If Exoneration in Adjudication Proceeding on Merits, Criminal Prosecution on Same Set of Facts Can Not be Allowed to Continue

Recently, a three judge bench of hon’ble Supreme Court in Radheshyam Kejriwal  Vs State of West Bengal & Anr. {(2011) 3 SCC 581; Decided on 18.02.2011} held as follows (per majority) (SCC para 37, 38 and 39).

“19……………. There may appear to be some conflict between the views in the case of Standard Chartered Bank and others vs. Directorate of Enforcement and others (2006) 4 SCC 278 andAssistant Collector of Customs, Bombay and another vs. L.R. Melwani and another AIR 1970 SC 962, holding that adjudication proceeding and criminal proceeding are two independent proceedings and both can go on simultaneously and finding in the adjudication proceeding is not binding on the criminal proceeding and the judgments of this Court in the case of Uttam Chand and others vs. Income Tax Officer, Central Circle, Amritsar (1982) 2 SCC 543, G.L. Didwania and Another vs. Income Tax Officer and Another 1995 Supp (2) SCC 724,and K.C. Builders and Another vs. Assistant Commissioner of Income Tax(2004) 2 SCC 731, wherein this Court had taken a view that when there is categorical finding in the adjudication proceeding exonerating the person which is binding and conclusive, the prosecution cannot be allowed to stand. Judgments of this Court are not to be read as statute and when viewed from that angle there does not seem any conflict between the two sets of decisions. It will not make any difference on principle that latter judgments pertain to cases under the Income Tax Act. The ratio which can be culled out from these decisions can broadly be stated as follows:-

(i) Adjudication proceeding and criminal prosecution can be launched simultaneously;

(ii) Decision in adjudication proceeding is not necessary before initiating criminal prosecution;

(iii) Adjudication proceeding and criminal proceeding are independent in nature to each other;

(iv) The finding against the person facing prosecution in the adjudication proceeding is not binding on the proceeding for criminal prosecution;

(v) Adjudication proceeding by the Enforcement Directorate is not prosecution by a competent court of law to attract the provisions of Article 20 (2) of the Constitution or Section 300 of the Code of Criminal Procedure;

(vi) The finding in the adjudication proceeding in favour of the person facing trial for identical violation will depend upon the nature of finding. If the exoneration in adjudication proceeding is on technical ground and not on merit, prosecution may continue; and

(vii) In case of exoneration, however, on merits where allegation is found to be not sustainable at all and person held innocent, criminal prosecution on the same set of facts and circumstances can not be allowed to continue underlying principle being the higher standard of proof in criminal cases.

In our opinion, therefore, the yardstick would be to judge as to whether allegation in the adjudication proceeding as well as proceeding for prosecution is identical and the exoneration of the person concerned in the adjudication proceeding is on merits. In case it is found on merit that there is no contravention of the provisions of the Act in the adjudication proceeding, the trial of the person concerned shall be an abuse of the process of the court.”

Highlights of the Industrial Disputes (Amendment) Act, 2010

The Article analyses impact of Industrial Disputes (Amendment) Act, 2010 on staffing, business and organisations:

In India, the Industrial Disputes Act, 1947 is the main legislation for investigation and settlement of all industrial disputes.

The Industrial Disputes (Amendment Act), 2010 have brought few significant changes to the Industrial Disputes Act, which are produced under the following headings:

Dismissal, Discharge, Termination and retrench of a workman/employee

By the Amendment Act, 2010, by inserting sub-section (2) to the section 2-A, a provision has been made for the workman/employee to make an application direct to the Labour Court or Tribunal for adjudication of the disputes relating to or arising out of discharge, dismissal, retrenchment or termination, after the expiry of the forty-five days from the date he has made the application to the conciliation officer of the appropriate Government for conciliation of the dispute.

On receipt of the application the Labour Court or Tribunal shall have powers and jurisdiction to adjudicate upon the dispute, as if it were a dispute referred to it by the appropriate Government in accordance with the provisions of the I.D Act (in short for, Industrial Disputes Act, 1947) and all the provisions of the Act shall apply in relation to such adjudication.

A new sub-section (3) has been inserted to section 2-A, which clearly provides that the applications referred above shall be made to the Labour Court or Tribunal before expiry of three years from the date of discharge, dismissal, retrenchment or termination as the case may be.

Effect

The amendment is a good relief for employees to sue employers directly against indiscriminate and illegal termination, discharge and dismissal.

