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March 25, 2021 0Comments 56Views

Efficiency drive shapes legal tech priorities in UK financial services

By LE Desk March 25: UK financial services institutions are thinking more strategically about their...

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March 18, 2021 0Comments 46Views

The Big Four & AI: The rising stakes in the legal tech market

March 18: For some time now, the Big Four accounting firms have had their sights...

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March 12, 2021 0Comments 73Views

UK’s leading legal news website launches Legal Tech podcast

By LE Staff England, March 12: UK-based Legal Futures, a leading news resource tracking the...

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March 12, 2021 0Comments 33Views

ASG LegalTech launches new parent company brand with four leading legal software products under one roof

January 9: New York-based ASG LegalTech, a suite of legal technology products backed by Alpine...

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March 12, 2021 0Comments 34Views

Simple tech tools transform lawyers’ work

January 15: From virtual reality collaborations to robots that write contracts, some of the technology...

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March 12, 2021 0Comments 40Views

Legaltech startup Lupl secures USD 14m funding ahead of full launch this year

January 23: Legaltech startup Lupl has secured a USD 14 million funding round and appointed...

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March 12, 2021 0Comments 39Views

What to expect from Legal Tech this year

January 30: With 713 per cent growth, 2018 was a record year for legal techinvestments....

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March 12, 2021 0Comments 17Views

US’ Legal Tech education group joins hands with leading e-discovery association

February 6: The Association of Certified E-Discovery Specialists (ACEDS), theworld’s leading e-discovery training and certification...

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March 11, 2021 0Comments 43Views

Legal Tech market a USD 15.9 billion industry: study

February 13: Legal tech refers to technologies and software that substantially change the way we...

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March 11, 2021 0Comments 51Views

AI based translation software inaugurated by Bangladesh Supreme Court

February 20: The Bangladesh Supreme Court launched the Artificial Intelligence (AI) based translation software ‘Amar...

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Legal options available to a renewable generator when the distribution licensee does not pay – By Surabhi Pandey

3 days ago 0Comments 51Views

Despite the mandate to promote clean energy, renewable generators have not been paid dues running into several hundred crores by distribution companies.

India has emerged as a key player in the world’s quest for cleaner energy. We have set an ambitious target of 450 GW of renewable energy capacity by 2030. With the promise of a growing market and a statutorily organised regulatory framework, we have succeeded in gaining the private sector’s trust and thereby the investment. The Electricity Act, 2003 and the policies thereunder, with the objective to promote a clean environment, mandate that all distribution licensees (discoms) procure a specified percentage of power requirements from renewable energy sources. However, like leprechaun’s gold, India’s plan to promote renewables may amount to nought if the State-owned discoms do not pay the generators.

The non-payment of dues running into hundreds of crores has put the entire market at unease and created a trust deficit especially when Power Purchase Agreements (PPA) are executed mostly pursuant to competitive bidding processes and always with the approval of the regulatory commissions.

The aggregate losses of the discoms in India are amongst the highest in the world. The fate of the private investors is intertwined with that of the financially distressed discoms. The government, conscious of the problem, is making efforts to remedy the situation. It has recently notified the Electricity (Late Payment Surcharge) Rules, 2021, to provide enhanced rate of Late Payment Surcharge (LPS) for each succeeding month, debarment of the discoms from procuring power from a power exchange till payment of unpaid bills after the expiry of seven months from the due date and for adjustment of all payments made by the discoms firstly towards LPS.

The Government is also proposing to amend The Electricity Act inter alia to delicense the discoms, mandate a payment security mechanism to the generators, and provide a much higher penalty for non-compliance of directions of the regulatory commissions.

Given that the amendments have not yet been notified, let’s examine the current legal remedies available to the generators.

The Electricity Act has created specialized forums, State Electricity Regulatory Commissions (SERC) in the States, which have wide powers to regulate the sale and purchase of electricity and to enforce its orders and directions. However, despite the specific timelines provided in the PPAs as stipulated in the Tariff Orders, the discoms have failed to make payments. In almost all cases, the discoms insist on making payments only after the generators waive off the LPS amounting to several crores. Such waivers besides defeating the purpose of LPS provision in the Tariff Orders and the PPAs, bolster continuous defaults.

The SERCs customarily do not take stringent action against discoms. Even where penalties are imposed, they are usually nominal even in cases of continuous non-compliance. One Commission has even transferred such disputes to arbitration, prolonging the delay in recovery of admitted dues, spooking the investors. The generators tied to the discoms by PPAs for terms ranging between 10 to 25 years do not press for harsh sanctions to avoid provoking the discoms.

In such a scenario, the SERCs ought to come to the rescue of the generators and perform their mandate to promote renewables and ensure compliance with the PPAs executed between the generators and the discoms in terms of the Tariff Orders. Recently in petitions filed by a multitude of RE generators against the discom for non-payment of dues and for non-payment of the LPS in terms of the PPAs, the Rajasthan Electricity Regulatory Commission (RERC) has directed the discoms to make arrangements to discharge their liabilities under the contracts. The order has resuscitated the confidence of renewable generators in the State regulator.

One option the generators could take recourse to is approaching the Appellate Tribunal of Electricity (Tribunal) in appellate proceedings challenging the SERCs’ orders in case the orders have proved ineffectual in the recovery of dues. The recent orders of the Tribunal indicate that it is unlikely to accept discoms’ financial difficulty as a justification for non-payment of admitted dues. Once the Tribunal passes directions reprimanding such delays, all Commissions will be bound to adjudicate similar matters in terms of the law settled by the Tribunal.

The Tribunal can also be petitioned to direct all SERCs to perform their functions under the Act. The generators may seek directions to the SERCs to inquire whether the funds allocated for the purchase of renewable power in the orders approving annual revenue requirements of the discoms have been utilized for that purpose. With assistance from the SERCs, the Tribunal may formulate a scheme to prevent future delays in payments by the discoms.

