Read Order: REHAN AHMED (D) THR. LRS. vs. AKHTAR UN NISA (D) THR.LRS. [SC- Civil Appeal-SLP (Civil) No.18772 of 2014]
Tulip Kanth
New Delhi, April 23, 2024: While allowing an appeal against a Rajasthan High Court order pertaining to a property dispute, the Supreme Court has asserted that when the objections of the second defendant’s son were already dismissed, similar objections by the defendant's wife would not be maintainable.
The dispute, in the present matter, related to a property situated in Jaipur which was originally owned by Ghulam Mohiuddin (Defendant No.1). An agreement to Sell was executed for the sale of the suit property by Saeeduddin – Defendant No.2 (brother of Defendant No.1) and also the power of attorney of Defendant No.1, for himself and for the principal Defendant No.1. Since the vendor was not executing the sale deed, the appellant (plaintiff) instituted a Civil Suit for specific performance impleading Ghulam Mohiuddin as Defendant no.1 and Saeeduddin as Defendant No.2. During the pendency of the Suit, the parties entered into a compromise. The total sale consideration was Rs.40,000 out of which as per paragraph No.2 of the Compromise Deed, Rs.15,000 had already been received by the Defendants.
When the matter reached the Addl. District & Sessions Judge, a decree was drawn and as per the decree when the defendant did not execute the Sale Deed, the Plaintiff -Decree holder initiated the proceedings for execution. The Executing Court opined that before the registration of the Sale Deed, Defendant No.1 was required to fulfil his obligations which included getting the third floor vacated, getting the NOC and also getting the rent deeds transferred in the name of the Plaintiff. As such there was no default on the part of the Plaintiff.
After Defendant No.1 Mohiuddin died and with the dismissal of the special leave petition, the innings of the objections under Section 47 CPC filed by the Judgment-debtor – Defendant No.1 Mohiuddin came to an end, a new round of objections under Section 47 CPC came to be initiated by respondent no.1
– Akhtar Un Nisa, wife of Defendant No.2-Saeeduddin and the mother of General Tariq.
The Executing Court dismissed her objections. Aggrieved by the same, Akhtar Un Nisa preferred a revision before the High Court which had since been allowed by the impugned order giving rise to the present appeal before the Top Court.
The Division Bench of Justice Vikram Nath and Justice Satish Chandra Sharma was of the opinion that the core of the High Court's reasoning was based on the erroneous assumption that the property was jointly owned by Defendants No. 1 and No. 2, and that the absence of Defendant No. 2's signature on the
compromise invalidated the decree. However, Defendant No. 2 had consistently acknowledged that he had no ownership rights over the property. In his written statement to the Trial Court, he explicitly stated that the property belonged solely to Defendant No.1. The compromise Deed also substantiated that Defendant No. 1 was the sole owner.
As per the Bench, the High Court also incorrectly held that the provisions of Order XXIII, Rule 3 of the CPC were not adhered to, claiming that the Trial Court failed to properly verify the compromise Deed. The recording of the compromise and the consequent decree on 09.05.1979, although appearing procedurally delayed, adhered to the process required
under CPC.
“Furthermore, the High Court overlooked the fact that General Tarik, legal heir of Defendant No. 2, had previously objected to the execution proceedings, which was dismissed on 09.12.1988. Subsequent appeals before the High Court, including a Special Leave Petition to this Court, were also dismissed. Therefore, similar objections by Respondent No. 1, Smt. Akhtar Un Nisa, in her capacity as one of the legal heirs of Defendant No. 2 would not be maintainable and would amount to abuse of process of law”, the Bench held.
Thus, observing that the Executing Court had rightly rejected the
objections under Section 47 CPC filed by Akhtar Un Nisa, the Bench restored the Executing Court's order and the objections of Respondent no.1 under Section 47 of the CPC stood rejected.
Read Order:BABU SAHEBAGOUDA RUDRAGOUDAR AND OTHERS v. STATE OF KARNATAKA[SC- CRIMINAL APPEAL NO(S). 985 OF 2010]
Tulip Kanth
New Delhi, April 23, 2024: Terming the FIR in question as a post-investigation document which didn't inspire confidence, the Supreme Court has acquitted the murder convicts sentenced to life. The Top Court also asserted that the disclosure statements couldn’t be read in evidence and the recoveries made in furtherance thereof were nonest in the eyes of law.
It was alleged by the prosecution that in the morning of September 19, 2001, the deceased Malagounda, son of complainant, along with labourers/servants-PW-2, PW-3, PW-4 & PW-5 had gone to put up a check dam in their land. When they were returning back to the village after their work, A-1, A-2, A-3 and A-4 suddenly came around and exhorted that the way the complainant party had murdered Sangound, they would take revenge upon the members of the complainant party in the same manner. A-1, A-2, A-3 and A-4 holding weapons belaboured Malagounda, as a result of which he fell down. The assailants thereafter threatened the complainant(PW-1) that if he tried to intervene, he too would meet the same fate as his son. Fearing for his own life, the complainant ran away and hid behind the bushes in order to avoid being beaten by the accused.
After sunset, the complainantreturned to the village and narrated about the incident to his family members. A written complaint of this incident came to be submitted and an FIR was registered. After conclusion of investigation, a charge sheet came to be filed against the appellants(A-1, A-2, A-3) and other accused(A-4, A-5 and A-6) for the offences punishable under Sections 143, 147, 148, 506(2) and Section 302 read with Section 149 IPC in the Court of jurisdictional Magistrate. The case being exclusively sessions triable was committed to the Court of Sessions Judge, Bijapur where charges were framed against the accused for the above offences.
The accused appellants had approached the Top Court challenging the judgment rendered by the Division Bench of the Karnataka High Court reversing the acquittal of the accused appellants and convicting them. A-1, A-2 and A-3 were sentenced to undergo imprisonment for life. The appeal as against A-5 and A-6 was dismissed, while appeal qua A-4 stood abated on account of his death.
The Division Bench of Justice B.R.Gavai& Justice Sandeep Mehta referred to the Judgments in Rajesh Prasad v. State of Bihar and Another ; H.D. Sundara&Ors. v. State of Karnataka and held that the scope of interference by an appellate Court for reversing the judgment of acquittal recorded by the trial Court in favour of the accused has to be exercised within four corners of these principles:
- The judgment of acquittal suffers from patent perversity;
- The judgment is based on a misreading/omission to consider material evidence on record;
- No two reasonable views are possible and only the view consistent with the guilt of the accused is possible from the evidence available on record.
It further highlighted that the appellate Court, in order to interfere with the judgment of acquittal would have to record pertinent findings on the above factors if it is inclined to reverse the judgment of acquittal rendered by the trial Court.
The Bench was of the view that none of these essential mandates governing an appeal against acquittal were adverted to by the Division Bench which proceeded to virtually decide the appeal as a first Court on independent appreciation of evidence and recorded its own findings to hold the accused appellants(A-1, A-2 and A-3) guilty of the charge under Section 302 read with Section 34 IPC and sentenced them to imprisonment for life.
The testimony of the complainant(PW-1) suffered from patent infirmities, contradictions and inherent loopholes which brought him within the category of wholly unreliable witness. “The non-production of the Daily Dairy maintained at the police station assumes great significance in the backdrop of these facts. Apparently thus, the FIR(Exhibit P-10) is a post investigation document and does not inspire confidence”, it held. Not only this but the claim of complainant(PW-1) that he was an eye witness to the incident was totally contradicted by PW-6 as he did not state about the presence of the complainant(PW- 1) at the place of incident while the victim was being assaulted.
It was further observed, “The conduct of the family members of the deceased and the other villagers in not taking any steps to protect the dead body for the whole night and instead, casually going back to their houses without giving a second thought as to what may happen to the mortal remains of the deceased, lying exposed to the elements is another circumstance which creates a grave doubt in the mind of the Court that no one had actually seen the incident and it was a case of blind murder which came to light much later.”
The version of the medical jurist also created a doubt. Noting that the witnesses admitted that it had been raining incessantly in the village for almost three days, it was observed that there was no logical explanation for the presence of the deceased and the servants in their field on the date and time of the incident
Reiterating that motive acts as a double-edged sword, the Bench opined that the very fact that members of the prosecution party were arraigned as accused in the murder of Sangound, son of A-4, this could also have been the motive for the prosecution witness to rope in the accused appellants for the murder of Malagounda.
Reliance was also placed upon State of Uttar Pradesh v. Deoman Upadhyaya and it was held, “The statement of an accused recorded by a police officer under Section 27 of the Evidence Act is basically a memorandum of confession of the accused recorded by the Investigating Officer during interrogation which has been taken down in writing. The confessional part of such statement is inadmissible and only the part which distinctly leads to discovery of fact is admissible in evidence.”
It was also opined that neither the so called voluntary statement nor the seizure memo were proved by the Investigating Officer(PW- 27) in his evidence.It was also asserted that the entire prosecution case came under the shadow of doubt as the evidence of seizure of weapons of the offence was not trustworthy, the prosecution did not procure any serological opinion to establish blood group on the recovered weapons so recovered and the evidence of the eye-witness was not trustworthy.
Thus, the Bench reversed the impugned judgment and acquitted the accused appellants of all the charges.
Read Order: HANSRAJ v. STATE OF M.P [SC- CRIMINAL APPEAL NO(S). 2143 OF 2024]
LE Correspondent
New Delhi, April 23, 2024: In a case of robbery, the Supreme Court has observed that the Investigating Officerwho recorded the disclosure statement of the accused and effected the recovery did not prove the disclosure memo as required by law. The Top Court allowed the appeal of the convict thereby acquitting him.
The substratum of the prosecution story was that on December 12, 1998, while the complainant Bhagu Bai was proceeding to her field, a person came from behind, closed her eyes, assaulted her with a knife and snatched away her silver anklet, necklace and a bracelet. After committing the crime and injuring the complainant in the process, the assailant ran away from the spot. The complainant stated in the First Information Report (FIR) that she was not able to see or identify the assailant.
The appellant was arrested after 2 days on the basis of suspicion. It was alleged that upon being interrogated by the police, the accused appellant made a confession/disclosure statement which was recorded as Memorandum. It was further stated that acting on the said disclosure statement, the Investigating Officer(PW-12) recovered the silver articles allegedly looted by the accused after assaulting the complainant.
Charge sheet was filed against the accused appellant for the offences under Sections 394 read with Section 397 of the Indian Penal Code, 1860 and the case was committed to the Sessions Court for trial. The accused was charged and tried for the offences mentioned above.
