Ningamma and another v. United India Insurance Co. Ltd., 2009 (13) SCC 710

Representing Advocates:

Vinod Chaudhri for the appellant

Contract Law – Liability of Surety – Delay by Creditor – Public Auction – Petitioner stood as surety for contractor in a public auction – Contractor defaulted on payments – Petitioner argued that delay by State in taking action discharged the surety – Held, State's delay does not discharge surety's liability – Contract terms and provisions of Section 128 make liability of surety co-extensive with that of principal debtor – Petitioner's liability upheld. [Paras 12-13, 20]

Contract Law – Surety’s Liability – Sections 128, 133, 135, 139, 141, 145 of the Indian Contract Act – Surety argued changes in contract terms and delay in action by State discharged his liability – Held, no changes in contract terms made without surety’s consent – Delay in termination of contract does not alter original terms – Surety's liability remains intact. [Paras 12-15, 18]

Decision – Appeals dismissed – Petitioner’s arguments rejected – Liability of surety upheld – Appeals dismissed with costs of Rs. 1,00,000 each. [Paras 23-24]

Constitutional Law – Equal Pay for Equal Work – Pay Parity – Petitioners recruited as drivers receiving lower pay than juniors despite performing the same work – State's contention to await 6th Pay Commission decision rejected – Held, seniors cannot draw less pay than juniors, violation of Article 14 and Article 39(d) – Step-up of salary of seniors directed. [Paras 1, 5, 7]

Administrative Law – Stepping Up of Pay – Petitioners drawing less pay than juniors due to ACP scheme – Supreme Court’s principle of stepping up pay in similar cases applied – Held, stepping up pay is the only way to prevent discrimination and uphold the principle of equal pay for equal work – Any provision allowing such anomaly is violative of natural justice and equity. [Paras 5, 6]

Decision – Petition allowed – Petitioners entitled to stepping up of pay on par with juniors from the date juniors received higher pay – Arrears to be disbursed within a reasonable time – Petitioner No. 2's case to be processed after expiry of punishment in July 2016. [Paras 8-10]

Information Technology Act, 2000 - Exemption from Liability - Intermediary Role - Held, Facebook India Ltd. is an intermediary and does not control or operate servers hosting content. No allegations of conspiracy or inducement against it. Exempt from liability under Section 79 of the IT Act. Not a necessary party to the suit.

Copyright Act, 1957 - Section 52(1)(c) Compliance - Pre-suit Notice Requirement - Held, no suit can be filed without serving a 21-day notice to the person responsible for storage of infringing content. No such notice was issued to Facebook India Ltd. by the plaintiff. Suit not maintainable against it.

Decision - Revision Petition Allowed - Court deleted Facebook India Ltd. from the array of parties, noting its role as an intermediary and the lack of mandatory notice as required under the Copyright Act and Rules.

Service Law - Ad hoc/Work-charged service - Seniority and financial benefits - Petitioners sought counting of ad hoc/work-charged service for seniority, additional increments, higher standard pay scales, and ACP scales - Held, ad hoc/work-charged service followed by regular service cannot be counted for purposes of seniority and financial benefits such as additional increments and higher standard pay scales - Only regular satisfactory service qualifies for these benefits - Petitions dismissed, except for pension and other pensionary benefits for qualifying service​​.

Regularization Policies - Analysis - Government policies on regularization stipulate that seniority of regularized ad hoc employees is determined from the date of regularization - Direct recruits on the same date as regularized ad hoc employees take seniority - Policies constitute binding contracts, including stipulations on seniority - Seniority re-determination claims affecting other employees not entertained without impleading affected parties​​.

Decision - Petitions dismissed - Ad hoc/work-charged service not counted towards seniority, additional increments, higher standard pay scales, or ACP scales - Only regular satisfactory service counts for these benefits - Relief granted only for pension and other pensionary benefits​​.