The discom’s action of prioritizing payments to thermal generators, even to those from which no energy is being drawn, over the renewables, fails the test of reasonable classification and is likely to be found to violate Article 14 of the Constitution. In view of the same, the generators could consider approaching the High Courts which have wide powers under writ jurisdiction, but given the high pendency of matters, the High Courts may be inclined to send the generators to the SERCs being the alternative remedy.

Generators would do well to remember that the way out of this labyrinth is not through the beguiling short cuts but by patiently following the flaxen thread of remedies given in the Electricity Act.

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The author is a Senior Associate at Urja Law Chambers. She has experience in the energy sector and has mostly been representing generators in State Commissions/ Central Commissions, APTEL, and the High Courts. She also handles the firm’s arbitration matters.

Columns

Dispute Management Strategy For Large Corporates: Forecast 2021 – By Archana Balasubramanian

April 5, 2021 0Comments 222Views

‘Commercial disputes’ is a complex unpredictable risk that is a constant in the life cycle of large corporates. The larger a company the greater the potential for it to suffer company-wide damage in a flash through an unmitigated unexpected dispute.

While the complexity always existed, in recent years such disputes have become even more volatile given the increasing complexities in the business ecosystems. Increasing number of non-Indian commercial entities have begun getting involved in disputes in India. Myriad sectoral regulators have started examining these disputes from a regulatory standpoint, thus inevitably expanding the scope of such disputes. Technological advancements and data vulnerability have also contributed to the complexity. The single biggest lesson that has emerged in risk management is that dynamism is the key. When looking at companies’ pre-dispute strategy, the management must have regard to the long-term objectives of the company and then pick the battles which are most appropriate given the organisation goals.

As disputes take on a life of their own, mitigation and avoidance has become synonymous with continuing adaptation of dispute strategy.

Avoidance: The first pillar of risk mitigation

Litigation risks frequently emerge from day-to-day business activities, including ESG issues, employer/employee disputes. intellectual property disputes, regulatory investigations.

The first part of a sound pre-dispute strategy builds itself on planning for five areas of commercial risk at the start of the commercial relationship: transaction risk, counterparty risk, product risk, process risk and regulatory risk.

Transaction Risk and Counterparty Risk

Transactions such as large M&A, structured finance deals, real estate investments among others attract greater risk. The strategy in these would be to work on clear contractual protections, defining risks in writing at the very outset. Additionally, indemnity clauses and insurance coverage that are not in conflict with the contractual provisions, fortifies risk mitigation in such cases. It is important to remember that multiple lesser claims together could in some cases be more damaging that any one large claim by itself.

Avoidance takes a different turn in international commercial transactions where it would become imperative to formulate a complete plan of action starting from review of offshore judicial approaches for each jurisdiction associated with the transaction and business. Certain jurisdictions have unevolved judicial systems or have highly evolved intricate judicial systems, in both cases presenting difficulty in obtaining and enforcing awards. Incorporating appropriate choice-of-law, jurisdiction and arbitration clauses is the first step in reducing such uncertainty.

Product and Process Risk

At a corporate level, the first step consumer litigation would involve simplifying standard terms and conditions. Key SOPs in relation to consumer protection based industrial regulations should be created at the start – with a first-time right approach.

Exposure to product risk asks for implementing sound quality management systems, product recall and crisis management plans, clear product instructions, marketing communications involvement, warnings displayed on products, contractual terms and insurance.

Vicarious liability for product risk for offshore parents can be minimised by giving the subsidiary full operational autonomy. Planning to select local counsel to advise on inter-corporate liability will help implement requisite legal structures and procedures in such cases. Corporates should evolve internal or external mechanism of multi-disciplinary screening of decisions of which legal counsel should be an integral part.

Regulatory Risk

Certain products and sectors carry the additional burden of being subject to political whims especially in developing markets with regional conflicts or unstable political strife. While doing business in off-shore jurisdictions, care must be taken to review and understand evolving taxation laws, requirement of obtaining permissions and range of red-tapism.

Protections in terms of obtaining local partner support in capital intensive business and amoritisation of risk through phasing capital expenditure – particularly real estate expenditure — is most advisable.

Resolution: Straight-forward process clauses

Fundamental strategy of management in cases where dispute is unavoidable should be to firstly steer clear of corporate litigation under unfamiliar substantive law and procedure, inconvenient location, language barriers, running out of representation options, excessive delays, restrictive or excessive awards, biased tribunals and difficult enforcement.

This would not be possible to achieve after the dispute situation arises. Hence, it is imperative at the time of drafting the relevant transaction documents to incorporate a straightforward dispute resolution mechanism in all contracts, or a combination of formal judicial or quasi-judicial and informal mechanisms. It is recommended that contracts provide for dispute resolution through arbitration or in the courts of a chosen jurisdiction. This would be applicable even where the contract provides a more informal procedure, such as mediation, as a precursor.

Most developed legal systems respect an express choice of law in a commercial contract. But if it is obvious that the choice of law was with the deliberate intention to avoid a mandatory provision, it may not be allowed. In the absence of an express choice of governing law, the court in the jurisdiction where the action was commenced will decide which law to apply to the contract according to that jurisdiction’s principles.

Coordination between local counsel and a trusted legal advisor of the organisation – someone aligned with management goals and perspectives is crucial in resolution.

Settlement and resolution through mediation particularly in non-APAC jurisdictions would be the most desired outcome without proceeding to dispute.

Obtaining guarantees from viable and substantial related parties of the contracting party in the same or different jurisdiction would be a good strategy in the event of an entry into the market through a smaller or newer entity.

Dynamism: Re-thinking and Re-aligning Strategy

Litigation management is an exercise with a life of its own. The course of the litigation or the broader context to the litigation — whichever way one looks at it — would evolve with the changing business ecosystems. Therefore, scoping out the plan is a dynamic evolutionary process.

It is advisable for businesses to periodically revisit their litigation strategies. The strategy needs to be examined to ensure that it remains applicable in the circumstances of the case and general business ecosystem in which the organisation operates. Simultaneously an examination of the viability of litigation in the commercial and operational context of the business needs to be examined by the team that has the foresight of overall business vision and growth strategy.