The Trial Court sentenced the accused to undergo seven years rigorous imprisonment with a fine of Rs. 1,000 and, in default of payment of fine, to undergo further rigorous imprisonment of three months.The High Court, affirmed the conviction and sentence of the accused and rejected the appeal filed by the accused. Aggrieved thereby, the accused-appellant approached the Top Court.
The Division Bench of Justice B.R. Gavai and Justice Sandeep Mehta noted that the complainant during the course of sworn testimony tried to improve upon her case by identifying the accused in the Court, but such evidence of identification of the accused was not relied upon by the Trial Court and the High Court and the case was found proved only on the basis of recovery of ornaments.
It was further noticed that the Investigating Officer (PW-12) who recorded the disclosure statement of the accused and effected the recovery did not prove the disclosure memo as required by law.
The deposition of the Investigating Officer revealed that he did not narrate the exact words spoken by the accused at the time of making the disclosure statement. He also did not state that the accused led him to the place where the articles were hidden and rather stated that he took the accused to the Beed and recovered the silver ornaments.
Reliance was also placed upon Nandlal Bharti v. State of Uttar Pradeshwhich postulates that for proving a disclosure memo recorded under Section 27 of the Indian Evidence Act, 1872 at the instance of the accused, the Investigating Officer would be required to state about the contents of the disclosure memo and in absence thereof, the disclosure memo and the discovery of facts made in pursuance thereto would not be considered as admissible for want of proper proof.
“As a consequence of the above discussion, we have no hesitation in holding that the prosecution miserably failed to prove the factum of disclosure made by the accused to the Investigating Officer (PW-12) leading to the recovery of the silver articles allegedly looted by the accused from the complainant”, the Bench opined.
It was also noted that the prosecution did not lead any evidence to show that the recovered articles were sealed at the time of recovery or that they were kept secure in the malkhana of the Police Station till the same were subjected to identification before the Executive Magistrate. In addition thereto, the Executive Magistrate was not examined in evidence.
The Bench further opined, “The complainant Bhagu Bai (PW-3) made a categorical admission in her cross examination that she could recognize the silver articles in the test identification proceedings upon being pointed out by the police officials. Thus, the recovery of the ornaments at the instance of the accused and the identification thereof has no sanctity in the eyes of law and cannot be relied upon. No other evidence was led by the prosecution to connect the accused appellant with the crime.”
In view of such legal and factual aspects, the Bench allowed the appeal and acquitted the convict of the charges.
Read Order: PARTEEK BANSAL v. STATE OF RAJASTHAN & ORS[SC- CRIMINAL APPEAL NO. 2167 OF 2024]
Tulip Kanth
New Delhi, April 23, 2024: In a matrimonial dispute matter, where the father of a woman Police Officer filed various complaints against her husband and family members only with the motive to harass them, the Supreme Court has imposed a cost of Rs 5 lakh on him.
The appellant and respondent No.3 came in contact with each other in June, 2014 through the internet.The complainant (respondent No.2) who is the father of respondent No.3 had visited the appellant in Udaipur, who is a Chartered Accountant based in Hisar, for proposal of marriage of his daughter (respondent No.3) who was at that time posted as Deputy Superintendent of Police at Udaipur, Rajasthan.
In 2015, the marriage was solemnised at Udaipur. The respondent No.2 filed a complaint. The said complaint was registered at Police Station Hisar as an FIR under Section 498A read with Section 34 IPC. In the meantime, respondent No.2 submitted another complaint on 15.10.2015 i.e. five days after the first complaint on the same set of allegations as in the previous complaint. This complaint came to be registered under Section 498A/506 IPC etc.
In the first FIR along with the appellant other family members were also roped in. However, after further investigation, a Police Report under Section 173(2) Cr.P.C. was submitted in December, 2015 only against the appellant under Section 498A IPC. Based on the said Police Report, the Magistrate took cognizance and the trial proceeded. Thereafter, the appellant filed a petition under Section 482 Cr.P.C. before the Rajasthan High Court for quashing of the second FIR. By the impugned order, the High Court dismissed the said petition on the ground that the complaint at Udaipur was prior in point of time than the complaint in Hisar. The second ground was that the Rajasthan Police was not aware of the earlier proceedings/complaint before the Hisar Police and as such the Udaipur Police should be at liberty to investigate the said complaint made at Udaipur.
After the impugned order was passed, the Trial Court acquitted the appellant. The appeal before the Top Court challenged this judgment.
“Without going into these statutory provisions and the case laws relied upon by the parties, we are convinced that the impugned proceedings are nothing but an abuse of the process of law”, the Division Bench comprising Justice Vikram Nath & Justice Prashant Kumar Mishra said.
It was not denied by the respondent Nos. 2 and 3 that they did not lodge a complaint at Hisar. They also did not file an application withdrawing their complaint on the ground that it was wrongly filed here or that the said complaint may be transferred to Udaipur for investigation as the offence was committed at Udaipur. They allowed the investigating agency to continue to investigate in which their statements were also recorded.
“The respondent No.3 was a gazetted Police Officer at the relevant time and was also well aware of the laws, in particular the Cr.P.C. and the provisions thereto. Neither the complainant nor the victim entered the witness box before the Hisar Court allowing total wastage of the valuable time of the Court and the investigating agency. Merely because she was a Police Officer, she first managed to get an FIR lodged at Hisar through her father, and thereafter she moved to her hometown at Udaipur and got another complaint lodged by her father within a week”, it added.
The Bench also took into consideration the fact that the Complaint at Hisar was dated 10.10.2015, Complaint at Udaipur was dated 15.10.2015, FIR registered at Hisar was dated 17.10.2015 and the FIR registered at Udaipur was dated 01.11.2015. Hence, the admitted dates were relevant to upset the finding of the High Court that the complaint at Udaipur was prior in point of time.
Moreover, in the complaint lodged at Udaipur, the allegations were the same as in the complaint at Hisar and additionally it was stated in the complaint at Udaipur that the complainant had earlier lodged a complaint at Hisar. Thus, the investigating agency at Udaipur was well aware of the complaint on similar allegations being lodged at Hisar.
As per the Bench, the High Court again fell in error in observing that the Rajasthan Police was not aware about the earlier proceedings initiated at Hisar. “The High Court and the Rajasthan Police were expected to at least read the complaint carefully”, it added.
The Bench further observed, “In the facts and circumstances as recorded above, we are of the view that respondent Nos. 2 and 3 had been misusing their official position by lodging complaints one after the other. Further, their conduct of neither appearing before the Trial Court at Hisar nor withdrawing their complaint at Hisar, would show that their only intention was to harass the appellant by first making him face a trial at Hisar and then again at Udaipur.”
It was also noted that the appellant had been arrested and thereafter granted bail. In the complaint made at Hisar, there were allegations to the effect that when respondent No.2 visited the appellant at Hisar, he had made a demand of Rs. 50,00,000/- and also an Innova Car. Thus, the argument that no offence was committed in Hisar but only at Udaipur was also not correct.
“We thus deprecate this practice of state machinery being misused for ulterior motives and for causing harassment to the other side”, the Bench stated while allowing the appeal and quashing the impugned order passed by the High Court.
The Top Court also quashed the FIR and imposed cost of Rs 5 lakh. 50% of this amount has been asked to be transmitted in the account of the Supreme Court Legal Services Committee and the remaining 50% to the appellant.
Read Order: JADUNATH SINGH v. ARVIND KUMAR & ANR. ETC [SC- CRIMINAL APPEAL NOS. 2170 OF 2024]
LE Correspondent
New Delhi, April 23, 2024: In a case of murder of apolice constable, the Supreme Court has set aside the order of the Allahabad High Court granting bail to two accused despite their period of incarceration being more than 10 years. The Apex Court, however, upheld the bail order of the third accused as he was not charge sheeted in the matter.
The factual background of this case was that on 11.02.2011, theappellant/Complainant- Jadunath Singh submitted a Written Report narrating that a plot was illegally taken by Arvind Kumar (accused- respondent). He was removed from its illegal possession by Rajvir, son of the Complainant, in accordance with the order of District Magistrate.On the same day that this incident took place, the Complainant Jadunath Singh along with his son Rajvir, Pawan Kumar, Rawan Kumar, Upendra, Chedalal were sitting together, discussing the disputed plot. At this time, Arvind Kumar, armed with country made pistol, his two sons- Chandra Kumar @ Chandu armed with katta and Rishi Kumar armed with katta along with Amit Kumar, armed with a rifle and two unknown persons with rifles, arrived there and immediately opened fire at the complainant and all other persons sitting with him.
The Complainant and others ran but they werechased by accused persons along with continuous firing. They managed to intrude in the room in which Rajvir and Pawan entered while hiding and escaping from the shots. There the accused aimed at Rajvir and Pawan, shot them dead and thus caused the death of both these victims and also injured daughter in law of Harvilas, causing injuries upon her. Thereafter the accused persons fled away. The injured persons were taken to Hospital.On the basis of the complaint given by Jadunath Singh (Appellant), FIR was registered under Sections 147, 148, 149, 302, 307, 120B of IPC against five named accused and two unknown. After investigation Chargesheet was submitted against all the seven accused.
The Trial Court convicted five accused namely Arvind Kumar, Chandra Kumar, Pramod Kashyap, Rishi Kumar and Aadesh Kumar under Section 302/149, 147, 148 and 120-B of IPC and awarded life sentence. It, however, acquitted two other accused namely Monu and Amit Kumar of all the charges.
Another criminal case involving some of the present convicted accused came into light. In the year 2013, two accused viz Rishi Kumar and Chandra Kumar were produced before Sessions Court at Mainpuri, while in judicial custody by Constable Ajay Kumar. The two accused persons requested the police constable to take them out for attending natures call. As soon as they moved out from the Court campus, the two accused opened fire on said police constable due to which said constable died on the spot and thereafter his dead body was thrown by the accused persons in front of the house of one Munshi Lal. Consequently, an FIR was registered under Section 302 IPC against eight accused persons under Sections 302, 201, 120B, 34, 224 of IPC, with allegation that all eight accused hatched conspiracy for committing murder of Police Constable. The accused Chandra Kumar and Rishi Kumar absconded and were later on arrested by STF from Maharashtra where also they had opened fire on the police party for which a separate FIR was lodged.
The appellant had approached the Top Court challenging a common Order passed by Allahabad High Court whereby the three Applicants- Arvind Kumar, Chandra Kumar @ Chandu and Rishi Kumar were granted bail during the pendency of their Criminal appeals, with condition of furnishing a personal bond in the sum of Rs50,000each. The Appellant-Complainant challenged the order of granting bail on the ground that after being released from jail, they will hatch another conspiracy for eliminating the complainant and his family members.
