Read Judgment: Dr. Aparna Singhal v. State of Haryana and another
Monika Rahar
Chandigarh, January 25, 2022: While dealing with a case involving the arrest of the petitioner-accused and others for allegedly carrying out a sex determination racket in New Delhi, the Punjab and Haryana High Court has reiterated that an FIR under the Pre-Conception and Pre-Natal Diagnostic Techniques (Regulation and Prevention of Misuse) Act, 1994 (Act) can be lodged and the offences under the Act can be investigated by the Police but cognizance can be taken by the Court only on the complaint filed as per Section 28 of the Act.
The factual background of this case was that after receiving secrete information about a sex determination racket that was being run in New Delhi, a team of appropriate authorities under the PC&PNDT Act conducted a raid with the help of a decoy patient and arrested one Smt. Pinki @ Roma Devi, her husband and the petitioner who conducted the ultrasound of the decoy patient at M/s Mantracare X-Ray and Diagnostic Centre Gurugram and disclosed the sex of the foetus as ‘Female’.
An FIR was registered under Section 23 of the Act and Section 120-B of IPC against them. Hence, the petitioner filed the present petition under Section 482 of Cr.P.C. praying for quashing of said FIR.
The petitioner’s counsel, while making a reference to Sections 17 and 28 of the Act, contended the FIR for an offence under the Act ought to be registered on the complaint of the duly notified District Appropriate Authority (DAA) (a three members body) and this was not the case in the present case. The counsel submitted that herein, the FIR was lodged on the complaint of the second respondent who was neither a member of the DAA nor was he authorized by the DAA to file the FIR.
It was also contended that the search and seizure were not conducted in compliance with Section 30(2) of the Act which required all searches and seizures under the Act to be in consonance with the provisions of the Cr.P.C.
The State stated in its reply that after receipt of the secret information regarding the illegal business of sex determination by the Civil Surgeon, Gurugram the same was communicated to the other members of the DAA. Then the DAA under the PNDT Act authorised the second respondent and other team members to take legal action as required. It was also stated that after the raid, the entire incident was brought to the notice of the three-member DAA which after considering the facts and circumstances asked the second respondent to initiate legal proceedings against the accused including the petitioner.
It was also submitted that the CCTV footage of the incident was taken from the spot as evidence regarding the conduct of the sex determination test.
The question which arose for the consideration of the High Court was whether the registration of the FIR and the consequent investigation was illegal as the FIR was not registered on the complaint of the District Appropriate Authority?
In this regard, the Court made reference to the Division Bench decision of this Court on Hardeep Singh Vs. State of Haryana and Ors., CRM-M- No. 4211 of 2014, wherein this question was addressed and it was held that that FIR can be lodged and the offences under the Act can be investigated by the Police but cognizance can be taken by the Court only on the complaint as per Section 28 of the Act.
As per the Act, Section 17 provides for the constitution of the three-member appropriate authority, while Section 28 of the Act debars a Court from taking cognizance of an offence under the Act except on the complaint of the Appropriate Authority concerned or any person authorised in this behalf by the Central or State Government or the Appropriate Authority.
Reverting back to the case, the Court observed that the position in the present case was that FIR was lodged on the complaint of the second respondent. It was the case of the respondents that the police was investigating the matter and after completion of the investigation, the police would file a `Kalandra’ before the DAA Gurugram. Thereafter, a criminal complaint along with Kalandra would be filed against the accused as per Section 28 of the Act before the Chief Judicial Magistrate, Gurugram.
Thus, in light of the clear exposition of law laid down by the Division Bench in Hardeep Singh’s case (supra), the Court concluded that no case for quashing the FIR and the ongoing investigation was made out.
Read Judgment: Naval Kishore Aneja @ Shammi v. Bindu and Others
Monika Rahar
Chandigarh, January 25, 2022: While dealing with a petition filed by the claimant-wife seeking the enhancement of the maintenance granted by the Family Court, the Punjab and Haryana High Court has held that it is the moral responsibility and obligation of a man to take care of his family and he cannot shirk from the same.
The Bench of Justice Suvir Sehgal further observed that from the material on the record, it was established that the husband was a man of means and he had sufficient income to support his wife and daughters.
The Court was dealing with two petitions filed by the husband and wife, separately against an order of the Family Court. In the first petition, the husband sought setting aside of the order of the Family Court (Additional District Sessions Judge), Rohtak, while with the second petition, the wife and her minor daughters sought modification of the said order for enhancement of the maintenance awarded by the Court below. Family Court by the impugned order directed the husband to pay interim maintenance of five thousand rupees per month to each of the claimants from the date of filing of the application.
The marriage between the parties was solemnized in 2005 and two daughters were born out of this wedlock. It was the case of the wife that she was harassed and physically assaulted for not being able to give birth to a male child and for bringing insufficient dowry. She made a complaint to the police after she was inflicted with injuries by her husband and his family. She along with her minor daughters was thrown out of the matrimonial home.
The husband filed a petition under Section 13 of the Hindu Marriage Act, 1955 however the same was withdrawn due to a compromise and the wife started residing at her matrimonial home. However, the situation persisted and demand for more dowry was further made, as a result of which the wife turned out of the matrimonial home and submitted a complaint with the police.
The claimant-wife contended that she worked as a teacher in a private school and was drawing a salary of Rs 6,000 which was not sufficient to sustain herself and her daughters. She invoked Section 125 of Cr.P.C. and sought monthly maintenance of Rs 1 Lakh from the date of filing of the application besides litigation expenses. She also claimed the grant of interim maintenance.
Along with her petition, the wife filed an affidavit of assets and liabilities claiming that she has been spending Rs 30,000 per month on her and her daughters’ living and education expenses. She also claimed that the husband did not pay her anything and her expenses were primarily met from the financial support given by her father and brother.
The husband, on the contrary, denied all the material allegations as well as the fact that he is earning more than Rupees 2 Lakh per month, rather he contended that the wife was earning thirty thousand rupees while working as a Computer Teacher and he also submitted that the wife had additional income from a Cosmetic Shop that she ran.
Without getting into the merits of the allegations and counter-allegations levelled by both the parties against each other, the Court noted that they were at variance on why the wife left her matrimonial house with her children. The Court made a note of the affidavit of expenditure filed by the wife and the lack of such an affidavit of assets and liabilities on part of the husband.
The Court also observed that the husband admitted the factum of owing two shops let out on monthly rent and also having ownership of a property having room constructed for the purpose of renting out. The Court also observed that there was nothing on the record to show that the wife continued to draw the same salary as was claimed by the husband.
Therefore, the Court concluded that the award of interim maintenance of five thousand rupees for each of the claimants was not unreasonable or excessive. Thus, opining that there was no illegality or perversity in the impugned order of the Family Court, the Court dismissed both the petitions.
Read Order: Gurjinder Singh and Another v. State of Punjab and Another
Monika Rahar
Chandigarh, January 25, 2022: While dealing with a challenge to certain summoning orders issued by the Trial Court against accused-petitioners in a rape case, the Punjab and Haryana High Court has held any supplementary chargesheet presented under Section 173(8) of the Cr.P.C. would be in continuation of the report filed under Section 173(2) of the Cr.P.C. and would remain part and parcel of the record of the proceedings of the case.
The Bench of Justice Jaishree Thakur also said that in the eventuality of the police submitting a supplementary chargesheet qua the investigation of accused against whom the report was not initially submitted, the procedure adopted will remain the same as applicable to a report under Section 173(2) Cr.P.C.
In this case, the prosecutrix was kidnapped and raped by three accused (including the two petitioners). Upon investigation, accused Gursewak Singh was arrested, a report under section 173(2) of the Cr.P.C. was submitted and charges were framed only against Gursewak Singh, as inquiry against the present two petitioners was still pending. The trial commenced against accused Gursewak Singh and the prosecutrix was examined as a prosecution witness.
Pursuant to her testimony, the Trial court directed the Police to file the status report pertaining to the role of the two petitioners, consequent to which, a supplementary chargesheet under Section 173(8) of the Cr.P.C. was filed, declaring petitioners innocent. Thereafter, an application under Section 319 of the Cr.P.C. was filed by the prosecutrix to summon the petitioners as additional accused to face the trial along with accused Gursewak Singh, which was allowed.