Will increase number of litigations from employees against the employers.

It is important to mention here that few states had made such provisions even before the aforesaid amendments, by making amendments to section 10 of the I.D Act. For Instance Karnataka has a similar provision by inserting sub section 4-A after section 10 sub (4), which provides that the disputes related to discharge, dismissal, retrenchment or termination, the individual workman may, within six months for the date of communication to him the order of discharge, dismissal, retrenchment or termination, apply in prescribed manner, to the Labour Court for adjudication of the dispute. Even Delhi state had similar amendments.

The employers in order to protect and defend the unwanted litigations must have strong internal dispute redressal mechanism, should have a good approach while recruiting and pro-employee policies and strong Labour/H.R compliances.

Enhancement of wage ceiling

The Industrial Disputes (Amendment Act), 2010, brought amendment to section 2 sub-sections (s) by enhancing the wage ceiling from rupees one thousand six hundred to ten thousand.

The exclusion is where the workmen employed in a supervisory capacity, draws wages exceeding ten thousand rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.

Effect

Shall have the effect of amending definition of workman, which means any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, but for the purpose of proceedings related to dismiss, discharge, or retrench, but does not include the following person:

A. Persons subject to Air force, Army and Navy Act.

B. Employed in police service or of a prison.

C. Employed mainly in a managerial or administrative capacity.

D. Employed in a supervisory capacity and draws wages exceeding ten thousand rupees.

The amendment has the effect of including more employees/workmen under the definition of “workman” of the I.D Act.

Grievance Redressal Machinery

The Industrial Disputes (Amendment Act), 2010 had substituted a new chapter for chapter II-B.

The Amendment provides that every industrial establishment employing twenty or more workmen shall have one or more grievance redressal committed for the resolution of disputes arising out of individual grievances.

2. The Grievance Redressal Committee shall consist of equal number of members from the employer and the workmen.

3. The chairperson of the Grievance Redressal Committee shall be selected from the employer and from among the workmen alternatively on rotation basis every year.

4. The total number of members of the Grievance Redressal Committee shall not exceed more than six.

Provided that there shall be, as far as practicable, one woman member if the Grievance Redressal Committee has two members and in case the numbers of members are more than two, the number of women members may be increased proportionately.

5. Notwithstanding anything contained in this section, the setting up of Grievance Redressal Committee shall not affect the right of the workman to arise industrial dispute on the same matter under the provisions of this Act.

6. The Grievance Redressal Committee may complete its proceedings within thirty days on receipt of a written application by or on behalf of the aggrieved party.

7. The workman who is aggrieved of the decision of the Grievance Redressal Committee may prefer an appeal to the employer against the decision of Grievance Redressal Committee and the employer shall, within one month from the date of receipt of such appeal, dispose of the same and send a copy of his decision to the workman concerned.

8. Nothing contained in this section shall apply to the workmen for whom there is an established Grievance Redressal Mechanism in the establishment concerned.

Effect

Grievance Redressal Committee or the Grievance Redressal Mechanism is a great support in systematic resolution of disputes.

To ensure a strong and legally complied Grievance Redressal Committee or Mechanism is formed in the organization or Company.

There is an appeal provision to the employer, the employer decision, compliance, reasoning skill and dispute resolution skill will be a great help for the Company in resolving disputes and preventing litigations.

The Grievance Redressal Committee or Mechanism can also be an effective tool or system to resolve the workman/employee disputes.

The Grievance Redressal Committee or Mechanism cannot prevent or affect the right of the workman to arise industrial dispute on the same matter under the provisions of this I. D Act.

Execution of the award, decree or settlement

The Industrial Disputes (Amendment Act), 2010, has inserted two new sub-sections (9) and (10) after sub-section (8) of the Principal Act, which provides the following:

Every order, award or settlement arrived before Labour Court or Tribunal or National Tribunal, as the case may be, shall be executed by Civil Court having jurisdiction in accordance with the procedure laid down for execution of orders and decree of a civil Court under order 21 of the Code of Civil Procedure, 1908.

The Labour Court or Tribunal or National Tribunal, as the case may be shall transmit any award, order or settlement to a Civil Court having jurisdiction and the Civil Court shall execute the award, order or settlement as if it were a decree passed by it.

Effect

The amendment as brought a clear and fast mechanism for execution of the award, order or settlement made before Labour Court or Tribunal or National Tribunal.