As per the Division Bench of Justice Vikram Nath &Justice Sanjay Kumar, there were certain facts which were not placed before the High Court. These were the facts relating to the murder of Ajay Kumar Police Constable in whose custody the accused Chandra Kumar and Rishi Kumar were produced before the Trial Court at Mainpuri and further, the fact that they had absconded after throwing the dead body of deceased Constable Ajay Kumar and later on arrested by Special Task Force (STF) from Maharashtra. Another fact was that they had resisted their arrest and opened fire on the police party for which a separate case was registered.
These were relevant facts which ought to have been placed before the High Court. The parity mentioned by the High Court in the impugned order relating to Adesh Kumar and Pramod Kashyap was clearly distinguishable not only with respect to their role in the case in hand but also, they were not involved in the murder of Police Constable, the Bench held.
The Top Court opined, “In our considered opinion, two accused respondents namely Chandra Kumar and Rishi Kumar despite their period of incarceration of more than 10 years would not be entitled to grant of bail for their subsequent conduct for which they are facing separate trial.”
Insofar as Arvind Kumar was concerned, the Bench noted that he was not charge sheeted in the murder case of Ajay Kumar and thus, no interference was warranted with the order of the High Court granting bail to him i.e. Arvind Kumar. However, insofar as the other two accused Rishi Kumar and Chandra Kumar were concerned, the Bench was of the view that their bail deserved to be cancelled.
Accordingly, Bench dismissed the appeal against Arvind Kumar and allowed the appeals against Chandra Kumar and Rishi Kumar are allowed.
Read Order: YASH RAJ FILMS PRIVATE LIMITED v. AFREEN FATIMA ZAIDI & ANR [SC- CIVIL APPEAL No. 4422/2024]
Tulip Kanth
New Delhi, April 23, 2024: While observing that promotional trailers are unilateral which do not transform into promises, much less agreements enforceable by law, the Supreme Court has allowed the appeal of known film producer Yash Raj Films challenging an order of the National Consumer Disputes Redressal Commission (NCDRC)which had held to be an ‘unfair trade practice’ the fact that the song, which wasincluded in the promotional trailer, was not included in the film.
The factual background of the case was such that the appellant-Yash Raj Films Private Limited, a known film producer, produced a film called ‘Fan’ in the year 2016. Before the release of the film, the appellant circulated a promotional trailer, both on television and online, which contained a song in the form of a video.
The respondent no. 1-complainant, working as a teacher in a school in Aurangabad, stated that having watched the promotional trailer of the film, she decided to go to watch the movie on the silver screen with her family. However, she found that the movie did not contain the song, even though the song was widely circulated for promoting and publicizing the movie. She filed a consumer complaint before the District Consumer Redressal Forum. She alleges that due to this, she felt cheated and deceived by the appellants and underwent mental agony. In view of the above, she claimed Rs 60,550 as damages.
This complaint was dismissed on the ground that there was no relationship of consumer and service provider. Against the above order, the complainant filed an appeal before the State Commission, which was allowed with the observation that entertainment services are covered under the definition of ‘service’ and the appellant is a service provider.
The State Commission held that the appellant had engaged in an unfair trade practice as the song in the promotional trailer was widely circulated but not shown in the film. The Commission awarded Rs10,000 as compensation for mental harassment and Rs 5,000 as cost to the complainant.
The appellant carried the matter to the National Consumer Disputes Redressal Commission (NCDRC)where it was held that the exclusion of the song from the movie will also constitute a deficiency, as defined in Section 2(1)(g) of the Consumer Protection Act, 1986, if the song is impliedly promised, but is later omitted while exhibiting the movie.
The Division Bench of Justice Pamidighantam Sri Narasimha and Justice Aravind Kumar explained that a song, dialogue, or a short visual in a promotional trailer may be seen in the context of the multifarious uses of advertisements. “There is no doubt about the fact that any person watching a movie after remitting the necessary consideration becomes a consumer of service. The service in this case is that of entertainment”, it said.
As per the Bench, it is a misplaced assumption that a promotional trailer is an offer or a promise. It was under this misplaced assumption that the complainant had assumed that the subsequent formation of a contract to watch the movie was not in compliance with the promise allegedly made through the promotional trailer.
“A promotional trailer is unilateral. It is only meant to encourage a viewer to purchase the ticket to the movie, which is an independent transaction and contract from the promotional trailer. A promotional trailer by itself is not an offer and neither intends to nor can create a contractual relationship”, it held while also adding, “The transaction of service is only to enable the complainant to watch the movie upon the payment of consideration in the form of purchase of the movie ticket. This transaction is unconnected to the promotional trailer, which by itself does not create any kind of right of claim with respect to the content of the movie.”
Since it was held that no contract is formed on the basis of the promotional trailer and as such, there is no deficiency of service, the Bench observed, “ The promotional trailer does not fall under any of the instances of “unfair method or unfair and deceptive practice” contained in clause (1) of Section 2(1)(r) that pertains to unfair trade practice in the promotion of goods and services. Nor does it make any false statement or intend to mislead the viewers.”
Thus, setting aside the impugned order and allowing the appeal, the Bench concluded the matter by saying, “Services involving art necessarily involve the freedom and discretion of the service provider in their presentation. This is necessary and compelling by the very nature of such services. The variations are substantial, and rightly so. Therefore, the standard by which a court of law judges the representation, followed by the service, must be different and must account for the creative element involved in such transactions.”
Read Order: RAMAYAN SINGH v. THE STATE OF UTTAR PRADESH & ANR [SC- CRIMINAL APPEAL NO(S). 2168 OF 2024]
Tulip Kanth
New Delhi, April 22, 2024:While observing that the accused persons were involved in a broad day-light murder which led to the closure of a market for 10 days due to their overwhelming influence in the area, the Supreme Court has allowed the appeals challenging their bail orders.
In this case, First Information Report (FIR) was lodged by the Appellant i.e., the Original Complainant, stating that on 02.01.2022, when the Appellant along with his uncle i.e., Jitendra Singh (the Deceased) and his driver i.e., Rahul were returning from Bankati Bazar when their vehicle was stopped by the accused person(s) including Respondent No. 2 and Punit Pal. The accused persons verbally abused the Deceased and proceeded to shatter the windows of the vehicle with iron rods. Subsequently they dragged the Deceased out of the vehicle – and physically assaulted the Deceased with iron rods, hockey sticks and bats with an intention to kill him.
It was also alleged that although the Appellant and Rahul i.e., the Driver attempted to intervene, they were injured by the accused persons. The accused persons snatched the mobile phones of the Deceased and the driver; as well as a gold chain belonging to the Deceased and ran away from the spot of the incident. The Deceased was initially rushed to the Primary Health Centre, Bankati, however, due to the serious nature of the injuries he was referred to the District Hospital, Basti and thereafter to Sahara Hospital in Lucknow where he eventually succumbed to his injuries.
Respondent No. 2 came to be apprehended and the murder weapon was also recovered at his instance. Later on Punit Pal also came to be apprehended. A chargesheet came to be filed in relation to the FIR under Section(s) 147, 148, 149, 323, 504, 506, 427, 394, 411, 302 and 120B of the Indian Penal Code, 1872 (IPC) read with Section 7 of the Criminal Law Amendment Act, 2013 (the Act). The Appellant herein i.e., the Original Complainant filedthe appeals before the Top Court assailing the correctness of the orders passed by the High Court enlarging Respondent No. 2 and Punit Pal on bail.
Referring to Neeru Yadav v. State of U.P., the Division Bench of Justice Sanjay Karol and Justice Satish Chandra Sharma observed, “It is well settled that the grant of bail involves the exercise of a discretionary power which ought not to be used arbitrarily, capriciously; and injudiciously.”
On the facts of the case, the Bench noted that Respondent No. 2 and Punit Pal had been charged under Section(s) 147, 148, 149, 323, 504, 506, 427, 394, 411, 302 and 120B IPC on the basis of the materials on record including but not limited to the post-mortem report and statements of witnesses.
Furthermore, on 2 occasions there had been allegations levelled against Respondent No. 2 and Punit Pal alleging that the accused persons had attempted to intimidate the Appellant i.e., the Original Complainant and another identified witnesses in an effort to de-rail the trial in the present case.
“Accordingly, in our considered opinion, the High Court ought not to have granted Respondent No. 2; and Punit Pal bail in relation to the proceedings emanating from the FIR on account of (i) the seriousness of the crime; (ii) the conduct of the accused person(s); and (iii) the overall impact of the crime on society at large i.e., the accused person(s) were involved in a broad day- light murder which led to the closure of a market for a prolonged period of 10 (ten) days due to their overwhelming influence in the area”, the Bench concluded.
Thus, allowing the appeal and setting aside the orders granting bail,the Bench directed the accused persons to be taken into custody. The Top Court also directed the Trial Court to conclude the trial expeditiously preferably within a period of one year.
Read Order: PERNOD RICARD INDIA (P) LTD v. THE STATE OF MADHYA PRADESH & ORS [SC- CIVIL APPEAL Nos. 5062-5099 of 2024]
LE Correspondent
New Delhi, April 22, 2024: In a case where the demand notice was issued to a sub-licensee eight months after the amendment of the Madhya Pradesh Foreign Liquor Rules, 1996 the Supreme Court has directed that the penalty to be imposed on the appellant would be on the basis of Rule 19 as substituted on March 29, 2011.
The appellant, in this case, is a sub-licensee under the M.P. Excise Act, 1915, for manufacture, import and sale of Foreign Liquor, regulated under the Madhya Pradesh Foreign Liquor Rules, 1996. Sub-licensees importing Foreign Liquor are granted transit permits in which the origin, quality, quantity and point of delivery of the imported liquor are recorded. 16 prescribes the permissible limits of loss of liquor in transit due to leakage, evaporation, wastage etc. The purpose and object of this Rule is to prevent illegal diversion of liquor for unlawful sale and also to prevent evasion of excise duty. At the point of destination, the consignment is verified for quality and quantity, and a certificate under Rule 13 is granted.
Rule 19 providing for a penalty that could be imposed during the relevant license period of 2009-2010 was about four times the maximum duty payable on foreign liquor. It was clear from the facts that no action was initiated during the license year of 2009-2010. On 29.03.2011, Rule 19 was substituted by an amendment. Substituted Rule 19 reduces penalty from four times the maximum duty payable to an amount not exceeding the duty payable on foreign liquor.