Elongated litigation and cash flow concerns were always strong triggers to revisit strategies but more so in the frugal post pandemic ecosystem.

Timelines and costs are also factors in themselves to pivot a change in some of the positions underpinning the original strategy.

Conclusion

Businesses and their legal advisors would do well to align their strategies towards avoidance as the first step, resolution and minimising effect of litigation. Constant re-evaluation of the basis of litigating in tandem with the business growth path would be most desired in the present unpredictable ecosystem.

Minimal cost through local advocates or boutique firms would go a long way in helping corporations to complete the marathon and avoid burning out in a short sprint.

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Archana Balasubramanian is the founding partner of Agama Law Associates, a Mumbai-based corporate law firm which she started in 2014. She specialises in general corporate commercial transaction and advisory as well as deep sectoral expertise across manufacturing, logistics, media, pharmaceuticals, financial services, shipping, real estate, technology, engineering, infrastructure and health.

Columns

Non-Compliance of Pre-Institution Mediation under Commercial Courts Act Not a Ground for Rejection of Plaint : Calcutta HC – By Vikrant Shetty

March 30, 2021 0Comments 34Views

Background

Section 12A of the Commercial Courts Act, 2015 (“Act”) had made initiation of mediation compulsory prior to filing a commercial suit, except in cases where the plaintiff was seeking an urgent interim relief. Pursuant thereto the Pre-Institution Mediation and Settlement Rules, 2018 (“Rules”) were framed and brought into effect from 3^rd July 2018.

The Hon’ble Calcutta High Court on 22^nd February 2021, passed a judgment in the case of M/s. Dhanbad Fuels Ltd. v. Union of India & Ors. (C.O. No. 1678 of 2020) holding that if a plaintiff did not follow the mediation procedure prescribed under the Act and Rules prior to filing of the Suit, it was not a ground for rejection of Plaint under O. VII Rule 11 of the Code of Civil Procedure.

Brief Facts of the Case

In the said matter before the Hon’ble Calcutta High Court, the Plaintiff had in August 2019 filed a commercial suit for recovery of money before the Commercial Court at Alipore. The Defendant filed an application under O. VII Rule 11 of the Code for rejection of the Plaint. The Commercial Court at Alipore dismissed the said application and appointed a lawyer as mediator to conduct mediation during the pendency of the Suit. A Revisional Application was filed by the Orig. Defendant filed before the Hon’ble Calcutta High Court challenging the said order of dismissal.

The Orig. Plaintiff submitted that at the time of institution of the suit i.e in August 2019 there were no trained mediators in any district for settlement of commercial disputes as contemplated under the Act and the Rules and neither was there appropriate infrastructure for the same, which fact was accepted by the Hon’ble Court.

Held

The learned Single Judge held that “The object of Section 12A was to expedite resolution of disputes in the ease of doing business and not to scuttle the right of a litigant to approach the court. A party cannot be denied the opportunity of participating in the justice dispensation system.”

Therefore, in tune with this reasoning, the Court ordered that the suit be kept in abeyance for seven months from or till the report of the mediator was filed, whichever was earlier. However, instead of approaching the lawyer appointed as a mediator by the lower court, the High Court directed the parties to approach the State Legal Services Authority in accordance with the Rules.

Concluding Remarks

The author must point out that while the judgment in M/s Dhanbad Fuels does provide relief to those who were unable to invoke pre-institution mediation on the grounds of lack of infrastructure at the time, there is a bit of ambiguity on whether the plaint could still be rejected if a plaintiff filed the suit after the relevant infrastructure was in place.

On the one hand the Court does note that “The situation would have been otherwise, had there been proper infrastructure in place” but it also goes on to state in very wide terms that “..the plaint should not be rejected at this stage on the ground of non-compliance with Section 12A of the said Act when the plaintiff can still be directed to comply with the provisions of law by keeping the suit in abeyance.”

It would definitely be interesting to see how other High Courts or the Apex Court interpret section 12A of the Act particularly vis-à-vis Order VII Rule 11 of the Code.

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Vikrant D. Shetty, is Partner at Taurus Legal, Advocates and Solicitors.

Columns

Assessing the Power of the Court of Session to Pass Interim Relief during the Pendency of Appeal under the Domestic Violence Act, 2005 – By Pawan Reley and Sajal Awasthi

March 19, 2021 0Comments 275Views

It is a common practice in District Courts that whenever the party (Specifically Husband) gets any final or interim order passed by the Magistrate against him under the Protection of Women from Domestic Violence Act, 2005 (Hereinafter “the DV Act”), he immediately rushes to file an appeal against the said order before the Court of Session under Section 29. Section 29 provides that an appeal shall lie to the Court of Session within thirty days from the date on which the order made by the Magistrate is served on the aggrieved person or the respondent, as the case may be, whichever is later. It is to be noted that with this appeal, the husband also files an application seeking stay on execution of the order of the Magistrate during the pendency of the appeal”. Here, the Court of Session, after hearing the flamboyant arguments of the Counsel and without self-contemplation of its vires to pass order for interim relief, passes the interim order for staying execution of the order of Magistrate during the pendency of appeal under Section 29.

Thus, the substantial question of law in relation to Section 29 of DV Act, that can eminently be emanated here is:

“Whether the Court of Session has any power under Section 29 of the DV Act to pass any interim order granting interim relief to any party during the pendency of the appeal?”

And in particular:

“Whether the Court of Session, during the pendency of the appeal under Section 29 of the DV Act, has any power to stay either interim or final order of maintenance passed by the Magistrate?”

Since there are hardly any judgement in which the said questions have been adjudicated, thus it incumbent on the authors to scan the anatomy of the said questions. The said question seems easy from outside since it has been the general practice in the District court to file appeal against the interim order and get stay from the Session Court. However, answer to the said question has many sheds. It has always been difficult to answer the question that whether power of the court to pass the order of final relief automatically includes the implied power to stay the order passed by lower court?

There are various judgements speaking on both the sides. There are some judgements which have held that power of the court to pass final relief automatically implies the power to provide interim relief. However, some judgements, have held that if court or tribunal is the creature of the statute, and if statute does not confer express power on the court to pass order of interim relief then the court will possess no power to pass the same.