Failing to comply with the award, order or settlement will lead to attachment of property, sale, warrants and other mode of execution from Civil Courts.

“Industry” and “Industrial Dispute” as per the Industrial Disputes Act, 1947

It is important here to mention the industry and industrial disputes the Act covers, namely:

“Industry” means any business, trade, undertaking, manufacture or calling of employers and includes any calling service, employment, handicraft or industrial occupation or avocation of workmen. As defined in section 2 (j) of the I.D Act.

“Industrial disputes” means any dispute or difference between:

Employers and employers, or between

Employers and workmen, or between

Workmen and workmen,

Which is connected with the employment or non-employment or the terms of employment or with the conditions of labour, of any person, as defined in section 2 (k) of the I.D Act.

Revelation of Swiss bank accounts – IS INDIA A POOR COUNTRY?

If black money deposits were an Olympics event…. India would have won a gold medal hands down. The second best Russia has 4 times lesser deposit. U.S. is not even there in the counting in top five! India has more money in Swiss banks than all the other countries combined! Recently, due to international pressure, the Swiss government agreed to disclose the names of the account holders only if the respective governments formally asked for it. Indian government is not asking for the details…….

no marks for guessing why?

We need to start a movement to pressurise the government to do so! This is perhaps the only way, and a golden opportunity, to expose the high and mighty and weed out corruption! Please read on……. and forward to all the honest Indians to….. like somebody is forwarding to you……. and build a ground-swell of support for action!

Is India poor, who says? Ask the Swiss banks. With personal account deposit bank of $1,500 billion in foreign reserve which have been misappropriated, an amount 13 times larger than the country’s foreign debt, one needs to rethink if India is a poor country?

DISHONEST INDUSTRIALISTS , scandalous politicians and corrupt IAS, IRS, IPS officers have deposited in foreign banks in their illegal personal accounts a sum of about $1500 billion, which have been misappropriated by them. This amount is about 13 times larger than the country’s foreign debt. With this amount 45 crore poor people can get Rs 1,00,000 each. This huge amount has been appropriated from the people of India by exploiting and betraying them. Once this huge amount of black money and property comes back to India , the entire foreign debt can be repaid in 24 hours. After paying the entire foreign debt, we will have surplus amount, almost 12 times larger than the foreign debt. If this surplus amount is invested in earning interest, the amount of interest will be more than the annual budget of the Central government. So even if all the taxes are abolished, then also the Central government will be able to maintain the country very comfortably.

Some 80,000 people travel to Switzerland every year, of whom 25,000 travel very frequently. ‘Obviously, these people won’t be tourists. They must be travelling there for some other reason,’ believes an official involved in tracking illegal money. And, clearly, he isn’t referring to the commerce ministry bureaucrats who’ve been flitting in and out of Geneva ever since the World Trade Organisation (WTO) negotiations went into a tailspin!

Just read the following details and note how these dishonest industrialists, scandalous politicians, corrupt officers, cricketers, film actors, illegal sex trade and protected wildlife operators, to name just a few, sucked this country’s wealth and prosperity. This may be the picture of deposits in Swiss banks only. What about other international banks?

Black money in Swiss banks — Swiss Banking Association report, 2006 details bank deposits in the territory of Switzerland by nationals of following countries:

TOP FIVE

INDIA $1,456 BILION

RUSSIA $470 BILLION

U.K.  $390 BILLION

UKRAINE $100 BILLION

CHINA  $96 BILLION

Now do the math’s – India with $1,456 billion or $1.4 trillion has more money in Swiss banks than rest of the world combined. Public loot since 1947:

Can we bring back our money? It is one of the biggest loots witnessed by mankind — the loot of the Aam Aadmi (common man) since 1947, by his brethren occupying public office. It has been orchestrated by politicians, bureaucrats and some businessmen.

The list is almost all-encompassing. No wonder, everyone in India loots with impunity and without any fear. What is even more depressing in that this ill-gotten wealth of ours has been stashed away abroad into secret bank accounts located in some of the world’s best known tax havens. And to that extent the Indian economy has been stripped of its wealth. Ordinary Indians may not be exactly aware of how such secret accounts operate and what are the rules and regulations that go on to govern such tax havens. However, one may well be aware of ‘Swiss bank accounts,’ the shorthand for murky dealings, secrecy and of course pilferage from developing countries into rich developed ones.