Eight months after the amendment, a demand notice was issued directing payment of penalty for exceeding the permissible limits during the license year 2009- 2010. The notice demanded a penalty of four times the duty as per the old Rule 19. The appellant replied that penalty could only be under the substituted Rule 19 as the old rule stood repealed and the demand was raised after the substituted Rule came into force.
The Deputy Commissioner rejected the objections and confirmed the demand for payment of penalty at four times the duty payable. The Deputy Commissioner’s order was upheld by the Excise Commissioner and thereafter by the Revenue Board Gwalior .
The appellant’s writ petition before the High Court was disposed of with 40 other petitions raising a similar issue. The Single Judge was of the view that the new Rule was introduced by way of a substitution and the old Rule stood repealed from the statute book and only the substituted Rule applied to all pending and future proceedings. The orders of the statutory authorities were set aside and the matter was remanded to them for determining the penalty as per the substituted Rule.
The Division Bench of the High Court reversed the decision of the Single Judge on the simple ground that as the license was granted for one year, the Rule that existed during that license year must apply.
At the outset, the Top Court observed that a repealed provision will cease to operate from the date of repeal and the substituted provision will commence to operate from the date of its substitution. This principle is subject to specific statutory prescription. Statute can enable the repealed provision to continue to apply to transactions that have commenced before the repeal. Similarly, a substituted provision which operates prospectively, if it affects vested rights, subject to statutory prescriptions, can also operate retrospectively.
It was further observed that the legislative authorization enabling the executive to make rules prospectively or retrospectively is crucial. Without a statutory empowerment, subordinate legislation will always commence to operate only from the date of its issuance and at the same time, cease to exist from the date of its deletion or withdrawal.
On the issue of rule-making power under the M.P. Excise Act, 1915, the Division Bench of Justice Pamidighantam Sri Narasimha & Justice Aravind Kumar opined that Section 63 only enables the government to issue subordinate legislation with effect from such a date as may be specified. Moreover, Rule 19 which has been substituted on 29.03.2011 has not been notified to operate from any other date by the Government.
“Subordinate legislation, by its very nature, rests upon the executives understanding of the primary legislation. When a Court is of the opinion that such an understanding is not in consonance with the statute, it sets it aside for being ultra-vires to the primary statute”, the Bench added.
It was observed that if the amendment by way of a substitution in 2011 is intended to reduce the quantum of penalty for better administration and regulation of foreign liquor, there is no justification to ignore the subject and context of the amendment and permit the State to recover the penalty as per the unamended Rule. The subject of administration of liquor requires close monitoring and the amendment must be seen in this context of bringing about good governance and effective management.
“Seen in the principle of Section 10 of MP General Clauses Act, 1957, relating continuation of a repealed provision to rights and liabilities that accrued during the subsistence of the Rule does not subserve the purpose and object of the amendment”, it held.
The Bench also made it clear that the Rule operates retroactively and thus saves it from arbitrarily classifying the offenders into two categories with no purpose to subserve.Rejecting the reasoning of the single Judge as well as the Division Bench, the Bench underscored the importance of a simple and plain understanding of laws and its processes, keeping in mind the purpose and object for which they seek to govern and regulate us.
Allowing the appeals, the Bench held that the penalty to be imposed on the appellants will be on the basis of Rule 19 as substituted on 29.03.2011.
Read Order:Wg Cdr A U Tayyaba (retd) & Ors v. Union of India & Ors [SC- Miscellaneous Application No of 2024 (D No 8208 of 2024)]
Tulip Kanth
New Delhi, April 22, 2024:In a clarificatory order, the Supreme Court has held that the pensionary payments to be made to women Short Service Commissioned Officers (SSCOs) of the Indian Air Force have to be computed on the basis of the salary on the date of the deemed completion of 20 years.
These proceedings, before the Top Court, arose from a judgment dated November 16, 2022 whereby it was directed that the women SSCO would be considered for the grant of one-time pensionary benefits on the basis that they had completed the minimum qualifying service required for pension.
It was also held therein that the officers who would be found eligible for the grant of pensionary benefits in terms of the present direction shall not be entitled to any arrears of salary, but the arrears of pension shall be payable with effect from the date on which the officers are deemed to have completed twenty years of service.
It was in terms of these directions that the Union government issued Pension Payment Orders (PPOs) for the officers.
While the proceedings were going on, it was brought to the Court’s attention that the women officers were released from service at the end of the fourteenth year and the salary for the purpose of computing the pension was taken as the last drawn salary as of the date of the release. No increments had been granted to the applicants between the date of release and the date on which they were deemed to have completed twenty years service in terms of the judgment of the Top Court dated November 16, 2022.
It was the case of the applicants that the authorities had not correctly interpreted the operative directions. It was submitted that once the applicants had been treated to have completed the minimum qualifying service required for pension, the last drawn salary must be taken as on that date and increments have to be computed for pension.
It was noticed by the 3-Judge Bench of Chief Justice D.Y. Chandrachud, Justice J.B. Pardiwala & Justice Manoj Misra that the first direction which was issued by the Top Court was that all the women Short Service Commissioned Officers (SSCOs) governed by the batch of cases would be considered for the grant of one time pensionary benefits on the basis that they have completed the minimum qualifying service required for pension. The minimum qualifying service for pension is 20 years.
The Bench thus directed:
- The pensionary payments would have to be computed on the basis of the salary on the date of the deemed completion of twenty years; and
- The women SSCOs would be entitled to notional increments between the date of release and the date on which they have completed the minimum qualifying period for pension, namely, the deemed completion of twenty years.
The Bench also made it clear that the one-time pensionary payment due in terms of the judgment dated November 16, 2022 shall be revised and arrears that remain due and payable shall be paid on or before June 15, 2024.
On the issue of the computation of the commuted value of the pensionary payment, the Bench held that the commuted value shall be computed as on the date of the deemed completion of twenty years. The commutation factor will be that which was applicable on the date of the deemed completion of twenty years. The arrears that remain to be paid have to be paid over on or before June15, 2024.
As regards the encashment of annual leave, the Bench said, “...In the event that any of the officers is found to have accumulated the maximum of 300 days in respect of which encashment is allowable, the difference between the encashable quantum of 300 days and the amount which has already been released shall be computed and paid over on or before 15 June 2024.”
The officers governed by this batch and other similarly placed officers have also been held entitled to ECHS benefits as retired officers.
Read Order: GOVIND KUMAR SHARMA & ANR v. BANK OF BARODA & ORS [SC- CIVIL APPEAL NO. 5028 OF 2024]
LE Correspondent
New Delhi, April 22, 2024: In a case where the Bank of Baroda had not followed the statutory procedure prescribed under the Security Interest (Enforcement) Rules, 2002, by not issuing the notice to the borrower as required under Rules 8(6) and 8(7), the Supreme Court has upheld the decision of the Debt Recovery Tribunal (DRT) to set aside the sale.
The firm-respondent no.3, in this case, had taken a loan from the respondent no.1-Bank. However, as it went into default, the Bank initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). In the said recovery proceedings, the Recovery Officer conducted an open auction. The appellants were the highest bidder. Their bid was accepted and they made good the deposits as per the terms of this auction. Accordingly, a sale certificate was issued.
The appellants were tenants of the borrower in the premises in question which had been put to auction. As such the status of the appellants changed from that of tenants to that of owners after the sale was confirmed. The borrower-respondent nos.3 and 4 filed a securitization application under Section 17 of the SARFAESI Act for setting aside the sale on the ground that notice as required under Rules 8(6) and 8(7) prescribed under the Security Interest (Enforcement) Rules, 2002.
The DRT, after examining the matter, came to the conclusion that the Bank itself had admitted that the statutory compliance under the above rules had not been made and as such proceeded to set aside the sale.
In effect the DRT, after setting aside the sale, further proceeded to direct the Bank to refund the auction money with interest only after receiving possession of the property from the auction purchaser within 15 days thereof. The borrower was directed to pay the dues of the Bank within 15 days with up to date interest, failing which the Bank would be at liberty to proceed further under the SARFAESI Act for recovery of its dues.
The appellants preferred an appeal before the DRAT which came to be dismissed. Thereafter the appellants approached the High Court by way of a Writ Petition which was dismissed by the impugned judgment and order, giving rise to the appeal before the Top Court.
In view of the concurrent finding based on the admission by the Bank that mandatory notice of 30 days was not given to the Borrower before holding the auction/sale, the Division Bench of Justice Vikram Nath & Justice Satish Chandra Sharma opined that the setting aside of the auction/sale couldn't be faulted with and the same had to be approved.
As per the Bench, once the sale is set aside, the status of the appellants as owners would automatically revert to that of tenants. The status of possession at best could have been altered from that of an owner to that of tenants but Bank would not have any right to claim actual physical possession from the appellants nor would the appellants be under any obligation to handover physical possession to the Bank. The DRT fell in error on the said issue. Therefore, the Bench held that the direction issued by the DRT that the Bank will first take possession and thereafter refund the auction money with interest applicable to fixed deposits, was not a correct direction.
It was further observed that as of date the dues of the Bank had been fully discharged and an additional amount of the auction money was lying with the Bank since 2009. This amount was to be returned to the appellants. In such facts and circumstances of the case, the Bench opined that rate of interest on the auction money had to be enhanced.
“Considering the fact that the money of the Bank is also public money, we feel that interest of justice would be best served if the auction money with 12 per cent per annum compound interest is returned to the appellants. Such interest be calculated from the date of deposit till the date it is actually paid”, it added.
There was some dispute between the Bank and the borrower that there could be minor adjustments still left.It was observed by the Bench that if any additional amount is lying with the Bank, the same would be returned to the borrower and if any amount is still due to be paid, the borrower would pay the said amount to the Bank. The Bank and the borrower had both agreed to make the said adjustments.
Thus, affirming the decision of setting aside of the auction sale, the Bench held that the status of the appellants as tenants shall stand restored leaving it open for the borrower as owner of the property to evict the appellants in accordance to law.The entire auction/sale money lying with the Bank (R-1 & 2) has been asked to be returned to the appellants along with compound interest @12 per cent per annum to be calculated from the date of deposit till the date of payment.
Lastly, the Bench concluded the matter by observing, “The Borrower Respondent nos.3 and 4 and the Bank–Respondent nos.1 and 2, would streamline their accounts and the Bank upon settlement of the same will issue a No Dues Certificate to the Borrower.”
