- A judgement of the Supreme Court of India [L.R. Patil v. Gulbarga University, 2023 SCC OnLine SC 1110] rendered in the context of an employee of a Govt run University makes the concept of 'lien' in the Indian context much more clearer. It has been held that the lien of the employee on the previous post does not expire till his 'appointment in the new post' is confirmed on expiration of the period of probation. It has also been noted that there is no need to resign from the previous post when moving from one post to another in Govt as long as he had applied for new post through proper channel.
- This decision, though rendered in the context of an Indian Civil Servant, throws further light on the concept of 'lien' as understood by the Indian Judiciary and hence should be a useful read while drafting / interpreting the 'secondment' agreements of employees of Parent cos sent on deputation to their Indian AEs (Associated Enterprise).
- It would be worth recollecting the ratio of the judgements of the Supreme Court of India in DIT (International Taxation) v. Morgan Stanley & Co. Inc., (2007) 7 SCC 1 and that of Delhi High Court in Centrica India Offshore Pvtl. Ltd. v. Income Tax-I, 2014 SCC OnLine Del 2739, wherein it has been held that an employee of a Parent Co, when deputed to its Indian AE, does not become an employee of the Indian AE as, such a deputationist holds 'lien' on his employment with the Parent Co and hence a Service PE can emerge in such a scenario.
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