Read Judgment: BALU SUDAM KHALDE AND ANOTHER v. THE STATE OF MAHARASHTRA
Tulip Kanth
New Delhi, April 5, 2023: While refusing to agree with the submission that an answer by a witness to a suggestion made by the defence counsel in the cross- examination does not deserve any value if it incriminates the accused in any manner, the Supreme Court has clarified that any concession or admission of a fact by a defence counsel would definitely be binding on his client, except the concession on the point of law.
Referring to the judgment in Rakesh Kumar alias Babli v. State of Haryana, the Division Bench of Justice Sudhanshu Dhulia and Justice J.B. Pardiwala said, “Thus, from the above it is evident that the suggestion made by the defence counsel to a witness in the cross-examination if found to be incriminating in nature in any manner would definitely bind the accused and the accused cannot get away on the plea that his counsel had no implied authority to make suggestions in the nature of admissions against his client.”
The case of the prosecution was that on the fateful day of the incident the first informant(first witness), was chatting with his friend Abbas Baig (deceased). At that time, while the second appellant accompanied by few other individuals was passing by the side, he was accosted by the deceased Abbas. There was some verbal altercation between the two.
After sometime the first and second appellants and the other two co-accused who came to be acquitted by the Trial Court reached at the spot. A fight ensued in which the first informant was assaulted on his head which was alleged to have been laid by the first appellant.
The first informant suffered a bleeding injury on his head. Thereafter, a severe assault was laid on the deceased by means of a sickle and sword and he ultimately succumbed to such injuries.
This appeal by special leave at the instance of two convict persons was directed against the judgment of the Bombay High Court affirming the order of conviction passed by the Additional Sessions Judge whereby both the appellants were convicted for the offence under Section 302 read with Section 34 of the Indian Penal Code, 1860 and sentencing them to suffer life imprisonment.
Enumerating the judicially evolved principles for appreciation of ocular evidence in a criminal case, the Bench opined that when eye-witness is examined at length it is quite possible for him to make some discrepancies but courts should bear in mind that it is only when discrepancies in the evidence of a witness are so incompatible with the credibility of his version that the court is justified in jettisoning his evidence.
The Bench also highlighted the fact that the presence of an injured eye-witness at the time and place of the occurrence cannot be doubted unless there are material contradictions in his deposition. The evidence of injured witness has greater evidentiary value and unless compelling reasons exist, their statements are not to be discarded lightly.The broad substratum of the prosecution version must be taken into consideration and discrepancies which normally creep due to loss of memory with passage of time should be discarded, the Bench added.
Further, the Bench also observed that suggestions made to the witness by the defence counsel and the reply to such suggestions would definitely form part of the evidence and can be relied upon by the Court along with other evidence on record to determine the guilt of the accused.
On the facts of the case, the Bench opined that in the cross-examination of the third witness, a suggestion was put to him that he had inquired with the first witness as to what had happened and the first witness in turn narrated the incident to third witness. This suggestion put by the defence counsel to the third witness was answered in the affirmative. This part of the evidence of the third witness was corroborated by the evidence of the first witness.
As there was no dispute that the death of the deceased occurred due to culpable homicide and not due to accident or suicide, the Bench had to consider whether the incident came within any of the exceptions indicated in Section 300 of the Code.
Noting that the the sine qua non for the application of an Exception to Section 300 always is that it is a case of murder but the accused claims the benefit of the Exception to bring it out of that Section and to make it a case of culpable homicide not amounting to murder, the Bench said, “On a plain reading of Exception 4, it appears that the help of Exception 4 can be invoked if death is caused (a) without premeditation, (b) in a sudden fight, (c) without the offenders having taken undue advantage or acted in a cruel or unusual manner; and (d) the fight must have been with the person killed. To bring a case within Exception 4 all the ingredients mentioned in it must be found.”