In fact, some finance experts and economists believe tax havens to be a conspiracy of the western world against the poor countries. By allowing the proliferation of tax havens in the twentieth century, the western world explicitly encourages the movement of scarce capital from the developing countries to the rich. In March 2005, the Tax Justice Network (TJN) published a research finding demonstrating that $11.5 trillion of personal wealth was held offshore by rich individuals across the globe.

The findings estimated that a large proportion of this wealth was managed from some 70 tax havens. Further, augmenting these studies of TJN, Raymond Baker — in his widely celebrated book titled ‘Capitalism’s Achilles Heel: Dirty Money and How to Renew the Free Market System’ — estimates that at least $5 trillion have been shifted out of poorer countries to the West since the mid-1970.

It is further estimated by experts that one per cent of the world’s population holds more than 57 per cent of total global wealth, routing it invariably through these tax havens. How much of this is from India is anybody’s guess.

What is to be noted here is that most of the wealth of Indians parked in these tax havens is illegitimate money acquired through corrupt means. Naturally, the secrecy associated with the bank accounts in such places is central to the issue, not their low tax rates as the term ‘tax havens’ suggests. Remember Bofors and how India could not trace the ultimate beneficiary of those transactions because of the secrecy associated with these bank accounts?

Equality at WORK: the Continuing Challenge

P. C. Chaturvedi Secretary of Labour & Employment Addresses the 100th Session of International Labour Conference on Report of ILO Director General-“Equality at WORK: the Continuing Challenge

“Millions of people suffer from discrimination in the world of work which not only violates a basic human right but has wider social and economic consequences. Discrimination stifles opportunities wasting the human talent needed for economic progress and accentuates social tensions and inequalities. Combating discrimination is an essential part of promoting Decent Work, and success on this front is felt well beyond the workplace.” Shri Prabhat C. Chaturvedi, Secretary, Ministry of Labour and Employment said this while speaking at the 100th session of the International Labour Conference on Friday 10th June, 2011at Geneva.

Shri Chaturvedi stated that discrimination on various grounds can be exacerbated in times of economic uncertainty. Whatever has been the social impact of the financial crisis, post-crisis recovery strategies and measures must not ignore the principles of non-discrimination and equality.

Shri Chaturvedi further stated that Government of India has ratified the Conventions on Equal Remuneration (C-100) and Discrimination (Employment and Occupation) C-111. To ensure the enforcement of ILO Convention No. 100 concerning Equal Remuneration to men and women for work of equal value, the Equal Remuneration Act, 1976 was enacted. The Constitution of India guarantees Civil Liberties which include individual rights common to most liberal democracies. Article 15 of the Constitution of India prohibits discrimination on grounds of religion, race, caste sex or place of birth and Article 16 states that there shall be Equality of Opportunity for all citizens in matters relating to employment or appointment to any office under the state.

He further added that the Right against Exploitation is also a fundamental right in our Constitution aimed to prevent exploitation of weaker sections of society. The Bonded Labour Abolition Act, 1976 has been enacted by Parliament to bring an end to this practice. The prevention of sexual harassment of women at the workplace also has the force of law under Article 141 of the Constitution of India. The practice of untouchability has been declared an offence punishable by law in India and Protection of Civil Rights Act, 1955 has been enacted by Parliament of India.

Shri Chaturvedi mentioned that Government of India attaches utmost priority to the welfare and development of the weaker sections of society. The structure and mechanism of implementation of protection of Civil Rights Act, 1954 and the SC/ST Prevention of Atrocities Act, 1989 include provision for legal aid to affected persons, setting up of special course, vigilance and monitory committees under Chief Minister and District Magistrate respectively. SC/ST candidate have been given reservation in professional courses like medical, engineering colleges in India and also have been providing reservation for jobs in the Civil Services of the country in order to encourage their participation in the economic and political mainstream of the country. Government of India reserves 50 per cent of seats in Central Institute of Higher Education for economically and socially backward candidates.

Shri Chaturvedi stated that Indian law provides a quota system, where by a percentage of seats are reserved in employment in Government and in the Public Sector Units (PSU) and in all public and private educational institution. The reservation policy is also extended to SC/ST for representation in Parliament of India. A reservation of 3% seats is given to physically challenged persons in Government jobs.

