27 August, 2007

Form 15G or 15H?

Monday, Aug 27, 2007 The Hindu

Referring to “Travails of tax credit” published in The Hindu dated July 9, clarification is requested whether it is not in order to submit Form 15H by a senior citizen where his total income exceeds the exemption limit, but getting it reduced within the limit by making contributions under Sec. 80C. Unlike in Form 15G, there is no declaration in 15H as to the maximum exemption limit.
Form 15G is for all taxpayers, while Form 15H is a special form for senior citizens. In either case, it can be filed only if their income falls below the taxable limit. Both forms incorporate a declaration that the declarant is not liable for tax. Such a form is bound to be accepted by the person required to deduct tax at source under Sec. 197A of the Income-tax Act, which spares them the obligation to deduct tax.
The special form for senior citizens is meant to be concessional in as much as the restriction for taxpayers other than senior citizens does not apply to them.
The restriction is that, assesses other than senior citizens cannot file the form, even if they have no taxable income, as long as the amounts liable for tax deduction at source exceeds the minimum exemption limit. Such a condition is not considered necessary for senior citizens.
Since both Form 15G and 15H incorporate the declaration that the tax payable on the estimated income during the year is nil, the inference that Form 15H is more favourable than Form 15G for the senior citizen is not correct.
But if a senior citizen utilises Form 15H, where tax-deductible amount does not exceed the minimum exemption limit, there could be no harm. In other words, there would be no violation of any law, but it is really not necessary.
http://www.hindu.com/2007/08/27/stories/2007082750071500.htm


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21 August, 2007

Backlog of cases causing concern: CJI

Date:16/08/2007 The Hindu
“Judiciary has protected freedom and constitutional values”
K.G. Balakrishnan
New Delhi: Chief Justice of India K.G. Balakrishnan on Wednesday voiced his concern over the mounting number of cases in various courts and consequent delay in dispensation of justice.
Speaking on the lawns of the Supreme Court after hoisting the national flag, Mr. Justice Balakrishnan said, “In the past 60 years, the judiciary has played an invaluable part in safeguarding and protecting our freedom and constitutional values. It is the duty of both the Bench and the Bar to uphold India’s constitutional values and I am proud to say that they have performed this duty with great diligence and assiduousness and would continue to do so.” He said: “Enlarging the ambit of fundamental rights and encouraging public interest litigation have been the hallmarks of the Indian judicial system. This would not have been possible had the court not been aided and assisted by proficient and committed Bar, whose sensitive attitude towards the needs of the common man, the underprivileged and the destitute is laudable.”
He said that even as the courts in India, hearing the largest number of cases in the world, zealously guard the rights and liberties of the people, the arrears in cases continued to be on the rise. “This causes a great delay in deciding cases and results in justice being rendered inaccessible. Consequently, the people’s faith in the judicial system begins to wane, because justice that is delayed is forgotten, excluded and finally discarded.”
Mr. Justice Balakrishnan said “it is imperative, therefore, to introduce innovative and creative solutions to tackle this hindrance.” He said various High Courts had introduced ‘evening courts,’ ‘mobile courts’ and ‘e-courts’ to make justice accessible to the remotest areas. Introduction of a nationwide case management system might be initiated so as to reduce cost of litigation, reduction in arrears and efficacious justice delivery system.
He said “the inadequate strength of the judiciary is another pressing concern and needs to be looked into at the earliest. This issue was examined by the Law Commission in its 120th report, yet the judicial system craves for more judges at all levels, especially at the level of the lower judiciary.”
He said the lower judiciary was hindered by inadequate infrastructure as well as poor working conditions in certain areas. “This is a pressing concern since most cases do not go beyond the lower judiciary. It is thus imperative to modernise the lowest rungs of the judicial system and introduce high quality and modernised training academies for the judges and lawyers.”
Solicitor-General G. E. Vahanvati said India was the only country in Asia which ensured that the Rule of Law prevailed and the fundamental rights of the citizens were guarded, the credit for which should go to the judiciary. Despite inadequate infrastructure such as court rooms, the judiciary had remarkably risen on every occasion to protect the fundamental rights.
President of the Supreme Court Bar Association P. H. Parekh traced the role of the judiciary in protecting the Constitution and the rights of the citizens.
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19 August, 2007

ESI medical service are covered under consumer protection Act.