Judgements which held that Court has implied power to grant stay/interim relief:

In Polini v. Grey, [1879] 12 Ch. D. 438 Lord Jessel M.R. said about the powers of the Court of Appeal to grant stay at page 443:

“It appears to me on principle that the Court ought to possess that jurisdiction, because the principle which underlies all orders for the preservation of property pending litigation is this, that the successful party, is to reap the fruits of that litigation, and not obtain merely a barren success. That principle, as it appears to me, applies as much to the Court of first instance before the first trial, and to the Court of Appeal before the second trial, as to. the Court of last instance before the hearing of the final appeal”.

The Hon’ble Supreme Court in the case of ITO, Cannanore vs. M.K. Mohammad Kunhi, AIR 1969 SC 430 held that the income tax appellate tribunal has implied powers to grant stay, although no such power has been expressly granted to it by the Income Tax Act. It further held that It could well be said that when s. 254 confers appellate jurisdiction, it impliedly grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution and that the statutory power carries with it the duty in proper cases to make such orders for staying proceedings as will prevent the appeal if successful from being rendered nugatory.

The Hon’ble Supreme Court in the case of Savitri vs. Govind Singh Rawat AIR 1986 SC 984 held that the power conferred on the Magistrate under Section 125Cr.P.C. to grant maintenance to the wife implies the power to grant interim maintenance during the pendency of the proceeding, otherwise she may starve during this period.

However, one cannot lose sight of the law laid down in the Sakiri Vasu vs State of UP, (2008) 2 SCC 409

“It is well-settled that when a power is given to an authority to do something it includes such incidental or implied powers which would ensure the proper doing of that thing. In other words, when any power is expressly granted by the statute, there is impliedly included in the grant, even without special mention, every power and every control the denial of which would render the grant itself ineffective. Thus where an Act confers jurisdiction it impliedly also grants the power of doing all such acts or employ such means as are essentially necessary to its execution.”

Judgements which held that Court has no power to grant stay/interim relief if not specifically conferred by statue:

The Hon’ble Supreme Court in the case of Bindeshwari Prasad Singh v. Kali Singh, (1977) 1 SCC 57, which was a decision as to the jurisdiction of a Magistrate to review or recall his order, held that in the absence of any specific power in the Code of Criminal Procedure, the Magistrate was not entitled to exercise such a power. It was also held that unlike Section 151 of the Civil Procedure Code, which vests the civil courts and certain tribunals with inherent powers, the subordinate criminal courts has no such inherent power, since there is no provision in the Code of Criminal Procedure empowering such powers.

The Hon’ble Supreme Court in the case of Morgan Stanley Mutual Fund Vs. Kartick Das [(1994) 4 SCC 225], was considering the scope of the provisions of the Consumer Protection Act, 1986. On construction of Section 14 of the said Act, this Court came to the conclusion that there was no power under the Act to grant any interim relief, even of an ad interim nature. The Hon’ble Apex court upon deciding the matter, observed as follows:

“……… If the jurisdiction of the Forum to grant relief is confined to the four clauses mentioned under Section 14, it passes our comprehension as to how an interim injunction could ever be granted disregarding even the balance of convenience.”

Also, the reference can be sought to the decision of the Hon’ble Punjab and Haryana High Court in Sham lal v. State Election Commission, AIR 1997 P&H 164, wherein, the Court observed that:

“If the legislature had so desired, nothing prevented it from conferring statutory power upon the Election Tribunal to grant interim stay or injunction or restraint order during the pendency of the election petition.”

Accordingly, the Court went on to hold that the Election Tribunal did not have the power to pass any order of injunction or stay which would impede the implementation of the result of election.

The Hon’ble Supreme Court in the case of Super Cassetts Industries Ltd vs Music Broadcast Pvt. Ltd, AIR 2012 SC 2144

39. As has been held by this Court in innumerable cases, a Tribunal is a creature of Statute and can exercise only such powers as are vested in it by the Statute…”

It is to be noted to the said reasoning, Chelameswar, J. concurring with the bench added the following:

4. In the context of Courts adjudicating civil disputes, the jurisdiction and powers necessary to effectively exercise the jurisdiction, such as, securing the presence of defendants / respondents or witnesses, granting of interim orders etc., and the method and manner of enforcement of a decision or a decree, are matters elaborately dealt by the Code of Civil Procedure. Similarly, the Code of Criminal Procedure contains provisions necessary for the exercise of the jurisdiction of the Criminal Courts. While the Code of Civil Procedure, under Section 151, recognizes the existence of inherent powers in all Civil Courts, the Code of Criminal Procedure recognises all such inherent powers only in the High Court under Section 482.

5. Therefore, the jurisdiction and authority of not only the Tribunals, but also the Courts are structured by the statutory grants and limitations.

Analysis of Section 29 of DV Act: Whether it contains the implied power to grant stay:

Before examining the said question, it is inevitable to cast a shadow on Section 29 of the DV Act:

Section 29: Appeal.—There shall lie an appeal to the Court of Session within thirty days from the date on which the order made by the Magistrate is served on the aggrieved person or the respondent, as the case may be, whichever is later.

Section 29 makes it apparent that appeal can lie to Court of Session, either against the final or interim order passed by the Magistrate under the DV Act. However, it is silent upon the power of the Court of Session to pass any interim order during the course of pending appeal against the order passed by Magistrate under the DV Act while such power is expressly conferred on the Magistrate under Section 23.

A correct answer to both the stated questions would depend upon how the DV Act of 2005 and the Code of Criminal Procedure, 1973 is to be viewed and interpreted. It is relevant to note here that the DV Act constitute a complete code for the matters arising under it.