Having regard to the nature of the injuries caused by dangerous weapons like sickle and sword which were applied on the vital part of the body, the Bench came to the conclusion that it was a case of Section 302 of the IPC.
Referring to its judgment in Rajwant Singh v. State of Kerala and considering the fact that the appellants herein inflicted as many as nine blows with a dangerous weapon on the deceased who was unarmed and was helpless, the Top Court said, “For cases to fall within clause (3) of Section 300 of the IPC, it is not necessary that the offender intended to cause death, so long as the death ensues from the intentional bodily injury or injuries sufficient to cause death in the ordinary course of nature.”
Thus, dismissing the appeal and noting that the accused-appellants were ordered to be released on bail pending the final hearing of the present appeal, the Bench cancelled the bail bonds and ordered both the appellants to surrender before the Trial Court.
Read Order: DINESH VS STATE OF HARYANA
LE Correspondent
Chandigarh, April 1, 2023: Referring to the judgment of the Top Court in Gurbaksh Singh Sibbia v State of Punjab wherein it has been observed that the bail decision must enter the cumulative effect of the variety of circumstances justifying the grant or refusal of bail, the Punjab and Haryana High Court has allowed an appeal under section 14-A of Scheduled Caste & Scheduled Tribes (Prevention of Atrocities) Act, 1989 of the accused challenging the dismissal of his bail application.
Justice Anoop Chitkara opined that the appellant made a case for bail in the instant case.
The appellant had filed a bail application before the Additional Sessions Judge, which was dismissed on March 1, 2023. The allegations were of abusing the people belonging to the scheduled castes by using the derogatory words prohibited under the Scheduled Caste & Scheduled Tribes (Prevention of Atrocities) Act, 1989.
The Counsel for the appellant submitted that he would have no objection in case any stringent conditions this Court might put upon the appellant. The appellant’s contention was that the custodial investigation would serve no purpose whatsoever, and the pre-trial incarceration would cause an irreversible injustice to the appellant and family.
The State as well as counsel for the complainant opposed the bail.
After considering the submissions from both the sides, the Court noted that on prima facie analysis of the nature of allegations and other factors peculiar to this case, there would be no justifiability for custodial or pretrial incarceration at this stage.
Furthermore, the appellant was a first offender, and one of the relevant factors would be to provide an opportunity to course-correct.
The Bench referred to the judgment of the Supreme Court in Dataram Singh v State of Uttar Pradesh, wherein it was held that the grant or refusal of bail is entirely within the discretion of the judge hearing the matter and though that discretion is unfettered, it must be exercised judiciously, compassionately, and in a humane manner. Also, conditions for the grant of bail ought not to be so strict as to be incapable of compliance, thereby making the grant of bail illusory.
In view of the above, the Court without commenting on the case's merits and in the facts and circumstances peculiar to this case, observed that the appellant made a case for bail, subject to certain terms and conditions, which shall be over and above and irrespective of the contents of the form of bail bonds in chapter XXXIII of CrPC, 1973.Hence, the appeal was accordingly allowed.
Read Order: MOHIT ALIAS DHANDI VS. STATE OF PUNJAB
Mansimran Kaur
Chandigarh, March 25, 2023: The Punjab and Haryana High Court has allowed a petition seeking regular bail under Section 439 of Cr.P.C., while observing that at the time when recovery of 500 grams of heroine and the weapons were effected, the petitioner was confined in Bhondsi Jail, Gurgaon and recovery was not effected from the conscious possession of the petitioner.
A Single-Judge Bench of Justice Deepak Gupta allowed the present petition instituted by the petitioner in the present case, seeking regular bail by way of this petition preferred under Section 439 Cr.P.C in case of FIR registered under Section 120-B of IPC; Section 21 & 29 of NDPS Act and Section 25 of the Arms Act .
After completion of investigation, report under Section 173 Cr.P.C. was filed against petitioner Mohit alias Dandi and co-accused Pawan Nehra, though remaining accused namely Tilak Singh, Harkesh and Vinod Yadav were yet to be arrested.