Held. The medical service rendered in an ESI hospital/dispensary to an insured employee fails with in the ambit of section 2(1) (o) of the Consumer Protection Act, and , therefore , the Consumer Protection Act have jurisdiction to adjudicate upon a dispute arising between the insured and the Employees’ State Insurance Corporation.
Chairman, Employees’ State Insurance Corporation,2007 LLR 740
With Thanks from Labour Law Reporter
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16 August, 2007

The Gamble of Burden of Proof under Labour Law

The Common respondent to five writ petitions filed by different petitioners against the awards made by the Industrial Tribunal on June 20, 1998 in the Allahbad High Court, appealed against the High Court’s decision in the Supreme Court . The five writ petitioner – respondents (the workmen) raised a dispute relating to their retrenchment stating that the present petitioner, Sriram Industrial Enterprises Ltd., appointed them between the years 1987-1991. They claimed that while they had worked continuously from the date of their appointment for more than 240 days in a calendar year, they were illegally retrenched from service in violation of the provisions of section 6-N of the Uttar Pradesh Industrial Disputes Act,1947(hereinafter , ‘the U.P. Act’) The State Government eventually referred this dispute to the Tribunal under section 4-K of the U.P. Act to determine whether the termination of services of these workmen was just or illegal.

The workmen –respondents supported their contention by saying that alongside continuously working from the date of their appointment till their services were terminated, they had been allowed grade number, provident fund (PF) number and other service benefits they were entitled. But when they demanded other benefits to which they were entitled, their services were terminated without any notice or compensation, in violation of the requirement under section 6-N of the U.P. Act. Thus, they claimed reinstatement in service with back wages . However, the employer-petitioner claimed that the real dispute was with regard to their claim for regularization of their services as they were only casual and temporary hands employed in the seasonal sugar industry and not the termination of their services as none of them had worked for 240 days in last 12 calendar months immediately preceding their alleged date of termination.

While the respondents submitted bonus slips, wage slips, deduction of PF slips and attendance cards for various months, they requested the present petitioner to produce certain documents like the attendance register, payment of bonus records, and some other documents pertaining to the engagement of respondents as workmen under it that were in its custody . The petitioner submitted only that extract of attendance records of the last 12 months immediately preceding the date of retrenchment from which it was evident that none of the workmen had worked beyond 240 days during the said period. Convinced that the petitioner did not keep such records relating to temporary hand and relying on the documents that had been produced before them., the Tribunal concluded that the workers had failed to put in the required 240 working days in the calendar year preceding their termination from service. Aggrieved by this award, the workmen-respondents filed separate writ petitions in the Allahabad High Court praying for quashing of the impugned award and reinstatement of their service with back wages.

The High Court decreed in favour of the workmen while drawing an adverse inference against the petitioner for non- production of all the documents in its possession under section 114 illustration (g) of the Indian Evidence Act, 1872. The High Court held that the petitioner had failed to discharge the onus and disprove the workmen’s claim.