Read Order: INSOLVENCY AND BANKRUPTCY BOARD OF INDIA v. SATYANARAYAN BANKATLAL MALU & ORS [SC- CRIMINAL APPEAL NO. 3851 OF 2023]
Tulip Kanth
New Delhi, April 22, 2024: The Supreme Court has held that the Single-Judge Bench of the Bombay High Court grossly erred in quashing a complaint filed by the Insolvency and Bankruptcy Board of India under Section 236 of the Insolvency and Bankruptcy Code, 2016 only on the ground that it was filed before a Special Court presided by a Sessions Judge.
The facts of the case suggested that M/s. SBM Paper Mills Private Limited (Corporate Debtor) had filed a petition on under Section 10 of the Insolvency and Bankruptcy Code, 2016 for initiation of the Corporate Insolvency Resolution Process (CIRP) of itself. The National Company Law Tribunal, Mumbai Bench (NCLT) admitted the Petition and appointed Amit Poddar as the Interim Resolution Professional (RP) to carry out the functions as prescribed under the provisions of the Code.
In the meanwhile, Satyanarayan Malu, i.e., the Respondent/Ex-Director of the Corporate Debtor filed an application before the NCLT under Section 12A for the withdrawal of the aforesaid petition under Section 10 in light of a One Time Settlement (OTS) entered into with the sole Financial Creditor, i.e., Allahabad Bank. On the other hand, the RP had also filed an application for the approval of the Resolution Plan. The NCLT allowed the application of the Respondent.
However, on account of non-compliance of the terms of the OTS by the Respondents, the NCLT issued a Show-Cause Notice against them. The Appellant-Board filed a Complaint against the Respondents before the Sessions Judge for offences punishable under Section 73(a) and 235A for the non-compliance of the terms of the OTS and for not having filed the application under Section 12A through the RP. The Sessions Judge directed issuance of process against the Respondents and further directed them to be summoned on the next date of hearing.
Being aggrieved thereby, the Respondents filed a Writ Petition before the Bombay High Court, praying for the quashing of the order passed by the Sessions Judge for the want of jurisdiction. The High Court allowed the Writ Petition. Hence, the appeal was filed before the Top Court.
It was the case of the petitioners that the reasoning given by the Single Judge that the offences other than the Companies Act cannot be tried by the Special Court consisting of Sessions Judge or Additional Sessions Judge was totally in ignorance of the provisions of sub-section (1) of Section 236 of the Code.The petitioner contended that the Single Judge had grossly erred in holding that, in view of the Companies (Amendment) Act, 2017, only the offences committed under the Companies Act can be tried by Special Court consisting of Sessions Judge or Additional Sessions Judge.
At the outset, the Division Bench of Justice B.R. Gavai and Justice Sandeep Mehta referred to Section 236(1) of the Code which provides that the offences under the Code shall be tried by the Special Court established under Chapter XXVIII of the Companies Act, 2013.
The Bench made it clear that that Section 435 of the Companies Act, 2013 as it originally existed, provided for only one class of Special Courts i.e. a person holding office of a Sessions Judge or an Additional Sessions Judge and all offences under the Companies Act, 2013 were required to be tried by such Special Courts. By the 2018 Amendment, two classes of Special Courts were established. The first class of Special Courts comprised of an officer holding the office as Sessions Judge or Additional Sessions Judge, whereas the second class of Special Courts comprised of Metropolitan Magistrate or a Judicial Magistrate of the First Class. The offences punishable under the Companies Act with imprisonment of two years or more were required to be tried by a Special Court comprising of Sessions Judge or Additional Sessions Judge, whereas all other offences i.e. the offences punishable with imprisonment of less than two years were to be tried by a Special Court comprising of Metropolitan Magistrate or the Judicial Magistrate of the First Class.
Another issue to be considered was whether the Special Court under the Code would be as provided under Section 435 of the Companies Act as it existed at the time when the Code came into effect, or it would be as provided under Section 435 of the Companies Act after the 2018 Amendment. The Bench observed that the answer to that question would depend upon as to whether the reference to Special Court established under Chapter XXVIII of the Companies Act, 2013 in Section 236(1) of the Code is a legislation by incorporation or a legislation by reference. If it is held that it is a legislation by incorporation, then the subsequent amendments would not have any effect on the Code and the Special Court would continue to be as provided under Section 435 of the Companies Act, as it existed when the Code came into effect. Per contra, if it is held that it is a legislation by reference then the subsequent amendments would also be applicable to the Code and the Special Courts would be as provided under Section 435 of the Companies Act after its amendment by the 2018 Amendment.
Noting that under Section 236(1) of the Code, reference is offences under this Code shall be tried by the Special Court established under Chapter XXVIII of the Companies Act, 2013, the Bench opined that the reference is not general but specific. The reference is only to the fact that the offences under the Code shall be tried by the Special Court established under Chapter XXVIII of the Companies Act.
Since the reference is specific and not general, the Bench observed the present case is a case of legislation by incorporation and not a case of legislation by reference. The effect would be that the provision with regard to Special Court has been bodily lifted from Section 435 of the Companies Act, 2013 and incorporated in Section 236(1) of the Code. This would mean that the provision of Section 435 of the Companies Act, 2013 with regard to Special Court would become a part of Section 236(1) of the Code as on the date of its enactment. If that be so, any amendment to Section 435 of the Companies Act, 2013, after the date on which the Code came into effect would not have any effect on the provisions of Section 236(1) of the Code. The Special Court at that point of time only consists of a person who was qualified to be a Sessions Judge or an Additional Sessions Judge.
Further noticing that Section 236(1) of the Code wasn’t amended, the Bench stated that the provision with regard to the reference in Section 236(1) of the Code pertaining to Special Court as mentioned in Section 435 of the Companies Act, 2013 stood frozen as on the date of enactment of the Code. As such, the Judge of the High Court had erred in holding that in view of the subsequent amendment, the offences under the Code shall be tried only by a Metropolitan Magistrate or a Judicial Magistrate of the First Class.
“In any case, the learned single Judge of the High Court has grossly erred in quashing the complaint only on the ground that it was filed before a Special Court presided by a Sessions Judges. At the most, the learned single judge of the High Court could have directed the complaint to be withdrawn and presented before the appropriate court having jurisdiction”, it held.
Thus, allowing the appeal, the Bench quashed the impugned judgment of the Single Judge and said, “It is held that the Special Court presided by a Sessions Judge or an Additional Sessions Judge will have jurisdiction to try the complaint under the Code. However, since the learned single judge of the High Court has not considered the merits of the matter, the matter is remitted to the learned single judge of the High Court for considering the petition of the respondents afresh on merits.”
Time for judiciary to introspect and see what can be done to restore people’s faith – Justice Lokur
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.
‘A major issue for startups, especially during fund raising, is their compliance with extant RBI foreign exchange regulations, pricing guidelines, and the Companies Act 2013.’- Aakash Parihar
Aakash Parihar is Partner at Triumvir Law, a firm specializing in M&A, PE/VC, startup advisory, international commercial arbitration, and corporate disputes. He is an alumnus of the National Law School of India University, Bangalore.
How did you come across law as a career? Tell us about what made you decide law as an option.
Growing up in a small town in Madhya Pradesh, wedid not have many options.There you either study to become a doctor or an engineer. As the sheep follows the herd, I too jumped into 11th grade with PCM (Physics, Chemistry and Mathematics).However, shortly after, I came across the Common Law Admission Test (CLAT) and the prospect of law as a career. Being a law aspirant without any background of legal field, I hardly knew anything about the legal profession leave alone the niche areas of corporate lawor dispute resolution. Thereafter, I interacted with students from various law schools in India to understand law as a career and I opted to sit for CLAT. Fortunately, my hard work paid off and I made it to the hallowed National Law School of India University, Bangalore (NSLIU). Joining NLSIU and moving to Bangalorewas an overwhelming experience. However, after a few months, I settled in and became accustomed to the rigorous academic curriculum. Needless to mention that it was an absolute pleasure to study with and from someof the brightest minds in legal academia. NLSIU, Bangalore broadened my perspective about law and provided me with a new set of lenses to comprehend the world around me. Through this newly acquired perspective and a great amount of hard work (which is of course irreplaceable), I was able to procure a job in my fourth year at law school and thus began my journey.
As a lawyer carving a niche for himself, tell us about your professional journey so far. What are the challenges that new lawyers face while starting out in the legal field?
I started my professional journey as an Associate at Samvad Partners, Bangalore, where I primarily worked in the corporate team. Prior to Samvad Partners, through my internship, I had developed an interest towards corporate law,especially the PE/VC and M&A practice area. In the initial years as an associate at Samvad Partners and later at AZB & Partners, Mumbai, I had the opportunity to work on various aspects of corporate law, i.e., from PE/VC and M&A with respect to listed as well as unlisted companies. My work experience at these firms equipped and provided me the know-how to deal with cutting edge transactional lawyering. At this point, it is important to mention that I always had aspirations to join and develop a boutique firm. While I was working at AZB, sometime around March 2019, I got a call from Anubhab, Founder of Triumvir Law, who told me about the great work Triumvir Law was doing in the start-up and emerging companies’ ecosystem in Bangalore. The ambition of the firm aligned with mine,so I took a leap of faith to move to Bangalore to join Triumvir Law.
Anyone who is a first-generation lawyer in the legal industry will agree with my statement that it is never easy to build a firm, that too so early in your career. However, that is precisely the notion that Triumvir Law wanted to disrupt. To provide quality corporate and dispute resolution advisory to clients across India and abroad at an affordable price point.
Once you start your professional journey, you need to apply everything that you learnt in law schoolwith a practical perspective. Therefore, in my opinion, in addition to learning the practical aspects of law, a young lawyer needs to be accustomed with various practices of law before choosing one specific field to practice.
India has been doing reallywell in the field of M&A and PE/VC. Since you specialize in M&A and PE/VC dealmaking, what according to you has been working well for the country in this sphere? What does the future look like?
India is a developing economy, andM&A and PE/VC transactions form the backbone of the same. Since liberalization, there has been an influx of foreign investment in India, and we have seen an exponential rise in PC/VA and M&A deals. Indian investment market growth especially M&A and PE/VC aspects can be attributed to the advent of startup culture in India. The increase in M&A and PE/VC deals require corporate lawyersto handle the legal aspects of these deals.
As a corporate lawyer working in M&A and PE/VC space, my work ranges from drafting term-sheets to the transaction documents (SPA, SSA, SHA, BTA, etc.). TheM&A and PE/VC deal space experienced a slump during the first few months of the pandemic, but since June 2021, there has been a significant growth in M&A and PE/VC deal space in India. The growth and consistence of the M&A and PE/VC deal space in India can be attributed to several factors such as foreign investment, uncapped demands in the Indian market and exceptional performance of Indian startups.