He further stated that Government of India is following a policy of positive discrimination by reserving a part of benefits under Flagship Welfare Programme like Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), Local Self Government (Panchayat), Municipalities and Vocational Training Institute exclusively for women. We have introduced legislation to assure minimum wages, maternity benefits and equal remuneration for women. A legislation to secure one-third reservation to women in the Parliament of India is currently under process. The Protection of Women for Domestic Violence Act is helping to act as a deterrent as well as providing legal recourse to women who are victims of any kind of domestic violence. A new scheme, Indira Gandhi Matritva Sahyog Yojana (IGMSY), for pregnant and lactating women has been approved by the Government. A woman Government servant having minor children below the age of 18 years may be granted child care leave for a maximum period of two years, i.e.730 days during the entire service for taking care of up to two children whether for rearing or to look after any of their needs like examination, sickness, etc.

Shri Chaturvedi mentioned that lack of work opportunities in home countries have led to the movement of people across borders. India has enacted the Emigration Act in 1983. The Act provides for the regulatory framework in respect of Indian workers for overseas employment on contractual basis and seeks to safeguard their interest and also to ensure their welfare. The Act makes it mandatory for registration of recruiting agents with the Office of Protector General of Emigrants for conducting business of recruitment of specified categories for overseas employment.

Shri Chaturvedi concluded by stating that all countries have major responsibility in steering and contributing to international action on the elimination of discrimination and inequality in the work-place. We appreciate that ILO has shown itself to be the leading body in combating discrimination and promoting equality, right from its inception. We the member countries of ILO should reiterate our commitment at this forum to ensure Decent Work & Equal opportunity in the World of Work, which alone can form the foundation of equitable and balanced growth.

Labour Minister’s speech at ILO Conference on “A New Era of Social Justice”

Following is the text of the Speech of Union Minister for Labour & Employment Shri Mallikarjun Kharge at the International Labour Conference 100th Session, 2011 in Geneva today on Report of the Director General- A New Era of Social Justice:

Mr. Chairperson,

We welcome the Director Generals’ Report on a ‘New Era of Social Justice’ in this historic 100th Session of the ILC. The Report provides a good opportunity to all member states of ILO for deliberating on the need for a strong social dimension to globalization in achieving improved and fair outcomes enshrined in the Decent Work Agenda.

Ensuring social sustainability of growth is a universal challenge today. Rapid growth and urbanization have contributed to increased inequalities and imbalances. Improving public services delivery particularly education and health, better targeting of subsidies, ensuring employment opportunities and economic support for women and marginalized sections of society are all needed to ensure social sustainability of growth. The world is now witnessing a major shift in policies inspired by a vision of sustainable development and inclusive growth in economies, enterprises, workplaces and ultimately in society.

India is also working towards implementing the commitment towards social progress, economic growth and increased engagement with nations around the world in a most effective and determined manner. We have pursued a strategy of seeking inclusive growth at home and inclusive globalization internationally that benefits the have-nots and reduces disparities.

We have enacted laws that guarantee the Right to Employment and Right to Education. We now propose to introduce a legislation giving our citizens the Right to Food. A superstructure of development has been built on this foundation of investment in human capabilities. Our policies have aimed to empower socially, educationally and economically weaker sections of our society.

The Report has highlighted the fact that the goal of more and better jobs remains a distant reality aggravated by the global crisis. In this context we would like to point out that the generation of adequate work opportunities for our growing labour force has been one of the central objectives of India’s development planning since its very inception. We have long recognized that productive employment is not merely a means to the ultimate end of economic development but also a direct and effective method of poverty alleviation. On the whole we have been reasonably successful in our efforts to generate adequate employment opportunities for the vast majority of informal workers in the rural areas through implementation of the MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act). In response to the global economic slowdown we undertook a massive fiscal stimulus programme that helped maintain reasonable growth. We are constantly working towards reducing the fiscal and revenue deficits, increasing public investment and cutting down on wasteful expenditure.

Our Government has launched a massive programme for skill development and technical training. A new National Skill Development Initiative has been launched to empower all individuals through improved skills, knowledge, nationally and internationally recognized qualifications to gain access to decent employment and ensure India’s competitiveness in the global market. India has set a target of creating 500 million skilled workers by 2022.

Social protection is an investment which enhances the productivity of workers in the long run. India has launched a massive campaign to provide basic healthcare facilities to workers in the unorganized sector who comprise of 94 per cent of the workforce in India through its ambitious and successfully running flagship programme – RSBY (Rashtriya Swasthya Bima Yojana). Labour Welfare Funds have been set up and the Unorganized Workers Social Security Act 2008 has been introduced to provide social protection measures to the informal sector workers.