The Supreme Court , upholding the decision of the High Court, stated that the conclusion was based on the understanding of the expression ‘continuous service’ as used in section 6-N read with section 2(g) of the U.P. Act (which is the law applicable to the instant petitions) vis-a-vis its usage under section 25-B(2)(a)(ii) of the Industrial Disputes Act , 1947(hereinafter, ‘the Central Act’) . Unlike the Central Act , the definition under the U.P. Act, the word ‘preceding’ has not been used. Consequently the U.P. Act does not require the workman to prove that he had worked 240 days continuously only during the preceding period of 12 months prior to termination of his services. The workman was only entitled to show that he had worked for 240 days continuously in a calendar year for any year prior to termination of his services as the U.P. Act did not confine period only the year immediately preceding the termination. This interpretation stems from the decision of the Supreme Court in U.P. Drugs & Pharmaceuticals Co. Ltd v. Ramanuj Yadav [(2003) 8 SCC 334]. The present petitioners , by submitting only those records immediately preceding the date of retrenchment , describing the records of the earlier years as irrelevant and not producing them before the court, withheld the best evidence, allowing the High Court to correctly draw an adverse inference against them. The workmen were successful in discharging their initial onus by producing the documents in their possession. In this context the Supreme Court held the case of Range Forest Officer vs S.T. Hadimani[(2002) 3 SCC 25], which accused the management from discharging their burden of proof, to be bad in law that was watered down by the case of R.M. Yelati vs Assistant Executive Engineer[(2006) 1 SCC 106], wherein it was determined that once the workman discharges his burden once he has stepped in to the witness box and adduced cogent evidence , both oral and documentary. .

Sriram Industrial Enterprises Ltd. vs. Mahak Singh &Others [(2007) 4 SCC 94].
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15 August, 2007

When employee failed to join duty on specific offer made in conciliation hence he is not entititled to any other relief that compensation.

Appellant-workman raised dispute about his illegal termination. On reference, industrial Tribunal awarded him compensation in lieu of reinstatement after observing that he had declined to join duty when specific offer to that effect was given by employer during conciliation proceeding. Appellant challenge to the same by writ petition is dismissed by learned Single Judge and hence this writ appeal, wherein submission is that appellant was willing to join duty as in the scale of skilled worker.
Appellant was admitted working as a helper and was drawing a salary of Rs 750/- p.m. . He was paid salary in the presence of Labour Inspector and he had never raised any objection while receiving the salary and to his designation being shown as helper. The appellant should have joined duty as helper under protest if he was of opinion that he as entitled to higher designation/ salary but he did not do do. In similar circumstances, Supreme Court in the case of Central P. & D. Ins. Ltd v. Union of India AIR 2005 SC 633 held that compensation should be granted instead of reinstatement.
In veiw of above, there is no force this appeal and it is dismissed.

Triloki Nath (Shri) v. Dharam Pal Arora & Anr. H.C.D.B. Del. 2007 I LLJ 578

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05 August, 2007

Vicarious Liability of directors of companies (in cases of alleged violations of Section 138 of the Negiotiable Instruments Act)


This case raised the issue of the vicarious liability of directors of companies in cases of alleged violations of Section 138 of the Negiotiable Instruments Act. The respondents, in this case, was a director of a company which had issued cheques that were dishonoured on the ground of insufficent funds. The dishounoured cheques were issued by the managing director of the erring company The respondent was arrayed as "Accused No. 4" in the proceeding that followed . The issue that was raised before the supreme court was whether in order to prove liability under Section 141( cases in which the offence under Section 138 was committed by a company) It was neccessay to aver that the person accused was in charge of and responsible for the conduct of business of the company.
This was answered in the affirmative by the Supreme Court. The Court, then went on to hold that there is no deemed liability of any director unless it is shown that the director was in charge of and responsible for the conduct of business of the company at relevant time. The Court stated that Section 141 of the Act does not say " a Director of a Company shall automatically be vicariously liable for commission of an offence on behalf of the Company.What is necessary is tha sufficent averments should be made to show that the person who is sought to be proceeded against on the premise of his being vicarously liable for the commission of an offence by the Company must be incharge and shall also be responsible to the Company for the conduct of its buisness."
Hence the liability of a director must be detemined on the date on which the offence is committed. The fact of the transaction ( that resulted in the issuance of the dishonoured cheques) does not lead to the inference that she was actively associated with the management of the day to day affairs of the company. The Court further went on to state that managing directors or joint managing directors of a company are in charge the company and responsible to company for the conduct of its business by virtue of the positions held. The signatory of a cheque, which is dishonored, is also clearly responsible for the incriminating act and is covered under Section 141.

SMS Pharmaceuticals vs Neeta Bhalla and Anr (2007) 4 SCC.
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