The Hon’ble Supreme Court in the case of Shalu Ojha v. Prashant Ojha, (2015) 2 SCC 99 doubted the power of the Session Court in granting the interim relief in any form though did not adjudicate the issue in detail because the same was not raised by the parties in that case. The extract of the relevant observation of the Hon’ble Supreme Court in the Shalu Ojha case is provided hereinbelow:

“Questioning the correctness of the Magistrate’s order in granting the maintenance of Rs.2.5 lakhs per month the respondent carried the matter in appeal under Section 29 to the Sessions Court and sought stay of the execution of the order of the Magistrate during the pendency of the appeal. Whether the Sessions Court in exercise of its jurisdiction under Section 29 of the Act has any power to pass interim orders staying the execution of the order appealed before it is a matter to be examined in an appropriate case. We only note that there is no express grant of power conferred on the Sessions Court while such power is expressly conferred on the Magistrate under Section 23. Apart from that, the power to grant interim orders is not always inherent in every Court. Such powers are either expressly conferred or implied in certain circumstances. This Court in Super Cassettes Industries Limited v. Music Broadcast Private Limited, (2012) 5 SCC 488, examined this question in detail. At any rate, we do not propose to decide whether the Sessions Court has the power to grant interim order such as the one sought by the respondent herein during the pendency of his appeal, for that issue has not been argued before us.”

It is relevant to note that there are two types of courts. One is he court which are the creation of the Constitution and Second the courts which are the creation of the Statute. Courts which are the creation of Constitution possess inherent power in them even if the same has not been conferred by any statute. However, Court which are creation of Statute does not contain the inherent power but only limited implied power/incidental power unless the same has specifically conferred on them by the Statute. Though these implied powers/ incidental powers can only be confined to grant adjournment, order the effective investigation in case of Section 156 (3) CrPC, to hear the early hearing applications so as to support the main case. However, the same cannot go to the extent of passing the order of stay. It is to be noted that Court of Session is the creature of statute. It is a well settled law that any court or tribunal which is a creature of statute does not get any implied power automatically until the same has been conferred on it by the said statute either expressly or in form of inherent power. The Domestic Violence Act vide Section 23 postulates power to grant interim relief only upon the magistrate, therefore, the Court of Session cannot assume the said power and grant any sort of interim relief under Section 29 of the Act against the interim or final order passed by the Magistrate.

Thus, an analysis of the aforementioned decisions of the Apex court and the principles of statutory interpretation reveals that the Session Court, in the absence of any express conferment of power or of inherent power by statute i.e. either the DV Act or the Code of Criminal Procedure, 1973, cannot grant an interim relief under Section 29 of the DV Act. It is submitted that the Session Court is a Court created under Section 9 of the CrPC, and being a creature of statute, its powers are confined to the powers given to it under general Code of Criminal Procedure, 1973 and special enactments like the DV Act for present purpose. It is relevant to note that Section 29 conferred certain limited powers to Session Court to hear the appeal from the order passed by the Magistrate. The same is procedural in nature and does not vest the Session Court with any kind of substantive power to grant interim orders under Section 29 of the DV Act. It is emphasised that if the legislature had so desired, nothing prevented it from conferring the power upon the Court of Session to grant interim relief.

Though the law is yet not settled due to non-adjudication of the said issue in any of the cases and the Court of Session is still using the power to grant interim relief to parties during the pendency of appeal under Section 29. However, the authors have fond hope that the same will be settled soon by the Hon’ble Supreme Court in the interest of justice.

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Pawan Reley is Advocate, Supreme Court of India

Sajal Awasthi is Advocate, Delhi High Court

Columns

The Indian VC Industry: How it Weathered the Covid Storm and Came Out Stronger – By Priya Makhijani & Archana Rajaram

March 18, 2021 0Comments 168Views

Looking back at 2020

When India closed its borders and went into a strict lockdown in March 2020, it created an air of uncertainty regarding the nation’s growth. High performing start-ups were suddenly dealing with plummeting revenues with e-commerce facing zero revenues during the first few months of the lockdown. Many start-ups had to shelve plans to raise external funding with meaningful mark-ups. Key regulatory changes that restricted foreign investment from countries that shared land borders with India was an added complexity to navigate. Particularly those trying to survive with follow-on funding from existing investors on the cap table were hit by the restriction.

In the face of such bleak realities, ongoing deals were expected to hit pause but they instead rushed to closure with ferocity. New deals in Q1 were being evaluated albeit cautiously and slowly. The next two quarters from July to December more than compensated for the temporary lag in deal-making. All players from founders to law firms were unexpectedly busy closing deals of all sizes – from seed stage to unicorns. While edtech stole the show (with Byju’s and Unacademy’s big ticket fund raises and UpGrad’s strategic acquisitions) several sectors got their fair share of action from virtual reality (Avataar.me’s fund raise from Sequoia Capital) to start-ups that help local businesses create online stores (Lightspeed Venture Partners and Matrix Partners investment in in Dukaan).

Interestingly, while the number of new start-ups declined (falling from approximately 3,500 in 2019 to around a mere 1,000 in 2020), 2020 saw a record-breaking number of eleven new unicorns. Overall, the Indian start-up ecosystem saw 924 deals close in 2020 (14 per cent higher than 2019) with deal value of USD 11.5 billion. These are healthy figures to contend with, especially against what we faced in Q1 of 2020. What’s more promising is that funding and deal count are expected to surge even higher for 2021 signalling a great year for lawyers in the venture capital space.

VC Lawyers – the Way Forward

Against the background of these promising projections for the surge in venture capital deal-making, lawyers assume a significant role in turning these to reality. We’ve identified three key characteristics that will help us scale and meet client expectations – keeping it simple, white over red flags, and staying present.

(i) Simplifying Complexity

Over the years we’ve come to realise that 100 pager agreements are rarely necessary for large ticket deals let alone early stage venture capital funding. It is critical for us to shift to simplified, standardised and concise documentation that protects parties from actual risks. There is certainly a need to move away from seemingly grave but largely academic protections such as extensive indemnities, especially for early stage companies with lean operations and few employees.

Moreover, this simplicity should also extend to communication during the course of the deal, especially negotiations. In our experience, breaking down key legal concepts for clients who, being outside the legal realm, are not always well-versed with legal jargon is crucial to effective lawyering.