We endorse the concept of Social Protection Floor but each country should decide the level of its Social Protection Floor. A uniform Social Security Floor cannot be prescribed for all countries and there should not be any fixed timelines. Social Protection Floor should be closely linked to the country’s financial resources, size of informal sector, employment strategy and other social policies. In India we are moving from ‘scheme based’ to ‘rights based’ social security entitlements.

We agree that the Global Jobs Pact has been instrumental in meeting the challenges posed by the financial crisis. It has helped member states of ILO to accelerate employment creation and jobs recovery through well regulated trade and markets that benefit all. However, the momentum has to be carried further. We need to shape policies that produce high levels of growth with decent work outcomes

We endorse the point made in the report that investment in labour regulations and emphasis on tripartite dialogue are essential components of the Decent Work Agenda that help to make growth more effective, the approach of India with regard to International Labour Standards has always been positive. The ILO instruments have provided guidelines and useful framework for the evolution of legislative and administrative measures for the protection and advancement of the interests of workers.

Mr Chairperson, India has great faith in principles and practices of ILO. The time has now come for all member states of ILO to pledge their support to ensure policy coherence for a social dimension in globalisation with decent work as the overriding policy objective.

Director not liable for all wrongs in a Company: SC

A director of a firm cannot be held liable for the wrongs committed by his company unless it is proved that he was involved in the irregularities, the Supreme Court has held. This court has repeatedly held that in case of a director, complaint should specifically spell out how and in what manner the director was in charge of or was responsible to the accused company for conduct of its business and mere bald statement that he or she was in-charge of and was responsible to the company for conduct of its business is not sufficient, a bench of justices P Sathasivam and Jasti Chelameswar said. The court passed the order while quashing criminal proceedings against a former director of Apparel Export Promotion Council in a cheque bounce case. The bench also held that a former director cannot be prosecuted in a case of bouncing of a cheque if it has been issued by the company after he ceased to be on its board member. The court set aside the Delhi High Court order which had dismissed the plea of the director for quashing the criminal proceedings. The counsel for the petitioner had pleaded that the director had ceased to be part of the company on the date when the cheque was issued by the firm and that the appelant could not be held liable for it getting dishonoured. We are unable to accept the reasoning of the high court and we are satisfied that the appellant has made out a case for quashing the criminal proceedings, the bench said, adding that it was established that the petitioner had resigned from the company as a director in 1998 while the cheque had been issued by it in 2004.

The 44th Indian Labour Conference recommends on taking up the norms on fixing the minimum wages decided at the 15th ILC

The Union Labour & Employment Minister Shri Mallikarjun Kharge has informed the Rajya Sabha that the norms recommended by the Indian Labour Conference (ILC), held in 1957 are taken into account while fixing the minimum wages. These are as follows: -

a) 3 consumption units for one earner.

b) Minimum food requirements of 2700 calories per average Indian adult.

c) Clothing requirements of 72 yards per annum per family.

d) Rent corresponding to the minimum area provided for under Government’s Industrial Housing Scheme.

e) Fuel, Lighting and other miscellaneous items of expe nditure to constitute 20% of the total minimum wage.

Subsequently the Hon’ble Supreme Court delivered a judgement in the case of Reptakos& Co. Vs. its workers that the children’s education, medical requirement, minimum recreation including festivals/ceremonies, provision for old age, marriage etc. should constitute 25% of the minimum wage and used as a guide in fixation of minimum wages. The State Governments have been requested from time to time to keep the above norms and judicial pronouncement in view while fixing/revising the minimum wages.

The variation of minimum wages between the States is due to differences in socio-economic and agro-climatic conditions, prices of essential commodities, paying capacity, productivity and local conditions influencing the wage rate. The regional disparity in minimum wages is also attributed to the fact that both the Central and State Governments are the appropriate Government to fix, revise and enforce minimum wages in scheduled employments in their respective jurisdictions under the Act.

The recently held 44th Indian Labour Conference, inter alia, discussed the issue of amendment of the Minimum Wages Act and made certain recommendations for incorporation in the amendment proposals. The recommendations were mainly on national minimum wage, enhancement of penal provisions, adoption of VDA in all States/UTs, etc. The details of the recommendations are given in Annexure- I.