When the matter was fixed for framing of charges against the petitioners, they filed an application for setting aside/recalling the impugned summoning order as well as an application under Section 227 of the Cr.P.C. for discharge. Aggrieved, the petitioners filed the instant petition under Section 482 of Cr.P.C. impugning the summoning order.
The petitioners’ counsel argued that if the supplementary chargesheet, declaring the petitioners innocent, was not accepted by the Trial Court then it would not form a part of the court record and they would not be able to rely upon it at the time of their defence.
On the contrary, the complainant’s counsel opposed the petitioners’ case by submitting that the investigation agency kept on lingering the investigation and petitioners made frivolous applications to further delay the case. Lastly, it was argued that once the trial court passed an order under Section 319 of the Cr.P.C., and summoned the petitioners to face the trial along with accused Gursewak Singh, the Trial court had no power under Cr.P.C. to recall its own order or discharge the accused persons, as would amount to recalling of its own order.
The Court at the outset made it clear after having a look at the provisions of Section 173 of the Cr.P.C. that the court was not bound by the opinion drawn by the police officer in the report under Section 173 of the Cr.P.C., as the court could not act merely as a post office or a mouthpiece of the prosecution, but had to consider the broad probabilities of the case, the total effect of the evidence and the documents produced before the court while applying its judicial mind.
“On being unsatisfied with the report under Section 173(2) of the Cr.P.C., the court is very well empowered to ask for further investigation, as would be evident from the provisions of Section 173(8) Cr.P.C.”, said the Bench.
Further, while addressing the contention of petitioners’ counsel on the supplementary chargesheet not becoming a part of the record, the Court observed that this argument was not sustainable in view of the detailed procedure provided under Section 173 of the Cr.P.C., and the accused can rely upon the same as per the provisions of the Indian Evidence Act.
Moreover, the Court noted that the Trial court nowhere held or observed that the supplementary chargesheet would not be read as part of the evidence, rather the lower court did not accept the finding of innocence of the petitioners as recorded by the Police. The Court was also in agreement with the Trial Court’s observation to the effect that the cell tower locations are not conclusive proof of anybody’s presence or absence on a particular spot.
Regarding the legal position governing summoning of a person, the Court opined that the power to summon a person as an additional accused is undisputed, but the same has to be exercised sparingly, with caution, and to be exercised in order to ensure that the culprit does not get away. For the above stated proposition, the Court relied upon the decision of the Constitution Bench of Supreme Court in Hardeep Singh v. State of Punjab, (2014) 3 SCC 92.
The Court further opined that the prosecutrix consistently implicated all the accused persons for committing rape on her and therefore, her testimony could not be negated merely because the investigation agency submitted a report declaring the petitioners innocent.
Thus, finding no infirmity or illegality in the impugned order of the Trial court, the Court dismissed the petition.
Read Order: Subhash Chand Sharma v. Sanjay Thakran
Monika Rahar
Chandigarh, January 25, 2022: The Punjab and Haryana High Court has allowed the Trial of a cheque dishonour case as a summon case based on the second proviso of Section 143 of NI Act and the findings recorded by the Trial Court which were to the effect that owing to the huge amount involved in the case, a sentence of imprisonment exceeding one year could be passed, therefore, trying the case summarily would be undesirable.
Section 143 of the NI Act provides for the power of a Court to try cases summarily, while its second proviso states that if during the summary trial of a case under this section, the Magistrate opines that the nature of the case is such that a sentence of imprisonment for a term exceeding one year may have to be passed or the Court finds it undesirable to try the case summarily, the Magistrate shall after hearing the parties, record an order to that effect and proceed to hear and rehear the case in the manner provided by the Cr.P.C.
The Bench of Justice Meenakshi I. Mehta observed that keeping in view the huge amount of the cheque in question, the lower court’s observations cannot be held to be unjustified at all and rather, when tested on the touch-stone of the provisions as contained in the second proviso appended to Section 143 of the NI Act, it emerges that the impugned order and judgment do fulfil the pre-requisites, as envisaged therein, to exercise the power to decide the mode of the trial of the Complaint Case under Section 138 of the NI Act.
In the present case, the respondent-complainant filed a Criminal Complaint case against the petitioner under Section 138 of the Negotiable Instruments Act, 1881 (the NI Act) alleging the dishonour of a cheque issued by him (petitioner). After hearing both the parties, the Court decided to try the said Complaint Case as a summons case. The petitioner assailed this order in a Criminal Revision but the Revisional Court dismissed his petition by the impugned judgment. Hence, feeling aggrieved by the same, the petitioner preferred the instant petition under Section 482 Cr.P.C.
The case of the petitioner’s counsel was that the trial Court decided to try the said Criminal Complaint case as a summons case without recording any cogent reasons for the same and that the Revisional Court also misconstrued the provisions of Section 143 of the NI Act while passing the impugned judgment.
The Court looked into the orders passed by the Trial Court and the Revisional Court and concluded that the trial Court categorically observed in its Order that the nature of the case was such that the sentence of imprisonment exceeding one year could be passed, and thus it considered it undesirable to try the case summarily and rather opted for the trial of the case as summons case. The Revisional Court also showed its agreement with the reasoning of the Trial Court while observing that the amount involved in the case was huge.
So far as the precedents governing this issue were concerned, the Court first made reference to the judgment of the Rajasthan High Court in Tripati Vyas vs. State of Rajasthan & another, 2013(4) R.C.R.(Criminal) 110 (Rajasthan), wherein it was held that the Judicial Magistrate would be at liberty to try a complaint case as summons case if it appears that the sentence of imprisonment for a term exceeding one year may have to be passed and he may further hold summons trial when he finds it undesirable to try the case summarily and then, he would record the order after hearing the parties.
Further reference was made to another case of the Ra in In Re: Expeditious Trial of Cases under Section 138 of NI Act 1881,Suo Motu Writ Petition (Crl.) No.2 of 2020, in which the Court asked the High Courts to issue practice directions to the Magistrates to record the reasons before converting the trial of the Complaints under Section 138 of the NI Act from summary trial to summons trial in exercise of the power under the proviso to Section 143 of the NI Act.
Lastly, the Court observed that in the case of Swaminatha Pillai vs. Mr. A. Senthil Kumar 2013(5) R.C.R. (Criminal) 429 (Madras), it was observed by the Madras High Court that the adoption of the procedure contemplated for a summon case should be the result of a conscious decision of the Court and not mere happenchance.
Coming to the factual aspects of the case again, the Court adjudged that the petitioner disputed the very factum of his liability to pay any amount to the complainant and that being so, the trial of the said Criminal Complaint as summons case would, rather, facilitate the logical adjudication of the said dispute between the parties by the trial Court while appreciating and evaluating the evidence that may be led by them on the record in support of their respective contentions in this regard.
Thus, while observing that the Trial Court was within the bounds of law and it recorded the specific reasons for opting to try the said Criminal Complaint as a summons case, the Court dismissed the petition.
Read Judgment: Arunachala Gounder (dead) By Lrs. V. Ponnusamy & Ors.
Pankaj Bajpai
New Delhi, January 24, 2022: The Supreme Court has opined that if a property of a male Hindu dying intestate is a self- acquired property or obtained in partition of a coparcenery or a family property, the same would devolve by inheritance and not by survivorship, and a daughter of such a male Hindu would be entitled to inherit such property in preference to other collaterals.
A Division Bench of Justice S. Abdul Nazeer and Justice Krishna Murari therefore observed that since the property in question was admittedly the self-acquired property of Marappa Gounder (deceased father of deceased Appellant daughter) despite the family being in state of jointness upon his death intestate, his sole surviving daughter Kupayee Ammal, will inherit the same by inheritance and the property shall not devolve by survivorship.
Going by the background of the case, suit for partition was filed by Thangammal, daughter of Ramasamy Gounder, claiming 1/5th share in the suit property on the allegations that the plaintiff and fifth & sixth defendants namely, Elayammal and Nallammal and one Ramayeeammal are sisters of Gurunatha Gounder, all the five of them being the children of Ramasamy Gounder. The said Ramasamy Gounder had an elder brother by the name of Marappa Gounder, who predeceased his brother Marappa Gounder after his death leaving behind the sole daughter by the name of Kuppayee Ammal who also died issueless in 1967. After death of Marappa Gounder, his property was inherited by Kuppayee Ammal and upon her death in 1967, all the five children of Ramasamy Gounder, namely, Gurunatha Gounder, Thangammal (Original Plaintiff now represented by legal heir), Ramayeeammal, Elayammal and Nallammal were heirs in equal of Kuppayee and entitled to 1/5th share each.