Further, while clients do not always experience how different clauses play out in the life of an investment, lawyers are specialists who are engaged when disputes arise and these disputes often stem from unfortunate loopholes in the documentation. Instead of parking too many issues to be resolved directly by clients (which may also sour investor-founder relationships), lawyers should ideally draw from their experience to determine what’s worth fighting for and where it might help to meet mid-way in the first instance of a dispute.

(ii) Risk Assessment

Given the fast paced nature of VC transactions, lawyers will need to be more pragmatic while identifying issues and assessing risk levels as part of their diligence. Even when a long list of issues is revealed through our thorough diligence, we must not lose sight that investors are keen on proceeding with the transaction with their exposure mitigated if not completely resolved, and therefore should steer clear of applying a one-size-fits-all approach when solving these issues. While not all problems can be easily remedied, having genuine enthusiasm to see the deal to closure brings out a collaborative spirit to resolve issues – in the midst identifying and waving red flags through the life of the transaction, we must remember to raise white flags too.

(iii) Staying Present

Most importantly, there is utmost value in being present, especially so while we’re all working remotely through this pandemic. Albert Mehrabian, a pioneer researcher of body language back in the 1950’s, found that the total impact of a message is about 7 percent verbal and 38 percent vocal (including tone of voice, inflection, and other sounds) and 55 percent nonverbal. While many corporate professionals have transitioned easily from in-person meetings to video conferences, we’ve noticed lawyers (ourselves included) are still hesitant, almost reluctant, to turn on video on negotiation calls. Possibly because lawyers use some of this time to multi-task to keep all clients happy given that everyone has a number of live transactions at any given point.

As we continue to close deals of all ticket sizes entirely remotely for at least the foreseeable future, reading the room is fundamental to steer negotiations with favourable outcomes. Our key learning here has been that the only way to achieve this is to recalibrate our minds. This is an impossible goal to achieve if we continue to disable video and multi-task on calls, simultaneously reviewing drafts, raising invoices, filling timesheets and the like.

****

Archana Rajaram is Founder & Managing Partner, Rajaram Legal. She advises several venture capital investors in their investments and exits.

Priya Makhijani is Senior Associate at Rajaram Legal.

________________

This article has been published in partnership with Forbes India and first appeared on forbesindia.com:

https://www.forbesindia.com/article/legalpowerlist2020/the-indian-vc-industry-priya-makhijani-archana-rajaram/66227/1

Interviews

Interviews, Trending

Time for judiciary to introspect and see what can be done to restore people’s faith – Justice Lokur

February 3, 2020 0Comments 1100Views

Justice Madan B Lokur, was a Supreme Court judge from June 2012 to December 2018. He is now a judge of the non-resident panel of the Supreme Court of Fiji. He spoke to LegitQuest on January 25, 2020.

Q: You were a Supreme Court judge for more than 6 years. Do SC judges have their own ups and downs, in the sense that do you have any frustrations about cases, things not working out, the kind of issues that come to you?

A: There are no ups and downs in that sense but sometimes you do get a little upset at the pace of justice delivery. I felt that there were occasions when justice could have been delivered much faster, a case could have been decided much faster than it actually was. (When there is) resistance in that regard normally from the state, from the establishment, then you kind of feel what’s happening, what can I do about it.

Q: So you have had the feeling that the establishment is trying to interfere in the matters?

A: No, not interfering in matters but not giving the necessary importance to some cases. So if something has to be done in four weeks, for example if reply has to be filed within four weeks and they don’t file it in four weeks just because they feel that it doesn’t matter, and it’s ok if we file it within six weeks how does it make a difference. But it does make a difference.

Q: Do you think this attitude is merely a lax attitude or is it an infrastructure related problem?

A: I don’t know. Sometimes on some issues the government or the establishment takes it easy. They don’t realise the urgency. So that’s one. Sometimes there are systemic issues, for example, you may have a case that takes much longer than anticipated and therefore you can’t take up some other case. Then that necessarily has to be adjourned. So these things have to be planned very carefully.

Q: Are there any cases that you have special memories of in terms of your personal experiences while dealing with the case? It might have moved you or it may have made you feel that this case is really important though it may not be considered important by the government or may have escaped the media glare?

A: All the cases that I did with regard to social justice, cases which concern social justice and which concern the environment, I think all of them were important. They gave me some satisfaction, some frustration also, in the sense of time, but I would certainly remember all these cases.

Q: Even though you were at the Supreme Court as a jurist, were there any learning experiences for you that may have surprised you?

A: There were learning experiences, yes. And plenty of them. Every case is a learning experience because you tend to look at the same case with two different perspectives. So every case is a great learning experience. You know how society functions, how the state functions, what is going on in the minds of the people, what is it that has prompted them to come the court. There is a great learning, not only in terms of people and institutions but also in terms of law.

Q: You are a Judge of the Supreme Court of Fiji, though a Non-Resident Judge. How different is it in comparison to being a Judge in India?

A: There are some procedural distinctions. For example, there is a great reliance in Fiji on written submissions and for the oral submissions they give 45 minutes to a side. So the case is over within 1 1/2 hours maximum. That’s not the situation here in India. The number of cases in Fiji are very few. Yes, it’s a small country, with a small number of cases. Cases are very few so it’s only when they have an adequate number of cases that they will have a session and as far as I am aware they do not have more than two or three sessions in a year and the session lasts for maybe about three weeks. So it’s not that the court sits every day or that I have to shift to Fiji. When it is necessary and there are a good number of cases then they will have a session, unlike here. It is then that I am required to go to Fiji for three weeks. The other difference is that in every case that comes to the (Fiji) Supreme Court, even if special leave is not granted, you have to give a detailed judgement which is not the practice here.

Q: There is a lot of backlog in the lower courts in India which creates a problem for the justice delivery system. One reason is definitely shortage of judges. What are the other reasons as to why there is so much backlog of cases in the trial courts?