Annexure- I

A Conference Committee of the 44th session of ILC was constituted to discuss Agenda Item No.(i) concerning Minimum Wages and related issues. These issues, inter alia, include norms for fixation/revision of minimum rates of wages, Variable Dearness Allowance(VDA), National Floor Level Minimum Wages etc. On the basis of detailed discussion, the following points emerged.

1. There was broad consensus that the Government may fix minimum wages as per the norms/ criteria recommended by the 15th ILC (1957) and the directions of the Hon’ble Supreme Court (Reptakos& Co. Vs. its workers Union) 1992. The Government may take necessary steps accordingly.

2. It was suggested that the Minimum Wages Act should cover all employments and the existing restriction for its applicability on the scheduled employments only should be deleted. This will also help India ratify ILO Convention No.131.

3. It was broadly agreed that there should be national minimum wages applicable to all employments throughout the country.

4. It was pointed out that the payment to the apprentices should be treated differently from the other categories.

5. The Committee noted that at present there are 12 States/UTs who have not adopted VDA. There was consensus that all States/UTs should adopt VDA.

6. It was also recommended that the payment of minimum wages should be done through Banks/Post Offices etc.

7. It was felt that the enforcing agencies should not be given the power of adjudication and, therefore, this proposal should be re-examined.

8. Regarding penal provision for violation of the Act, it was felt that imprisonment clause under Section 22 and 22A is harsh to the employer and may be re-examined. Further, it was felt that non-maintenance of registers should not attract imprisonment.

9. The proposal of paying different minimum wages in respect of same employment either in the Centre or in the States should be done away with.

Interest Subsidy Scheme to provide full interest subsidy on educational loans taken by students belonging to economically weaker sections

Ministry of Human Resource Development has formulated an Interest Subsidy Scheme to provide full interest subsidy during the period of moratorium on educational loans taken by students belonging to economically weaker sections from scheduled banks under the Model Educational Loan Scheme of the Indian Banks’ Association (IBA) for pursuing any of the approved courses of studies in technical and professional streams from recognized institutions in India.

Students whose parental income is less than Rs. 4.5 lakhs per annum and are enrolled in recognized technical & professional courses, after class twelfth, in India are eligible under the scheme. Educational loans of such students disbursed from 1st April 2009, irrespective of date of sanction are eligible for interest subsidy.

Use of International Debit Cards/Store Value Cards/Charge Cards/Smart Cards by Resident Indians while on a visit outside India

RBI/2011-12/102

A. P. (DIR Series) Circular No.102

To

All Authorised Persons in Foreign Exchange

Madam/ Sir,

Use of International Debit Cards/Store Value Cards/Charge Cards/Smart
Cards by Resident Indians while on a visit outside India

Attention of all Authorised Persons, who are authorised to issue foreign currency pre-paid cards to resident Indians visiting outside India, is invited to Para B(5) of the A. P. (DIR Series) Circular No. 46 dated June 14, 2005, in terms of which the use of such cards is limited to permissible current account transactions and subject to the prescribed limits under the Foreign Exchange Management (Current Account Transactions) Rules, 2000, as amended from time to time.

2. As per the practice followed by issuers, resident Indians who purchase their travel cards, are permitted refund of the unutilised foreign exchange balance only after 10 days from the date of last transaction and accordingly, this condition is stated in the “user guide”. Since these cards are expected to act as substitutes for cash/Travellers Cheques, the facilities available to the user will have to be similar.

3. Accordingly, all such Authorised Persons shall redeem the unutilized balance outstanding in the cards immediately upon request by the resident Indians to whom the cards are issued subject to retention of:-.

1. The amounts that are authorised and remain unclaimed/ not settled by the acquirers as of the date of redemption till the completion of the respective settlement cycle;
2. A small balance not exceeding US$ 100, for meeting any pipeline transactions till the completion of the respective settlement cycle; and
3. Transaction fees/service tax payable in India in Rupees.

For the amounts that are authorised but unclaimed/ not settled by the acquirer, the issuer of such cards can hold such amounts until such transactions are processed/ settled by the acquirers within the prescribed settlement timeframe.

4. All the other instructions contained in the above circular dated June 14, 2005, as amended from time to time, shall remain unchanged.

5. Authorised Persons may bring the contents of this circular to the notice of their constituents and customers concerned.

