy P.V.

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Delhi High Court Deems Monthly Pension of ₹3K for Building and Construction Workers Minuscule in a City Like Delhi.

Case title: Delhi Building and other Construction Workers Welfare Board v. Dulari Devi and Anr.

Case no: LPA 372/2023 and CM APPL.20067/2023

Dated on: 01st May, 2024.

Quorum: Hon’ble Mr. Justice Rajiv Shakdher and Hon’ble Mr. Justice Amit Bhansal.

Facts of the case: 

The appeal is directed against a common judgement dated 23.02.2023 rendered by learned single judge in WP (C) 13969/2022 and WP (C) 14432/2022. Respondent No.1 in the appeal is the wife of the deceased worker, Shri Gauri Shankar Gupta, while the respondent No.2 is the Govt. of NCT of Delhi. The respondent No.1/ Smt. Dulari Devi had preferred WP (C) 13969/2022, an order dated 23.08.2022 passed by the appellant, i.e; Delhi Building and the Other Construction Workers Welfare Board was assailed. Shri Shankar Gupta had been employed as a building worker in Delhi for decades. He registered as with the welfare board for the first time on 17.12.2007, when he was 58 years old. At the time of the registration, Shri Shankar Gupta had deposited the contribution for three months i.e; 17.12.2007 and 17.03.2008. Acknowledging the fact that Shankar Gupta had reached 60 on 01.01.2009. Upon completing 60years, Gupta preferred an application for pension with the Welfare Board. An official had informed him with the fact that his application to grant pension has been rejected by the Welfare Board on 19.08.2020. Aggrieved by the decision, Shri Shankar Gupta lodged an appeal on 19.01.2021 under Rules 273(4) of the BOCW rules. Unfournately, Shri Shankar Gupta expired on 05.05.2021, nearly three weeks after the order dated 16.04.2021 was passed. Respondent No.1/ Smt Dulari Devi received a fresh notice dated 28.07.2021 to conduct a hearing for the same. Based on the advice of the Legal Advisor, Labour Department, the Secretary, welfare Board directed the Deputy Secretary, North-West to decide the matter afresh, after hearing Shri Gauri Shankar Gupta. Shri Gauri Shankar Gupta expired on 05.05.2021. Respondent no.1/Smt Dulari Devi (wife) received fresh notice to conduct hearing in the matter. Another deficiency letter dated 02.09.2021 was issued by the Welfare Board advising to produce documents related to the renewal of Shri Guari Shankar Gupta’s membership for the period 17.03.2008 and 16.10.2012. Since the receipts were unavailable and not submitted, the application preferred by the deceased Shri Gauri Shankar Gupta for granting a pension was temporarily closed. Respondent no.1/Smt Dulari Devi and others protested against the closure of the application. In response, the Secretary of the Welfare Board suggested to file affidavits to overcome the objections raised by the Welfare Board. As per records one, Ms Badam Verva, who was in a similar situation, filed an affidavit in substitution of the renewal receipts. Since Ms Badam Verva application for pension was not processed by the Welfare Board, she approached this Court, where High Court issued directions to consider the affidavit filed by Ms Badam Verva. Respondent no.1/Smt Dulari Devi, taking note of this Order filed affidavit on 10.05.2022, but the Welfare Board rejected the application for pension vide order dated 23.08.2022. Aggrieved by the order dated 23.08.2022, respondent no.1/Smt Dulari Devi filed WP (C) 13969/2022 which was disposed vide the impugned judgment.  

Contentions of the appellant: 

Under the BOCW Act and BOCW Rules, a building worker is not entitled to pension solely upon reaching 60 years of age. The building worker is required to apply for pension in the prescribed form, in accordance with Rule 272 of the BOCW Rules. Section 14(2) of BOCW Act, provides that a construction worker would be eligible for a pension if he fulfils the following criteria. (i)He should have attained the age of 60 years. (ii) He should have been a beneficiary continuously for three (3) years immediately before reaching the age of 60. The explanation to Section 14 (2) permits inclusion in the stipulated timeframe, i.e., three (3) years, any period for which the building worker has been a beneficiary with any other Welfare Board immediately before his registration with the concerned Welfare Board. Since the deceased, Shri Gauri Shankar Gupta had been registered with the Welfare Board only for three months, between 17.12.2007 and 17.03.2008, he did not fulfil the eligibility criteria as provided in Section 14(2) of the BOCW Act. The impact of the impugned judgment is that any person who acquires membership of the Welfare Board, even for a day between the prescribed age span, i.e., 18 years and 60 years, is entitled for pension and such an interpretation by the learned Single Judge would put severe financial burden on the Welfare Board. The Supreme Court in in NCC-CL v. Union of India & Ors. Held; pension constitutes permanent liability which the states may not be able to sustain in the long term, the State Welfare Boards may formulate pension schemes depending upon their financial capacity. However, pension should be admissible to only those registered of 10 years. In this regard the State Welfare Board should issue a certificate to the effect that a BOC worker has remained registered for a period of 10 years.