Similarly, Gurunatha Gounder, died leaving behind respondents as heirs and legal representatives. The plaintiff-appellant, Thangammal, died leaving behind, Arunachala Gounder (Appellant), since having died was being represented by her legal representatives.
The Respondents pleaded that as per the provisions of Hindu Law prevailing prior to 1956, Gurunatha Gounder was the sole heir of Marappa Gounder and accordingly, he inherited the suit properties and was in possession and enjoyment of these properties and after his death the respondents were continuing as lawful owners. The suit property was independently purchased by Marappa Gounder in the year 1938 through the process of a Court auction and thus, it was his independent property. However, there was an issue between the parties in respect of the date of death of Marappa Gounder.
The Trial Court concluded that Marappa Gounder died on April 15, 1949 and thus, the suit property would devolve upon the sole son of deceased Ramasamy Gounder, the deceased brother of Marappa Gounder by survivorship and the appellant had no right to file the suit for partition and, accordingly, dismissed the suit. This finding was confirmed by the High Court.
After considering the submissions, the Top Court found that the date of death of Marappa Gounder being April 15, 1949, it is a finding of fact affirmed by the two fact-finding Courts based on appreciation of material evidence existing on the record of the case and is not liable to be interfered with.
Right of a widow or daughter to inherit the self-acquired property or share received in partition of a coparcenary property of a Hindu male dying intestate is well recognized not only under the old customary Hindu Law but also by various judicial pronouncements, added the Court.
Referring to section 15 of the Act, the Bench stated that Section 15(1)(d) provides that failing all heirs of the female specified in Entries (a)-(c), but not until then, all her property howsoever acquired will devolve upon the heirs of the father. The devolution upon the heirs of the father shall be in the same order and according to the same rules as would have applied if the property had belonged to the father and he had died intestate in respect thereof immediately after her death.
Speaking for the Bench, Justice Krishna Murari noted that in the present case since the succession of the suit properties opened in 1967 upon death of Kupayee Ammal, the Hindu Succession Act, 1956, shall apply and thereby Ramasamy Gounder’s daughters being Class-I heirs of their father too shall be heirs and entitled to 1/5th share each in the suit properties.
Accordingly, the Apex Court allowed the appeal and the suit stood decreed.
Read Judgment: Mohit Bansal V. Institute of Chartered Accountants Of India & Anr.
Pankaj Bajpai
New Delhi, January 24, 2022: The Delhi High Court has opined that in case of offences involving ‘moral turpitude’, the removal of the disability contemplated u/s 8 of the Chartered Accountants Act, 1949 by the Central Government would be impermissible, and such power has been vested under the Act, only with the Council through the Board of Discipline or the Disciplinary Directorate.
The Bench of Justice Pratibha M. Singh observed that given that the disability is at the stage of entry to the register, the clear purport of the language u/s 8 of the 1949 Act is that it is inclusive of all convictions for offences/acts involving ‘moral turpitude’, irrespective of when the same was committed.
Going by the background of the case, the ICAI (first Respondent) issued a notice to show cause as to why action u/s 8 of the 1949 Act should not be taken against Mohit Bansal (Petitioner) in view of his conviction by the Delhi High Court u/s 354 and 506-II of the IPC, 1860. The ICAI observed that the offences for which the Petitioner was convicted were involving ‘moral turpitude’ and hence recommended his removal from the register u/s 8(v) of the Act. The Committee also observed that disciplinary proceedings under the Act could not have been opened against him, as the offence in question was committed prior to him having enrolled as a CA.
In the SCN, it was however stated that if no response was received from the Petitioner in the matter within the stipulated time and/or he did not avail the opportunity of hearing before the Council on the date, time and venue as specified, then the matter will be considered and decided by the Council without any further reference to him in accordance with the provisions of the Chartered Accountants Act. Hence, present petition was filed seeking to quash this notice of hearing served upon the Petitioner by the ICAI, and the entire proceedings u/s 8(v) r/w/s 20(1)(d) of the Act initiated against him.
After considering the submissions, the Apex Court found from a reading of Section 8(v) & 8(vi) of the 1949 Act, that if any of the disabilities such as (a) Conviction for an offence involving ‘moral turpitude’; (b) Conviction for an offence committed in professional capacity which is not technical in nature; (c) Person held guilty of ‘professional’ or ‘other misconduct’ post an inquiry by the Disciplinary Committee, as per Section 21 of the Act exist, either at inception or even after a person has qualified as a Chartered Accountant, and is a member of the ICAI, such person would not be entitled to have their name entered upon and would be liable to have their name removed from the register of the ICAI.
The Petitioner, in this case, having been convicted for offences u/s 354 and 506-II of IPC, is clearly attracted by the disability u/s 8(v) of the 1949 Act and he has already practiced for almost 12 years by the time the notice was issued by ICAI, added the Court.
Justice Singh observed that ideally, ICAI ought to have had adequate checks at the time of registration itself. However, the fact that the conviction of the Petitioner may have not come to the attention of the ICAI for more than 10 years would not, in any manner, bar ICAI from taking action, especially, when the offence involved is one of such a grave and serious nature.
Accordingly, the High Court dismissed the petition and asked the ICAI to frame a policy and a mechanism, if not already in existence, for disclosure by members both at the inception as also on a periodic basis thereafter, of any criminal cases or convictions so that the spirit and intent of the statute is given effect to and the ICAI is not in the dark about the same until it is notified by some information or complaint.
Read Judgment: Sushil Kumar V. The State of Haryana & Ors.
Pankaj Bajpai
New Delhi, January 24, 2022: While referring to Punjab Police Rules, 1934, the Supreme Court has opined that the merits and accolades of the candidates recommended for promotion vary from year to year on a comparative merit scale, and hence, it is the domain of the Inspector General of Police (IG) as also the Central Departmental Promotion Committee (CDPC) to analyze, consider and clear the names of the candidates found fit to be promoted in the List B-I to the post of Head Constable for that year.
A Division Bench of Justice K.M.Joseph and Justice Pamidighantam Sri Narasimha observed that the recommendation of the Departmental Promotion Committee (DPC) does not give any indefinite right to be appointed as Head Constable, and hence, it can never be contended that mere recommendation of the Superintendent of Police (SP) at the initial stage is sufficient to claim a right for promotion.
Going by the background of the case, Sushil Kumar (Appellant) was appointed as a Constable in the year 1995 and was positioned as a Head Constable under the extent ORP Policy on Aug 21, 2001. Due to his acts of bravery his name was recommended by the SP for promotion under the 10% quota of outstanding performance for inclusion in the B-I List for promotion to the post of Head Constable. However, the Appellant’s name was dropped down by the IG, when only 7 out of the 9 names were forwarded to the CDPC. Three years thereafter, his name was again forwarded by the SP and this time it was passed by the IG, by virtue of which he was granted promotion and was made the Officiating Head Constable.
However, the appellant filed a writ seeking retrospective promotion contending that he should have been promoted in the year 2004 itself and that the delay in appointing him in 2008 was illegal and arbitrary. However, the petition was dismissed on the ground that selection is not a matter of right. Hence, present appeal.
After considering the submissions, the Top Court found that the assumption that the recommendation of DPC headed by the SP is final and that the IG has no power to review or substitute the decision is misconceived.
The Punjab police Rules, 1934 itself clarifies the position that the recommendations of the SP are not final until the same is approved by the IG, and therefore, if the IG is not satisfied, he shall not accord approval, added the Court.
Speaking for the Bench, Justice Narasimha noted that the scope of the power vested in the IG is also indicated in the Rule which provides that he can seek clarifications from the DPC and also refer the List back to the SP for corrections/omissions if he thinks it is necessary.
The 10% quota for constables having outstanding performance will be filled on the basis of State level comparative merits, and there is a three-stage scrutiny before a constable is selected as a Head Constable, added the Bench.