A: I think case management is absolutely necessary and unless we introduce case management and alternative methods of dispute resolution, we will not be able to solve the problem. I will give you a very recent example about the Muzaffarpur children’s home case (in Bihar) where about 34 girls were systematically raped. There were about 17 or 18 accused persons but the entire trial finished within six months. Now that was only because of the management and the efforts of the trial judge and I think that needs to be studied how he could do it. If he could do such a complex case with so many eyewitnesses and so many accused persons in a short frame of time, I don’t see why other cases cannot be decided within a specified time frame. That’s case management. The second thing is so far as other methods of disposal of cases are concerned, we have had a very good experience in trial courts in Delhi where more than one lakh cases have been disposed of through mediation. So, mediation must be encouraged at the trial level because if you can dispose so many cases you can reduce the workload. For criminal cases, you have Plea Bargaining that has been introduced in 2009 but not put into practice. We did make an attempt in the Tis Hazari Courts. It worked to some extent but after that it fell into disuse. So, plea bargaining can take care of a lot of cases. And there will be certain categories of cases which we need to look at carefully. For example, you have cases of compoundable offences, you have cases where fine is the punishment and not necessarily imprisonment, or maybe it’s imprisonment say one month or two month’s imprisonment. Do we need to actually go through a regular trial for these kind of cases? Can they not be resolved or adjudicated through Plea Bargaining? This will help the system, it will help in Prison Reforms, (prevent) overcrowding in prisons. So there are a lot of avenues available for reducing the backlog. But I think an effort has to be made to resolve all that.

Q: Do you think there are any systemic flaws in the country’s justice system, or the way trial courts work?

A: I don’t think there are any major systemic flaws. It’s just that case management has not been given importance. If case management is given importance, then whatever systematic flaws are existing, they will certainly come down.

Q; And what about technology. Do you think technology can play a role in improving the functioning of the justice delivery system?

I think technology is very important. You are aware of the e-courts project. Now I have been told by many judges and many judicial academies that the e-courts project has brought about sort of a revolution in the trial courts. There is a lot of information that is available for the litigants, judges, lawyers and researchers and if it is put to optimum use or even semi optimum use, it can make a huge difference. Today there are many judges who are using technology and particularly the benefits of the e-courts project is an adjunct to their work. Some studies on how technology can be used or the e-courts project can be used to improve the system will make a huge difference.

Q: What kind of technology would you recommend that courts should have?

A: The work that was assigned to the e-committee I think has been taken care of, if not fully, then largely to the maximum possible extent. Now having done the work you have to try and take advantage of the work that’s been done, find out all the flaws and see how you can rectify it or remove those flaws. For example, we came across a case where 94 adjournments were given in a criminal case. Now why were 94 adjournments given? Somebody needs to study that, so that information is available. And unless you process that information, things will just continue, you will just be collecting information. So as far as I am concerned, the task of collecting information is over. We now need to improve information collection and process available information and that is something I think should be done.

Q: There is a debate going on about the rights of death row convicts. CJI Justice Bobde recently objected to death row convicts filing lot of petitions, making use of every legal remedy available to them. He said the rights of the victim should be given more importance over the rights of the accused. But a lot of legal experts have said that these remedies are available to correct the anomalies, if any, in the justice delivery. Even the Centre has urged the court to adopt a more victim-centric approach. What is your opinion on that?

You see so far as procedures are concerned, when a person knows that s/he is going to die in a few days or a few months, s/he will do everything possible to live. Now you can’t tell a person who has got terminal cancer that there is no point in undergoing chemotherapy because you are going to die anyway. A person is going to fight for her/his life to the maximum extent. So if a person is on death row s/he will do everything possible to survive. You have very exceptional people like Bhagat Singh who are ready to face (the gallows) but that’s why they are exceptional. So an ordinary person will do everything possible (to survive). So if the law permits them to do all this, they will do it.

Q: Do you think law should permit this to death row convicts?

A: That is for the Parliament to decide. The law is there, the Constitution is there. Now if the Parliament chooses not to enact a law which takes into consideration the rights of the victims and the people who are on death row, what can anyone do? You can’t tell a person on death row that listen, if you don’t file a review petition within one week, I will hang you. If you do not file a curative petition within three days, then I will hang you. You also have to look at the frame of mind of a person facing death. Victims certainly, but also the convict.

Q: From the point of jurisprudence, do you think death row convicts’ rights are essential? Or can their rights be done away with?

A: I don’t know you can take away the right of a person fighting for his life but you have to strike a balance somewhere. To say that you must file a review or curative or mercy petition in one week, it’s very difficult. You tell somebody else who is not on a death row that you can file a review petition within 30 days but a person who is on death row you tell him that I will give you only one week, it doesn’t make any sense to me. In fact it should probably be the other way round.

Q: What about capital punishment as a means of punishment itself?

A: There has been a lot of debate and discussion about capital punishment but I think that world over it has now been accepted, more or less, that death penalty has not served the purpose for which it was intended. So, there are very few countries that are executing people. The United States, Saudi Arabia, China, Pakistan also, but it hasn’t brought down the crime rate. And India has been very conservative in imposing the death penalty. I think the last 3-4 executions have happened for the persons who were terrorists. And apart from that there was one from Calcutta who was hanged for rape and murder. But the fact that he was hanged for rape and murder has not deterred people (from committing rape and murder). So the accepted view is that death penalty has not served the purpose. We certainly need to rethink the continuance of capital punishment. On the other hand, if capital punishment is abolished, there might be fake encounter killings or extra judicial killings.

Q: These days there is the psyche among people of ‘instant justice’, like we saw in the case of the Hyderabad vet who was raped and murdered. The four accused in the case were killed in an encounter and the public at large and even politicians hailed it as justice being delivery. Do you think this ‘lynch mob mentality’ reflects people’s lack of faith in the justice system?

A: I think in this particular case about what happened in Telangana, investigation was still going on. About what actually happened there, an enquiry is going on. So no definite conclusions have come out. According to the police these people tried to snatch weapons so they had to be shot. Now it is very difficult to believe, as far as I am concerned, that 10 armed policeman could not overpower four unarmed accused persons. This is very difficult to believe. And assuming one of them happened to have snatched a (cop’s) weapon, maybe he could have been incapacitated but why the other three? So there are a lot of questions that are unanswered. So far as the celebrations are concerned, the people who are celebrating, do they know for certain that they (those killed in the encounter) were the ones who did the crime? How can they be so sure about it? They were not eye witnesses. Even witnesses sometimes make mistakes. This is really not a cause for celebration. Certainly not.