After considering the submissions from both the sides, the Court noted, It is admitted position that at the time when recovery of 500 grams of heroine and the weapons was effected, the petitioner was confined in Bhondsi Jail, Gurgaon and thus, recovery was not effected from the conscious possession of the petitioner.
Even as per investigation carried out by the police, it emerged that contraband and the weapons were arranged by co-accused Pawan Nehra, who also intentionally leaked the information to the police. In these circumstances, whether on the basis of conspiracy, petitioner can be assumed to be in conscious possession of the contraband will be a moot point and subject matter of trial, the Court noted.
Further reference was placed on the case Maulana Mohd Amir Rashadi v. State of U.P. wherein it was held that merely on the basis of criminal antecedents, the claim of the petitioner for grant of bail cannot be rejected and that it is the duty of the Court to find out the role of the accused in the case, in which he has been charged and other circumstances such as possibility of his fleeing away from the jurisdiction of the Court etc.
Another reference was placed on the case Tofan Singh v. State of Tamil Nadu, wherein it was held, “a confessional statement recorded under Section 67 of NDPS Act will remain inadmissible in trial of an offence under the NDPS Act. In view of the said legal position, the bail cannot be denied to the petitioner simply on the basis of disclosure statements suffered by him or his co-accused”.
Further reference was made to judgment in Surinder Kumar Khanna v. Intelligence Officer Directorate of Revenue Intelligence, wherein it was held that confessional statement of co-accused recorded under Section 67 of the NDPS Act cannot by itself be taken as substantive piece of evidence and can at best be used or utilized in order to lend assurance to Court.
Thus, having regard to all the aforesaid facts and circumstances, particularly, the role attributed to the petitioner in the crime to the effect that contraband was not recovered from his conscious possession and at that time he was confined in jail, hence, without commenting anything further on the merits of the case, the Court opined that the petitioner should be admitted to bail on his furnishing bail bonds/surety bonds to the satisfaction of the Trial Court/Duty Magistrate concerned.
Hence, in view of the observations stated above, the petition was accordingly allowed.
Read Order: M/S S P Metals vs. Assistant Commissioner of Commercial Taxes
Tulip Kanth
Bengaluru, March 23, 2023: In a case where the Show Cause Notice was issued when the assessee was in judicial custody, the Karnataka High Court has asked the petitioner-assessee to file returns within a period of 4 weeks and also directed the Superintendent of Central Tax to pass suitable orders if the returns are accordingly filed.
In this matter before the Single-Judge Bench of Justice B M Shyam Prasad, the petitioner was aggrieved by the Assistant Commissioner’s order cancelling the
petitioner’s GST registration. The petitioner also sought direction to revoke the cancellation and for certain other reliefs.
The Petitioner had put up a case that the second respondent visited his business premises and seized certain invoices/documents under a mahazar. The second respondent called him to his office purportedly for investigation, but he was then arrested. He was in
judicial custody until he was admitted to bail and released thereafter.
In the meanwhile, the first respondent had allegedly issued Show Cause Notice o to the petitioner alleging that he has issued invoices and bills without actual supply of either goods or services in violation of the provisions of the Central Goods and Services
Tax Act, 2017 and the Rules thereunder to enable wrongful availing or utilizing input tax credit or refund of tax.
It was submitted from the petitioner’s side that if the petitioner was in custody from
November 16, 2022 until December 8, 2022 when he was admitted to bail and released, the petitioner could not have been served with a Show Cause Notice dated
November 17, 2022 and he could not have issued any response.
However, the GST registration was cancelled based on the said Show Cause Notice holding that petitioner’s response was considered. It was argued that it would be
irrefutable that the cancellation of GST registration was arbitrary & without due opportunity.
The Bench considered the fact that the Counsel of both the contesting parties submitted that the petitioner must be called upon to furnish the returns for the period for which the returns were not filed as a condition for revocation of the cancellation as against
a cancellation by this order without any condition.