The Apex Court therefore dismissed the appeal and concluded that in judicial review proceedings, the Courts are concerned with the decision-making process and not the decision itself.
Read Judgment: Sunil Kumar Maity V. State Bank of India & Anr.
Pankaj Bajpai
New Delhi, January 24, 2022: The Supreme Court has opined that the revisional jurisdiction of the National Consumer Disputes Redressal Commission (NCDRC) u/s 21(b) of the Consumer Protection Act,1986 is extremely limited and should be exercised only if it appears to the National Commission that the State Commission has exercised a jurisdiction not vested in it by law, or has failed to exercise jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity.
A Division Bench of Justice Sanjiv Khanna and Justice Bela. M Trivedi were therefore surprised by the action of the National Commission in setting aside the findings & conclusion recorded by the District and State Forum, by simply reproducing the report by one of the officers of the party in litigation with the appellant.
The observation came pursuant to an appeal by Sunil Kumar Maity (Appellant – Complainant) challenging the judgment, whereby the National Commission (NCDRC) allowed the revision petition and dismissed the complaint with a liberty to the complainant to approach a competent civil court as per the law. In the impugned judgment, the NCDRC also stated that if the complainant chooses to bring action in a civil court, he is free to file an application u/s 5 of the Limitation Act, 1963, and, in such contingency, the chronological facts and proceedings in the consumer protection forum would be material and relevant towards making such application.
After considering the submissions, the Apex Court was at a loss to understand as to how the National Commission could have sought for a report at the revisional stage, that too from an officer of the party which already had an opportunity to submit all the documents necessary for purpose of defending itself before the Consumer Forum, and as to how such a report in the form of an additional evidence produced at the revisional stage could be relied upon, in respect of which the two fora below had no opportunity to deal with.
“The report that tries to absolve the respondent-bank of its liability is based on surmises and conjectures as it abstrusely and without evidence holds that the bank has every reason to believe that wrong account number was intentionally inserted by the appellant himself for reasons best known to the appellant or on account of negligence by the appellant by not keeping the passbook in his safe and proper custody. The suppositions are contradictory as well as incredulous and fanciful. The appellant did not know the second respondent and would not have known his account number unless given to him by a bank officer. There was no way that the appellant would have known that the second respondent, namely Sunil Maity had an account in the same branch. No sane person would deposit cash or cheque meant to be deposited in his account in an account number belonging to another person with similar name”, added the Court.
Speaking for the Bench, Justice Trivedi referred to the decision of the Supreme Court in CCI Chambers Coop. Hsg. Society Ltd. vs. Development Credit Bank Ltd., (2003) 7 SCC 233 , wherein it was held that requirement of leading detailed evidence could not be a ground to shut the doors of any forum created under the Act like the Consumer Protection Act, and the anvil on which entertainability of a complaint by a forum under the Act is to be determined, is whether the questions, though complicated they may be, are capable of being determined by summary enquiry.
The Division Bench therefore allowed the appeal observing that the order passed by the National Commission was in utter ignorance of the provisions of the Limitation Act, in as much as Section 5 of the Limitation Act does not apply to the institution of civil suit in the Civil Court.
Read Order: Sarbjit Singh v. State of Punjab
Monika Rahar
Chandigarh, January 24, 2022: The Punjab and Haryana High Court has exercised its inherent power under Section 482 of Cr.P.C. to allow the petitioner to include Section 201 of IPC (added subsequently to the FIR) to the headnote and prayer clause of his petition, the filing of which resulted in an order of the High Court earlier this month, granting the petitioner bail.
While observing that the non- mentioning of Section 201 IPC in the headnote as well as in the prayer clause of the petition was an inadvertent error, the Bench of Justice Vikas Bahl allowed the amendment of the headnote, as well as the prayer clause of the petition, by allowing to add Section 201 IPC.
In the case at hand, the High Court granted bail to the petitioner by its earlier Order dated January 17, 2022, but in the said Order, Section 201 of the IPC was not reflected owing to the fact that it was subsequently added in the FIR and thus, the petitioner neither mentioned it in the head of the petition nor in the prayer clause. Hence, the present application under Section 482 of the Cr.P.C. was made for the inclusion of Section 201 IPC in the said order and petition.
The petitioner’s counsel appearing before the Court submitted that since the applicant-petitioner was not aware of the addition of Section 201 IPC in the case, thus, inadvertently the said Section was neither mentioned in the head of the petition nor in the prayer clause and therefore, the same was not reflected in Court’s earlier order. Thus, the counsel prayed for the amendment of the headnote, as well as the prayer clause of the petition for adding Section 201 IPC to it.
Keeping in view the above said facts and circumstances, the Court allowed the aforesaid amendment and the order granting bail to the applicant-petitioner was directed to be read as including Section 201 IPC also, in addition to the other Sections as mentioned in the order.
Thus, the petition was allowed.
Read Judgment: State Of Gujarat V. Arcelor Mittal Nippon Steel India Limited
Pankaj Bajpai
New Delhi, January 24, 2022: The Supreme Court has held that Essar Steel (ESL, now Arcelor Mittal Nippon Steel) (eligible unit under ‘The Scheme for Special Incentives to Prestigious Units 1990-95’) is disentitled to exemption from payment of purchase-tax as per original Entry No.255(2) by F.D.’s Notification dated March 5, 1992, issued u/s 49(2) of Gujarat Sales Tax Act, 1969.
A Division Bench of Justice M.R. Shah and Justice Sanjiv Khanna observing that by transfer of Naphtha and Natural Gas (raw-materials) by eligible unit (ESL) to another unit Essar Power Limited (EPL), after availing exemption from payment of purchase-tax and not using raw materials for own use for manufacture of goods, held that there was non-compliance of original Entry No.255(2) issued by Notification dated March 5,1992.
The two main grounds for such non compliance were the facets that firstly,it did not fulfill the eligibility criteria/conditions mentioned in original Entry No.255(2) and, secondly, there was a breach of declaration in Form No.26 furnished by the assessee.
The observation came pursuant to an appeal preferred by State of Gujarat (Appellant) challenging the judgment, whereby the High Court had upheld the common order passed by the Gujarat Value Added Tax Tribunal, Ahmedabad holding that Arcelor Mittal Nippon Steel India (Respondent) is entitled to the exemption from payment of amount of sales tax as per the original Entry No.255(2) vide F.D.’s Notification dated Mar 5, 1992, which was issued u/s 49(2) of the Gujarat Sales Tax Act, 1969.
The Division Bench sternly rejected the applicability of ‘principle of promissory estoppel’ stating the said doctrine is an equitable remedy and has to be moulded depending on the facts of each case and not straitjacketed into pigeonholes.
Further, speaking for the Bench, Justice Shah observed that, the Joint Commissioner, the Tribunal as well as High Court committed “a grave error in quashing and setting aside the penalty imposed by the Assessing Officer” as modus operandi adopted by assessee “warrants a penalty”.
As such, Justice Shah lamented that, by such transfer and sale of raw materials by ESL to EPL, EPL got the benefit of exemption, which otherwise being a power producing company was not eligible for such an exemption.
There was justification in State’s plea that accepting such an interpretation put forward by assessee, “would completely defeat the purpose of the exemption” and it would permit eligible industries to simply transmit raw-materials to other units, even though such units are not eligible for exemption under the notification, added the Bench.
Interpreting the exemption entry, the Top Court clarified that “only in a case where the raw materials, processing materials or consumable stores are used by the eligible unit and the eligible unit actually uses the goods purchased within the State of Gujarat as raw materials, processing materials or consumable stores in the manufacture of goods, there shall be exemption from payment of purchase tax/sales tax to the extent provided in the said Entry”.
The Top Court concluded that even the reasoning given by the Tribunal and the High Court that the demand of purchase tax is hit by the principle of promissory estoppel cannot be accepted.
Accordingly, the Apex Court restored the order passed by the Assessing Officer levying the demand of purchase tax and imposing the penalty and allowed Revenue’s appeal.
Read Order: Court on its own motion v. Union of India and Others
Monika Rahar
Chandigarh, January 24, 2022: Owing to a sudden and alarming surge in the number of COVID cases because of which the situation has turned grim and unsafe, the Punjab and Haryana High Court has re-imposed its interim directions issued on April 28, 2021, with immediate effect and these directions have been directed to remain operative until February 28, 2022.