Q: It seems some people are losing their faith in the country’s justice delivery system. How to repose people’s faith in the legal process?

A: You see we again come back to case management and speedy justice. Suppose the Nirbhaya case would have been decided within two or three years, would this (Telangana) incident have happened? One can’t say. The attack on Parliament case was decided in two or three years but that has not wiped out terrorism. There are a lot of factors that go into all this, so there is a need to find ways of improving justice delivery so that you don’t have any extremes – where a case takes 10 years or another extreme where there is instant justice. There has to be something in between, some balance has to be drawn. Now you have that case where Phoolan Devi was gangraped followed by the Behmai massacre. Now this is a case of 1981, it has been 40 years and the trial court has still not delivered a judgement. It’s due any day now, (but) whose fault is that. You have another case in Maharashtra that has been transferred to National Investigating Agency two years after the incident, the Bhima-Koregaon case. Investigation is supposedly not complete after two years also. Whose fault is that? So you have to look at the entire system in a holistic manner. There are many players – the investigation agency is one player, the prosecution is one player, the defence is one player, the justice delivery system is one player. So unless all of them are in a position to coordinate… you cannot blame only the justice delivery system. If the Telangana police was so sure that the persons they have caught are guilty, why did they not file the charge sheet immediately? If they were so sure the charge sheet should have been filed within one day. Why didn’t they do it?

Q: At the trial level, there are many instances of flaws in evidence collection. Do you think the police or whoever the investigators are, do they lack training?

A: Yes they do! The police lacks training. I think there is a recent report that has come out last week which says very few people (in the police) have been trained (to collect evidence).

Q: You think giving proper training to police to prepare a case will make a difference?

A: Yes, it will make a difference.

Q: You have a keen interest in juvenile justice. Unfortunately, a lot of heinous crimes are committed by juveniles. How can we correct that?

A: You see it depends upon what perspective we are looking at. Now these heinous crimes are committed by juveniles. Heinous crimes are committed by adults also, so why pick upon juveniles alone and say something should be done because juveniles are committing heinous crimes. Why is it that people are not saying that something should be done when adults are committing heinous crimes? That’s one perspective. There are a lot of heinous crimes that are committed against juveniles. The number of crimes committed against juveniles or children are much more than the crimes committed by juveniles. How come nobody is talking about that? And the people committing heinous crimes against children are adults. So is it okay to say that the State has imposed death penalty for an offence against the child? So that’s good enough, nothing more needs to be done? I don’t think that’s a valid answer. The establishment must keep in mind the fact that the number of heinous crimes against children are much more than those committed by juveniles. We must shift focus.

Q: Coming to NRC and CAA. Protests have been happening since December last year, the SC is waiting for the Centre’s reply, the Delhi HC has refused to directly intervene. Neither the protesters nor the government is budging. How do we achieve a breakthrough?

A: It is for the government to decide what they want to do. If the government says it is not going to budge, and the people say they are not going to budge, the stalemate could continue forever.

Q: Do you think the CAA and the NRC will have an impact on civil liberties, personal liberties and people’s rights?

A: Yes, and that is one of the reasons why there is protest all over the country. And people have realised that it is going to happen, it is going to have an impact on their lives, on their rights and that’s why they are protesting. So the answer to your question is yes.

Q: Across the world and in India, we are seeing an erosion of the value system upholding rights and liberties. How important is it for the healthy functioning of a country that social justice, people’s liberties, people’s rights are maintained?

A: I think social justice issues, fundamental rights are of prime importance in our country, in any democracy, and the preamble to our Constitution makes it absolutely clear and the judgement of the Supreme Court in Kesavananda Bharati and many other subsequent judgments also make it clear that you cannot change the basic structure of the Constitution. If you cannot do that then obviously you cannot take away some basic democratic rights like freedom of assembly, freedom of movement, you cannot take them away. So if you have to live in a democracy, we have to accept the fact that these rights cannot be taken away. Otherwise there are many countries where there is no democracy. I don’t know whether those people are happy or not happy.

Q: What will happen if in a democracy these rights are controlled by hook or by crook?

A: It depends upon how much they are controlled. If the control is excessive then that is wrong. The Constitution says there must be a reasonable restriction. So reasonable restriction by law is very important.

Q: The way in which the sexual harassment case against Justice Gogoi was handled was pretty controversial. The woman has now been reinstated in the Supreme Court as a staffer. Does this action of the Supreme Court sort of vindicate her?

A: I find this very confusing you know. There is an old joke among lawyers: Lawyer for the petitioner argued before the judge and the judge said you are right; then the lawyer for the respondent argued before the judge and the judge said you’re right; then a third person sitting over there says how can both of them be right and the judge says you’re also right. So this is what has happened in this case. It was found (by the SC committee) that what she said had no substance. And therefore, she was wrong and the accused was right. Now she has been reinstated with back wages and all. I don’t know, I find it very confusing.

Q: Do you think the retirement age of Supreme Court Judges should be raised to 70 years and there should be a fixed tenure?

A: I haven’t thought about it as yet. There are some advantages, there are some disadvantages. (When) You have extended age or life tenure as in the United States, and the Supreme Court has a particular point of view, it will continue for a long time. So in the United States you have liberal judges and conservative judges, so if the number of conservative judges is high then the court will always be conservative. If the number of liberal judges is high, the court will always be liberal. There is this disadvantage but there is also an advantage that if it’s a liberal court and if it is a liberal democracy then it will work for the benefit of the people. But I have not given any serious thought onthis.

Q: Is there any other thing you would like to say?

A: I think the time has come for the judiciary to sit down, introspect and see what can be done, because people have faith in the judiciary. A lot of that faith has been eroded in the last couple of years. So one has to restore that faith and then increase that faith. I think the judiciary definitely needs to introspect.

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