6. The directions contained in this circular have been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.

Yours faithfully,

(Rudra Narayan Kar) 
Chief General Manager

Relief and Savings bonds-Compensation structure for delay in payment of interest and/or principal

RBI/2011-12/491 

DGBA.CDD.H-6614 /13.01.298/2011-12

April 10, 2012

The Chairman and Managing Director/Managing Director
Head Office (Government Accounts Department)
State Bank of India and Associates,
All Nationalized Banks
(excluding Punjab and Sind Bank & Andhra Bank),
IDBI Bank Ltd. /ICICI Bank Ltd./Axis Bank Ltd./HDFC Bank Ltd.,
SHCIL

Dear Sir/Madam,

Relief and Savings bonds-Compensation structure for delay in payment of interest and/or principal

Please refer to our circulars RBI/2005/477 and RBI/2011-12/294 dated May 20, 2005 and December 09, 2011 respectively, on the above subject. As per the circular dated December 09, 2011 it was advised that agency banks may compensate an investor in Relief/Savings bonds, for the financial loss due to late receipt/delayed credit of interest warrants/maturity value, at their own savings bank rate for respective amounts (i.e. upto ` 1 lakh and over ` 1 lakh) without any discrimination.

2. Under the present scenario of deregulated interest rate on the savings bank account, in order to avoid ambiguity and variation in compensation rates across different agency banks, these instructions have been reviewed. It has now been decided that with effect from the date of this circular, an agency bank shall compensate an investor in Relief/Savings bonds, for the financial loss due to late receipt/delayed credit of interest warrants/maturity value, at a fixed rate of 8% per annum.

3. It may be added that the Reserve Bank may review the above compensation rate as and when considered appropriate.

4. Please acknowledge receipt.

Yours faithfully,

(Sangeeta Lalwani)
Deputy General Manager

National Floor Level Minimum Wage recommended by NCRL

In order to have a uniform wage structure and to reduce the disparity in minimum wages across the country, the concept of National Floor Level Minimum Wage (NFLMW) was mooted on the basis of the recommendations of the National Commission on Rural Labour (NCRL) in 1991. Keeping in view the recommendation of NCRL and taking into account the rise in price indices, the NFLMW was initially fixed at Rs.35/- per day in 1996.

On the basis of increase in the Consumer Price Index (Industrial Worker), the Central Government has revised the NFLMW from time to time. The NFLMW was Rs.80/- w. e. f. 01.09.2007. The same was raised to Rs.100/- from 01.11.2009 and again raised to Rs.115/- with effect from 01.04.2011.

Since NFLMW is a non-statutory measure, the Ministry of Labour & Employment has requested to all the States/UT Governments that in none of the scheduled employments, the minimum wages should be less than the NFLMW. At present, there is also a proposal to amend the Minimum Wages Act, 1948 to make the NFLMW statutory.

Small Savings Schemes – Public Provident Fund Scheme, 1968 & Senior Citizens Savings Scheme, 2004 – Revision of interest rates

Small Savings Schemes – Public Provident Fund Scheme, 1968 (PPF, 1968) and Senior Citizens Savings Scheme, 2004 (SCSS, 2004) – Revision of interest rates

Circular DGBA.CDD. No. H- 6506/15.02.001/2011-12, dated 3-4-2012

Please refer to our circular RBI/2011-12/359, dated January 20, 2012 regarding interest rates on small savings schemes, wherein it was indicated that as per Government’s decision on revision of interest on small savings schemes, the interest rates on various small savings schemes for every financial year will be notified by the Government before April 1st of that year.

2. The Government of India have vide their Office Memorandum (OM) No. 6-1/2011-NS.II (Pt.), dated March 26, 2012, advised the rate of interest on various small savings schemes for the financial year 2012-13. Accordingly, the rates of interest on PPF, 1968 and SCSS, 2004 for the financial year 2012-13 effective from April 1, 2012, on the basis of the interest compounding/payment built-in in the schemes, will be as under:

Scheme	Rate of interest w.e.f. 01.12.2011	Rate of interest w.e.f. 01.04.2012
5 year SCSS, 2004	9.0% p.a	9.3% p.a
PPF, 1968	8.6% p.a	8.8% p.a

3. The contents of this circular may be brought to the notice of the branches of your bank operating the PPF, 1968 and SCSS, 2004 schemes. These should also be displayed on the notice boards of your branches for information of the PPF, 1968 and SCSS, 2004 subscribers.