During the pandemic many businesses were shut down but surprisingly many new businesses started, which adapted to the challenges imposed by the pandemic. Since we are in the recovery mode, I think the M&A and PE/VC deal space will reach bigger heights in the comingyears. We as a firm look forward to being part of this recovery mode by being part of the more M&A and PE/VC deals in future.
You also advice start-ups. What are the legal issues or challenges that the start-ups usually face specifically in India? Do these issues/challenges have long-term consequences?
We do a considerable amount of work with startupswhich range from day-to-day legal advisory to transaction documentation during a funding round. In India, we have noticed that a sizeable amount of clientele approach counsels only when there is a default or breach, more often than not in a state of panic. The same principle applies to startups in India, they normally approach us at a stage when they are about to receive investment or are undergoing due diligence. At that point of time, we need to understand their legal issues as well as manage the demands of the investor’s legal team. The majornon-compliances by startups usually involve not maintaining proper agreements, delaying regulatory filings and secretarial compliances, and not focusing on proper corporate governance.
Another major issue for startups, especially during fund raising, is their compliance with extant RBI foreign exchange regulations, pricing guidelines, and the Companies Act 2013. Keeping up with these requirements can be time-consuming for even seasoned lawyers, and we can only imagine how difficult it would be for startups. Startups spend their initial years focusing on fund-raising, marketing, minimum viable products, and scaling their businesses. Legal advice does not usually factor in as a necessity. Our firm aims to help startups even before they get off the ground, and through their initial years of growth. We wanted to be the ones bringing in that change in the legal sector, and we hope to help many more such startups in the future.
In your opinion, are there any specific India-related problems that corporate/ commercial firms face as far as the company laws are concerned? Is there scope for improvement on this front?
The Indian legal system which corporate/commercial firms deal with is a living breathing organism, evolving each year. Due to this evolving nature, we lawyers are always on our toes.From a minor amendment to the Companies Act to the overhaul of the foreign exchange regime by the Reserve Bank of India, each of these changes affect the compliance and regulatory regime of corporates. For instance, when India changed the investment route for countries sharing land border with India,whereby any country sharing land border with India including Hong Kong cannot invest in India without approval of the RBI in consultation with the central government,it impacted a lot of ongoing transactions and we as lawyers had to be the first ones to inform our clients about such a change in the country’s foreign investment policy. In my opinion, there is huge scope of improvement in legal regime in India, I think a stable regulatory and tax regime is the need for the hour so far as the Indian system is concerned. The biggest example of such a market with stable regulatory and tax regime is Singapore, and we must work towards emulating the same.
Your boutique law firm has offices in three different cities — Delhi NCR, Mumbai and Bangalore. Have the Covid-induced restrictions such as WFH affected your firm’s operations? How has your firm adapted to the professional challenges imposed by the pandemic-related lifestyle changes?
We have offices in New Delhi NCR and Mumbai, and our main office is in Bangalore. Before the pandemic, our work schedule involved a fair bit of travelling across these cities. But post the lockdowns we shifted to a hybrid model, and unless absolutely necessary, we usually work from home.
In relation to the professional challenges during the pandemic, I think it was a difficult time for most young professionals. We do acknowledge the fact that our firm survived the pandemic. Our work as lawyers/ law firms also involves client outreach and getting new clients, which was difficult during the lockdowns. We expanded our client outreach through digital means and by conducting webinars, including one with King’s College London on International Treaty Arbitration. Further, we also focused on client outreach and knowledge management during the pandemic to educate and create legal awareness among our clients.
‘It’s a myth that good legal advice comes at prohibitive costs. A lot of heartburn can be avoided if documents are entered into with proper legal advice and with due negotiations.’ – Archana Balasubramanian
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.
August 13, 2021:
Lawyers see companies ill-prepared for conflict, often, in India. When large corporates take a remedial instead of mitigative approach to legal issues – an approach utterly incoherent to both their size and the compliance ecosystem in their sector – it is there where the concept of costs on legal becomes problematic. Pre-dispute management strategy is much more rationalized on the business’ pocket than the costs of going in the red on conflict and compliances.
Corporates often focus on business and let go of backend maintenance of paperwork, raising issues as and when they arise and resolving conflicts / client queries in a manner that will promote dispute avoidance.
Corporate risk and compliance management is yet another elephant in India, which in addition to commercial disputes can be a drain on a company’s resources. It can be clubbed under four major heads – labour, industrial, financial and corporate laws. There are around 20 Central Acts and then specific state-laws by which corporates are governed under these four categories.
Risk and compliance management is also significantly dependent on the sector, size, scale and nature of the business and the activities being carried out.
The woes of a large number of promoters from the ecommerce ecosystem are to do with streamlining systems to navigate legal. India has certain heavily regulated sectors and, like I mentioned earlier, an intricate web of corporate risk and compliance legislation that can result in prohibitive costs in the remedial phase. To tackle the web in the preventive or mitigative phase, start-ups end up lacking the arsenal due to sheer intimidation from legal. Promoters face sectoral risks in sectors which are heavily regulated, risks of heavy penalties and fines under company law or foreign exchange laws, if fund raise is not done in a compliant manner.
It is a myth that good legal advice comes at prohibitive costs. Promoters are quick to sign on the dotted line and approach lawyers with a tick the box approach. A lot of heartburn can be avoided if documents are entered into with proper legal advice and with due negotiations.
Investment contracts, large celebrity endorsement contracts and CXO contracts are some key areas where legal advice should be obtained. Online contracts is also emerging as an important area of concern.
When we talk of scope, arbitration is pretty much a default mechanism at this stage for adjudicating commercial disputes in India, especially given the fixation of timelines for closure of arbitration proceedings in India. The autonomy it allows the parties in dispute to pick a neutral and flexible forum for resolution is substantial. Lower courts being what they are in India, arbitration emerges as the only viable mode of dispute resolution in the Indian commercial context.
The arbitrability of disputes has evolved significantly in the last 10 years. The courts are essentially pro-arbitration when it comes to judging the arbitrability of subject matter and sending matters to arbitration quickly.
The Supreme Court’s ruling in the Vidya Drolia case has significantly clarified the position in respect of tenancy disputes, frauds and consumer disputes. It reflects upon the progressive approach of the court and aims to enable an efficient, autonomous and effective arbitration environment in India.
Law firms stand for ensuring that the law works for business and not against it. Whatever the scope of our mandate, the bottom line is to ensure a risk-free, conflict-free, compliant and prepared enterprise for our client, in a manner that does not intimidate the client or bog them down, regardless of the intricacy of the legal and regulatory web it takes to navigate to get to that end result. Lawyers need to dissect the business of law from the work.
This really involves meticulous, detail-oriented, sheer hard work on the facts, figures, dates and all other countless coordinates of each mandate, repetitively and even to a, so-called, “dull” routine rhythm – with consistent single-mindedness and unflinching resolve.
As a firm, multiply that effort into volumes, most of it against-the-clock given the compliance heavy ecosystem often riddled with uncertainties in a number of jurisdictions. So the same meticulous streamlining of mandate deliverables has to be extrapolated by the management of the firm to the junior most staff.
Further, the process of streamlining itself has to be more dynamic than ever now given the pace at which the new economy, tech-ecosystem, business climate as well as business development processes turn a new leaf.
Finally, but above all, we need to find a way to feel happy, positive and energized together as a team while chasing all of the aforesaid dreams. The competitive timelines and volumes at which a law firm works, this too is a real challenge. But we are happy to face it and evolve as we grow.
We always as a firm operated on the work from anywhere principle. We believed in it and inculcated this through document management processes to the last trainee. This helped us shut shop one day and continue from wherever we are operating.
The team has been regularly meeting online (at least once a day). We have been able to channel the time spent in travelling to and attending meetings in developing our internal knowledge banks further, streamline our processes, and work on integrating various tech to make the practice more cost-effective for our clients.
Validity & Existence of an Arbitration Clause in an Unstamped Agreement
By Kunal Kumar
January 8, 2024
In a recent ruling, a seven-judge bench of the Supreme Court of India in its judgment in re: Interplay between arbitration agreements under the Arbitration & Conciliation Act 1996 and the Indian Stamp Act 1899, overruled the constitutional bench decision of the Supreme Court of India in N. N. Mercantile Private Limited v. Indo Unique Flame Ltd. & Ors. and has settled the issue concerning the validity and existence of an arbitration clause in an unstamped agreement. (‘N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – III’)
Background to N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – III
One of the first instances concerning the issue of the validity of an unstamped agreement arose in the case of SMS Tea Estate Pvt. Ltd. v. Chandmari Tea Company Pvt. Ltd. In this case, the Hon’ble Apex Court held that if an instrument/document lacks proper stamping, the exercising Court must preclude itself from acting upon it, including the arbitration clause. It further emphasized that it is imperative for the Court to impound such documents/instruments and must accordingly adhere to the prescribed procedure outlined in the Indian Stamp Act 1899.
With the introduction of the 2015 Amendment, Section 11(6A) was inserted in the Arbitration & Conciliation Act 1996 (A&C Act) which stated whilst appointing an arbitrator under the A&C Act, the Court must confine itself to the examination of the existence of an arbitration agreement.
In the case of M/s Duro Felguera S.A. v. M/s Gangavaram Port Limited, the Supreme Court of India made a noteworthy observation, affirming that the legislative intent behind the 2015 Amendment to the A&C Act was necessitated to minimise the Court's involvement during the stage of appointing an arbitrator and that the purpose embodied in Section 11(6A) of A&C Act, deserves due acknowledgement & respect.
In the case of Garware Wall Ropes Ltd. v. Cosatal Marine Constructions & Engineering Ltd., a divisional bench of the Apex Court reaffirmed its previous decision held in SMS Tea Estates (supra) and concluded that the inclusion of an arbitration clause in a contract assumes significance, emphasizing that the agreement transforms into a contract only when it holds legal enforceability. The Apex Court observed that an agreement fails to attain the status of a contract and would not be legally enforceable unless it bears the requisite stamp as mandated under the Indian Stamp Act 1899. Accordingly, the Court concluded that Section 11(6A) read in conjunction with Section 7(2) of the A&C Act and Section 2(h) of the Indian Contract Act 1872, clarified that the existence of an arbitration clause within an agreement is contingent on its legal enforceability and that the 2015 Amendment of the A&C Act to Section 11(6A) had not altered the principles laid out in SMS Tea Estates (supra).
