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Name: Saurabh Gupta Roll No.

Part Time Masters in Business Administration - Marketing Div: A ,VIth Tremester.

Subject: Business Law. Under supervision of Respective Mr. N. K. Dhondy Narsee Monjee Institue of Management Studies

I, Nadirshaw K. Dhondy, Advocate, Supreme Court have examined the thesis of Saurabh Gupta who is enrolled the Part time - Masters in Business Administration Programme at Narsee Monjee Institute of Management Studies for the Academic Year 2008-2011 at unique Roll no.08.

He has earned Date:

Marks out of 50. of 2010.

Signature: Nadirshaw.K.Dhondy Advocate Supreme Court


I am heartily thankful to Mr. Amrish Pate l, The Chancellor, Dr. Rajan Saxena, The Vice Chancellor, Mr. Balwant Seth, Dr. C. D. Gupta, Dr. Bala Krishnamurthi and all th e Trustees of Narsee Monjee Institute of Management Studies. I also take this opportunity to thank all those who have d irectly and indirectly helped me and have provided insight duri ng my work on this thesis.I thank my supervisor, Mr. N. K. D hondy for providing me with an opportunity to explore myself thr ough this assignment
Saurabh Gupta

Table of Contents
Prologue 5 Case law Index 6

The Straw Board Manufacturing Co. Ltd. Vs. Its Workmen over GRATUITY 7 2. Consumer of medical service sought compensation from Hospital 22 3 Insurer vs. Insurance Company over claim amount. Settl ement under coercion 62 Epilogue 69 Bibliography 70

:Case1:In 1959 workers were not granted the Gratuity by The Straw Boar d Manufacturing. This caused the dispute and workers challenged th is in High court. workers went through traumic situation even left turning up for th e court. After 19yrs court is pronouncing its judgment Case2:Engineer student suffered through fever. He admitted in hospital NIMS. Doctors informed to operate on biopsy excision. After doctors do ne & patient who is consumer of this medical service was discharged, he suffer ed through through Paralysis. Patients parent seeks response from hospital b ut no response from hospital. Supreme court to take decision on the appeal of par ent to get compensation. Case3:Shoes shopkeeper`s shop caught fire. He got claim from insurance company. He lodged complaint in District Forum claiming that cla im was undervalued and settlement was arrived under coercion. District fo rum awarded a sum of Rs. 4, 95,000 on appeal. Insurance company filed appeal against this

before State Commission. State commission dismissed it. Insuranc e company filed revision before National Commission. National commission dismi ssed. Now Insurance company has filed appeal before Supreme Court.

Case law index

1 .

The Straw Board Manufacturing Co. Ltd. Vs. Its W orkmen - Mar 1
1977 Citation: 1977 2 SCC329, AIR1977 SC 941, [1977 (3 4) FLR269], (1977) I LLJ463 SC, [1977]3 SCR91

IN THE SUPREME COURT OF INDIA Civil Appeal Nos. 4119 of 1999 and 3126 of 2000 Nizam Institute of Medical Sciences Vs. Prasanth S. Dhananka and Ors

3. Civil Appeal No. 1602 of 2008 (Arising out of S LP (C) No. 12953 of 2005) National Insurance Company Ltd. Vs. Sehtia Shoes

Case1:Case law index :The Straw Board Manufacturing Co. Ltd. Vs. Its Work men Mar 1 1977 Citation: 1977 2 SCC329, AIR1977 SC 941, [1977 (34) FLR269], (1977) I LLJ463 SC, [1977]3 SCR91
Honorable Judges: Jaswant Singh and V.R. Krishna Iyer, JJ. Issue: Payment of Gratuity Act, 1972 Section 2;Constitution of India - Article 136; Labour Law; Industrial Law; Date Of Judgment: Mar 1 1977 Case No: Civil Appeal No. 1539 of 1970 Prior History: From the Award dated October 1/31, 1969 of the In dustrial Tribunal Allahabad in Ref. 20/58 published in the U.P. Gazette, dated the J anuary 10, 1970 Case:1. A dispute between the appellant mill (the Strawboard Manufacturing Company Ltd.) and its workmen, regarding a scheme of gratuity, was referre d to the Industrial Tribunal, way back in February 1958; and, long 19 years later, this Court is pronouncing

or the validity of the award made by the Tribunal in favour of the workmen! Small wonder the respondent workmen, after this tiring and traumatic ta ntalization, have not turned up to argue their cause, although Shri Parekh, as amicus cur iae, has filled the gap. Such an unhappy and not infrequent phenomenon as consider able delay in adjudication and implementation is destructive of industrial peace and productive of disenchantment with labour jurisprudence.