It was asserted from the petitioner’s side that the petitioner would file the returns within a period of 4 weeks.
In light of such factual aspects, the Bench allowed the petition and ordered, “The second
respondent – the Superintendent of Central Tax - is permitted to pass suitable orders for revocation of the cancellation of the registration, if the petitioner files Returns for the relevant period for which returns have to be filed.”
Read Order: M/S BALAJI EXIM Vs.COMMISSIONER, CGST AND ORS
LE Correspondent
New Delhi, March 16, 2023: The Delhi High Court has come to the aid of an assessee by holding the petitioner-assessee to be entitled to the refund of the ITC on goods that have been exported by it after noting that the petitioner’s refund applications were rejected on a mere apprehension that its supplier had issued fake invoices
“The allegations of any fake credit availed by M/s Shruti Exports cannot be a ground for rejecting the petitioner’s refund applications unless it is established that the petitioner has not received the goods or paid for them. In the present case, there is little material to support any such allegations”, the Bench opined.
In this case, the petitioner had filed its refund application (in Form – GST-RFD – 01) seeking refund of the unutilized Input Tax Credit amounting to Rs 72,03,961 which comprised of Integrated Goods and Service Tax amounting to Rs 19,53,062 and Cess of Rs 52,50,899. The petitioner also filed another refund application (in Form GST-RFD – 01) claiming refund of ITC of Rs 12,40,270 comprising of IGST of Rs 3,37,174 and
Cess amounting to Rs 9,03,096. The refund sought was in respect of goods exported by the petitioner.
The Authority issued an acknowledgment (in Form GSTRFD-02) in respect of the petitioner’s refund application for the amount of Rs 12,40,270. In respect of the first application a deficiency memo was issued stating that the supporting documents were not uploaded on the GST portal. Accordingly, the petitioner filed another application along with all documents in support of its refund application.
The petitioner’s applications were not processed as the supplier from whom the petitioner had purchased the goods had allegedly received fake invoices from its suppliers. The petitioner (its proprietor) was summoned to appear before the Superintendent, Anti Evasion Branch and furnish documents.
The petitioner wrote several letters to requesting for an early disposal of his refund applications. However, his requests were not acceded to. In the meantime, the petitioner became aware of the allegations that its supplier, M/s Shruti Exports, had issued fake invoices and its ITC was blocked.
Show cause notice was issued to the petitioner proposing to reject the petitioner’s refund applications. The petitioner was also afforded a personal hearing. The refund applications were rejected and it was opined that an investigation had been initiated against the supplier (M/s Shruti Exports) from where the petitioner had allegedly procured the goods.
The petitioner appealed the said orders rejecting its refund applications, which was dismissed by the impugned order.
The Bench noted that it was clear that the petitioner’s refund applications were rejected on a mere apprehension that its supplier had issued fake invoices. There was no conclusive finding on the basis of any cogent material that the invoices issued by M/s Shruti Exports to the petitioner were fake invoices.
“It is apparent that the petitioner’s refund applications have been rejected merely because of suspicion without any cogent material. There is no dispute that goods have been exported; the invoices in respect of which the petitioner claims the ITC were raised by a registered dealer; and, there is no allegation that the petitioner has not paid the invoices, which include taxes. Thus, the applications for refund cannot be denied”, the Bench said.
Noting that the allegations of any fake credit availed by M/s Shruti Exports cannot be a ground for rejecting the petitioner’s refund applications unless it is established that the petitioner had not received the goods or paid for them, the Bench held that the petitioner would be entitled to the refund of the ITC on goods that have been exported by it.
Read Order: SUNDER VS LALA RAM THROUGH HIS LRS AND OTHERS
Mansimran Kaur
Chandigarh, March 15, 2023: Merely by relying upon the document Mark ‘AB’ a conclusion should not have been drawn that there had been encroachment by the petitioner, specifically when there was absence of any cogent material being put on record to demonstrate the encroachment, the Punjab and Haryana High Court has observed.