In the suo motu proceeding, the Division Bench of Chief Justice Ravi Shanker Jha and Justice Arun Palli heard the Amicus Curiae, the Additional Solicitor General of India, the Advocate General, Haryana and other parties and observed that several Judges of the High Court a huge number of High Court staff and a large number of Advocates got infected with the virus. Thus, the representatives of the High Court Bar Association stressed the need to restore the directions issued by this Court on previous occasions.
The interim orders which have been ordered to be re-imposed and are to remain operative till February 28, 2022, are as follows-
Along with these specifications, the High Court has also clarified that the time for filing of a written statement or return in any Suit or proceeding pending before any Civil Court or any other forum, unless specifically directed, were extended until February 28, 2022. However, it was stated that the parties would not be precluded from filing such written statement or return before February 28, 2022.
The Government or any other local body or instrumentality of the State has been directed to not take any action for eviction and demolition in respect of any property, over which any citizen or person or party or any Body Corporate, has physical or symbolic possession till February 28, 2022.
It has also been directed that any Bank or Financial Institution should not take action for auction in respect of any property of any citizen or party or any Body corporate till February 28, 2022 subject to the clarification issued by this Court vide orders dated August 20,2021 and September 23,2021 restricting its applicability.
If Government or any other entity is required by the order of High Court or any Court subordinate to it or the Tribunals, to do a particular thing or carry out a certain direction in a particular manner, which is going to expire, the time for compliance of such order has now been extended up to February 28, 2022, unless specifically directed otherwise by the Court concerned; subject to the fact that the aforesaid prohibition shall not apply to the orders/ directions, which were required to be complied with and are meant for the benefit of the litigant or public at large.
Further, to clear ambiguity, the Court also passed certain directions that those interim orders / directions, which are not for a limited duration and are to operate until further orders, shall by this order remain unaffected.
In case extension of interim order as per the present order passed by this Court, causes any undue hardship and prejudice of any extreme nature, to any of the parties to such proceeding(s), such parties would be at liberty to seek appropriate relief by moving appropriate application before the Competent Court, Tribunal, Judicial or Quasi-Judicial Forum, and these directions shall not be taken as a bar for such Courts/Forums to consider such application filed by the aggrieved party, on its own merit, after due notice and providing opportunity of hearing to the other side, added the Court.
These directions will not preclude the States or Union Territory, Chandigarh or CentralGovernment from moving appropriate application for vacation/modification of such order in any particular case for reason of overriding public interest and all Courts, Tribunals, Judicial and Quasi-judicial authorities have been directed to abide by these directions, and the parties seeking relief covered by these directions can file hard copy or soft copy of this order before the competent court/forum, which shall be given due weightage.
The matter is further listed for February 24, 2022.
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.
Right to Disclosure – Importance & Challenges in Criminal Justice System – By Manu Sharma
Personal liberty is the most cherished value of human life which thrives on the anvil of Articles 14 and 21 of the Constitution of India (“the Constitution”). Once a person is named an accused, he faces the spectre of deprivation of his personal liberty and criminal trial. This threat is balanced by Constitutional safeguards which mandate adherence to the rule of law by the investigating agencies as well as the Court. Thus, any procedure which seeks to impinge on personal liberty must also be fair and reasonable. The right to life and personal liberty enshrined under article 21 of the Constitution, expanded in scope post Maneka Gandhi[1], yields the right to a fair trial and fair investigation. Fairness demands disclosure of anything relevant that may be of benefit to an accused. Further, the all-pervading principles of natural justice envisage the right to a fair hearing, which entails the right to a full defence. The right to a fair defence stems from full disclosure. Therefore, the right of an accused to disclosure emanates from this Constitutional philosophy embellished by the principles of natural justice and is codified under the Code of Criminal Procedure, 1973 (“Code”).
Under English jurisprudence, the duty of disclosure is delineated in the Criminal Procedure and Investigations Act, 1996, which provides that the prosecutor must disclose to the accused any prosecution material which has not previously been disclosed to the accused and which might reasonably be considered capable of undermining the case for the prosecution against the accused or of assisting the case for the accused, except if such disclosure undermines public interest.[2] Fairness ordinarily requires that any material held by the prosecution which weakens its case or strengthens that of the defendant, if not relied on as part of its formal case against the defendant, should be disclosed to the defence.[3] The duty of disclosure under common law contemplates disclosure of anything which might assist the defence[4], even if such material was not to be used as evidence[5]. Under Indian criminal jurisprudence, which has borrowed liberally from common law, the duty of disclosure is embodied in sections 170(2), 173, 207 and 208 of the Code, which entail the forwarding of material to the Court and supply of copies thereof to the accused, subject to statutory exceptions.
II. Challenges in Enforcement
The right to disclosure is a salient feature of criminal justice, but its provenance and significance appear to be lost on the Indian criminal justice system. The woes of investigative bias and prosecutorial misconduct threaten to render this right otiose. That is not to say that the right of an accused to disclosure is indefeasible, as certain exceptions are cast in the Code itself, chief among them being public interest immunity under section 173(6). However, it is the mischief of the concept of ‘relied upon’ emerging from section 173(5) of the Code, which is wreaking havoc on the right to disclosure and is the central focus of this article. The rampant misuse of the words “on which the prosecution proposes to rely’ appearing in section 173(5) of the Code, to suppress material favourable to the accused or unfavourable to the prosecution in the garb of ‘un-relied documents’ has clogged criminal courts with avoidable litigation at the very nascent stage of supply of copies of documents under section 207 of the Code. The erosion of the right of an accused to disclosure through such subterfuge is exacerbated by the limited and restrictive validation of this right by criminal Courts. The dominant issues highlighted in the article, which stifle the right to disclosure are; tainted investigation, unscrupulous withholding of material beneficial to the accused by the prosecution, narrow interpretation by Courts of section 207 of the Code, and denial of the right to an accused to bring material on record in the pre-charge stage.
A. Tainted Investigation
Fair investigation is concomitant to the preservation of the right to fair disclosure and fair trial. It envisages collection of all material, irrespective of its inculpatory or exculpatory nature. However, investigation is often vitiated by the tendencies of overzealous investigating officers who detract from the ultimate objective of unearthing truth, with the aim of establishing guilt. Such proclivities result in collecting only incriminating material during investigation or ignoring the material favourable to the accused. This leads to suppression of material and scuttles the right of the accused to disclosure at the very inception. A tainted investigation leads to miscarriage of justice. Fortunately, the Courts are not bereft of power to supervise investigation and ensure that the right of an accused to fair disclosure remains protected. The Magistrate is conferred with wide amplitude of powers under section 156(3) of the Code to monitor investigation, and inheres all such powers which are incidental or implied to ensure proper investigation. This power can be exercised suo moto by the Magistrate at all stages of a criminal proceeding prior to the commencement of trial, so that an innocent person is not wrongly arraigned or a prima facie guilty person is not left out.[6]
B. Suppression of Material
Indian courts commonly witness that the prosecution is partisan while conducting the trial and is invariably driven by the lust for concluding in conviction. Such predisposition impels the prosecution to take advantage by selectively picking up words from the Code and excluding material favouring the accused or negating the prosecution case, with the aid of the concept of ‘relied upon’ within section 173(5) of the Code. However, the power of the prosecution to withhold material is not unbridled as the Constitutional mandate and statutory rights given to an accused place an implied obligation on the prosecution to make fair disclosure.[7] If the prosecution withholds vital evidence from the Court, it is liable to adverse inference flowing from section 114 of the Indian Evidence Act, 1872 (“Evidence Act). The prosecutor is expected to be guided by the Bar Council of India Rules which prescribe that an advocate appearing for the prosecution of a criminal trial shall so conduct the prosecution that it does not lead to conviction of the innocent. The suppression of material capable of establishment of the innocence of the accused shall be scrupulously avoided. [8]
C. Scope of S. 207
The scope of disclosure under section 207 has been the subject of fierce challenge in Indian Courts on account of the prosecution selectively supplying documents under the garb of ‘relied upon’ documents, to the prejudice of the defence of an accused. The earlier judicial trend had been to limit the supply of documents under section 207 of the Code to only those documents which were proposed to be relied upon by the prosecution. This view acquiesced the exclusion of documents which were seized during investigation, but not filed before the Court along with the charge sheet, rendering the right to disclosure a farce. This restrictive sweep fails to reconcile with the objective of a fair trial viz. discovery of truth. The scheme of the code discloses that Courts have been vested with extensive powers inter alia under sections 91, 156(3) and 311 to elicit the truth. Towards the same end, Courts are also empowered under Section 165 of the Evidence Act. Thus, the principle of harmonious construction warrants a more purposive interpretation of section 207 of the code. The Hon’ble Supreme Court expounded on the scope of Section 207 of the Code in the case of Manu Sharma[9] and held that documents submitted to the Magistrate under section 173(5) would deem to include the documents which have to be sent to the magistrate during the course of investigation under section 170(2). A document which has been obtained bona fide and has a bearing on the case of the prosecution should be disclosed to the accused and furnished to him to enable him to prepare a fair defence, particularly when non production or disclosure would affect administration of justice or prejudice the defence of the accused. It is not for the prosecution or the court to comprehend the prejudice that is likely to be caused to the accused. The perception of prejudice is for the accused to develop on reasonable basis.[10] Manu Sharma’s [supra] case has been relied upon in Sasikala [11] wherein it was held that the Court must concede a right to the accused to have access to the documents which were forwarded to the Court but not exhibited by the prosecution as they favoured the accused. These judgments seem more in consonance with the true spirit of fair disclosure and fair trial. However, despite such clear statements of law, courts are grappling with the judicial propensity of deviating from this expansive interpretation and regressing to the concept of relied upon. The same is evident from a recent pronouncement of the Delhi High Court where the ratios laid down in Manu Sharma & Sasikala [supra] were not followed by erroneously distinguishing from those cases.[12] Such “per incuriam” aberrations by High Court not only undermine the supremacy of the Apex Court, but also adversely impact the functioning of the district courts over which they exercise supervisory jurisdiction. Hopefully in future Judges shall be more circumspect and strictly follow the law declared by the Apex Court.