Rent Law – Bona Fide Requirement – Conversion from Residential to Non-Residential Use – Petitioners sought eviction of tenants for bona fide requirement of non-residential use – Rent Controller and Appellate Authority dismissed petitions on grounds that residential premises let out for residential use cannot be evicted for non-residential use – Held, word “residential” in Section 13(3)(a) of the Haryana Act struck down as unconstitutional – No distinction between residential and non-residential buildings for bona fide requirement – Petition allowed. [Paras 6, 12, 14]

Rent Law – Eviction – Old Cities and Zoning – In old cities of Haryana, no separate zoning for residential and commercial areas – Residential premises on main roads often used for commercial purposes – Eviction allowed if landlord's requirement is bona fide – Section 11 of the Haryana Act allows for conversion with Controller’s permission after possession. [Paras 14, 17]

Decision – Petitions allowed – Orders of Rent Controller and Appellate Authority set aside – Tenants granted three months to vacate premises – Bona fide requirement of landlord for non-residential use upheld. [Paras 18-19]

Administrative Law – Delay in Departmental Proceedings – Charge-sheet for Allotment Irregularities – Initiation of departmental proceedings 14 years post-incident and 3 years post-discharge in a criminal case – Held, departmental proceedings initiated after such delay cannot be justified, especially when based on identical facts leading to discharge in the criminal case – Charges quashed, and petitioner entitled to all due benefits. [Paras 13-14]

Criminal Law – Right Against Double Jeopardy – Vexed Twice on Same Imputation – Departmental charges identical to those in the criminal case leading to discharge – Held, petitioner cannot be vexed twice on the same imputation of charges – Department's failure to present fresh material other than what was presented in the criminal case. [Paras 12-13]

Administrative Law – Role of Allotment Authority – Petitioner not the Allotment Authority – Evidence showing petitioner's non-involvement in allotment process – Held, petitioner, a Naib Tehsildar, not involved in allotment, conspiracy charges against him unsustainable without direct evidence. [Para 10]

Decision – Petition allowed – Charge-sheet dated 27.11.2012 and consequential proceedings quashed – All pensionary benefits including gratuity to be released to the petitioner within two months – If promotion withheld due to proceedings, competent authority to review and decide eligibility. [Paras 14]

Criminal Law – Negotiable Instruments Act – Vicarious Liability of Directors – Ex-Director Liability – Petitioner resigned prior to issuance of disputed cheque – Form No. 32 and annual return showed resignation – Held, Magistrate not justified in summoning petitioner without specific averments in the complaint regarding his role in conduct of company’s business – Summoning order and complaint quashed. [Paras 1-3, 21]

Criminal Law – Summoning of Accused – Prima Facie Satisfaction – Magistrate must be satisfied on the basis of material produced that prima facie case exists – Material referred to in complainant's reply but not in the complaint cannot be considered at summoning stage. [Paras 6-7, 21]

Corporate Law – Director’s Liability – Requirements for Summoning – For non-Chairman/Managing/Joint Managing Director or authorized signatory, specific averments about their role in company’s business necessary – Mere reproduction of Section 141 words insufficient for other directors – Court to seek Form No. 32 and latest annual return to determine directors at time of offense. [Paras 28-29]

Decision – Petitions allowed – Summoning orders and complaints quashed – Trial Courts directed to obtain Form No. 32 and annual return before summoning directors to ensure correct identification of directors during offense. [Paras 27, 29-30]

Debt Recovery – Limitation – Condonation of Delay – Section 17 of Securitization Act – Application under Section 17 dismissed by DRT due to lack of power to condone delay – Held, provisions of Limitation Act, 1963 applicable to proceedings under Section 17 in view of Section 24 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 – DRT has power to condone delay – Matter remitted back to DRT to decide the application for condonation of delay afresh on merits. [Paras 6-9, 18]

Debt Recovery – Special Law – Applicability of General Law – Securitization Act does not expressly exclude the application of Limitation Act, 1963 – Therefore, Section 5 of Limitation Act applicable to proceedings under Section 17 of Securitization Act – Impugned orders quashed. [Paras 7, 18-19]

Decision – Petitions allowed – Impugned orders passed by DRT quashed – Matter remitted back to DRT to decide application for condonation of delay afresh on merits. [Para 19]