The present revision petition was preferred to assail the order whereby the application filed under Order XXI Rule 32 of the Code of Civil Procedure, 1908 was allowed. Justice Alka Sarin observed that the impugned order did not state as to on what basis the Court had arrived at the conclusion that there had been an encroachment in the case at hand
The present revision petition was preferred to assail the order dated November 11, 2016 whereby the application filed under Order XXI Rule 32 of the Code of Civil Procedure, 1908 was allowed.
The brief facts relevant to the present lis were such that the first and second respondents filed a suit for permanent injunction and mandatory injunction. Through judgment and decree dated February 28, 2009 only a decree for permanent injunction was passed and the decree for mandatory injunction was declined.
On October 12, 2011 respondents first and second filed an application under Order XXI Rule 32 CPC for directions to remove the encroachment from the rasta on the suit property. The details when the property was encroached upon are woefully missing from the said application.
Vide order dated August 22, 2014, the said application was allowed by the Executing Court and it was ordered that the illegal possession from the rasta be removed.
Yet again an application was filed under Order XXI Rule 32 CPC that since there was an encroachment hence the same be directed to be removed. Thud, through the impugned order dated November 11, 2016 it was directed that the encroachment be removed and the order dated August 22, 2014 be complied with.
After considering the rival contentions from both the sides, the Court noted that in the present case, through order dated February 16, 2016 , it was noticed that counsel for the respondents therein had stated that he would be satisfied with an observation from the Court that the judgment debtor i.e. petitioner herein would not cause any encroachment. Thereafter, an application for removal of the encroachment was filed which was allowed through the impugned order. The said order did not state as to on what basis the Court had arrived at the conclusion that there had been an encroachment.
“Merely by relying upon the document Mark ‘AB’ a conclusion was drawn that there had been encroachment by the petitioner. There was nothing forthcoming to prove that the petitioner had caused any encroachment”, the Bench held while setting aside the impugned order.
Tulip Kanth
Lucknow, March 13, 2023: In a case where the Joint Commissioner, Central Goods & Service Tax and Central Excise, Lucknow passed an Order even before the date fixed for hearing, the Lucknow Bench of the Allahabad High Court has imposed a cost of Rs 25,000 on the Officer for the patently illegal order passed by him.
Before the Division Bench of Chief Justice Rajesh Bindal and Justice Alok Mathur, the petitioner challenged the Order in Original dated November 4.11.2022 passed by Joint Commissioner, Central Goods & Service Tax and Central Excise, Lucknow.
The petitioner submitted that the show cause notice was issued to him on November 1,2022 for appearance on November 10, 2022. However, the impugned order was passed prior to that on November 4, 2022. This, according to the petitioner, was done in violation of the principles of natural justice.
As per the petitioner, such Order having been passed even before the date fixed for hearing deserved to be quashed.
It was noticed by the Bench that the respondents did not dispute the fact that the order was passed before the date fixed in the show cause notice issued to the petitioner for appearance. It was even submitted that the order could be quashed but the officer stated that he would not withdraw his order.
“There is no reference to the notice dated 01.11.2022 issued to the petitioner for his appearance on 10.11.2022. Though the aforesaid notice dated 01.11.2022 refers to the earlier notice dated 28.10.2022 which finds mention in the impugned order”, the Bench said.
Considering the fact that the impugned order was passed in violation of the principles of natural justice and even before the date fixed for hearing of the case, the Bench allowed the petition and quashed the Order.
Read Order: MANVINDER SINGH VS SARABJEET KAUR
Mansimran Kaur
Chandigarh, March 3, 2023: In a case where the petitioner-husband sought setting aside of an order whereby the Trial Court allowed interim maintenance of Rs 25,000 to the respondent(wife) and children of the petitioner, the Punjab and Haryana High Court has observed that the petitioner is morally, ethically and statutorily duty bound to maintain his wife and children.