D. Pre-Charge Embargo
Another obstacle encountered in the enforcement of the right to disclosure is the earlier judicial approach to stave off production or consideration of any additional documents not filed alongwith the charge sheet at the pre-charge stage, as the right to file such material was available to the accused only upon the commencement of trial after framing of charge.[13] At the pre-charge stage, Court could not direct the prosecution to furnish copies of other documents[14] It was for the accused to do so during trial or at the time of entering his defence. However, the evolution of law has seen that at the stage of framing charge, Courts can rely upon the material which has been withheld by the prosecutor, even if such material is not part of the charge sheet, but is of such sterling quality demolishing the case of the prosecution.[15] Courts are not handicapped to consider relevant material at the stage of framing charge, which is not relied upon by the prosecution. It is no argument that the accused can ask for the documents withheld at the time of entering his defence.[16] The framing of charge is a serious matter in a criminal trial as it ordains an accused to face a long and arduous trial affecting his liberty. Therefore, the Court must have all relevant material before the stage of framing charge to ascertain if grave suspicion is made out or not. Full disclosure at the stage of section 207 of the code, which immediately precedes discharging or charging an accused, enables an accused to seek a discharge, if the documents, including those not relied upon by the prosecution, create an equally possible view in favour of the accused.[17] On the other hand, delaying the reception of documents postpones the vindication of the accused in an unworthy trial and causes injustice by subjecting him to the trauma of trial. There is no gainsaying that justice delayed is justice denied, therefore, such an approach ought not to receive judicial consent. A timely discharge also travels a long way in saving precious time of the judiciary, which is already overburdened by the burgeoning pendency of cases. Thus, delayed or piecemeal disclosure not only prejudices the defence of the accused, but also protracts the trial and occasions travesty of justice.
III. Duties of the stakeholders in criminal justice system
The foregoing analysis reveals that participation of the investigating agency, the prosecution and the Court is inextricably linked to the enforcement of the right to disclosure. The duties cast on these three stakeholders in the criminal justice system, are critical to the protection of this right. It is incumbent upon the investigating agencies to investigate cases fairly and to place on record all the material irrespective of its implication on the case of prosecution case. Investigation must be carried out with equal alacrity and fairness irrespective of status of accused or complainant.[18] An onerous duty is cast on the prosecution as an independent statutory officer, to conduct the trial with the objective of determination of truth and to ensure that material favourable to the defence is supplied to the accused. Ultimately, it is the overarching duty of the Court to ensure a fair trial towards the administration of justice for all parties. The principles of fair trial require the Court to strike a delicate balance between competing interests in a system of adversarial advocacy. Therefore, the court ought to exercise its power under section 156(3) of the Code to monitor investigation and ensure that all material, including that which enures to the benefit of the accused, is brought on record. Even at the stage of supply of copies of police report and documents under section 207 of the Code, it is the duty of the Court to give effect to the law laid down by the Hon’ble Supreme Court in Manu Sharma (supra) and Sasikala (supra), and ensure that all such material is supplied to the accused irrespective of whether it is “relied upon” by the prosecution or not.
IV. Alternate Remedy
The conundrum of supply of copies under section 207 of the code abounds criminal trials. Fairness is an evolving concept. There is no doubt that disclosure of all material which goes to establish the innocence of an accused is the sine qua non of a fair trial.[19] Effort is evidently underway to expand the concept in alignment with English jurisprudence. In the meanwhile, does the right of an accused to disclosure have another limb to stand on? Section 91 of the Code comes to the rescue of an accused, which confers wide discretionary powers on the Court, independent of section 173 of the Code, to summon the production of things or documents, relevant for the just adjudication of the case. In case the Court is of the opinion that the prosecution has withheld vital, relevant and admissible evidence from the Court, it can legitimately use its power under section 91 of the Code to discover the truth and to do complete justice to the accused.[20]
V. Conclusion
A society’s progress and advancement are judged on many parameters, an important one among them being the manner in which it administers criminal justice. Conversely, the ironic sacrilege of the core virtues of criminal jurisprudence in the temples of justice evinces social decadence. The Indian legislature of the twenty first century has given birth to several draconian statutes which place iron shackles on personal liberty, evoking widespread fear of police abuses and malicious prosecution. These statutes not only entail presumptions which reverse the burden of proof, but also include impediments to the grant of bail. Thus, a very heavy burden to dislodge the prosecution case is imposed on the accused, rendering the right to disclosure of paramount importance. It is the duty of the Court to keep vigil over this Constitutional and statutory right conferred on an accused by repudiating any procedure which prejudices his defence. Notable advancement has been made by the Apex Court in interpreting section 207 of the Code in conformity with the Constitutional mandate, including the right to disclosure. Strict adherence to the afore-noted principles will go a long way in ensuring real and substantial justice. Any departure will not only lead to judicial anarchy, but also further diminish the already dwindling faith of the public in the justice delivery system.
**
Advocate Manu Sharma has been practising at the bar for over sixteen years. He specialises in Criminal Defence. Some of the high profile cases he has represented are – the 2G scam case for former Union minister A Raja; the Religare/Fortis case for Malvinder Singh; Peter Mukerjee in the P Chidambaram/ INX Media case; Devas Multimedia in ISRO corruption act case; Om Prakash Chautala in PMLA case; Aditya Talwar in the aviation scam case; Dilip Ray, former Coal Minister in one of the coal scam cases; Suhaib Illyasi case.
**
Disclaimer: The views or opinions expressed are solely of the author.
[1] Maneka Gandhi and Another v. Union of India, (1978) 1 SCC 248
[2] S. 3 of the Criminal Procedure and Investigations Act, 1996
[3] R v. H and R v. C, 2004 (1) ALL ER 1269
[4] R v. Ward (Judith), (1993) 1 WLR 619 : (1993) 2 ALL ER 577 (CA)
[5] R v. Preston, (1994) 2 AC 130 : (1993) 3 WLR 891 : (1993) 4 ALL ER 638 (HL), R v. Stinchcome,
(1991), 68 C.C.C. (3d) 1 (S.C.C.)