Brief Factual Matrix – N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd.
Indo Unique Flame Ltd. (‘Indo Unique’) was awarded a contract for a coal beneficiation/washing project with Karnataka Power Corporation Ltd. (‘KPCL’). In the course of the project, Indo Unique entered into a subcontract in the form of a Work Order with N.N. Global Mercantile Pvt. Ltd. (‘N.N. Global’) for coal transportation, coal handling and loading. Subsequently, certain disputes arose with KPCL, leading to KPCL invoking Bank Guarantees of Indo Unique under the main contract, after which Indo Unique invoked the Bank Guarantee of N. N. Global as supplied under the Work Order.
Top of FormS
Subsequently, N.N. Global initiated legal proceedings against the cashing of the Bank Guarantee in a Commercial Court. In response thereto, Indo Unique moved an application under Section 8 of the A&C Act, requesting that the Parties to the dispute be referred for arbitration. The Commercial Court dismissed the Section 8 application, citing the unstamped status of the Work Order as one of the grounds. Dissatisfied with the Commercial Court's decision on 18 January 2018, Indo Unique filed a Writ Petition before the High Court of Bombay seeking that the Order passed by the Commercial Court be quashed or set aside. The Hon’ble Bombay High Court on 30 September 2020 allowed the Writ Petition filed by Indo Unique, aggrieved by which, N.N. Global filed a Special Leave Petition before the Supreme Court of India.
N. N. Global Mercantile Pvt. Ltd. v. Indo Unique Flame Ltd. – I
The issue in the matter of M/s N.N. Global Mercantile Pvt. Ltd. v. M/s Indo Unqiue Flame Ltd. & Ors. came up before a three-bench of the Supreme Court of India i.e. in a situation when an underlying contract is not stamped or is insufficiently stamped, as required under the Indian Stamp Act 1899, would that also render the arbitration clause as non-existent and/or unenforceable (‘N.N. Global Mercantile Pvt. Ltd. v. Indo Flame Ltd. – I’).
The Hon’ble Supreme Court of India whilst emphasizing the 'Doctrine of Separability' of an arbitration agreement held that the non-payment of stamp duty on the commercial contract would not invalidate, vitiate, or render the arbitration clause as unenforceable, because the arbitration agreement is considered an independent contract from the main contract, and the existence and/or validity of an arbitration clause is not conditional on the stamping of a contract. The Hon’ble Supreme Court further held that deficiency in stamp duty of a contract is a curable defect and that the deficiency in stamp duty on the work order, would not affect the validity and/or enforceability of the arbitration clause, thus applying the Doctrine of Separability. The arbitration agreement remains valid and enforceable even if the main contract, within which it is embedded, is not admissible in evidence owing to lack of stamping.
The Hon’ble Apex Court, however, considered it appropriate to refer the issue i.e. whether unstamped instrument/document, would also render an arbitration clause as non-existent, unenforceable, to a constitutional bench of five-bench of the Supreme Court.
N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II
On 25 April 2023, a five-judge bench of the Hon’ble Supreme Court of India in the matter of N. N. Mercantile Private Limited v. Indo Unique Flame Ltd. & Ors. held that (1) An unstamped instrument containing an arbitration agreement cannot be said to be a contract which is enforceable in law within the meaning of Section 2(h) of the Indian Contract Act 1872 and would be void under Section 2(g) of the Indian Contract Act 1872, (2) an unstamped instrument which is not a contract nor enforceable cannot be acted upon unless it is duly stamped, and would not otherwise exist in the eyes of the law, (3) the certified copy of the arbitration agreement produced before a Court, must clearly indicate the stamp duty paid on the instrument, (4) the Court exercising its power in appointing an arbitration under Section 11 of the A&C Act, is required to act in terms of Section 33 and Section 35 of the Indian Stamp Act 1899 (N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II).
N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – III
A seven-judge bench of the Supreme Court of India on 13 December 2023 in its recent judgment in re: Interplay between arbitration agreements under the Arbitration & Conciliation Act 1996 and the Indian Stamp Act 1899, (1) Agreements lacking proper stamping or inadequately stamped are deemed inadmissible as evidence under Section 35 of the Stamp Act. However, such agreements are not automatically rendered void or unenforceable ab initio; (2) non-stamping or insufficient stamping of a contract is a curable defect, (2) the issue of stamping is not subject to determination under Sections 8 or 11 of the A&C Act by a Court. The concerned Court is only required to assess the prima facie existence of the arbitration agreement, separate from concerns related to stamping, and (3) any objections pertaining to the stamping of the agreement would fall within the jurisdiction of the arbitral tribunal. Accordingly, the decision in N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II and SMS Tea (supra) was overruled, by the seven-judge bench of the Supreme Court of India.
Kunal is a qualified lawyer with more than nine years of experience and has completed his LL.M. in Dispute Resolution (specialisation in International Commercial Arbitration) from Straus Institute for Dispute Resolution, Pepperdine University, California.
Kunal currently has his own independent practice and specializes in commercial/construction arbitration as well as civil litigation. He has handled several matters relating to Civil Law and arbitrations (both domestic and international) and has appeared before the Supreme Court of India, High Court of Delhi, District Courts of Delhi and various other tribunals.
No Safe Harbour For Google On Trademark Infringement
By Mayank Grover & Pratibha Vyas
October 9, 2023
Innovation, patience, dedication and uniqueness culminate in establishing a distinct identity. A trademark aids in identifying the source and quality, shaping perceptions about the identity's essence. When values accompany a product or service's trademark, safeguarding against misuse and infringement becomes crucial. A recent pronouncement of a Division Bench of the Delhi High Court dated August 10, 2023 in Google LLC v. DRS Logistics (P) Ltd. & Ors. and Google India Private Limited v. DRS Logistics (P) Ltd. & Ors. directed that Google’s use of trademarks as keywords for its Google Ads Programme does amount to ‘use’ in advertising under the Trademarks Act and the benefit of safe harbour would not be available to Google if such keywords infringe on the concerned trademark.
Factual Background
Google LLC manages and operates the Google Search Engine and Ads Programme, while, Google India Private Limited is a subsidiary of Google that has been appointed as a non-exclusive reseller of the Ads Programme in India. The Respondents, DRS Logistics and Agarwal Packers and Movers Pvt. Ltd. are leading packaging, moving and logistics service providers in India.
On 22.12.2011, DRS filed a suit against Google and Just Dial Ltd. under provisions of the Trademarks Act, 1999 (‘TM Act’) inter alia seeking a permanent injunction against Google from permitting third parties from infringing, passing off etc. the relevant trademarks of DRS. The core of the dispute revolved around Google’s Ads Programme. DRS claimed that its trade name 'AGARWAL PACKERS AND MOVERS' is widely recognized and a 'well-known' trademark. Use of DRS’s trademark as a keyword diverts internet traffic from its website to that of its competitors and they were entitled to seek restraint against Google for permitting third parties who are not authorized to use the said trademark. DRS further argued that Google benefits from these trademark infringements. This practice involved charging a higher amount for displaying these ads, constituting an infringement of their trademarks. Whereas, Google contended that the use of the keyword in the Ads Programme does not amount to ‘use’ under the TM Act notwithstanding that the keyword is/or similar to a trademark. Thus, the use of a term as a keyword cannot be construed as an infringement of a trademark under the TM Act, and being an intermediary, it claimed a safe harbour under Section 79 of the Information Technology Act, 2000. (‘IT Act’).
In essence, the dispute between the parties was rooted in DRS’s grievance concerning the Ads Programme. The Learned Single Judge vide judgment dated 30.10.2021interpreted relevant provisions of the TM Act and drew on multiple legal precedents to arrive at the decision that DRS can seek protection of its trademarks which were registered under Section 28 of the TM Act and issued directions to investigate complaints alleging the use of trademark and/or to ascertain whether a sponsored result has an effect of infringing a trademark or passing off.
Being aggrieved, Google LLC and Google Pvt. Ltd. filed appeals before the Division Bench. Google LLC argued that the Single Judge’s findings were erroneous and the directions issued were liable to be set aside. Google India claimed that it doesn’t control and operate the Search Engine and the Ads Programme making it unable to comply with the directions passed in the impugned judgment.
Analysis & Decision of Court
The Division Bench found Single Judge’s rationale for assessing trademark infringement through keywords and meta-tags valid. Meta-tags are a list of words/code in a website, not readily visible to the naked eye. It serves as a tool for indexing the website by a search engine. If a trademark of a third party is used as a meta-tag, the same would serve as identifying the website as relevant to the search query that includes the trademark as a search term. The use of keywords in the Ads Programme also serves similar purpose. The Division Bench was unable to accept that using a trademark as a keyword, even if not visible, would not be considered trademark use under the TM Act.
Google placed heavy reliance on the decisions rendered by Courts across jurisdictions of United Kingdom, United States of America, European Union, Australia, New Zealand, Russia, South Africa, Canada, Spain, Italy, Japan and China; in the cases of Google France SARL and Google Inc. v. Louis Vitton SA & Ors.[1], Interflora Inc. v. Marks & Spencer Plc.[2], and L’Oreal SA v. eBay International AG[3] in support of the contention that the use of trade marks is by the advertiser and not by Google. However, the Division Bench rejected Google’s passive role; highlighting its active involvement in recommending and promoting trademark keywords for higher clicks in its Ads Programme. Division Bench referred to a few judicial decisions rendered in the United States of America that captured the essence of the controversy for perspective, concluding that Google actively promotes and encourages trademarks associated with major goods and services, rather than having a passive role.
It was held that the contention that the use of trademarks as keywords, per se constitutes an infringement of the trademark is unmerited; the assumption that an internet user is merely searching the address of the proprietor of the trademark when he feeds in a search query that may contain a trademark, is erroneous.
The Doctrine of 'Initial Interest Confusion' addresses trademark infringement based on pre-purchase confusion. The doctrine is applied when meta-tags, keywords, or domain names cause initial confusion similar to a registered trademark. If users are misled to access unrelated websites, trademark use in internet advertising may be actionable and reliance was placed on US precedents. Referring to Section 29 of the TM Act, it was directed that Section 29 does not specify the duration for which the confusion lasts but, even if the confusion is for a short duration and an internet user is able to recover from the same, the trade mark would be infringed and would offend Section 29(2) of the TM Act.