A Single bench of Justice Jagmohan Bansal dismissed the instant application by observing that keeping in view the present cost of living; social and legal responsibility of the petitioner to maintain his family and interim maintenance awarded; this court did not find that the amount of interim maintenance fixed by court below was on higher side.
The applicant was seeking condonation of delay of 10 days in filing the instant petition. In view of averments made in the application and arguments advanced by counsel for the applicant, the application was allowed and delay of 10 days in filing the instant petition was condoned.
The petitioner, through the instant petition was seeking setting aside of order dated June 9, 2022 whereby the trial court allowed interim maintenance of Rs. 25,000/- to respondent(wife) and children of the petitioner.
The brief facts of the case were such that the marriage of the petitioner was solemnized with respondent on February 27, 2005 and from this wedlock, two children were born. The petitioner was working in the Labour Court as a Class -IV employee. The parties could not enjoy the fruits of the marriage and started staying separate.
Subsequently, the respondent filed a petition under Section 12 of Protection of Women from Domestic Violence Act, 2005, wherein she claimed maintenance to the tune of Rs. 40,000/- per month. The respondent filed an application under Section of 23 of D.V.Act
seeking interim maintenance. The Magistrate through order dated June 9, 2022 awarded interim maintenance of Rs. 25,000/- per month to the respondent i.e. Rs. 5000/- to the respondent and Rs. 10,000/- each to minor children of the petitioner.
In pursuance of the same, the petitioner preferred an appeal before Appellate Court which came up for consideration before Additional Sessions Judge, Ludhiana, who vide impugned order dated November 19, 2022 dismissed appeal of the petitioner.
Counsel for the petitioner submitted that he was not running away from his responsibility, however, his grouse was qua quantum of maintenance. The petitioner was getting a salary of Rs. 38,500/- and it was not possible to spare a sum of Rs. 20,000/- per month awarded to his children.
After considering the submissions from both the sides, the Court at the outset noted that the petitioner was not disputing the factum of marriage as well as birth of two sons from the wedlock. He was also not disputing the fact that both sons of the petitioner were studying in 10+1 at Jalandhar. The salary of the petitioner was undisputed, the Court noted.
As per affidavit of the petitioner, the gross salary of the petitioner is Rs. 44,000/- per month and carry home salary is Rs. 38,500/-. The trial court as well as Appellate court awarded a small amount of Rs. 5000/- to the wife and Rs. 10,000/- per month each to both sons of the petitioner.
In furtherance of the same, the Court noted that the petitioner is morally, ethically and statutorily duty bound to maintain his wife and children. The amount awarded to the wife is so minuscule that there is no possibility even to consider reducing that amount. A sum of Rs. 20,000/- was awarded to both children who are school going. Nowadays school going children are not only paying school fees but also they are supposed to pay tuition fees which are exorbitant, the Court noted.
“It is apt to mention here that the maintenance awarded by Family Court was interim, thus, the petitioner would get an opportunity to put forth his stand at the time of determination of final maintenance”, the Court further observed.
Keeping in view the present cost of living; social and legal responsibility of the petitioner to maintain his family and interim maintenance awarded; this court does not find that the amount of interim maintenance fixed by court below was on higher side, thus, the present petition deserves to be dismissed on merits and was accordingly dismissed.
Read Order: M/S. RAKESH ENTERPRISES v. THE PRINCIPAL COMMISSIONER CENTRAL GOODS AND SERVICES TAX & ORS
LE Correspondent
New Delhi, February 15, 2023: The Delhi High Court has allowed a petition impugning an order of the Superintendent whereby the petitioner's registration under the Central Goods and Services Tax Act, 2017 was canceled.
In this matter before the Division Bench of Justice Vibhu Bakhru and Justice Amit Mahajan, the said order was passed in furtherance of the proceedings commenced by the Show Cause Notice and the allegation against the petitioner was that it had defaulted in filing the returns for more than six months.