[6] Vinubhai Haribhai Malaviya and Others v. State of Gujarat and Another, 2019 SCC Online SC 1346
[7] Sidhartha Vashishth alias Manu Sharma v. State (NCT of Delhi), (2010) 6 SCC 1
[8] R. 16, part II, Ch. VI of the Bar Council of India Rules
[9] Manu Sharma, (2010) 6 SCC 1
[10] V.K. Sasikala v. State, (2012) 9 SCC 771 : AIR 2013 SC 613
[11] Sasikala, (2012) 9 SCC 771 : AIR 2013 SC 613
[12] Sala Gupta and Another v. Directorate of Enforcement, (2019) 262 DLT 661
[13] State of Orissa v. Debendra Nath Padhi¸(2005) 1 SCC 568
[14] Dharambir v. Central Bureau of Investigation, ILR (2008) 2 Del 842 : (2008) 148 DLT 289
[15] Nitya Dharmananda alias K. Lenin and Another v. Gopal Sheelum Reddy, (2018) 2 SCC 93
[16] Neelesh Jain v. State of Rajasthan, 2006 Cri LJ 2151
[17] Dilwar Balu Kurane v. State of Maharashtra, (2002) 2 SCC 135, Yogesh alias Sachin Jagdish Joshi v. State of Maharashtra, (2008) 10 SCC 394
[18] Karan Singh v. State of Haryana, (2013) 12 SCC 529
[19] Kanwar Jagat Singh v. Directorate of Enforcement & Anr, (2007) 142 DLT 49
[20] Neelesh, 2006 Cri LJ 2151
Disclaimer: The views or opinions expressed are solely of the author.
Validity & Existence of an Arbitration Clause in an Unstamped Agreement
By Kunal Kumar
January 8, 2024
In a recent ruling, a seven-judge bench of the Supreme Court of India in its judgment in re: Interplay between arbitration agreements under the Arbitration & Conciliation Act 1996 and the Indian Stamp Act 1899, overruled the constitutional bench decision of the Supreme Court of India in N. N. Mercantile Private Limited v. Indo Unique Flame Ltd. & Ors. and has settled the issue concerning the validity and existence of an arbitration clause in an unstamped agreement. (‘N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – III’)
Background to N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – III
One of the first instances concerning the issue of the validity of an unstamped agreement arose in the case of SMS Tea Estate Pvt. Ltd. v. Chandmari Tea Company Pvt. Ltd. In this case, the Hon’ble Apex Court held that if an instrument/document lacks proper stamping, the exercising Court must preclude itself from acting upon it, including the arbitration clause. It further emphasized that it is imperative for the Court to impound such documents/instruments and must accordingly adhere to the prescribed procedure outlined in the Indian Stamp Act 1899.
With the introduction of the 2015 Amendment, Section 11(6A) was inserted in the Arbitration & Conciliation Act 1996 (A&C Act) which stated whilst appointing an arbitrator under the A&C Act, the Court must confine itself to the examination of the existence of an arbitration agreement.
In the case of M/s Duro Felguera S.A. v. M/s Gangavaram Port Limited, the Supreme Court of India made a noteworthy observation, affirming that the legislative intent behind the 2015 Amendment to the A&C Act was necessitated to minimise the Court's involvement during the stage of appointing an arbitrator and that the purpose embodied in Section 11(6A) of A&C Act, deserves due acknowledgement & respect.
In the case of Garware Wall Ropes Ltd. v. Cosatal Marine Constructions & Engineering Ltd., a divisional bench of the Apex Court reaffirmed its previous decision held in SMS Tea Estates (supra) and concluded that the inclusion of an arbitration clause in a contract assumes significance, emphasizing that the agreement transforms into a contract only when it holds legal enforceability. The Apex Court observed that an agreement fails to attain the status of a contract and would not be legally enforceable unless it bears the requisite stamp as mandated under the Indian Stamp Act 1899. Accordingly, the Court concluded that Section 11(6A) read in conjunction with Section 7(2) of the A&C Act and Section 2(h) of the Indian Contract Act 1872, clarified that the existence of an arbitration clause within an agreement is contingent on its legal enforceability and that the 2015 Amendment of the A&C Act to Section 11(6A) had not altered the principles laid out in SMS Tea Estates (supra).
Brief Factual Matrix – N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd.
Indo Unique Flame Ltd. (‘Indo Unique’) was awarded a contract for a coal beneficiation/washing project with Karnataka Power Corporation Ltd. (‘KPCL’). In the course of the project, Indo Unique entered into a subcontract in the form of a Work Order with N.N. Global Mercantile Pvt. Ltd. (‘N.N. Global’) for coal transportation, coal handling and loading. Subsequently, certain disputes arose with KPCL, leading to KPCL invoking Bank Guarantees of Indo Unique under the main contract, after which Indo Unique invoked the Bank Guarantee of N. N. Global as supplied under the Work Order.
Top of FormS
Subsequently, N.N. Global initiated legal proceedings against the cashing of the Bank Guarantee in a Commercial Court. In response thereto, Indo Unique moved an application under Section 8 of the A&C Act, requesting that the Parties to the dispute be referred for arbitration. The Commercial Court dismissed the Section 8 application, citing the unstamped status of the Work Order as one of the grounds. Dissatisfied with the Commercial Court's decision on 18 January 2018, Indo Unique filed a Writ Petition before the High Court of Bombay seeking that the Order passed by the Commercial Court be quashed or set aside. The Hon’ble Bombay High Court on 30 September 2020 allowed the Writ Petition filed by Indo Unique, aggrieved by which, N.N. Global filed a Special Leave Petition before the Supreme Court of India.
N. N. Global Mercantile Pvt. Ltd. v. Indo Unique Flame Ltd. – I
The issue in the matter of M/s N.N. Global Mercantile Pvt. Ltd. v. M/s Indo Unqiue Flame Ltd. & Ors. came up before a three-bench of the Supreme Court of India i.e. in a situation when an underlying contract is not stamped or is insufficiently stamped, as required under the Indian Stamp Act 1899, would that also render the arbitration clause as non-existent and/or unenforceable (‘N.N. Global Mercantile Pvt. Ltd. v. Indo Flame Ltd. – I’).
The Hon’ble Supreme Court of India whilst emphasizing the 'Doctrine of Separability' of an arbitration agreement held that the non-payment of stamp duty on the commercial contract would not invalidate, vitiate, or render the arbitration clause as unenforceable, because the arbitration agreement is considered an independent contract from the main contract, and the existence and/or validity of an arbitration clause is not conditional on the stamping of a contract. The Hon’ble Supreme Court further held that deficiency in stamp duty of a contract is a curable defect and that the deficiency in stamp duty on the work order, would not affect the validity and/or enforceability of the arbitration clause, thus applying the Doctrine of Separability. The arbitration agreement remains valid and enforceable even if the main contract, within which it is embedded, is not admissible in evidence owing to lack of stamping.
The Hon’ble Apex Court, however, considered it appropriate to refer the issue i.e. whether unstamped instrument/document, would also render an arbitration clause as non-existent, unenforceable, to a constitutional bench of five-bench of the Supreme Court.
N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II
On 25 April 2023, a five-judge bench of the Hon’ble Supreme Court of India in the matter of N. N. Mercantile Private Limited v. Indo Unique Flame Ltd. & Ors. held that (1) An unstamped instrument containing an arbitration agreement cannot be said to be a contract which is enforceable in law within the meaning of Section 2(h) of the Indian Contract Act 1872 and would be void under Section 2(g) of the Indian Contract Act 1872, (2) an unstamped instrument which is not a contract nor enforceable cannot be acted upon unless it is duly stamped, and would not otherwise exist in the eyes of the law, (3) the certified copy of the arbitration agreement produced before a Court, must clearly indicate the stamp duty paid on the instrument, (4) the Court exercising its power in appointing an arbitration under Section 11 of the A&C Act, is required to act in terms of Section 33 and Section 35 of the Indian Stamp Act 1899 (N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II).