2. Naturally, even constitutional provisions and governmental decisi ons about Labour and concern for its welfare cease to achieve the desired go als when the legal process imps and lingers and rights turn illusory when remedies pr ove elusive. The life of rights is remedies and a jurisprudence of ready reliefs alone can inhibit the weaker numbers of our land asking the disturbing question: 'Is Law Dead? ' Dicey wrote long ago: The law ubi jus ibi remedium, becomes from this point of view so mething much more important than a mere tautological proposition. In its bearing upon constitutional law, it means that the Englishmen whose labours gradually formed the co mplicated set of laws and institutions which we call the Constitution, fixed their minds f ar more intently on providing remedies for the enforcement of particular rights or for averting definite wrongs, than upon any declarations of the Rights of Man or Englishmen." (Jurisprudence of Remedies: University of Pennsylvania law Revi ew Vol. 117, November 1968. P. 1, 16) 2. It is more than rhetoric to say that courts belong to the people. 'J udges occupy the public's bench of justice. They implement the public's sense of just ice'. If the courts are the fulcrum of the justicesystem, there is a strong case for the reform of Court methodology

and bestowal of attention on efficient management of judicial adm inistration. Otherwise, the courts may be so overloaded or so mismanaged that they grind to a halt and citizens' exercise of their rights discouraged or frustrated. The vital aspects of the jurisprudence of remedies include speeding the pace of litigation 'from the cradle to the grave'. We are reluctant to make these selfcritical observations about putting our house in order, but when the consumers of justice like workmen lose interest in the ju dicial process and are absent, legislative unawareness of research and development as to the needs of courts and simplification and acceleration of the judicative apparatus become matters of national concern. Law's delays are in some measure, caused by legislative i naction in making competent, radical change in the procedural laws and sufficient fin ancing and modernising of the justice system as a high priority programme.

3. The chequered career of this lis and its zigzag, climb up the pre cipice of justice contextually deserves brief narration. The order of reference was made early in 1958, the usual processual exercise before the Tribunal resulted in an award on May 1, 1958 where the tribunal refused the relief bearing on gratuity. The disappointe d workers challenged the award before the High Court which set it aside in November 1963 - too long a hibernation in the High Court for a labour dispute where prompt adjudication i s the essence of industrial peace. Anyway, when the case came back to the tribunal , its decision took another six inscrutable years and, on October 31, 1969, a fresh aw ard was made whereunder the tribunal framed a gratuity scheme and gave the gu idelines thereof. This time the appellant mill straight came to the Supreme Court with th e present appeal for which special leave was granted in a limited way, in the sense that it was confined to the question 'whether the correct principles on which gratuity should b e payable have been followed in this case or not.' It is a fact, though unfortunate, that th is labour litigation arrived in this Court in 1970 but its final chapter is being written b y this judgment only in 1977. And it is noteworthy that the facts are brief, the legal issues small, the arguments brief and this judgment, but for general observations and tradition

al reference to rulings cited at the bar, could have been judiciously abbreviated. 4. The main battle at the bar has been over the correct principles in a scheme of gratuity for factory workers and further whether those principles have been departed from under the award assailed by the appellant. We may mention, at this stage , that the Parliament has enacted the Payment of Gratuity Act, 1972, which has come in to force with effect from September 16, 1972. Section 4(5) of the said Act gives an option t o the workers to choose between the gratuity scheme under the award and the one under th e statute. Had the workers been represented before this Court it might have been pos sible for us finally to close this controversy or even produce a reasonable solution by di scussion and negotiation and persuade them to opt for one or the other scheme. Early finalit y, credible certainty and mutually assented solutions, are the finer processes of conflict res olution - a pursuit which baffles us here because of labour's absence.

All that we can do, therefore, is to adjudicate upon the correctness or otherwise of the principles which have gone into the gratuity scheme prepared by t he tribunal in the light of the rulings of this Court and the canons of industrial law. 5. We now proceed to itemise the grounds of attack levelled by Sh ri I. N. Shroff for the appellant and assay their worth in the light of the submissions in d efence of the award made by Shri P. N. Parekh appearing as amicus curiae. Even here we may place on record our appreciation of Shri Parekh's services to the Court and the fair ness of Shri Shroff in making his points on behalf of the appellant. 6. The only dispute, which has ramified into a few issues, relates t o the gratuity scheme the tribunal has framed. Shri Parekh is right in drawing our attention i n limine to the financial insignificance, for the appellant, of the subject matter of this lis an d the consequential disinclination we must display to disturb the award. He has urged t hat the total annual impact on the industry by the implementation of the award is of th e order of Rs. 3,000 to a substantial part of which the management has no objection. What i s more, the appellant is prosperous enough to distribute dividends around 20% over the ye ars. Further, since 1972 an obligatory statutory gratuity scheme has come into force with t he result that the economic consequences of this litigation, even if the appellant los es, are marginal or nil.