The petitioner had allegedly responded to the said Show Cause Notice by filing a reply and it was the petitioner’s case that the same had not been filed along with the petition as the copy of the same was not readily available.
From the respondent’s side it was submitted that the case history did not reflect that the petitioner had filed any response to the Show Cause Notice possibly, there was a technical glitch and the reference to the reply had been automatically generated.
The Bench was unable to accept that the petitioner had not filed a response to the Show Cause Notice, as the order expressly referred to the petitioner's response to the Show Cause Notice. As per the Bench, the Order did not indicate as to the contents thereof or reflected any discussion in respect of the petitioner's explanation.
Finding merit in the petitioner’s contention that the impugned order couldnot be sustained, the Bench noted that there was no dispute that the petitioner has filed its returns, albeit belatedly, and had also paid the tax and penalty in accordance with the Act.
The Bench also referred to the judgment of the Madras High Court in TVL. Suguna Cutpiece Center v. Appellate Deputy Commissioner (ST) (GST),2022 (61) G.S.T.L. 515 (Mad.), wherein it was observed that it is not the intention of the authorities to debar and de-recognise assessees from coming back into the Goods and Service Tax (GST) fold.
“ It is not necessary for this Court to examine whether the time period as stipulated under Section 30 of the Act is mandatory in this case. This is because it is apparent that the impugned order dated 28.12.2020, cancelling the petitioners registration is unsustainable as it does not consider the petitioners response to the Show Cause Notice”, the Bench said while setting aside the impugned order and directing the respondents to restore the petitioner’s Registration.
Read Order: M/S solex energy v/s State of Jharkhand
LE Correspondent
Ranchi, February 13, 2023: The Jharkhand High Court has remitted a matter to the adjudicating authority after setting aside a summary of order contained in Form GST DRC-07.
The facts of the case were such that the Petitioner company, engaged in the business of Engineering, procurement and construction of solar power generating system and a manufacturer of the solar panel had filed its return in Form GSTR3B for the month of October 2020.
The petitioner noticed that an amount of Rs.39,77,727 was debited from its electronic credit ledger and Rs.21,060 was debited from its electronic cash ledger. It was found that the said amount had been recovered against the outstanding demand ID which was created vide summary of order in Form GST DRC-07.
According to the petitioner, he came to know about the proceedings for the first time and copies of the orders were issued to him in relation to summary order in Form GST DRC-07. However, he claimed that he was never in receipt of any notice in relation to DRC-07.
When the Petitioner preferred an application under RTI Act 2005 before the Public Information Officer requesting him to provide information regarding copy of DRC-01A, DRC-01, show cause notice and other relevant documents, he was provided the copy of Form GST DRC-01 for F.Y. 2017-18 Form GST DRC-02 for F.Y. 2017-18, Form GST DRC-07 and Form GST RFD-06 .
Petitioner complained that he was never in receipt of the summary notice in Form GST DRC-01 and summary of statement in Form GST DRC-02, either electronically or physically at any time before. None of the documents i.e. summary notice in Form GST DRC-01, summary of statement in Form GST DRC-02, summary order in Form GST DRC-07 were signed by any authority nor any detailed order was issued. Therefore, the petitioner being aggrieved had approached the High Court.
As per a 2022 order, the Court directed the respondents to produce the records of assessment proceedings certified to be true from the original. The Respondents had by that time filed a counter affidavit also. However, the question whether any adjudication order was passed in relation to the instant proceedings or not, still remained unanswered. Therefore, a direction was issued to produce the original records with a true copy thereof for consideration of this Court.
The Bench was of the opinion that the assessment proceedings suffered from serious procedural errors in absence of a proper show-cause notice. The summary of order issued in Form GST DRC-07 did not precede with a proper adjudication order either, the Bench added.