It was held that the Ads Programme is a platform for displaying advertisements. Google, being an architect and operator of its own programme makes it an active participant in the use of trademarks and determining the advertisements displayed on search pages. Their use of proprietary software makes them utilize trademarks and control the distribution of information related to potentially infringing links, ultimately leading to revenue maximization. Hence, a substantial link exists between Google LLC and Google India, rendering it impossible for Google India to deny its role in operating the Ads Programme. It was further held that Google sells trademarks as keywords to advertisers and encourages users to use trademarks as keywords for ads. It is contradictory for Google to encourage trademark use while claiming data belongs to third parties for exemption. After 2004, Google changed policies to boost revenue and subsequently, introduced a tool that searches effective terms, including trademarks. Google's active involvement in its advertising business and online nature does not necessarily qualify it for benefits under Section 79 of the IT Act. The Division Bench agreed with the view of the Single Judge that Google would not be eligible for protection of safe harbour under Section 79(1) of the IT Act, if its alleged activities infringe trademarks.
Conclusion
This is a seminal decision governing (and rather, restricting) the operations of intermediaries and redefining the jurisprudence of safe harbour under the IT Act. The decision is well-reasoned and establishes a significant precedent for safeguarding trademarks by uniquely holding Google accountable under its Ads Programme. The same will prevent usage of tradenames as a third-party trademark in keyword search or metatags by advertisers on Google’s search engine. While keywords and meta-tags have different levels of visibility, their purpose is similar i.e. advertising and attracting internet traffic. The use of trademarks as meta-tags by a person who is neither a proprietor of the trademark nor permitted to use the same leads to confusion amongst public at large due to the automated processes of search engines and consequently, constitutes trademark infringement.
About the Authors: Mayank Grover is a Partner and Pratibha Vyas is an Associate at Seraphic Advisors, Advocates & Solicitors
[1] C-236/08 to C-238/08 (2010) [2011] All ER (EC) 41
[2] [2014] EWCA Civ 1403
[3] 2C- 324/09 (2010)
Environment and Sustainable Development – A Balanced Approach - Nayan Chand Bihani
The debate between protection of the environment and sustainable development is an age old one and is growing in proportion with every passing day all over the world, in general and specifically with respect to developing countries like India, in particular.
The Stockholm Declaration on the Human Enviornment,1972 categorically stated that man is both the creator and the moulder of his environment, which gives him physical sustenance and affords him the opportunity of intellectual, moral, social and spiritual growth. In the long run and tortuous evolution of the human race on this planet a stage has been reached when through the rapid acceleration of science and technology man has acquired the power to transform his environment in countless ways and on an unprecedented scale. Both aspect of man’s environment, the natural and the man-made, are essential to his wellbeing and to the enjoyment of basic human rights-even the right to life itself. It also states that the protection and improvement of the human environment is a major issue which affects the wellbeing of peoples and economic development throughout the world, it is the urgent desire of the people of the whole world and the duty of all the Governments. The Declaration, in Principle 2, states that the natural resources of the earth, including the air, water, land, flora and fauna and especially representative samples of natural eco-systems, must be safeguarded for the benefit of present and future generations through careful planning or management, as appropriate. It further, in Principle 8, states that economic and social development is essential for ensuing a favourable living and working environment for man and for creating conditions on earth that are necessary for the improvement of the quality of life.
A milestone in this field is the Rio Declaration on Environment and Development, 1992. It, interalia, states that human beings are at the centre of concern for sustainable development and that they are entitled to a healthy and productive life in harmony with nature. It also states that the right to development must be fulfilled so as to equitably meet developmental and environmental needs of present and future generations. It states that in order to achieve sustainable development, environmental protection shall constitute an integral part of the development process and cannot be considered in isolation from it and that to achieve sustainable development and a higher quality of life for their people, States should reduce and eliminate unsustainable patterns of production and consumption and promote appropriate demographic policies. It contemplates that the States shall enact effective environmental legislation. Environmental standards, management objectives and priorities should reflect the environmental and developmental context to which they apply. The Declaration states that in order to protect the environment, the precautionary approach shall be widely applied by the states according to their capabilities and that environmental impact assessment, as a national instrument, shall be undertaken for proposed activities that are likely to have a significant adverse impact on the environment and are subject to a decision of a competent national authority.
Initially, the trend was to use ‘Polluter Pays’ principle and punish the offending unit. Subsequently, vide judicial decisions, the principle of sustainable development was widely applied so as to balance the two principles.
The Polluter Pays principle talks about the liability of the polluter. With the increase in the industrial development what subsequently also increased is the waste emitted out of these industries and as a result of these wastes not only were the immediate surroundings adversely affected but also the environment at large. There is no specific definition of the Polluter Pays principle, rather it is a practice emphasising on the fact that one who pollutes the environment should be held accountable and responsible for the same with consequential steps to be taken. The principle not just focuses on punishing the polluter but its main criterion is to ensure that the polluted environment returns back to its original state. The reason behind it is to promote ‘Sustainable Development’. Thus it can be summed up that Polluter Pays principle is an essential element of sustainable development. Therefore, whosoever causes pollution to the environment will have to bear the cost of its management. The principle imposes a duty on every person to protect the natural environment from pollution or else he will be responsible for the cost of the damage caused to the environment. The main reason behind imposing a cost is two folds. Firstly, to refrain any person from polluting the environment and secondly, if in the case there is pollution then it is the polluter’s duty to undo the damage. Hence, both of the above ensures that there should be sustainable development. It is pertinent to mention that the Polluter Pays principle is not a new concept. It was first referred to in 1972 in a Council Recommendation on Guiding Principles Concerning the International Economic Aspects of Environmental Policies of the Organisation for Economic Co-operation and Development. The same is also enshrined in Principle 16 of the Rio Declaration, which states that ‘the polluter, in principle, bear the cost of pollution.’ The need of the hour is a demonstrable willingness to adhere to the essence of the principle in order to ensure that there is development, but not at the cost of causing environmental degradation.
The Hon’ble Supreme Court of India in the case of Indian Council for Enviro-legal Action vs Union of India reported in LQ/SC/1996/358, interalia, putthe absolute liability upon the polluter for the harm caused to the environment.
The Hon’ble Supreme Court of India in the case of Vellore Citizens Welfare Forum vs Union of India, reported in LQ/SC/1996/1368, interalia, accepted the Polluter Pays Principle as a part of the Article 21 of the Constitution of India and also emphasised Article 48A and Article 51A(g) of the Constitution of India.
The Hon’ble Supreme Court of India in the case of Amarnath Shrine reported in LQ/SC/2012/1121, has categorically stated the right to live with dignity, safety and in a clean environment.Article 21 of the Constitution of India, guaranteeing the right to life is ever widening and needs to maintain proper balance between socio-economic security and protection of the environment.
The Hon’ble Apex Court in the case of Bombay Dyeing and Manufacturing Co Ltd- vs – Bombay Environmental Action Group reported in LQ/SC/2006/206, interalia, states that the consideration of economic aspects by Courts cannot be one and it depends on the factors of each case. However, strict views ought to be taken in cases of town planning and user of urban land so as to balance the conflicting demands of economic development and a decent urban environment. Ecology is important but other factors are no less important and public interest will be a relevant factor.
The Hon’ble Supreme Court in the case of Dahanu Taluka Environment Protection Group –vs- Bombay Suburban Electricity Supply Company Ltd reported in LQ/SC/1991/157, has held that it is primary for the Government to consider importance of public projects for the betterment of the conditions of living of people on one hand and necessity for preservation of social and ecological balance, avoidance of deforestation and maintenance of purity of atmosphere and water from pollution and the role of the Courts is restricted to examine the whether the Government has taken into account all the relevant aspects and has not ignored any material condition.
The Hon’ble Supreme Court of India in the case of Narmada BachaoAndolan vs Union of India reported in LQ/SC/2000/1509, interalia, reiterated the Polluter Pay Principle.
A milestone case is that of M C Mehta vs Union of India reported in LQ/SC/2004/397, wherein the Hon’ble Supreme Court explained the Precautionary principle and the principle of Sustainable Development. It was, interalia, stated that the development needs have to be met but a balance has to be struck between such needs and the environment. The Hon’ble Supreme Court also reiterated similar views in a series of cases, some of which are stated hereinbelow;
LQ/SC/2007/1421
- M C Mehta vs Union of IndiaLQ/SC/2009/1231
- Tirpur Dyeing Factory Owners Association vs Noyyal River Ayacutdars Protection Association &Ors.LQ/SC/2009/1891
An interesting question came up before the Hon’ble Supreme Court with regard to the setting up of nuclear power plants with regard to the possibility of considerable economic development weighed against risk of feared radiological hazard. The Hon’ble Apex Court in the case of G.Sundarrajan –vs- Union of India reported in LQ/SC/2013/536, interalia, held that the Courts will be justified to look into the aspect as to the opinions of experts and the adequacy of safety measures and will be justified to look into the safety standards being followed by the Nuclear Power Plant.
The Hon’ble Supreme Court, in the case of Lal Bahadur vs State of UP reported in LQ/SC/2017/1384, interalia, emphasised the importance of striking a balance between the two principles.
An important development is the advent of the National Green Tribunal which has the jurisdiction over all civil cases where a substantial question relating to environment (including enforcement of any legal right relating to environment) is involved and relates to the Acts specified in Schedule I, namely the Water (Prevention and Control of Pollution) Act, 1974, the Water(Prevention and Control of Pollution) Cess Act, 1977, the Forest Conservation Act, 1980, the Air (Prevention and Control of Pollution) Act, 1981, the Environment (Protection) Act, 1986, the Public Liability Insurance Act, 1991 and the Biological Diversity Act, 2002. The National Green Tribunal, since its inception, has been looking into the aspects of environmental pollution and the mitigation thereof.
It can thus be said that both the environment and development are essential in the modern world for the betterment and living standards of the people. However, rampant and unplanned development at the cost of the environment is not to be entertained and the Courts will keep a close watch into the aspect of sustainable development, interalia, based on the criteria and guidelines, as specified.
Nayan Chand Bihani is a practising advocate at Calcutta High Court. Mr. Bihani pursued his LL.B from the Calcutta University College of Law, Hazra Campus and was enrolled as an Advocate in December,1998. Mr. Bihani deals mainly with Writ petitions, specially in Environmental laws, Election laws, Educational laws, Municipal laws, Service laws and Public Interest Litigations. He also represents several authorities like the West Bengal State Election Commission, the West Bengal Pollution Control Board, the State of West Bengal, several Educational Institutions and Universities and several Municipalities and Municipal Corporations and the Odisha Pollution Control Board. He can be contacted at nayanbihani@gmail.com.
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