This makes us ponder whether, in matters of less than grave mome nt, this Court should, as part of high judicial policy to arrest the tidal flow of unsubstantial litigation, turn away at the portals those who invoke our jurisdiction to examine every cas e where some legal principle has been wrongly decided, regardless of a sense of 'sum mit court' perspective and the rare use of its reserve power so as to preempt a docket explosion and the injustice of delayed justice and invest the High Courts and high tribunals with final legal wisdom. The amplitude of Article 136 is meant more for exceptional situations t han to serve as hospitable basket to receive all challenges to seemingly erroneous judgments in the country.

THESIS : Labour Law

The blood of the Workman has to be bor ne by the Industry

Submitted to Adv. Nadirshaw K. Dhondy
By :

Mr. Sachin N. Shah PTMBA Div A Roll No 42.

I, Nadirshaw K. Dhondy, Advocate Supreme Court, ha ve examined the thesis of Mr. Sachin Shah, who is enroll ed at NMIMS Management College, Mumbai in the PTMBA Marketing, Div:A, course for the academic year 20082011. He has completed the thesis entitled The Blood of th e Workman has to be borne by the Industry in part complet ion of the final examinations. He has been rated to receive ______ marks out of _____.
Date : 25

February 2010. Place : Mumbai Signature: Mr. Nadirshaw K. Dhondy (Advocate Supreme Court)


hrough this acknowledgment, I express my sincere gratitude t o all those people who have been associated with this assignment and h ave helped me with it and made it a worthwhile experience. The following thesis, while an individual work, benefited fro m the insights and direction of several people. Firstly I would like to exp ress the deepest appreciation to the campus head and the senior advisor of NMIMS Mr. Amrish Patel - Chancellor, Dr. Rajan Saxena Vice Chancellor, Mr. Balwant Sheth Trustee, Dr. Chandan Dasgupta Dean and Dr. Balakrishna Murthy Head of Department. I would also like to express my gratitude to Mr. Nadirshaw K. Dh ondy Supreme Court Advocate, my teacher and guide for giving me opportunity to commence this thesis in the first instance, to do the necessary research work and to use departmental data. I can never measure the contribution of my family and friends, wh ose

blessings, love, perpetual support and encouragement has mad e me what I am. Lastly I am grateful to almighty for giving me an oppor tunity to showcase my practical effort in the work led by many.


t is easy to recruit an employee but difficult to dispense with his service. Entrepreneurs should take utmost important to safe guard the interests of their employee, The Indian Labour Laws provide invulnerable job secur ity to a workman. The Ministry of Labour has the mandate to prote ct and safeguard the interests of workers in general and those constituting the deprived and marginal classes of the soc iety in particular with due regard to creation of a healthy wor k environment for higher production and productivity. Workmen's Compensation Act 1923 is central legislation which provides for payment of compensation for injuries suffered b ya workman in the course of and arising out of his emplo yment according to the nature of injuries suffered and disabilit y

incurred, where death results from the injury, the amou nt of compensation is payable to the dependants of the workmen. The Indian government's inspection teams have an important rol e to play in improving standards, as they have an intimate knowl edge of the labour laws but there needs to be tougher enforcement of the laws.


Case 1 : Rajasthan State Road Transport Corporation and another Vs. Tilla Ram - Aug 25 2004 Honourable Judges : Arijit Pasayat & D.M. Dharmadhikari, JJ. Issue

: Labour Law

Date Of Judgment Case No

: Aug 25 2004

: Civil Appeal No. 4032 of 2001

Case 2 : Hanil Era Textiles Ltd. Vs. Namdeo Mukund Deoghare - Jun 15 2007 Citation : 2007 (4) MhLJ 820 Honourable Judges

: Roshan Dalvi, J.


Workmen's Compensation Act, 1923


: For Appellant: C.S. Bhandari, Adv. For Respondents Date Of Judgment Case No : First Appeal No. 1155 of 1995 in W.C. Appln. No. 47 of 1994 : Jun 15 2007 : M.H. Solkar, Adv.