Contentions of the respondent: 

BOCW Act is a welfare legislation and under Section 22(1)(a) to (g) of the BOCW Act and Clause (h) of Section 22(1) of the BOCW Act, the Welfare Board can make provisions for and improvement of such other welfare measures and facilities. As far as pension payment to beneficiaries was concerned, as per Section 22 (1) (b) pension would be paid to beneficiaries who completed 60 years of age. This provision had to be read with Section 2(1)(b), which defines beneficiary as a building worker registered under Section 12 of the BOCW Act. Section 12, provides that only that building worker could register himself with the Welfare Board who had completed 18 years of age but had not reached 60 years of age and who had been engaged in any building or construction work for not less than 90 days for the preceding 12 months. Under Section 14 of the BOCW Act, the registration acquired by the building worker ceases once the building worker attain 60 or when he is not engaged in building or other construction work for 90 days or more in a year. Under Clauses (a) to (g) of Section 14 (1), the Board had power to make provisions or improvements in the welfare measures and facilities as may be prescribed from time to time. A building worker could avail welfare measures or improvements only if he had been a beneficiary for at least three years immediately preceding the date he completed 60 years of age. For availing pension, the building worker was not required to fulfil the criteria stipulated in Section 14(2). No eligibility criteria was provided in the BOCW Act for a pension grant. The eligibility criteria was, provided in Rule 272 of the BOCW Rules wherein, a building worker, who was a member of the fund would become eligible for pension upon completion of 60 years of age, if he had been working for not less than one year after the commencement of the BOCW Rules. It was contended that contrary to the submissions advanced on behalf of the Welfare Board, there was no inconsistency between the provisions of the BOCW Act and the BOCW Rules.  

Issues:  

Whether Smt. Dulari Devi would be entitled to receive pension in terms of the BOCW Act read with the BOCW Rules? 

Legal provisions:

 Section 12 of the BOCW Act- there is no restriction for a worker to avail or get registered after fulfilling the conditions. 
Section 14(2) of BOCW Act- The members of the export committee shall be paid such fees and allowances for attending the meetings of the committee as may be prescribed.

Courts analysis and judgement: 

There is no contestation that Shri Gauri Shankar Gupta was a building worker within the meaning of the provisions of Section 2(1)(e) of the BOCW Act. There is no dispute that Shri Gauri Shankar Gupta fulfilled the criteria for registration as a beneficiary, as prescribed under Section 125 of the BOCW Act. Shri Gauri Shankar Gupta’s application for registration renewal was allowed on 31.01.2012. The exercise of the power of registration/renewal in Shri Gauri Shankar Gupta’s case, as observed in the order dated 16.04.2021 was in in accordance to Section 17 of the BOCW Act. It is not disputed that Shri Gauri Shankar Gupta had deposited Rs.532/- as his contribution for the period between 17.03.2008 and 16.10.2012. The renewal of registration as a beneficiary would relate back to March 2008 and therefore, on the date Shri Gauri Shankar Gupta reached 60, he fulfilled the eligibility criteria concerning registration and crossing the threshold of 60 years of age to claim a pension from the Welfare Board. The point to considered as whether Shri Gauri Shankar Gupta should have been registered as a beneficiary in the immediately preceding three years before attaining the age of 60 years as for claiming pension? Under Section 22 (1) (a) to (g) of the BOCW Act invest in the Welfare Board power to accord specific benefits to registered beneficiaries. The Welfare Board has been, among other things, conferred with a specific power to grant pensions to beneficiaries who have reached 60 years of age. However, the BOCW Act does not provide eligibility criteria as regards the qualifying period for which the building worker should have worked before he reached 60. The stipulated eligibility criteria of having been a beneficiary for at least three (03) years preceding the date when the beneficiary completes 60 years of age cannot apply to specific benefits which are the subject matter of Section 22 (1) (a) to (g). Pension is one such specific benefit, provided in Section 22 (1) (a) to (g), and cannot be controlled by the eligibility criteria provided in sub- Section (2) of Section 14. The eligibility criteria concerning pensions are expressly provided in Rule 272 of BOCW Rules 8. The said provision, in no uncertain terms, states that a member of the fund who is a building worker would be eligible for a pension on reaching 60 years of age if he has worked for a period of not less than one year. Although Shri Gauri Shankar Gupta had asserted that he had been working as a building worker in Delhi for several decades before his registration with the Welfare Board on 17.12.2007, even if it is assumed that he commenced his work from the said date, he would have met the minimum eligibility criteria of one year provide in Rule 272 before the date when he completed the age of 60 years. 21. It is not disputed that Shri Gauri Shankar Gupta turned 60 on 01.01.2009, at which point he had already worked as a building worker for more than one (01) year. Therefore, the order dated 23.08.2022 passed by the Welfare Board was contrary to the provisions of the BOCW Act and BOCW Rules. The object and purpose of the BOCW Act is not only to regulate employment and conditions of service for building workers but also to provide safety, health, and other welfare measures from time to time. The Welfare Board, have to find resources, like increasing the rate of levy of cess, to gather funds to extend benefits to building workers. The financial burden that may fall on the Welfare Board cannot be a basis for non-implementation of the will of the legislature, which can very well be gathered in the scheme of the BOCW Act and Rules. In view of the aforesaid reasons, it is not required to interfere with the impugned judgment and the appeal is, accordingly, dismissed.  

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Judgement reviewed by- Parvathy P.V.

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