As such, considering the ratio rendered by this Court in the case of M/s Nkas Services Private Limited (supra) and the fact that there were serious discrepancies in the proceedings, the Bench set aside the impugned summary of order contained in Form GST DRC-07.
The matter was remitted to the adjudicating authority to proceed in accordance with law afresh after issuing a proper show cause notice.
Read order: Om Parkash and another v. Matadeen and others
Monika Rahar
Chandigarh, February 11, 2023: While dismissing a revision petition for setting aside the lower court orders whereby the plaintiff-respondents' application for temporary injunction under Order XXXIX Rules 1 and 2 of CPC was allowed and appeal by the petitioners/defendants which was dismissed, the High Court of Punjab and Haryana has held that the mandatory injunction was sought to re-transfer the said connection in the name of plaintiffs and other co-sharers of land, therefore, the injunction being sought was not against the interests of the co-sharers, rather it is to serve their interests.
Essentially, in the case before the Bench of Justice Tribhuvan Dahiya, it was the case of the plaintiffs that the suit property jointly owned by the plaintiffs along with the defendants was not partitioned, however, they cultivated their separate killas owing to a mutual settlement between the parties.
It was further pleaded that there existed a joint well in which electricity connection was
installed in the name of late Prabhu Singh son of Roop Chand (common ancestor of the parties) with joint expenses and consent of all the co-sharers, since long. Prabhu Singh died issueless more than 15 years back, still the electricity connection continued in his name upto August, 2020.
The plaintiffs claimed to be cultivating their lands with the said tubewell for the last many years and paying the electricity bills also as per their shares. Similarly, the petitioners/defendants ('defendants') and other co-sharers were also cultivating their land from the said tubewell.
However, the plaintiffs contended that the defendants, in collusion with one Raj Kumar (working in office of DHBVN, Buroli), got the electricity connection transferred in the name of the first defendant. This was done without the plaintiffs' consent, only to deprive them of joint usage of the tubewell and electricity connection.
The prayer in the application for interim injunction was that the plaintiffs may be allowed to use the said electric well jointly for irrigating lands as per their share on payment of electricity charges, till final decision of the suit.
The High Court was dealing with a revision petition for setting aside the orders of the Trial Court and the lower appellate Court respectively, whereby the application for temporary injunction filed by the respondents/plaintiffs under Order XXXIX Rules 1 and 2 of CPC was allowed, and appeal against the same filed by the petitioners/defendants, was dismissed.
After during the parties, the Court observed at the very outset that no evidence or material was brought before the Courts below to establish that the electric tubewell connection was exclusively being used by either of the parties only, to the exclusion of the other. The Court observed that this was a fact to be decided by the trial Court after adducing of evidence before it.
"In case, till final adjudication of the issue between the parties, the trial Court has granted interim injunction allowing the plaintiffs to temporarily use the electric tubewell three times in a week or on alternate days as per their wish, no exception can be taken to it", the Bench opined while also adding that in case the plaintiffs were prevented from using it altogether, an irreparable loss will be caused.
Further, the Bench was of the opinion that since the plaintiffs by way of the civil suit in question were merely seeking a declaration that the electricity connection existing in the joint land of parties, which was originally in the name of their common ancestor, was owned by all the co-sharers, and defendant No.1 could not have got it transferred in his name.
"The mandatory injunction has been sought to re-transfer the said connection in the name of plaintiffs and other co-sharers of land. Therefore, the injunction being sought is not against the interests of the co-sharers; rather it is to serve their interests. It does not seek their ouster or any restrain on usage of land as per their share", the Bench added.
Also, the Bench was of the opinion that the grant of temporary injuction too does not unsettle the things in any manner, as the electric well was admittedly in the name of parties’ common ancestor, installed in their unpartitioned land.
"The preponderance of probabilities also indicate joint use of the well by the parties, and the temporary injunction granted by the trial Court only facilitates its joint use", the Bench asserted.
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.
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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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