CASE 1 Rajasthan State Road Transport Corporation and a nother Vs. Tilla Ram - Aug 25 2004
Honourable Judges: Arijit Pasayat and D.M. Dharmadhikari, JJ. Issue: Labour Law Date Of Judgment: Aug 25 2004 Case No: Civil Appeal No. 4032 of 2001

Head Note: Suit for declaration that the order of termination passed by the Corporation is illegal.. First Additional District Judge No. V by the

judgment reversed the conclusions of the Trial Court and held that the order of termination was illegal and violative of principles of natur al justice and employee was entitled to be in the service of the Corpo ration and he was entitled to the monetary and financial consequential benefits.Rajasthan State Road Transport Corporation calls in question legality of the judgment rendered by learned Single Judg e of the Rajasthan High Court dismissing the second appeal filed by th e Corporation.we remit the matter to the High Court to decid e the appeal in accordance with law after giving due opportunities to the parties. Cases referred to: K.V. Krishnamani vs. Lalit Kala Academy 1996 (5) SCC 889

JUDGMENT: Arijit Pasayat, J. 1. Rajasthan State Road Transport Corporation (hereinafter referred to as 'Corporation') calls in question legality of the judgment rendered by learned Single Judge of the Rajasthan High Cou rt dismissing the second appeal filed by the Corporation. 2. Background facts necessary for disposal of the appeal in a nutshell are as follows: 3. The respondent (hereinafter referred to as the 'employee') filed a civil suit in the Court of the learned Additional Civil Judge, Senior Division and Judicial Magistrate III, Jaipur City, Jaipur. Suit was for declaration that the order of termination dated 18.3.1986 passed by the Corporation is illegal. According to him he w as

appointed as a Conductor on permanent basis and on erroneous impression that he was carrying passengers without tickets, h is services were terminated. He was not departmentally proceed ed against and no inquiry was conducted, and, therefore, the order of termination was illegal and arbitrary. It was further pleaded that the principle of 'last come first go' was not followed in his case. The Corporation took the stand that the employee was appointed on daily wage basis. He was not appointed on permanent ba sis. There was no necessity for departmental proceedings or enqu iry since he was engaged on a daily wage basis, and the engagement was discontinued. 4. In any event there was no stigma attached. The Trial Court after consideration of the materials brought on record came to hold that the employee was appointed on daily wage basis. There was no question of departmental inquiry in case of daily wager. The employee had not produced an appointment order to substantive

his plea that he was engaged on permanent basis. There was no inquiry held and, therefore, the question whether the inquiry was proper or not did not arise for consideration. The Trial Court did not think it necessary to decide the question of jurisdiction t o entertain the suit. The suit was dismissed. The employee preferred an appeal before the First Additional District Judge No. V, Jaipur City who by the judgment dated 23.3.1999 reversed the conclusions of the Trial Court and held that the order of termination was illegal and violative of principles of natural justic e and employee was entitled to be in the service of the Corporation and he was entitled to the monetary and financial consequent ial benefits. 5. The Corporation preferred an appeal before the Rajasthan Hi gh Court and the learned Single Judge as noted above dismissed the second appeal. 6. In support of the appeal Mr. Sushil Kumar Jain, learned cou nsel

submitted that the approach of the High Court is clearly erroneous. It recorded findings which are contrary to the materials on record. The High Court proceeded on the basis as if the Trial Court held that the inquiry against the plaintiff was not in accordance with the principles of natural justice and that the procedure of holding enquiry was grossly violative. The High Court and the Appellate Court had held that the inquiry was not in accordance with the principles of natural justice. After referring to the conclusions of the First Appellate Court, the High Court felt that decision given on merits is based on facts. 7. None appeared on behalf of respondents in spite of service o f notice. 8. We find that while the Trial Court had analysed the factual position in law in great detail and had arrived at the right


conclusions, the First Appellate Court did not consider the matter in the proper perspective. Some of its conclusions are clearly untenable. For example on the basic question as to the validity of the action taken by the Corporation, the First Appellate Cour t observed as follows: 9. The contention of the learned advocate for respondent is that the plaintiff was a daily wage worker and was on a temporary po st and that there is no need for holding the departmental enquir y before terminating him. That in support of the contention the learned advocate has produced the following illustrations befo re me:--

1. 1991 S.C.C. 591 State of Uttar Pradesh vs. Kaushal Kishore Shukl a. 2.

A.I.R. 1994 Supreme Court 2411 State of Uttar Pradesh vs. P rem Lata. 3. 1996(5) SCC 889 K.V. Krishnamani vs. Lalit Kala Academy. 4. 1996(1) SCC 560 Satya Narayan vs. High Court of Madhya Prade sh and others 5. R.L.R. 1990(2) page 268 Shakti Kant Pathak vs. Paschmi Du gadh Utpadak Sahkari Sangh Ltd. 6. 1994(2) W.L.C. (Raj.) 25 Kanwar Singh vs. Union of India." 7. It is to be noted that before the First Appellate Court the Corporation was the respondent. After referring to some judgments referred to by the Corporation, it inappropriately came to the conclusions that the judgment and decree was liable to be appealed and the appeal of the plaintiff was liable to be accepted