N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – III
A seven-judge bench of the Supreme Court of India on 13 December 2023 in its recent judgment in re: Interplay between arbitration agreements under the Arbitration & Conciliation Act 1996 and the Indian Stamp Act 1899, (1) Agreements lacking proper stamping or inadequately stamped are deemed inadmissible as evidence under Section 35 of the Stamp Act. However, such agreements are not automatically rendered void or unenforceable ab initio; (2) non-stamping or insufficient stamping of a contract is a curable defect, (2) the issue of stamping is not subject to determination under Sections 8 or 11 of the A&C Act by a Court. The concerned Court is only required to assess the prima facie existence of the arbitration agreement, separate from concerns related to stamping, and (3) any objections pertaining to the stamping of the agreement would fall within the jurisdiction of the arbitral tribunal. Accordingly, the decision in N. N. Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. – II and SMS Tea (supra) was overruled, by the seven-judge bench of the Supreme Court of India.
Kunal is a qualified lawyer with more than nine years of experience and has completed his LL.M. in Dispute Resolution (specialisation in International Commercial Arbitration) from Straus Institute for Dispute Resolution, Pepperdine University, California.
Kunal currently has his own independent practice and specializes in commercial/construction arbitration as well as civil litigation. He has handled several matters relating to Civil Law and arbitrations (both domestic and international) and has appeared before the Supreme Court of India, High Court of Delhi, District Courts of Delhi and various other tribunals.
No Safe Harbour For Google On Trademark Infringement
By Mayank Grover & Pratibha Vyas
October 9, 2023
Innovation, patience, dedication and uniqueness culminate in establishing a distinct identity. A trademark aids in identifying the source and quality, shaping perceptions about the identity's essence. When values accompany a product or service's trademark, safeguarding against misuse and infringement becomes crucial. A recent pronouncement of a Division Bench of the Delhi High Court dated August 10, 2023 in Google LLC v. DRS Logistics (P) Ltd. & Ors. and Google India Private Limited v. DRS Logistics (P) Ltd. & Ors. directed that Google’s use of trademarks as keywords for its Google Ads Programme does amount to ‘use’ in advertising under the Trademarks Act and the benefit of safe harbour would not be available to Google if such keywords infringe on the concerned trademark.
Factual Background
Google LLC manages and operates the Google Search Engine and Ads Programme, while, Google India Private Limited is a subsidiary of Google that has been appointed as a non-exclusive reseller of the Ads Programme in India. The Respondents, DRS Logistics and Agarwal Packers and Movers Pvt. Ltd. are leading packaging, moving and logistics service providers in India.
On 22.12.2011, DRS filed a suit against Google and Just Dial Ltd. under provisions of the Trademarks Act, 1999 (‘TM Act’) inter alia seeking a permanent injunction against Google from permitting third parties from infringing, passing off etc. the relevant trademarks of DRS. The core of the dispute revolved around Google’s Ads Programme. DRS claimed that its trade name 'AGARWAL PACKERS AND MOVERS' is widely recognized and a 'well-known' trademark. Use of DRS’s trademark as a keyword diverts internet traffic from its website to that of its competitors and they were entitled to seek restraint against Google for permitting third parties who are not authorized to use the said trademark. DRS further argued that Google benefits from these trademark infringements. This practice involved charging a higher amount for displaying these ads, constituting an infringement of their trademarks. Whereas, Google contended that the use of the keyword in the Ads Programme does not amount to ‘use’ under the TM Act notwithstanding that the keyword is/or similar to a trademark. Thus, the use of a term as a keyword cannot be construed as an infringement of a trademark under the TM Act, and being an intermediary, it claimed a safe harbour under Section 79 of the Information Technology Act, 2000. (‘IT Act’).
In essence, the dispute between the parties was rooted in DRS’s grievance concerning the Ads Programme. The Learned Single Judge vide judgment dated 30.10.2021interpreted relevant provisions of the TM Act and drew on multiple legal precedents to arrive at the decision that DRS can seek protection of its trademarks which were registered under Section 28 of the TM Act and issued directions to investigate complaints alleging the use of trademark and/or to ascertain whether a sponsored result has an effect of infringing a trademark or passing off.
Being aggrieved, Google LLC and Google Pvt. Ltd. filed appeals before the Division Bench. Google LLC argued that the Single Judge’s findings were erroneous and the directions issued were liable to be set aside. Google India claimed that it doesn’t control and operate the Search Engine and the Ads Programme making it unable to comply with the directions passed in the impugned judgment.
Analysis & Decision of Court
The Division Bench found Single Judge’s rationale for assessing trademark infringement through keywords and meta-tags valid. Meta-tags are a list of words/code in a website, not readily visible to the naked eye. It serves as a tool for indexing the website by a search engine. If a trademark of a third party is used as a meta-tag, the same would serve as identifying the website as relevant to the search query that includes the trademark as a search term. The use of keywords in the Ads Programme also serves similar purpose. The Division Bench was unable to accept that using a trademark as a keyword, even if not visible, would not be considered trademark use under the TM Act.
Google placed heavy reliance on the decisions rendered by Courts across jurisdictions of United Kingdom, United States of America, European Union, Australia, New Zealand, Russia, South Africa, Canada, Spain, Italy, Japan and China; in the cases of Google France SARL and Google Inc. v. Louis Vitton SA & Ors.[1], Interflora Inc. v. Marks & Spencer Plc.[2], and L’Oreal SA v. eBay International AG[3] in support of the contention that the use of trade marks is by the advertiser and not by Google. However, the Division Bench rejected Google’s passive role; highlighting its active involvement in recommending and promoting trademark keywords for higher clicks in its Ads Programme. Division Bench referred to a few judicial decisions rendered in the United States of America that captured the essence of the controversy for perspective, concluding that Google actively promotes and encourages trademarks associated with major goods and services, rather than having a passive role.
It was held that the contention that the use of trademarks as keywords, per se constitutes an infringement of the trademark is unmerited; the assumption that an internet user is merely searching the address of the proprietor of the trademark when he feeds in a search query that may contain a trademark, is erroneous.
The Doctrine of 'Initial Interest Confusion' addresses trademark infringement based on pre-purchase confusion. The doctrine is applied when meta-tags, keywords, or domain names cause initial confusion similar to a registered trademark. If users are misled to access unrelated websites, trademark use in internet advertising may be actionable and reliance was placed on US precedents. Referring to Section 29 of the TM Act, it was directed that Section 29 does not specify the duration for which the confusion lasts but, even if the confusion is for a short duration and an internet user is able to recover from the same, the trade mark would be infringed and would offend Section 29(2) of the TM Act.
It was held that the Ads Programme is a platform for displaying advertisements. Google, being an architect and operator of its own programme makes it an active participant in the use of trademarks and determining the advertisements displayed on search pages. Their use of proprietary software makes them utilize trademarks and control the distribution of information related to potentially infringing links, ultimately leading to revenue maximization. Hence, a substantial link exists between Google LLC and Google India, rendering it impossible for Google India to deny its role in operating the Ads Programme. It was further held that Google sells trademarks as keywords to advertisers and encourages users to use trademarks as keywords for ads. It is contradictory for Google to encourage trademark use while claiming data belongs to third parties for exemption. After 2004, Google changed policies to boost revenue and subsequently, introduced a tool that searches effective terms, including trademarks. Google's active involvement in its advertising business and online nature does not necessarily qualify it for benefits under Section 79 of the IT Act. The Division Bench agreed with the view of the Single Judge that Google would not be eligible for protection of safe harbour under Section 79(1) of the IT Act, if its alleged activities infringe trademarks.
Conclusion
This is a seminal decision governing (and rather, restricting) the operations of intermediaries and redefining the jurisprudence of safe harbour under the IT Act. The decision is well-reasoned and establishes a significant precedent for safeguarding trademarks by uniquely holding Google accountable under its Ads Programme. The same will prevent usage of tradenames as a third-party trademark in keyword search or metatags by advertisers on Google’s search engine. While keywords and meta-tags have different levels of visibility, their purpose is similar i.e. advertising and attracting internet traffic. The use of trademarks as meta-tags by a person who is neither a proprietor of the trademark nor permitted to use the same leads to confusion amongst public at large due to the automated processes of search engines and consequently, constitutes trademark infringement.
About the Authors: Mayank Grover is a Partner and Pratibha Vyas is an Associate at Seraphic Advisors, Advocates & Solicitors
[1] C-236/08 to C-238/08 (2010) [2011] All ER (EC) 41
[2] [2014] EWCA Civ 1403
[3] 2C- 324/09 (2010)
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